MINUTES OF THE CITY OF SARASOTA FIREFIGHTERS PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING OF JANUARY 25, 2017 Present: Chair Michael Hartley, Vice Chair Shelia Roberson, Secretary/Treasurer Pamela Nadalini (arrived at 9:04 a.m.) and Trustees Charles Joseph and Scott Snow Others: Attorney Robert Sugarman, Pension Plans Administrator Harry Ramphal, Senior Pension Analyst Anthony Ferrer, and Pension Specialist Lois Belle Absent: None 1. CALL THE MEETING TO ORDER: Chair Hartley called the meeting to order at 9:02 a.m. 2. PLEDGE OF CIMILITY: Vice Chair Roberson 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. PUBLIC INPUT: No one signed up to speak. 4. APPROVAL OF MINUTES: 4.1. Approval Re: Minutes of the irefighters' Pension Plan Board of Trustees Regular Meeting of December 7, 2016 A motion was made by Chair Hartley, seconded by Vice Chair Roberson to approve the Minutes of the Firefighters' Pension Plan Board of Trustees Regular Meeting December 7, 2016. Motion carried unanimously (4-0). Secretary/Treasurer Nadalini arrived at 9:04 a.m. 5. APPROVAL OF RETIREMENT REQUESTS: None 6. INVESTMENT PERFORMANCE REVIEW: 6.1. Presentation and Discussion Re: Graystone Consulting Investment Performance as of December 31, 2016 Charles Mulfinger, Managing Director, and Scott Owens, Institutional Consultant, Graystone Consulting came before the Board to discuss the Plan's overall Investment Performance as of December 31, 2016. Mr. Mulfinger stated that Plan earned $2,000,000 in the quarter ending December 31, 2016; that the quarter was good and the portfolio beat the benchmark; that there is no negative news to report. Mr. Owens gave a brief overview of the economic and financial market condition, and stated that the economy continues to be strong with solid growth and the Board should expect to see slow growth with fits of volatility. In response to a question from Trustee Snow asking if the City's Plan will be compared to closed Plans at State level, Mr. Mulfinger stated that the question asked is valid; however the comparisons are more based on the amount of Plan assets not status. Book 1 Page 49 01/25/17 9:00 A.M. Book 1 Page 50 01/25/17 9:00 A.M. Attorney Sugarman suggested the Board draft a joint letter, with other Boards with closed Plans, to the State to request outlining open and closed Plans to show comparison more accurately. Mr. Mulfinger stated that the quarter had the highest gain and the Plan's current position continues to be appropriate going forward; that no change to asset allocation is recommended at this time, and provided the Board with an in-depth discussion with regard to each Investment Manager's style and performance. In response to a question from Chair Hartley about the criteria used to select funds, Mr. Mulfinger stated that the Investment Managers lean toward larger companies. Mr. Mulfinger stated that the Plan is up 53 basis points per year due to having such an efficient portfolio and recommendation for the next 12-to 18- months would be to allocate more to equity than Bonds; that a comfort level is felt with all the Investment Managers, and Chair Hartley agreed the Plan has a well situated portfolio. In response to a question from Trustee Snow asking if the Board should not be looking toward more long- term, Mr. Mulfinger stated that the Plan is currently at 6.5%; that because it is a closed Plan the 20- year projection allocation must change. Brad Armstrong, Actuary, Gabriel Roeder Smith & Company agreed with Mr. Mulfinger, and Chair Hartley expressed concern about the Plan becoming more fixed in the short-term. 7. UNFINISHED BUSINESS: None 8. NEW BUSINESS: 8.1. Presentation and Discussion Re: Schedules of Employer Allocations and Pension Amounts by Employer as of the Fiscal Year Ended September 30, 2015 Allison Wester, CPA, Partner, Mauldin & Jenkins, LLC came before the Board to discuss the Schedules of Employer Allocations and Pension Amounts as of Fiscal Year Ended September 30, 2015. Ms. Wester stated that the Report is the GASB 68 that the County and City need to do financial reporting based on valuation as of September 30, 2015 and then is rolled forward for Fiscal Year reporting