Book 1 Page 319 06-10-2022 8:30 a.m. MINUTES OF THE CITY OF SARASOTA GENERAL EMPLOYEES' PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING OF JUNE 10, 2022 Present: Chair Ryan Chapdelain, Vice Chair Mark Nicholas, Treasurer Kelly Strickland, Secretary Shayla Griggs, Trustee Robert Reardon, Trustee Barry Keeler, and Trustee Jan Thornburg. Others: Attorney Scott Christiansen, Senior Pension Analyst Anthony Ferrer, and Pension Specialist Peter Gottlieb. Absent: None. 1. CALL MEETING TO ORDER: Chair Chapdelain called the General Employees' Pension Plan (Plan) Board of Trustees Regular meeting to order at 8:30 a.m. 2. PLEDGE OF ALLEGIANCE: Presenter(s): Secretary Griggs. Chair Chapdelain led the Board and meeting attendees in the Pledge of Allegiance. 3. PLEDGE OF CIVILITY: Chair Chapdelain stated for the record, "We may disagree, but we will always be respectful to one another. We will direct all comments to issues, and we will not engage in personal attacks." 4. ROLL CALL: Senior Pension Specialist Anthony Ferrer called roll. All trustees were present. 5. PUBLIC INPUT: None. 6. APPROVAL OF MINUTES: 6.1. Approval Re: Minutes of the General Employees Pension Plan Board of Trustees Regular Meeting of May 9, 2022. Presenter(s): Chair Chapdelain. Trustee Keeler made a motion to accept the minutes of the Regular Meeting of May 9, 2022; Vice Chair Nicholas seconded the motion. The motion carried unanimously (7-0). 7. APPROVAL OF RETIREMENT REQUEST/S): 7.1. Presentation and Discussion: DROP Retirement Request of Lawrence Murphy. Presenter: Anthony Ferrer, Senior Pension Analyst. Senior Pension Analyst Ferrer stated that Mr. Murphy entered the DROP effective May 1, 2022 with 30.18 years of service; he elected the 50% Joint and Survivor option. To Trustee Reardon's question, Senior Pension Analyst Ferrer advised Mr. Murphy works in Development Services. Vice Chair Nicholas made a motion to accept Mr. Lawrence's request for retirement; Trustee Keeler seconded the motion. The motion carried unanimously (7-0). 8. INVESTMENT PERFORMANCE REVIEW: 8.1. Presentation and Discussion Re: AEW, Investment Performance Review as of March 31, 2022. Presenter(s): Steve Reissfelder, Director, Finance, AEW Core Property Trust; Emily Margolis, Director Investor Relations for AEW Core Property Trust; AEW. Emily Margolis and Steve Reissfelder of AEW appeared before the Board telephonically and introduced themselves. Ms. Margolis provided a brief history of the Plan's investments with AEW, noting the Plan initially invested $6.5 million in 2013, redeemed $1.5 million in 2019, and reçeived $2.4 million in dividends since inception, with an annualized net return of 9.38% since inception and current net asset value of $10.2 million. Turning to the presentation materials, Ms. Margolis stated there have been no significant changes in the investment team and discussed the Portfolio Overview, asserting that its gross property value and net asset value allowed AEW to be a substantial fund which remains sufficiently nimble. Mr. Reissfelder reviewed the Performance page of the presentation materials, noting the 1-year performance has been the best since inception. In discussing the One Year Property Type Retums, Mr. Reissfelder stated that although appreciation has played a significant role in returns, when the economy normalizes, income will make up the majority of returns. He discussed the Diversified Portfolio, noting strategic overweighting in the industrial sector in Los Angeles, CA, as well as in the multi-family sector in Austin, TX, Phoenix, AZ, and Charlotte, SC. He provided highlights from the Recent Transaction Activity, Non-Core Investments, and Projected NOI Growth, advising the blue line is the core operating portfolio and the red line includes non-core properties; Mr. Reissfelder asserted the portfolio is well positioned for rising interest rates as well as expanding or consistent capitalization rates. He discussed the Fund Operations and Balance Sheet pages of the presentation materials. Trustee Reardon asked AEW to describe a typical industrial cold storage tenant profile. Mr. Reissfelder explained that type of property is used by fresh and frozen food tenants, pharmaceutical tenants, and the flower industry. Chair Chapdelain asked Mr. Reissfelder to address the overweight in retail and underweight in multi-family, relative to the index. Mr. Reissfelder explained the retail sector has been overweight since prior to the COVID-19 pandemic; while AEWI had intended to sell off some ofi its retail assets prior to the pandemic, it has held onto them because itbelievedi the market values have been depressed. Further, income from the retail sector remains strong. Regarding multi-family, AEW aims to increase its allocation to be overweighted, however it has had difficulty identifying properties with adequate capitalization rates. The Board thanked Mr. Reissfelder and Ms. Margolis for their presentation. 