Book 1 Page 249 09-22-2021 9:00 a.m. MINUTES OF THE CITY OF SARASOTA FIREFIGHTERS PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING OF SEPTEMBER 22, 2021 Present: Chair Michael Hartley, Vice Chair Shelia Roberson, Trustee Charles Joseph, and Trustee Scott Snow. Others: Attorney Robert Sugarman, Pension Plans Administrator Debra Martin, Pension Specialist Peter Gottlieb. Absent: Secretary/Treasurer Shayla Griggs 1. CALL MEETING TO ORDER: Chair Hartley called the Sarasota Firefighters Pension Plan Board of Trustees regular meeting to order at 9.00 a.m. 2. PLEDGE OF CIVILITY: Presenter(s): Chair Hartley. Trustee Snow stated for the record, "We may disagree, but we will be respectful to one another. We will direct all comments to issues. We will not engage in personal attacks.' 3. ROLL CALL: Pension Plans Administrator Martin called roll; Secretary/Treasurer Griggs was not in attendance. Attorney Robert Sugarman and Pedro Herrera appeared telephonically; Pension Plans Administrator Martin and Pension Specialist Gottlieb appeared in person. Vice Chair Roberson and Trustee Joseph requested excused absences from the July 28, 2021, meeting; the Board approved each absence by consensus. 4. PUBLIC INPUT: None. 5. APPROVAL OF MINUTES: 5.1. Approval Re: Minutes of the Firefighters' Pension Plan Board of Trustees Regular Meeting of July 28, 2021. Presenter(s): Chair Hartley. Trustee Snow made a motion to adopt the minutes from July 28, 2021, meeting; Vice Chair Roberson seconded the motion. The motion carried unanimously (4-0). 6. NOMINATION OF BOARD OFFICERS: 6.1. Appointment Re: Selection of Chair. Presenter(s): Pension Plans Administrator Martin. Pension Plans Administrator Martin advised Board officers are selected annually, and that other boards have voted to retain their existing officers in a single motion. Chair Hartley stated he had no reservations to continuing his role as chair. Trustee Snow voiced support for retaining the current Board officers. 6.2. Appointment Re: Selection of Vice Chair. Presenter(s): Pension Plans Administrator Martin. Vice Chair Roberson stated she would continue to serve as Vice Chair if no other trustee wished to assume the role. 6.3. Appointment Re: Selection of SecretaryfTreasurer. Presenter(s): Pension Plans Administrator Martin. Pension Plans Administrator Martin advised the City Auditor and Clerk is generally assumed to hold the position of Secretary provided the Board approves. Chair Hartley stated he would entertain a motion to retain himself as Chair, Shelia Roberson as Vice Chair, and Shayla Griggs as Secretary/Treasurer. The motion carried unanimously (4-0). 7. INVESTMENT PERFORMANCE REVIEW: 7.1. Presentation and Discussion Re: Renaissance Investment Management Performance Summary as of June 30, 2021. Presenter(s): Andrew M. Temming, CFA, Partner, Research Analyst, Renaissance Investment Management. Andrew Temming appeared before the Board and introduced himself. Mr. Temming stated there have been no structural or institutional changes at Renaissance, that it is an international growth manager, and he reviewed its investment philosophy and process. Mr. Temming stated Renaissance has reorganized its presentation materials to comply with the Board's request; he reviewed the Portfolio Summary and Trailing Performance Summary. He stated that during the 2nd quarter, the portfolio had a 4% overweight in China relative to its index; the regulatory environment and COVID-19 issues caused Renaissance's portfolio to underperform. Renaissance adjusted its holdings during the 3rd quarter, and it still remains ahead of its benchmark on both a fiscal year-to-date and inception-to-date bases. Mr. Temming reviewed the Portfolio Sector Attribution and Portfolio Country Attribution. Book 1 Page 250 09-22-2021 9:00 a.m. Book 1 Page 251 09-22-2021 9:00 a.m. Chair Hartley asked Mr. Temming to discuss production and manufacturing levels in Europe compared to the United States. Mr. Temming stated there are similar bottlenecks in those sectors due to the COVID-19 Delta Variant. While he could not comment on what process each government uses, he stated that each of the European countries are injecting cash into their economies through various methods to support laborers. As Europe was generally hit third by COVID-19, after China and the United States, those countries are now emerging from lockdowns and opening their borders again, which is beneficial according to Renaissance. Chair Hartley asked if the contributions in 2018 were related to rebalancing. Mr. Temming could not state with certainty that it was. Vice Chair Roberson thanked Renaissance for reorganizing their presentation materials as it makes comparison to Graystone Consulting's reports easier. Mr. Temming concluded his presentation by noting Renaissance intends to recall its staff to the office later in the month. Chair Hartley thanked Mr. Temming for their presentation. 