for 2016, that this is the report the County has agreed to pay for the report. Ms. Wester stated the Report shows no significant findings; that the Audit opinion references Audit opinion of prior year from Mauldin & Jenkins; that a clean opinion was issued. In response to a question from Chair Hartley asking if the audit was completely independent of any influence, Ms. Wester stated that it is a totally Independent Audit Review. In response to a question from Attorney Sugarman asking what condition the books and records were found to be in, Ms. Wester stated that the Audit is still ongoing and she is working with Staff to complete, that this Report is essentially a roll forward from previous year with no significant findings. A motion was made by Secretary/Treasurer Nadalini, seconded by Vice Chair Roberson to accept Schedules of Employer Allocations and Pension Amounts by Employer as of the Fiscal Year Ended September 30, 2015 Report as presented. Motion carried unanimously (5-0). 8.2. Presentation and Discussion Re: Fiscal Year Ended September 30, 2016 Actuarial Valuation Brad Armstrong, Actuary, Gabriel Roeder Smith & Company came before the Board to discuss the Actuarial Valuation for Fiscal Year ended September 30, 2016. In response to a question from Chair Hartley asking what the contribution was for last year, Mr. Armstrong stated that the total contribution for last year was $6.9 Million. In response to a question from Attorney Sugarman asking if the new Mortality Tables are detrimental to closed Plans, Mr. Armstrong stated that a catch up would be required. In response to a question from Attorney Sugarman asking if there was any legislative relief from new Mortality Tables, Mr. Armstrong stated that the recommendation is to use new Mortality Tables; that the change in Mortality Table is approximately $3.2 million with an increase in liability of 8.8%. Discussion ensued about Mortality Tables. Chair Hartley noted Board consensus for staff to find out how the portfolio does in market and to revisit the topic next year after discussions with County and City Officials. 8.3. Presentation and Discussion Re: Supplemental Valuation for the Fiscal Year Ended September 30, 2016 Actuarial Assumption Brad Armstrong, Actuary, Gabriel Roeder Smith & Company came before the Board to discuss the Actuarial Assumption Changes for Fiscal Year ended September 20 2016, provided the Board with a historical account of Mortality Table updates, and indicated that the preliminary report prepared by shows the Plan staying at 7%. Chair Hartley noted Board consensus to defer consideration until after full valuation is presented and the intention to revisit in November/December 2017. Vice Chair Roberson stated that she will follow up with County leadership to be sure they are aware of projected number. 9. ATTORNEY MATTERS: Attorney Sugarman advised the Board of an email received from Laura Stein from Robbins Geller, regarding the lawsuit against OM Group being dismissed by agreement with the Plaintiff; and indicated that Ms. Stein advised it was not worthwhile to pursue an Appeal; that he will try to get more information to provide to the Board before the suit is over. Attorney Sugarman continued that he worked with Pension Staff on the Japanese tax form which will provide money back in the Plan from part of taxes imposed by Japan on foreign investors; that he is also working with Brad Armstrong, Gabriel Roeder Smith & Company on the new Ordinance regarding distributions. In response to a question from Secretary/Treasurer: Nadalini asking if that work would require an amendment to the Plan, Attorney Sugarman stated that it would not. 10. OTHER MATTERS: Secretary/Treasurer Nadalini reminded the Board Members to fill out the Form 1 Financial Disclosures and to maintain a copy of the receipt. Pension Specialist Lois Belle was introduced and provided a brief overview of her qualifications. 11. ADJOURN. Chair Hartley adjourned the Firefighters' Pension Plan Board of Trustees Regular Meeting at 11:07 a.m. Book 1 Page 51 01/25/17 9:00 A.M. Book 1 Page 52 01/25/17 9:00 A.M. - gge 00 0 Chair Michael Hartley SècretaryTreasurer Pamela M. Nadalini