MINUTES OF THE CITY OF SARASOTA POLICE OFFICERS' PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING SEPTEMBER 23, 2022 Present: Chair Demetri Konstantopoulos, Vice Chair Johnathan Todd, Secretary/Treasurer Shayla Griggs, Trustee Ronnie K. Baty, and Trustee Joseph Jody" Hudgins. Others: Attorney Scott Christiansen, Pension Plans Administrator Debra Martin, and Pension Specialist Peter Gottlieb. Absent: None. 1. CALL MEETING TO ORDER: Presenter(s): Chair Konstantopoulos. Chair Konstantopoulos called the regular meeting of the Police Officers' Pension Plan (Plan) Board of Trustees to order at 8:15 a.m. 2. PLEDGE OF ALLEGIANCE: Presenter(s): Secretarny/Treasurer Griggs. Secretary/Treasurer Griggs led the Board and those in attendance in the Pledge of Allegiance. 3. PLEDGE OF CIVILITY: Presenter(s): Chair Konstantopoulos. Chair Konstantopoulos stated for the record, "We may disagree, but we will be respectful of one another. We will direct all comments to issues. We will not engage in personal attacks." 4. ROLL CALL: Presenter: Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin called roll. All trustees were present. 5. PUBLIC INPUT: None. 6. APPROVAL OF MINUTES: 6.1. Approval Re: Minutes of the Police Officers' Pension Plan Board of Trustees Regular Meeting of July 22, 2022. Presenter(s): Chair Konstantopoulos. Vice Chair Todd made a motion to approve the minutes of the Regular Meeting of July 22, 2022; Trustee Baty seconded the motion. The motion carried unanimously (5-0). Book 1 Page 302 09-23-2022 8:15 a.m. Book 1 Page 303 09-23-2022 8:15 a.m. 6.2. Approval Re: Minutes of the Police Officers' Pension Plan Board of Trustees Special Meeting of August 30, 2022. Presenter(s): Chair Konstantopoulos. Trustee Hudgins made a motion to approve the minutes of the Special Meeting of August 30, 2022; Vice Chair Todd seconded the motion. The motion carried unanimously (5-0). 7. RETIREMENT REQUEST(S): 7.1. Approval Re: DROP Retirement Request of Danny Robbins. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin stated that Officer Robbins asked to enter the DROP after 23 years of service; he selected the 100% to joint annuitant option. Vice Chair Todd made a motion to accept the DROP Retirement Request of Danny Robbins; Trustee Baty seconded the motion. The motion carried unanimously (5-0). 7.2. Approval Re: Vested, Deferred Retirement Request of Tammy Featherstone. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin stated that Tammy Featherstone separated from employment on September 4, 2020; she selects the lifetime only benefit. Vice Chair Todd made a motion to accept the Deferred Vested Retirement Request of Tammy Featherstone; Trustee Baty seconded the motion. The motion carried unanimously (5-0). 7.3. Approval Re: DROP Retirement Request of Christopher O'Donnell. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin stated that Christopher O'Donnel asked to enter the DROP as of July 1, 2022, after 21.5 years of service; he selected the 50% to joint annuitant option. Vice Chair Todd made a motion to accept the DROP Retirement Request of Christopher O'Donnell; Trustee Hudgins seconded the motion. The motion carried unanimously (5-0). 7.4. Approval Re: Deferred Vested Retirement Request of Jeffrey Dunn. Presenter(s): Debra Martin, Pension Plans Administrator Pension Plans Administrator Martin stated that Jeffrey Dunn separated on August 1, 2018; he selected the life and 10-year certain option. Vice Chair Todd made a motion to accept the Deferred Vested Retirement Request of Jeffrey Dunn; Trustee Baty seconded the motion. The motion carried unanimously (5-0). 8. INVESTMENT PERFORMANCE REVIEW: 8.1. Presentation and Discussion Re: National Investment Services, Investment Performance Summary for Period Ending August 31, 2022. Presenter(s): Mark Anderson, CFA, Chief Strategy Officer; Ray Caprio, Director, Institutional Sales; National Investment Services. Mark Anderson and Ray Caprio of National Investment Services appeared before the Board telephonically and introduced themselves. Mr. Caprio discussed the Company overview in the presentation materials, advising there have been no meaningful changes in their management or investment team, and provided highlights of the Performance History; he noted the portfolio outperformed the benchmark despite the difficult year for fixed income. Mr. Anderson also noted the challenging year for fixed income investments; he does not expect improvement in the near future. He noted that