Book 1 Page 39 10/17/16 8:30 A.M. MINUTES OF THE OCTOBER 17, 2016, CITY OF SARASOTA GENERAL EMPLOYEES PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING Present: Chair Barry Keeler, Vice Chair Ryan Chapdelain, Treasurer Kelly Strickland, and Trustee Bonnie Wagner Others: Attorney Scott Christiansen, Pension Plans Administrator Harry Ramphal, Senior Pension Analyst Anthony Ferrer, and Pension Specialist Chinyere Deehan Absent: Secretary Pamela Nadalini, Trustees Kari McVaugh and Gretchen Schneider 1. CALL THE 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 Board Meeting Protocols and Pledge of Civility." 3. ROLL CALL: Chair Keeler called the roll and a quorum for the meeting was noted. Pension Plans Administrator Ramphal stated that Secretary Nadalini and Trustee McVaugh have requested their absences to be excused; that Trustee Schneider has not requested her absence to be excused. 4. PUBLIC INPUT: Former Treasurer Lege came to the Board and thanked the Trustees for the last four years of service. Susan Blake, member of the Teamsters Local 173, a union representing certain General Employees, came before the Board and stated that Attorney Christiansen was emailed questions the Teamsters asked regarding the proposed changes in the ordinance. Attorney Christiansen stated that Ms. Blake's email was received and discussed with Attorney Sarah Warren and Human Resources Director Stacie Mason who will be contacting Ms. Blake to discuss her questions and concerns. 5. APPROVAL OF MINUTES: 5.1. Approval Re: Meeting Minutes of the September 19, 2016 General Employees' Pension Plan Board of Trustees Regular Meeting A motion was made by Vice Chair Chapdelain and seconded by Trustee Wagner to approve the minutes of the September 19, 2016, General Employees' Pension Plan Board of Trustees Regular Meeting. Motion carried unanimously (4-0). 6. APPROVAL OF RETIREMENT REQUEST/S): 6.1. Approval Re: DROP Retirement Request of Kelvin Johnson Pension Plans Administrator Ramphal stated that Kelvin Johnson requested a DROP retirement date of October 1, 2016; that Mr. Johnson is 53 years of age, has 30.02 years of service, and elected the Lifetime Option. A motion was made by Vice Chair Chapdelain and seconded by Trustee Wagner to approve the DROP retirement request of Kelvin Johnson. Motion carried unanimously (4-0). 7. INVESTMENT PERFORMANCE REVIEW: 7.1. Presentation and Discussion Re: Allianz Global Investors and NFJ Investment Group Michele Cameron, Director, Senior Account Manager, Allianz Global Investors, Blake Burdine, Director, Portfolio Manager, Allianz Global Investors, and John Mowrey, CFA, Director, Portfolio Manager, Allianz Global Investors, came before the Board to present the small cap growth portfolio and the small cap value portfolio. Ms. Cameron gave a brief overview of the firm; and stated that the firm acquired NFJ Investment Group in 2012, consolidating the two organizations into one global firm; that the firm has been managing the portfolio for the City of Sarasota General Employees' Pension Plan for 24 years. Mr. Burdine stated that the small cap growth portfolio market value is $2.2 billion as of September 30, 2016; that the total portfolio rate of return is 7.64% for the quarter to date versus the benchmark at 9.22%; that since inception in 1992 the rate of return for the portfolio is 9.61% versus the benchmark of 6.99%; that the past two years have been a struggle for the growth managers, leading the portfolio to underperform; that the performance numbers are improving in 2016. Mr. Mowrey stated that the small cap value portfolio market value is $14.6 million as of September 30, 2016; that the total portfolio rate of return is 5.23% for the quarter to date versus the benchmark at 8.87%; that since inception in 1998 the rate of return for the portfolio is 11.48% versus the benchmark of 8.51%; that the year to date numbers have consistently outperformed the benchmark. 8. UNFINISHED BUSINESS: None. 9. NEW BUSINESS: 9.1. Presentation and Discussion Re: USFAS' SSAE16 Report on Description of USFAS' System and the Suitability of the Design and Operating Effectiveness of Controls Bradley Rinsem, President and Chief Executive Officer, Salem Trust Company, came before the Board (by telephone) and stated that an independent auditor, Crowe Horwath LLP, was brought in to conduct an examination related to the fiduciary and investment services of USF Affiliate Services (USFAS) on behalf of Salem Trust Company and report their findings; that the report came back with no significant issues; that no significant changes in control procedures or in the operation of controls have been found; that the 12 controls were tested randomly 77 times and were deemed satisfactory. 10. ATTORNEY MATTERS: Attorney Christiansen stated that a follow up letter was mailed to Andrew Goenne, retiree, regarding repayment of his lump sum overpayment; that a response has not been reçeived; that the Board has to decide what needs to be done regarding recoupment of the funds. Attorney Christiansen stated that each year the Board must submit a report to the City Commission listing all of the assets the Pension Fund owns as of the end of the fiscal year. Book 1 Page 40 10/17/16 8:30 A.M. Book 1 Page 41 10/17/16 8:30 A.M. Attorney Christiansen continued that work is still being done on the draft of the operating rules and procedures for the General Employees' Pension Plan; that the changes Secretary Nadalini sent to him are being reviewed; that the final draft will be presented to the Board at the next meeting. 11. OTHER MATTERS: None. 12. ADJOURN Chair Keeler adjourned the General Employees Pensions Board of Trustees Regular meeting at 9:29 a.m. BAEAINS Lerer Chair Barry Keeler Secretary Pamela M. Nadalini