8.2. Presentation and Discussion Re: UBS, Investment Performance Review as of March 31, 2022. Presenter(s): Ronald Lanier, Managing Director, UBS. Ronald Lanier of UBS appeared before the Board telephonically and introduced himself. Book 1 Page 320 06-10-2022 8:30 a.m. Book 1 Page 321 06-10-2022 8:30 a.m. Mr. Lanier discussed the Trumbull Property Fund Investment Results, and noted to Chair Chapdelain's question, that the 1-, 3-, and 5-year ODCE performance percentages are later in the presentation materials. He discussed the Trumbull Property Fund Highlights, Full market cycle total returns = peak to peak, and TPF performance VS. NFI-ODC which show the 1-, 3-, and 5-year ODCE performance. He also noted the performance chart breaks out the income and appreciation components of performance. Mr. Lanier discussed the TPF VS. Barclays Capital Aggregate Bond Index and TPF fund restructure. Regarding the TPF Diversified Core & Non-Strategic, Chair Chapdelain asked for UBS's expectation upon liquidating all of the assets; Mr. Lanier referred to the slide titled Non-Strategic asset ("NSA") disposition forecast, and chart titled "Percentage of NSA portfolio sold since inception,' which shows what percentage of the NSA portfolio UBS expects to sell in 2022 and 2023. Additionally, he noted that the "Sales update" column provides details of the sales activity in 2022, and the "Breakdown by sector" chart shows the types of properties it expects to sell and notes the property value in millions at the top of each column. If the 2022 sales are completed as expected, UBS would hold only 2 additional properties in the NSA portfolio, and it expects them to sell in 2023. He reviewed the page titled Non-Strategic sales activity, chart titled 4Q 2021 Non-Strategic sales overview, as well as the page titled Non-Strategic sales activity, chart titled 1Q 2022 Non-Strategic overview, which show sales both above and below appraised values over the last 2 quarters. Mr. Lanier discussed the TPF Diversified Core VS. ACOE, and noted that the reason it underperformed from July 1, 2020 to March 31, 2022 in the Industrial sector was due to the TPF's overweight in industrials in the mid-western region when the coastal regions performed better. He discussed the Property type allocation (%) on the TPF sector strategies, TPF portfolio strategy (1Q2022), Investment activity 1Q2022, noting the updates for the Cambridge Side property in Cambridge, MA, and Capital Flows. In discussing the Fund governance, Mr. Lanier stated that because the fund falls under federal banking regulations, it will be transitioning to a board of trustees which will consist of UBS's chief officer and 4 or 5 independent officers. UBS is in the process of identifying and vetting officers and anticipates the TPF will be operating under a board of trustees by the 1st quarter of 2023. UBS will formally request the Plan to ratify this transition, which will require 51% of its clients to approve. Attomey Christiansen asked Mr. Lanier what authority the new board will have regarding investments. Mr. Lanier explained the board willl have no day-to-day investment oversight, but will approve an annual plan, fund guidelines, and the fund's auditor. The fund will meet with its board quarterly to discuss performance. Attomey Christiansen expressed concern for the trustees' qualifications to provide general directions for investments. Mr. Lanier stated that the trustees will be industry professionals with varying degrees of real estate investment experience and reiterated that the board will only a high-level purview. He also noted that this is an industry-wide requirement. Chair Chapdelain asked Mr. Lanier to describe the selection process and who will be making the selections. Mr. Lanier stated that he was on the committee, and the board will consist of retired executives of former clients which UBS respected or who are recommended by respected people within the industry. The board will contain no employees of current clients or consultants to maintain independence. Trustee Thornburg asked ifUBS would be seeking approval from the Plan for the concept of the board or its make- up. Mr. Lanier explained that UBS will request approval from the Board to implement a board of directors to decontrol the fund. He stated that the Board will be given advance notice of the request, as well as biographies of each of the prospective board members. Chair Chapdelain thanked Mr. Lanier for his presentation. 