corporate bonds are performing worse than they had during the Great Depression in 1931; he attributed the performance to the Federal Reserve's ("Fed's") increasing interest rates to combat inflation, which NIS is monitoring to determine when to make more aggressive investments. NIS uses duration management, which is also called interest rate exposure, to protect at risk investments; it currently has less exposure than the market. He cautioned against significantly diverging from the benchmark as the market remains unpredictable. Significant drivers ofNIS's relative performance have been its underweight position in corporate bonds, and slight overweight in asset-backed debt which is further conçentrated in automobile loans. He explained that the values of used cars have increased significantly since the COVID-19 pandemic, the collateralization associated with bundled car loan investments increased as individuals have paid off their loans, and underwriting standards have improved dramatically since the previous financial crisis 15 years ago. He noted the presentation materials include a write-up of events from Q2 2022, a discussion of credit spreads including 2 periods of recession which suggest the economy may be headed towards another recession, and, in The Economy section, a chart showing the Inflation at Multi-Decade Highs, which shows the current rate of inflation is high compared to previous periods. While he believes the market may be convinced the Fed's efforts to combat inflation are serious, NIS remains conservative with larger holdings in cash and treasury bonds and is keeping the portfolio's duration at approximately 95% of the index. The Board had no questions, and thanked Mr. Anderson and Mr. Caprio for their presentation. 8.2. Presentation and Discussion Re: Allspring Global Investments, Investment Performance Summary for Period Ending June 30, 2022. Presenter(s): Bob Gruendyke, Senior Portfolio Manager; Dann Smith, Director, Institutional Client Relations & Business Development; Allspring Global Investments. Dann Smith and Bob Gruendyke appeared before the Board and introduced themselves. Mr. Smith noted that Allspring separated from Wells Fargo on November 1, 2021. He advised that assets have remained stable at approximately $470 Billion, and it relocated to Charlotte, North Carolina. Mr. Gruendyke gave an overview of their presentation and discussed the Performance slide of the materials. He conceded Allspring's relative performance in 2021 was poor. He explained the portfolio had performed evenly with the benchmark until the last week of Q3 2021 when the market shifted preference Book 1 Page 304 09-23-2022 8:15 a.m. Book 1 Page 305 09-23-2022 8:15 a.m. from growth to value; the Market returns slide shows the relative performance of the growth and value indexes. Allspring holds a diversified portfolio in accordance with its philosophy, however that was a hinderance in 2021 due to outperformance by 5 to 10 stocks in the benchmark during Q4 2021 and Q1 2022; Mr. Gruendyke noted that 5 stocks, Apple, Tesla, Home Depot, Google, and Nvidia accounted for 60% of the returns during Q4 2021; while Allspring holds these 5 stocks, it has smaller concentrations than the index. Allspring holds overweighted positions in mid-caps, yet during 2021, large caps outperformed, which also hurt the portfolio. He explained that Allspring continues to seek robust and sustainable growth stocks which are not currently favored by the market. He explained how Airbnb, Inc. is an example of a stock with strong fundamentals which was not açcordingly rewarded. Mr. Smith noted that several of Allspring's holdings have strong fundamentals and are consistently beating expectations, yet stock prices are down by as much as 30%. Larry Cole of Burges Chambers & Associates appeared before the Board and introduced himself. He noted that high concentrations of stocks in the benchmark also hurt investors which did not have proportionate concentrations. Mr. Gruendyke advised that Allspring continues, without trying to tilt the portfolio in any specific direction due to interest rates, to focus on stocks with growth potential which will generate free cash flow now and aid valuations. He referred to the Portfolio positioning slide of the materials and stressed the underperformance in Q4 2021 and Q1 2022 has since stabilized in Q2 and Q3 2022 relative to where the market is currently. Allspring's top 10 holdings have greater near-term free cash flow which