MINUTES OF THE CITY OF SARASOTA GENERAL EMPLOYEES' PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING OF FEBRUARY 12, 2018 Present: Chair Barry Keeler, Vice Chair Ryan Chapdelain, Treasurer Kelly Strickland, Secretary Pamela Nadalini, Trustees Bonnie Wagner, and Gretchen Schneider Others: Attorney Scott Christiansen, Senior Pension Analyst Anthony Ferrer, and Pension Specialist Lois Belle Absent: Trustee Kari McVaugh 1. CALLI MEETING TO ORDER: Chair Keeler called the meeting to order at 8:31 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: Senior Pension Analyst Ferrer conducted the Board roll call, noting that Secretary Nadalini was expected to arrive momentarily; that Trustee McVaugh had contacted the pension office stating she was ill and would seek an excused absence at the next meeting. 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 January 26, 2018 Vice Chair Chapdelain noted a few corrections to the minutes and requested additional detail regarding the assumed rate of discussion be added to the meeting minutes. Treasurer Strickland stated she voted no regarding approval Re: Minutes of General Employees' Pension Plan Board of Trustees Regular Meeting of December 4, 2017. The minutes of the General Employees' Pension Plan Board of Trustees Regular Meeting of January 26, 2018 will be reviewed by Staff and re-presented for approval at the General Employees' Pension Plan Board of Trustee Membership meeting of March 26, 2018. Secretary Nadalini entered Chambers at 8:35 a.m. Book 1 Page 93 2/12/18 8:30 a.m. Book 1 Page 94 2/12/18 8:30 a.m. 6. APPROVAL OF RETIREMENT REQUESTIS): 6.1. Approval Re: Deferred Retirement Option Plan (DROP) Request of Roger Brow Presenter(s): Senior Pension Analyst Ferrer Senior Pension Analyst Ferrer stated that Mr. Brow is 65 years of age; that he has 11.32 years of service time and that he has elected the Lifetime Only option; that Mr. Brow will enter the DROP effective January 31, 2018. A motion was made by Secretary Nadalini and seconded by Vice Chair Chapdelain to approve the Deferred Retirement Option Plan Request of Roger Brow. Motion passed unanimously (6-0). 6.2. Approval Re: Normal Retirement Request of Dolores Gamble Presenter(s): Senior Pension. Analyst Ferrer Senior Pension Analyst Ferrer stated that Ms. Gamble is 65 years of age; that she has 23.02 years of service time and that she elected the 50% Pop-up option. A motion was made by Vice Chair Chapdelain and seconded by Treasurer Strickland to approve the Normal Retirement Request of Dolores Gamble. Motion passed unanimously (6-0). 6.3. Approval Re: Vested, Terminated Retirement Request of David Hegel Presenter(s): Senior Pension Analyst Ferrer Senior Pension Analyst Ferrer stated that Mr. Hegel was 55 years of age; that he had 13.35 years of service time and separated from service on May 31, 2010; that he elected the 100% Pop-up option. A motion was made by Trustee Schneider and seconded by Vice Chair Chapdelain to approve the Vested, Terminated Retirement Request of David Hegel. Motion passed unanimously (6-0). 6.4. Approval Re: Vested, Deferred Retirement Request of Karen McGowan Presenter(s): Senior Pension. Analyst Ferrer Senior Pension Analyst Ferrer stated that Ms. McGowan's retirement date has been extended; that he expects to present her Vested, Deferred Retirement request at the General Employees' Pension Plan Board of Trustees Membership Meeting of March 26, 2018. 7. INVESTMENTI PERFORMANCE REPORT: None 8. UNFINISHED BUSINESS 8.1. Approval Re: Addendum to Agreement for Investment Performance Monitoring and Advisory Services between the Board of Trustees of the City of Sarasota General Employees' Defined Benefit Pension Plan and Morgan Stanley Smith Barney, LLC Presenter(s): Attorney Scott Christiansen, Law Offices - Christiansen & Dehner, P.A. Attorney Christiansen stated that the Addendum is based on discussion held at the General Employees' Pension Plan Board of Trustee Regular meeting of January 26, 2018 A motion was made by Secretary Nadalini and seconded by Vice Chair Chapdelain to move approval of the Addendum to the Morgan Stanley Smith Barney Investment Performance Monitoring Agreement as presented by the attorney. Motion passed unanimously (6-0). In response to a question from Secretary Nadalini seeking clarify on when the Board would receive fully executed agreement, Attorney Christiansen stated that if the Chair and Secretary could sign the Agreement, provided in triplicate, and send to Morgan Stanley Smith Barney. Upon return from Morgan Stanley the contract would be fully executed. 