Book 1 Page 66 5/15/17 8:30 A.M MINUTES OF THE CITY OF SARASOTA GENERAL EMPLOYEES' PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING OF MAY 15, 2017 Present: Chair Barry Keeler, Vice Chair Ryan Chapdelain, Treasurer Kelly Strickland, Trustees Bonnie Wagner, Gretchen Schneider and Kari McVaugh Others: Attorney Scott Christiansen, Senior Pension Analyst Anthony Ferrer, and Senior Pension Accountant Cynthia Akersloot Absent: Secretary Pamela Nadalini and Pension Specialist Lois Belle 1. CALL MEETING TO ORDER: Chair Keeler called the meeting to order at 8:30 a.m. 2. PLEDGE OF CIVILITY: Chair Keeler read into the record a memorandum from Mayor Willie Charles Shaw, dated February 13, 2015, entitled "City Commission and Advisory Boards Meeting Protocols and Pledge of Civility." 3. ROLL CALL: Chair Keeler requested Senior Pension Accountant Akersloot call roll in Secretary Nadalini's absence; Senior Pension Accountant Akersloot called the roll and a quorum of the Trustees in attendance was noted. Senior Pension Analyst Ferrer informed Board members that Secretary Nadalini willl be unable to attend today's Board meeting and she will seek an excused absence at the General Employees' Pension Plan Regular Meeting of June 19, 2017. 4. PUBLIC INPUT: No one signed up to speak. 5. APPROVAL OF THE MINUTES: 5.1. Approval Re: Minutes of General Employees Pension Plan Board of Trustees Regular Meeting of April 17, 2017 A motion was made by Vice Chair Chapdelain and seconded by Trustee Schneider to approve the minutes of the General Employees' Pension Plan Board of Trustees Regular Meeting of April 17, 2017. Motion carried unanimously (6-0). 6. BOARD APPOINTMENTS: 6.1. Approval Re: Selection of Chair Presenter(s): Secretary Nadalini A motion was made by Vice Chair Chapdelain and seconded by Trustee Schneider to nominate Chair Keeler to remain as Chair. Motion carried unanimously (6-0). 6.2. Approval Re: Selection of Vice Chair Presenter(s): Secretary Nadalini A motion was made by Chair Keeler and seconded by Trustee Schneider to nominate Vice Chair Chapdelain to remain as Vice Chair. Motion carried unanimously (6-0). 7. APPROVAL OF RETIREMENT REQUESTIS): 7.1. Approval Re: Early Retirement Request of Les Urbanski Presenter(s): Senior. Pension Accountant Akersloot Senior Pension Accountant Akersloot stated that Les Urbanski is 55 years of age, has 10.90 years of service, and elected the 100% Joint Annuitant option. A motion was made by Trustee Schneider and seconded by Treasurer Strickland for the Board to approve the early retirement request of Les Urbanski. Motion carried unanimously (6-0). 8. INVESTMENT PERFORMANCE REVIEW: 8.1. Presentation and Discussion Re: Center Coast Capital Investment Performance Presenter(s): Robert Chisholm, Principal and Senior Portfolio Manager, Center Coast Capital Robert Chisholm, Principal and Senior Portfolio Manager, Center Coast Capital came before the Board. Mr. Chisholm provided a market update and future outlook as it relates to the portfolio; that Center Coast's objectives have not changed despite market volatility; that Center Coast is uniquely positioned to exploit the MLP investment opportunity and is well qualified to take advantage of the total return potential of the MLP and midstream asset class. In response to a question from Vice Chair Chapdelain asking about some of the potential risks going forward, Mr. Chisholm stated that there are additional investments being made but that the outcomes will be different this time; that in the short-term correlations might go back up and the asset classes might trade down with the crude oil prices but what is different now is that there are $60-$70 billion in MLP activity and thei investment is hedged. In response to a question from Vice Chair Chapdelain asking about timing of production and infrastructure to come online, Mr. Chisholm stated that a substantial portion of projects are coming online in the second half of 2017, 2018 and 2019 with a majority oft the builds on the gulf coast. There were no further questions from the Board and Chair Keeler thanked Mr. Chisholm for his presentation. 8.2. Presentation and Discussion Re: Graystone Consulting Investment Performance Presenter(s): Charlie Mulfinger, Managing Director, Graystone Consulting and Scott Owns, Institutional Consultant, Graystone Consulting Charlie Mulfinger, Managing Director, and Scott Owens, Institutional Consultant, Graystone Consulting, came before the Board. Mr. Mulfinger provided the Board with an overview of the topics to be presented and stated that Scott would discuss the economy and the market; that he would speak about managers; that he just passed out a fee schedule for review with the Board; that Q1, 2017 was a strong quarter that beat benchmark Book 1 Page 67 5/15/17 8:30 A.M Book 1 Page 68 5/15/17 8:30 A.M Mr. Owens briefly discussed the economic environment, and stated that the market is up significantly; that