adds more balance. He noted a greater weighting in financials, as some of those holdings benefit from higher interest rates. He stated that companies which benefit from inelastic demand and have strong pricing power tend to be found in the growth part of the market. Mr. Gruendyke discussed Allspring's Outlook and pointed to the slide titled Mid-cap growth relative to large cap growth, and noted that mid caps are the least expensive compared to large caps in at least 10 years; A;lspring maintains a slight overweight in mid caps. He discussed the Performance in a rising rate environment slide and suggested 2008-2009 may correlate to the current environment. He asserted that, as rates rise, the economy looks to slow; investors will continue to seek secular growth, however the slowing economy adds pressure to lower quality business models. Turning to the slide titled, Dynamic Premier Growth: Strong Recovery, Mr. Gruendyke noted the portfolio has rebounded strongly after previous drawdowns, and he believes it will again when the current downturn reverses. To Mr. Cole's question, Mr. Gruendyke stated that quarter-to-date, the portfolio is approximately in line with the benchmark. Board had no further questions for Mr. Gruendyke or Mr. Smith and thanked them for their presentation. 8.3. Presentation and Discussion Re: Burgess Chambers & Associates, Quarterly Investment Performance Review for Period Ending June 30, 2022. Presenter(s): Larry M. Cole, Executive Vice President, Burgess Chambers & Associates Mr. Cole returned before the Board and noted some volatility in the market during the current quarter, however it is now approximately the same as it was on June 30, 2022. He advised he contacted Peter Strong, of Gabriel, Roeder and Smith (GRS), the Plan's actuary, and asked what the impact to the Plan would be if the portfolio ends the year down 15%; he stated that Mr. Strong believes a 15% negative return would cause the actuarial funded ratio to decline from 91.3% as of September 30, 2021 to approximately 90%, and the City of Sarasota's (City's) employer contribution requirement would increase by approximately $250,000. He noted that the expected rate of investment return, which Attorney Christiansen confirmed the Board agreed to set at 6.5%, eases long term pressures caused by negative markets such as the current, but increases the City's employer contributions in the short term. He also reminded the Board that in 2021, the portfolio return was approximately 20%. To Trustee Hudgin's question, Mr. Cole stated that the Plan is in very good health according to its funded ratio; anything over 90% is very good, and above 80% is considered healthy by most actuarial standards. He stated he has several plans which have funded ratios over 90%, and some even at 120%, although those plans each have unique circumstances. To Vice Chair Todd's question regarding the highest the Plan's funded ratio has been, Trustee Hudgins noted that based on market value, the Plan had been funded at 100% at the end of fiscal year 2021. Mr. Cole added that Mr. Strong advised the Plan's market value could drop by approximately 20% if it experiences a 15% negative return for the year, but that it increased by 20% in in Fiscal Year 2021. Mr. Cole reviewed his quarterly report and noted that, fiscal year-to-date, the portfolio is currently very close to where it was on June 30, 2022, if not slightly lower. Trustee Hudgins asked Mr. Cole where the portfolio's exposure was regarding positioning. Mr. Cole pointed to the Actual VS. Target Asset Allocation page of the materials and noted that a substantial amount of the portfolio's performance is attributed to overweighted positions in equities which hurt performance in the last down-market. That overweight would have self-corrected had bonds outperformed, however bonds also declined dramatically which maintained the relative overweight position in equities. He explained that most investment options available to the Plan decreased in value over the last year with the exception of real estate, which outperformed; outperformance was most likely because real estate valuations were more accurate than anticipated. In that context, the overweight in equities remains the biggest exposure. He proposed the Board consider moving a portion of its international equity holdings into infrastructure sace. Mr. Cole noted that although the portfolio's underweighted position in bonds has helped over the long term, bond returns were not as