9. UNFINISHED BUSINESS: None. 10. NEW BUSINESS: None. 11. ATTORNEY MATTERS: 11.1. Presentation and Discussion Re: Actuarial Impact Letter Regarding Ordinance No. 21-5387. Presenter(s): Scott Christiansen, Christiansen & Dehner, PA. Attorney Christiansen stated this is regarding the ordinance transitioning new employees of the City to the Florida Retirement System (FRS). When Ordinance 21-5387 was proposed, the Plan's actuary, Gabriel, Roeder, and Smith (GRS), indicated there would be no financial impact. However, at that time, the Plan did not know which, if any, Plan members would transition to the FRS. With the knowledge of which members wished to remain in the Plan and which elected to leave for the FRS, GRS has issued an Actuarial Impact Statement, which should be forwarded to the State of Florida; Attorney Christiansen did not believe the State would have an issue with the Actuarial Impact Statement as iti indicates a slight decrease in its Unfunded Actuarial Accrued Liability which increases the Plan's funded ratio. Attorney Christiansen noted that Trustee Reardon's term ends on June 30, 2022. He is appointed by the City Commission, and he indicated he is willing to serve another term. To Chair Chapdelain's question, Secretary Griggs stated that Mr. Reardon's seat will be discussed at an upcoming City Commission meeting which is prior to the next Board meeting. Attorney Christiansen noted that Trustee Reardon could continue to serve until he was either re-appointed or replaced by a new trustee. Attorney Christiansen noted that the Board should select officers at its next meeting. Attorney Christiansen asked if each of the trustees submitted their State of Florida Financial Disclosures. To Chair Chapdelain's request, Attorney Christiansen stated that, prior to fines being assessed, he checks the State of Florida's website to confirm it received disclosures from each of the trustees of the boards he serves, and that trustees may verify for themselves by going to the internet website myflorida.com, sub-page Commission on Ethics; starting September 1, thet fine will be $25 per day, up to $1,500. Secretary Griggs noted that the local Supervisor of Elections also confirms receipt to those trustees who submit financial disclosures. Lastly, Attorney Christiansen noted that, at an upcoming meeting, Investment Consultant Scott Owens will be presenting an issue regarding Allianz, in which several of its officers were convicted of fraud. Although the Plan is not invested in any of the affected funds, Mr. Owens would likely advise whether the Plan should take any action regarding the matter. Chair Chapdelain asked, regarding UBS's transition to a board of trustees, ift the Board should contact AEW to confirm it is taking similar actions. Attorney Christiansen stated that he frequently reviews, what he called "co- mingled" funds, which includes UBS, and many have advisory boards of investment representatives, similar to limited partnerships, which are responsible for high-level decision-making: UBS appears to be referring to it as al board of trustees. While he has no legal concerns with this structure, he questioned the potential for a person with limited or dubious experience in the asset class to make impactful decisions regarding the fund management. 12. OTHER MATTERS: 12.1. Presentation and Discussion Re: Administrative Expense Budget, January 1, 2022 through March 31, 2022. Presenter(s): Anthony Ferrer, Senior Pension Analyst. Book 1 Page 322 06-10-2022 8:30 a.m. Book 1 Page 323 06-10-2022 8:30 a.m. Senior Pension Analyst Ferrer presented the Administrative Expense Budget, noting a negative variance for Auditing and Accounting expenses in the amount of $500. The Board had no questions regarding this item. 12.2. Presentation and Discussion Re: Check Register, January 1, 2022 through March 31, 2022. Presenter(s): Anthony Ferrer, Senior Pension Analyst. Senior Pension Analyst Ferrer presented the Check Register; he noted the payments to individuals are payments of DROP funds. The Board had no questions regarding this item. 12.3. Presentation and Discussion Re: Asset Allocation as of May 31, 2022. Presenter(s): Anthony Ferrer, Senior Pension Analyst. Senior Pension Analyst Ferrer presented the. Asset Allocation. The Board had no questions regarding this item. 13. ADJOURN. Chair Chapdelain adjourned the meeting at 9:30 a.m. - Chair Ryan Chapdelain Secretary Shayla Griggs