the current environment is pro-growth; that positive earnings revisions and global reinflation provide positive incentives for growth. Mr. Mulfinger stated that as of March 31, 2017, the market value of the Plan's assets is $146,319,869 with a total gain, net of fees, of $6,011,864 for the quarter; that the Plan's investment allocation is within the Plan's ranges on asset class and that there is no need to rebalance, briefly discussed each of the Plan's Investment Managers, and concluded his presentation by stating that the Plan's Investment portfolio had a very strong quarter and the return exceeded the benchmark. Mr. Mulfinger stated that much of the Plan's Investment Management fees are very competitive; that there is an opportunity for discussion with NFJ and Allianz's fee structure. There was Board consensus for Mr. Mulfinger to pursue a possible fee reduction discussion with NFJ & Allianz. Mr. Mulfinger stated that from an investment standpoint, he is comfortable with the NFJ & Allianz merger. There were no further questions from the Board and Chair Keeler thanked Mr. Mulfinger and Mr. Owens for their presentation. 9. UNFINISHED BUSINESS 9.1. Continued Discussion Re: Revised Operating Rules and Procedures Presenter(s): Attorney Scott Christiansen, Christiansen & Dehner Attorney Christiansen stated that he provided the Revised Operating Rules and Procedures which includes discussed changes and asked if the Board now needs to vote Senior Pension Accountant Akersloot stated that Secretary Nadalini apologizes she could not attend this meeting and requested that the Board postpone the vote. In response to a question from Senior Pension Accountant Akersloot asking if there was discussion with the City Attorney regarding adoption of the Revised Operating Rules and Procedures, Attorney Christiansen stated that he had not discussed the proposed Revised Operating Rules and Procedures with the City Attorney or the Assistant City Attorney; Senior Pension Accountant Akersloot stated that there was some concern about this document not being in alignment with the Code and that Secretary Nadalini requested the final draft be provided to the City Attorney for review prior to any vote by the Board. Attorney Christiansen stated that he added section 16 to the document and discussion ensued around the Board's Fiduciary responsibility and how that works within the internal processes of Pension Plan Administration. There was consensus by the Board postpone a vote to provide Secretary Nadalini the opportunity to discuss the draft of the Operating Rules and Procedures with the City Attorney. 10. NEW BUSINESS: 10.1. Approval Re: Merger of NFJ Investment Group LLC with and into Allianz Global Investors U.S. LLC Presenter(s): Attorney Scott Christiansen, Christiansen & Dehner Attorney Christiansen stated that he recommends approval of merger of NFJ with and into Allianz; that he will review the. Allianz contract to ensure no conflict with regard to Nicholas Applegate/Allianz merger. A motion was made by Vice Chair Chapdelain and seconded by Treasurer Strickland to approve the merger of NFJ Investment Group LLC with and Into Alliance Global Investors U.S. LLC. Motion carried unanimously (6-0). 11. ATTORNEY MATTERS: Attorney Christiansen stated that the term of Kari McVaugh's seat is expiring. Trustee McVaugh stated that she has reapplied for nomination. Attorney Christiansen reminded Board members that Financial Disclosure Statements are due July 1, 2017; that Form 1 must be filed with the Supervisor of Elections. Attorney Christiansen stated that the legislative session is over; that no Bills were passed which require changes to comply with State law. Attorney Christiansen stated that the General Employees' Pension Plan Tax certificate has been received and should be used going forward. 12. OTHER MATTERS: Discussion ensued around the eligible pool of candidates to serve on the General Employees' Pension Plan Board and the possibility of proposing changes to the ordinance. In response to a question from Chair Keeler asking if he can continue to serve if he enters the Deferred Retirement Option Plan (DROP), Attorney Christiansen read Section 24.98(a) ifa member trustee enters the DROP he may complete his term, but shall not run for re-election. In response to a question from Chair Keeler asking what are the duties of the board as stated in the Ordinance and is the Board solely responsible for administration of the Plan, Attorney Christiansen stated that according to the Ordinance that the Board is solely responsible for administration of the Plan; that Section 24.98(a) states "sole and exclusive administration of and responsibility for the operation of the Defined Benefit Plan." 13. ADJOURN. Chair Keeler adjourned the General Employees' Pension Plan Board of Trustees Regular Meeting at 9:55 a.m. DApI) Nlrevee CPPT Chair Barry Keeler Vice Chair Chapdelain Book 1 Page 69 5/15/17 8:30 A.M