negatively impacted as equities on an absolute basis; in that context, the underweight in bonds detracted from the portfolio's performance. If interest rates continue to rise, which he expects the Fed to continue to raise short term rates, he suggested the Board may consider investing more in fixed income which would have the added benefit of further de-risking the portfolio without increasing the gap between the expected rate of investment return and actual rate of return. Trustee Hudgins asserted interest rates will remain high for 1 or 2 quarters and asked how to position the portfolio to take advantage of the opportunity. Mr. Cole disagreed and asserted interest rates will remain higher for a longer period of time due to supply chain issues; he suggested the Board authorize him to, with the Chair's approval, reinvest up to a specified amount of the portfolio between his quarterly appearances before the Board. Attorney Christiansen advised he has no concerns if the authority is clearly defined. Regarding how long he expects interest rates to remain high, Mr. Cole reminded the Board of his focus on the Consumer Price Index ("CPI"), which measures retail inflation and gets significant media attention, and the Producer's Price Index ("PPI"), which is akin to a wholesale price index; the PPI is issued the day after the CPI, and it receives far less media attention. For the last few years, the PPI has been 3% to 5% above the CPI which suggests either producers have more costs to pass onto consumers, or producers' earnings are being diminished, which will adversely affect their respective stock values. Last month, the CPI was 8.3% and the PPI was 8.7%; while this narrowing gap is good, both are relatively high. Mr. Cole stated that up to 70% of the CPI is influenced significantly by energy costs, as most all goods are delivered by truck, therefore the cost of diesel fuel, which is currently high at $4.50 a gallon, raises consumer prices. He does not foresee a resolution to energy costs in the near future. To compound the issue, he expects global food shortages in the near future due to fertilizer shortages caused by the Russia/Ukraine conflict, which has impacted 60% to 70% of the world's fertilizer market. If farmers are able to purchase fertilizer, it will be at higher costs which will then be passed on to consumers; if farmers are unable to purchase fertilizer, crops will diminish. These will factori into extending inflation well into next year. He noted the Fed intends to reduce inflation to 5% in 2023 with the goal of 2%; Mr. Cole expressed skepticism the Fed would reach its goals. Trustee Hudgins asked to discuss granting more authority to Mr. Cole to change investments between Board meetings; Mr. Cole noted the portfolio value is approximately $275 million and suggested the Board reduce its position in equities. Trustee Hudgins stated that the Board should not increase its position in real estate, noting the real estate managers mark to market every quarter without taking into consideration a 200-basis point increase in the 10-year treasury note, which is what capitalization rates trade off of, and capitalization rates ultimately effect a real estate investment's value. Mr. Cole reminded the Board that real estate investments are highly illiquid, and oftentimes, a redemption request is able to be fulfilled at the same time the market changes sufficiently to warrant investment into real estate again. Mr. Cole explained that the reason he asks for more investment authority is because interest rates have Book 1 Page 306 09-23-2022 8:15 a.m. Book 1 Page 307 09-23-2022 8:15 a.m. spiked recently to produce more attractive yields in shorter-term bonds than in long-term bonds; he noted that the gap between the 2-year and 10-year on September 22, 2022 was the largest he's seen in 10 years. To Trustee Hudgins' question, he stated that if the 10-year Treasury bond offering 5% to 6% would be extremely attractive, and forecasted that, if the Fed increases short-term rates by 75 basis points at its next meeting, the 2-year rate could be as high as 5%, which would be a good alternative to equities. The Board weighed limiting the proposed authority based on a percentage of the portfolio balance, noting that 5% is currently more than $10 Million, or a specific dollar amount. Mr. Cole recommended any authority granted should not to exceed $10 Million. To Chair Konstantopoulos's question, Mr. Cole agreed the authority should be limited to