9. NEW BUSINESS: 9.1. Presentation and Discussion Re: Independent Auditor's Report for the Fiscal Year Ending September 30, 2017 Presenter(s): Ms. Alison Wester, CPA Partner, Mauldin & Jenkins, LLC Alison Wester, CPA Partner, Mauldin & Jenkins, LLC came to the dais and introduced herself and Jennifer Cook, Manager, Mauldin & Jenkins, LLC. Ms. Wester presented thel Independent. Auditor's Report for thel Fiscal Year Ending September 30, 2017; that she is pleased to present another year with a clean, unmodified opinion of the financial statement; that there was a $13 million increase in total assets and net position during the year; that contributions and investment returns primarily were driving the increases; the decreases were primarily related to benefits and some administrative and investment expenses; total investments at the end of the year were approximately $152 million. Ms. Wester provided al high-level overview on the structure of the report and described each Note to the Financial Statements; that there were no subsequent events that required disclosure; that there is now four (4) years of supplementary information showing the summary oft the net pension liability and the net pension liability as a percentage of covered payroll; that there were no material weaknesses identified this year; that the follow-up of prior finding is resolved. Ms. Wester stated that the Auditors' Discussion & Analysis Report provides background on the firm; that the report discusses the different components of auditors' opinions and the required communications and responsibilities. There were no audit adjustments proposed to the Plan, very clean this year; there were no uncorrected misstatements and reaffirms independence; lastly, for educational purposes, provides a walk through some of the upcoming GASB; that Mauldin & Jenkins offers complimentary continuing education for clients and if any trustee is interested in attending to please contact the offices to enroll. Book 1 Page 95 2/12/18 8:30 a.m. Book 1 Page 96 2/12/18 8:30 a.m. A motion was made by Treasurer Strickland and seconded by Trustee Schneider to accept the Independent Auditor's Report for the Fiscal Year Ending September 30, 2017. Motion passed unanimously (6-0). 9.2. Presentation and Discussion Re: Proposed Changes to Section 24-98 of the City of Sarasota General Employees' Defined Benefit Pension Plan, amending the Board of Trustees Section of the Plan to Provide Eligibility for DROP Members and Retirees of the Plan to Become Trustees of the Board Presenter(s): Attorney Scott Christiansen, Law Offices = Christiansen & Dehner, P.A Attorney Christiansen stated that the changes proposed have to do with the make-up of the Board and the representation of the Trustees; that the first option relates to changing the rule regarding DROPS; that the second change allows for members or retirees plus eliminates the number of seats based on location. Chair Keeler stated that he has done some research and that there are 644 participants in the plan, of which 431 are retirees and approximately 180 active members; that the Board appears to need more retiree representation. Discussion ensued around voting eligibility and the best approach for representation throughout. In response to a question from Trustee Wagner asking how other plans handle this type of situation, Attorney Christiansen indicated that the State statute notes for closed Plans with less than ten (10) members that retirees are eligible to vote. Discussion ensued around voting eligibility and best approach to ensure appropriate board representation based on Plan's population; that DROP participants may complete the term of their seat; that the recommendation to the City Commission is to leave the designated seats as is, make two seats at large to the held by a member and two seat at large to be held by a member/retiree; that the seats currently held by Chair Keeler and Trustee Schneider would become member/retiree seats. A motion was made by Vice Chair Chapdelain, and seconded by trustee Schneider to draft ordinance recommending change to board configuration as stated above to the City Commission. Motion carried unanimously (6-0). 10. ATTORNEY MATTERS: 10.1. Presentation and Discussion Re: Proposed Changes to Section 24-98 of the City of Sarasota General Employees' Defined Benefit Pension Plan, amending the Board of Trustees Section of the Plan to Provide Eligibility for DROP Members and Retirees of the Plan to Become Trustees of the Board Presenter(s): Attorney Scott Christiansen, Law Offices - Christiansen & Dehner, P.A Christiansen & Dehner is hosting a mini conference in Auburndale, FL designed to meet continuing education requirements if Trustees are unable to get to an FPPTA conference. Attorney Christiansen requested a status update on the State letters regarding declaration of assumed rate of return and copies of the Actuarial Valuations. Secretary Nadalini stated that her office is coordinating submission of the State letters for all three Plans to be sent out at the same time. 11. OTHER MATTERS: Attorney Christiansen stated that Rule 2.1 requires Trustees' attendance cannot fall below 75% unless the absence is waived by majority plus one vote by Board. Ar motion was made by Vice Chair Chapdelain, and seconded by Treasurer Strickland, to waive Trustee Wagner's absence at the General Employees Pension Plan Board of Trustee Regular Meeting of January 26, 2018 as excused. Motion carried unanimously (6-0). 12. ADJOURN. Chair Keeler adjourned the General Employees' Pension Plan Board of Trustees Regular Meeting at 9:53 a.m. DAcer J KEEvR C.PPT. (X Chair Barry Keeler Secretary Pamela Nadalini Book 1 Page 97 2/12/18 8:30 a.m.