Book 1 Page 42 10/26/16 9:00 A.M. MINUTES OF THE OCTOBER 26, 2016 CITY OF SARASOTA FIREFIGHTERS PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING Present: Chair Michael Hartley, Vice Chair Shelia Roberson, Secretary/Treasurer: Pamela Nadalini (arrived at 9:39 a.m.), and Trustees Charles Joseph and Scott Snow Others: Attorney Pedro Herrera, Pension Plans Administrator Harry Ramphal, Senior Pension Analyst Anthony Ferrer, and Pension Specialist Chinyere Deehan Absent: None 1. CALL THE MEETING TO ORDER: Chair Hartley called the meeting to order at 9:02 a.m. 2. PLEDGE OF CIVILITY: 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. PUBLICI INPUT: No one signed up to speak. 4. APPROVAL OF MINUTES: 4.1. Approval Re: Minutes of the Firefighters Pension Plan Board of Trustees Regular Meeting of September 21, 2016 A motion was made by Trustee Joseph and seconded by Vice Chair Roberson to approve the minutes of the Firefighters' Pension Plan Board of Trustees Regular Meeting of September 21, 2016. Motion carried unanimously (4-0). 5. APPROVAL OF RETIREMENT REQUESTIS): None. 6. INVESTMENT PERFORMANCE REVIEW: 6.1. Presentation and Discussion Re: Graystone Quarterly Review Charles Mulfinger, Managing Director, Graystone Consulting, came before the Board to present the quarterly performance evaluation as of September 30, 2016; and provided an overview of the economy and the growth of certain sectors. Mr. Mulfinger discussed the growth rates experienced in investments by the individual managers; that as of September 30, 2016, the portfolio value is $135.4 million; that the total return is 3.12% versus the benchmark at 1.77%; that since inception in 2006, the rate of return is 5.57% versus the benchmark at 7.25%. He stated that the quarter has been very good; that most of the managers did well; that no changes are recommended at this time. 7. UNFINISHED BUSINESS: None. 8. NEW BUSINESS: 8.1. 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, and Lynn Skinner, Vice President, Salem Trust Company, came before the Board to present the USF Affiliate Services (USFAS) SSAE16 report of the description of USFAS' System. Mr. Rinsem stated that an independent auditor, Crowe Horwath, LLP, was engaged to conduct an examinationrelated to the fiduciary and investment services of USFAS on behalf of Salem Trust Company and report their findings; that the report came back with no significant issues; that controls were tested and only two minor exceptions were found; that the 12 controls were tested randomly and deemed satisfactory; that no significant changes in control procedures or in the operation of controls have been recommended. In response to a question from Chair Hartley regarding the length of time of the audit, Mr. Rinsem stated that preplanning for the audit took two months; that the auditors were onsite for two to four weeks; that the firm has a dedicated group who works on the audit all year. Secretary/Treasurer Nadalini arrived in the Chambers at 9:39 a.m. 8.2. Presentation and Discussion Re: 2016 Share Distribution Brad Armstrong, Senior Consultant and Actuary, Gabriel, Roeder, Smith & Company, came before the Board (by teleconference) to discuss the 2016 share distribution; that the focus is primarily on the pre- 2003 retirees' share determination for the post-2003 retirees' share distribution; that an explanation of the calculations used to determine the share amount was provided to the Board. In response to a question from Trustee Snow asking if the State allows the distribution of premium tax funds to occur later in the year, Mr. Armstrong stated yes; that the distribution has been occurring later each year. In response to a question from Secretary/Treasurer: Nadalini asking how the $2 million allocated for the unfunded liability was split between the two employers, City of Sarasota and Sarasota County, Mr. Armstrong stated that he did not know how the funds were split; that he will find out and inform Pension Plans Administrator Ramphal. The following people spoke: Ernest Cave, retired Firefighter, stated that many of the retirees do not understand the reason for the delay in receiving their share distribution checks; that he understands in previous years, the share distribution checks were paid out before funds were received from the State; that many retirees plan on receiving the share distribution checks at a certain time. Chair Hartley stated that the check sent from the State is a physical check received in the mail; that the Chair must sign the check before the check is deposited into the bank; that this process has to be completed before any pre-2003 or post-2003 retirees can receive their share distribution checks; that the turnaround in Pension Administration is very quick from when the check is received from the State to when the share distribution checks are issued to retirees; that Pension Administration staff has kept him informed at every step of the share distribution process. 9. ATTORNEY MATTERS: Attorney Herrera stated that educational opportunities will be upcoming for the Board members, as discussed in previous Board meetings; that the Florida Public Pension Trustees Association (FPPTA) Book 1 Page 43 10/26/16 9:00 A.M. Book 1 Page 44 10/26/16 9:00 A.M. Trustees' School will start at the end of January 2017 in Orlando; that the International Foundation of Employee Benefits Conference will be held in Orlando on November 13-16, 2016; that the Division of Retirement State School will be held on November 2-4, 2016 in Orlando; that no registration fees are required to attend. 10. OTHER MATTERS: Vice Chair Roberson stated that recommendations for the assumed rate of return from Mr. Mulfinger would be appreciated. Mr. Mulfinger came before the Board and stated that the assumed rate of return is currently at 7.25% including fees; that the assumed rate of return is on the lower end which is acceptable; and does not need to be changed. Chair Hartley noted Board consensus to have a continued discussion regarding the assumed rate of return at the next Board meeting on December 7, 2016. 11. ADJOURN. Chair Hartley adjourned the Firefighters' Pension Plan Board of Trustees Regular meeting at 10:46 a.m. - ChairMichael Hartléy Secretaryreasurer Pamela M. Nadalini