liquidations from the equity space. The Board further discussed concerns that adequate safeguards are in place. Mr. Cole stated that he would like to be able to e-mail the Chair to explain that bond managers are offering specific terms, and he request's the Chair's approval to liquidate, for example, $1 Million from Allspring and $1 Million from Mellon, and invest the $2 Million proceeds into one, some, or all of the portfolio's existing bond managers. He would likely not move as much as $10 Million unless rates were extremely attractive and noted amounts would be dollar-cost averaged. The Chair would approve by e-mail, and Mr. Cole would then execute the appropriate trades and coordinate with Pension Administration. The remaining Board members could be copied on the e-mails; Attorney Christiansen cautioned that the remaining Board members are restricted from replying to other trustees or discussing the e-mails outside of a public meeting. Attorney Christiansen added that, although a trustee could telephone Mr. Cole, or reply directly to his e- mail without copying the other trustees, Mr. Cole could not relay any information to the other trustees. Vice Chair Todd noted this would grant significant authority to the Chair to make decisions on behalf of the Board. Attorney Christiansen advised that the Board had granted Mr. Cole and the Chair similar authority during the COVID-19 pandemic when Board meetings were less frequent; Trustee Baty noted the Board has granted similar authority prior to the COVID-19 pandemic as well for various reasons. Mr. Cole proposed a motion to grant the investment consultant, with the approval of the Chair, the authority to, between meetings, rebalance up to $10 million from equities into bonds. Trustee Hudgins made a motion as proposed by Mr. Cole; Trustee Baty seconded the motion. The motion carried unanimously (5-0). Referring to the 5 Years Rolling Percentile Ranking 5 Years on the Total Fund page of his presentation materials, Mr. Cole noted the Plan had been in the top quartile amongst its peer group of public pension plans 100% of the time, however it is currently in the top 26th percentile, even though the Asset Allocation & Performance Gross page states the Plan ranks in the top 14th percentile. Mr. Cole noted that the 26th percentile ranking has nothing to do with the current year's performance and instead is related to the Plan's ranking in March 2020 when it was in the top 24th percentile. Of the current peer group, looking back 5 years, the Plan now ranks in the 26th percentile. He reminded the Board that the portfolio has performed very well 95% of the time, and it has consistently beaten its benchmarks over the last 10 years on a rolling 5-year basis. He noted that this has been the most difficult 6 to 9 month, and that as of June, the Plan's 1 year ranking was in the bottom 18 percent. At Trustee Hudgins' request, Mr. Cole stated that he believed resolution to the Russian/Ukraine issue would help to restore some consumer and investor confidence, but that ultimately the United States must be less dependent on foreign energy to bring about more positive economic changes. To Trustee Hudgins' question, Mr. Cole stated that Environmental, Social, Governance (ESG) investments are contradictory to the Board's, fund managers, and investment consultants' fiduciary responsibilities, as the topic is highly subjective and can be political. The Board and Attorney Christiansen informally agreed. To Vice Chair Todd's question, Mr. Cole advised that he does not have many clients which broach the topic of ESG investments, and he cautions fund managers to avoid it in their presentations. He added that if he were to determine that ESG investments caused underperformance, he would recommend terminating the relationship. While he would not take issue with a manager which includes ESG in its investment criteria and consistently outperformed, he wouid, however, recommend keeping that manager under closer scrutiny than managers which did not include ESG in their strategy. Attorney Christiansen echoed Mr. Cole's concemns and noted that the State of Florida's legislation which prohibited investment in politically charged areas such as Iran, Darfur, and Sudan created a fiduciary conflict for trustees, however, because it was codified into law, it absolved trustees from that conflict. He clarified that fund managers which incorporate ESG into their philosophies and strategies is a different circumstance, and that trustees are fiduciarily required to seek the best returns on investments considering the risks, in a legal manner. While there may not be a conflict if an ESG manager produces comparable returns to a non-ESG manager, ESG should not be a factor in investment decisions. Mr. Cole provided an anecdote regarding JP Morgan Chase CEO Jamie Dimon, who, during congressional testimony, asserted that application of ESG to its lending policies would lead to economic ruin. Mr. Cole further noted that electric vehiçles are ultimately dependent on oil- and coal-based manufacturing plants and energy sources. The Board thanked Mr. Cole for his presentation. Chair Konstantopoulos noted that the Board had not made or approved a motion regarding Mr. Cole's recommendation to move assets from international equities to bonds. Mr. Cole reiterated that he recommended the Board liquidate $2 Million from Euro-Pacific Fund and invest $1 Million into Cohen and Steers and $1 Million into Lazard infrastructure due to the amount of risk in Europe. Trustee Hudgins made a motion as recommended by Mr. Cole; Trustee Baty seconded the motion. The motion carried unanimously (5-0). 9. UNFINISHED BUSINESS: None. 10. NEW BUSINESS: 10.1. Presentation and Discussion Re: Proposal to Provide Audit Services for Fiscal Year Ending September 30, 2022. Presenter(s): Alison Wester, Mauldin & Jenkins. Alison Wester appeared before the Board and introduced herself. Ms. Wester explained she is presenting the 2022 audit engagement letter, as well as advise of a fee increase. Although Mauldin & Jenkins had issued a 3-year price projection at the end of 2021 they have now determined their costs have increased such that they must accordingly raise their price by approximately $1,000 from the original proposal. Ms. Wester noted some changes in the order and form of the engagement letter, which will carry through to the final audit report, are due to changes in auditing standards. While many of the changes are not substantial, she noted that under identified risk(s) of material misstatements as part of their audit planning, industry standards always require listing Management's override of internal controls. " It is not indicative of any change in Pension Administration or in governance, however it must be discussed in the engagement letter. Additionally, the Reporting section contains an additional statement regarding how the substance and form of the financial statements will be reported. She noted that the fee for services is stated on page 7 of the engagement letter, and it is now $12,000 instead of $11,000 as previously projected. Book 1 Page 308 09-23-2022 8:15 a.m. Book 1 Page 309 09-23-2022 8:15 a.m. Trustee Hudgins asked if Mauldin & Jenkins tests GRS's actuarial report. Ms. Wester advised they do not recalculate the actuary's report, however they review the actuarial assumptions for statutory compliance, and if changes to the mortality tables are incorporated appropriately. She noted that the actuarial liability is also included in the City of Sarasota's financial statements, and the City's auditors also test that information. Ms. Wester noted that the financial statements are required to include a 10-year history of the funded ratio; as of September 30, 2021, the funded ratio was 107.38% net position based on calculated liabilities, and the lowest it has been during the last 10 years was 77% in 2015. She added that the financial statements do not actuarially smooth investment gains or losses. She noted that the Addendum to the Engagement Letter included in the materials has been amended to reflect the City Auditor and Clerk's correct e-mail address, and the letter also includes the amendments requested by Attorney Christiansen. Trustee Hudgins made a motion to accept the Audit Engagement Letter as amended; Trustee Baty seconded the motion. The motion carried unanimously (5-0). 11. ATTORNEY MATTERS: 11.1. Presentation and Discussion Re: Entitlement of Share Plan Funds - Form PF 30. Presenter/(s): Scott Christiansen, Christiansen & Dehner. Attorney Christiansen advised that this form was unrelated to any event at the City of Sarasota, as far as he was aware. He explained that a vested Police Officer who terminates employment in the Plan has the right to request a disbursement of their Chapter 185 Share Plan monies within 180 days of termination, even though they are not eligible, at that time, to request a retirement benefit. However, receiving a distribution of Chapter 185 Share Plan monies is considered a retirement benefit, which then precludes that person from receiving a refund of their contributions; the former Police Officer may only apply for a retirement benefit when they are eligible. Similarly, if a terminated, vested former Police Officer receives a refund of their retirement contributions, they forfeit all future benefits from the Plan, which includes Chapter 185 Share Plan monies. This form advises vested and terminated Police Officers that if they wish to refund their contributions, they are unable to receive their Chapter 185 Share Plan monies first. Attorney Christiansen stated this was a proactive measure to ensure there is no confusion by vested and terminated Police Officers regarding what they are allowed to receive. He stated the Board is not required to take any action on the matter. He noted that the State issued approximately $735,000 in Share Plan monies; Pension Plan Administrator Martin confirmed receipt of the funds. 12. OTHER MATTERS: 12.1. Presentation and Discussion Re: 2023 Proposed Meeting Schedule. Presenter(s): Debra Martin, Pension Plans Administrator. Attorney Christiansen stated he provided to Pension Administration a list of dates he was available for meetings. Trustee Hudgins asked if any of the meeting dates could be changed as he anticipates conflicts may arise due to his other professional obligations which should only last 1 more year; he asked if the meeting schedule could be adopted at the next Board meeting. Pension Plans Administrator Martin noted that the City Commission Chambers is available on the dates presented, and that Chambers may not be available on other dates. The Board agreed to move forward with the proposed dates. To Vice Chair Todd's question, Attorney Christiansen clarified that trustees may attend Board meetings telephonically, however they are unable to vote when attending telephonically. Trustees must be physically present at a Board meeting to vote, unless extraordinary cirçumstances exist, and professional obligations are not considered extraordinary circumstances. Vice Chair Todd made a motion to approve the 2023 proposed Meeting Schedule; Trustee Baty seconded the motion. The motion carried unanimously (5-0). Attorney Christiansen advised he received notices of 2 potential class action suits filed by Robbins Geller Rudman & Dowd, LLP (Robbins Geller), the Plan's securities monitoring firm. The first suit is regarding Torrid Holdings, and the second is regarding Rent The Runway; memos have been provided to the Board previously. Robbins Geller suggested the Board consider filing for lead plaintiff on either or both cases and would like to present more detailed information to the Board. Attorney Christiansen asked the Board to express interest in either case before he scheduled presentations from Robbins Geller. Trustee Hudgins and Trustee Baty noted that the Plan's total losses were approximately $41,000; Attorney Christiansen advised that, if the class action were to prevail, each party in the class would likely receive some amount less than $41,000, and the lead plaintiff would not be entitled to any greater portion of the award than the remaining parties in the class. To Trustee Hudgins' question, Attorney Christiansen advised he is not aware of any involvement by the Securities and Exchange Commission (SEC) at this pointi in either matter; Trustee Hudgins noted the Board has typically refrained from action in these types of matters until the SEC finds fault. He recalled a previous securities litigation which involved the Plan's investment consultant at the time, Mike Callaway, and the law firm Levin Papantonio Rafferty (Levin) and stated that he did not believe the Plan's and staff's involvement in securities litigation, prior to SEC findings, is a constructive use of resources at this time. The Board informally concurred. Attorney Christiansen noted that the Plan would remain part of the class, even if iti is not lead plaintiff, and would therefore be entitled to a fair portion of any award to the class. To Vice Chair Todd's request, Attorney Christiansen opined that securities monitoring firms encourage public entities to file for lead plaintiff to add weight and a public profile to the class action; additionally, public entities typically suffer greater losses than individual investors, which may then have more credibility with aj judge who would decide which party will be lead plaintiff. Mr. Cole asked if mult-bilion-dollar plans would be better lead plaintiffs; Attorney Christiansen noted that class actions of this size may be too small for mull-billion-dollar plans. To Trustee Hudgins' question, Attorney Christiansen stated he is typically not involved in class action lawsuits beyond reviewing the claim and relaying information to the Board, for which he charges, and he may receive some nominal additional compensation. Trustee Hudgins recalled the Levin matter, which was different from the current cases, and stated that Lee Dehner was named in the award, and received extraordinary compensation which had not been disclosed. Attorney Christiansen advised that Christiansen & Dehner performed significant amounts of work in that suit, and all of their clients were made aware of the firm's involivement; Trustee Hudgins maintained the Board was not advised of Christiansen & Dehner's Book 1 Page 310 09-23-2022 8:15 a.m. Book 1 Page 311 09-23-2022 8:15 a.m. involvement and stated that it should be disclosed in the future. He recalled a Board meeting in which a City Commission member who was also a Northern Trust investment advisor attended to ensure the Board understood the matter, that Mr. Callaway was a target of the lawsuit, and that Trustee Hudgins was personally deposed by the SEC. Attorney Christiansen noted the lawsuit was against Merrill Lynch. Trustee Hudgins advised that the suit impugned Mr. Callaway; he expressed concern that securities litigation could be used to unreasonably target parties who were not responsible for the alleged losses yet charged with accountability for them. Attorney Christiansen noted the Plan recovered close to $1 Million from that lawsuit. Trustee Hudgins noted the Board disagreed that Merril Lynch mismanaged or mislead the Plan, it caused Mr. Callaway's early retirement, and Mr. Cole to become the Plan's investment consultant. Mr. Cole noted that the lawsuit resulted in a settlement and not an award. Trustee Hudgins noted that he was ohly recalling the events and understood Attorney Christiansen was obliged to present the matter to the Board. At Attorney Christiansen's recommendation, Trustee Hudgins made a motion to decline participation in either the Torrid Holdings or the Rent The Runway actions as lead plaintiff; Vice Chair Todd seconded the motion. The motion carried unanimously (5-0). Attorney Christiansen provided an update on the Patrick disability case; the Board had asked the ndependent Medical Examination (IME) physician to provide additional testimony, however the IME physician advised they could provide no additional information without additional diagnostic testing which they had recommended. Attorney Christiansen will have a meeting scheduled with Officer Patrick's attorney and the Workers' Compensation physician to discuss the possibility of ordering the IME physician's recommended diagnostic testing. The IME physician declined to perform the additional diagnostic testing even if the tests are ordered by the Workers' Compensation physician. 12.2. Presentation and Discussion Re: Administrative Expense Budget Analysis. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin presented the Administrative Expense Budget and noted that $28,000 had been budgeted for Legal and Judicial, yet the Plan had spent $33,000 as of June 30, 2022 and $37,000 by August, 2022, almost $25,000 of which is for the Patrick disability case. She asked for al budget increase to $45,000. Trustee Hudgins made a motion to increase the budget line for Legal & Judicial services to $45,000; Trustee Baty seconded the motion. The motion passed unanimously (5-0). The Board had no questions regarding the remaining line items. 12.3. Presentation and Discussion Re: Check Register, April 1, 2022 through June 30, 2022. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin presented the Check Register for the Board's information. Pension Plans Administrator Martin advised Trustee Baty's seat will expire January 31, 2023, and he would need to submit an electronic application if he would like to continue to serve. Attorney Christiansen noted Trustee Baty is elected by the Board and questioned if he would need to complete the application; Attorney Christiansen advised that it only needs to be put on the City Commission's agenda if the Board re-elects him. 13. ADJORN. Chair Konstantopoulos adjourned the meeting at 9:53 a.m. DMS - Chair Démetri Konstantopoulos &e Seorétary/yreasurer Shayla Griggs Book 1 Page 312 09-23-2022 8:15 a.m.