7.2. Presentation and Discussion Re: Richmond Capital, Quarterly Performance Summary as of June 30, 2021. Presenter(s): Howard Bos, CFA, President, Portfolio Manager, Richmond Capital. Howard Bos appeared before the Board telephonically and introduced himself. Mr. Bos advised Richmond Capital has not had any structural or institutional changes, however it has added staff to its investment and operations teams and will continue to increase its staffing levels over the next several months. Mr. Bos discussed the Performance Review, noting that while it has outperformed the benchmark, interest rates have fallen to historically low levels which bodes poorly fori its overall yield. Year-to-date through August 30, 2021, the portfolio is down 69 basis points compared to the Barclays Government Credit Index at 87, and Barclays' A or Better Index at 1.2. He noted that while the Plan requires A or better credit, the Govemment Credit index currently allows 20% of BBB grade credit, and it has historically been rising. He noted there has been uncertainty in the bond/fixed income market due to uncertainty of the re-appointment of Jerome Powell as the Federal Reserve Chairman. The Biden administration has given little indication if it will retain or replace Mr. Powell, although Richmond believes re-appointing him to another term would provide the most stability for the market. Mr. Bos noted the Federal Reserve reported that as of March 2020, it held approximately $5 trillion in US treasuries and agency mortgage-backed securities; the Federal Reserve has since purchased an additional $3.6 trillion of those same asset types to provide as much liquidity to the market as possible. The Federal Reserve has indicated it will begin reducing its purchases which Richmond believes could increase interest rates; while this may be healthier for the long-term economy and stock markets and fixed income markets, it would be painful for the portfolio. Mr. Bos discussed the Portfolio Review, noting the extraordinarily low yield and asserted higher interest rates would be beneficial to increasing the yield, the Treasury Yield Curve, Corporate Bond Allocation, Top Ten Holdings noting that the top 4 are US Treasuries, and Quality Distribution. In response to Chair Hartley's questions, Mr. Bos stated the portfolio has 159 separate holdings, although he noted there may be more than 1 holding in a company. Because of low yields on short-term corporate paper, Richmond has tried selling some of its 2-to 3-year corporates and buying 7-, 8-, and 9-year maturities which can result in simultaneously holding multiple positions in some companies. He added that most of the AAA rated holdings are inU.S. Treasury space and approximately 2-3 % in the commercial mortgage-backed space. Lastly, Mr. Bos stated he does not plan to retire for at least 6 years. Chair Hartley thanked Mr. Bos for his presentation and Richmond's history of service to the Plan. 8. UNFINISHED BUSINESS: 8.1. Presentation and Discussion: Legal Fees. Presenter(s): Pedro Herrera, Sugarman Susskind. Robert Sugarman and Pedro Herrera appeared before the Board elephonically and introduced themselves. Attorney Sugarman explained Sugarman Susskind has had the same fee with the Plan since 2014 at approximately $3,472 a month; an automatic escalator was built into the fee structure although their fee has not risen in several years. He proposed reducing its retainer effective October 1, 2021, to $2,250 per month with no escalator, and increasing the fee for outside-ot-retainer service from $175 per hour to $300 per hour. Items which would be outside the retainer would be in case of lawsuits, IRS audits, and disputes with the State of Florida regarding 175 funds, which Attorney Sugarman stated are not common in closed funds. Vice Chair Roberson asked for additional examples of services covered under the retainer as well as: services not covered under the retainer, which the Board may soon encounter. Attorney Sugarman stated that there is nothing foreseeable now related to non-retainer services, however common examples of non-retainer services are defending denials of disability benefits, disputes regarding State of Florida 175 monies which could not be resolved through regular correspondence and were escalated to an administrative law judge or farther into thej judicial process, a drastic re-rewrite to the Internal Revenue Code which required the entire plan to also be re-written, although Attorney Sugarman noted he knew of no such proposed changes, if the IRS audited the Plan, or the Plan were to request a private letter rulings by the IRS; these are examples of services covered by hourly rates. Attorney Herrera noted that special meetings are also covered under retainer services, although out-of-pocket travel expenses are reimbursed. Attorney Herrera added that litigation arising from a dispute of death benefits would also be hourly rate services; he assured the Board that hourly services related to a significant issue could be discussed with the Board under the retainer to determine a scope or even create a separate retainer for those specific services. Attorney Sugarman explained the Board could make a motion to authorize the Chair to execute a new contract or letter with Sugarman Susskind with the proposed fees, effective October 1, 2021. Trustee Joseph made a motion, as explained by Attorney Sugarman, to authorize the Chair to accept the proposed retainer and fees by Sugarman Susskind. Trustee Snow seconded the motion. The motion carried unanimously (4-0). Chair Hartley asked if a retired firefighter could request disability benefits after they had redeemed their first pension benefit check. Attorney Sugarman explained a person who is receiving retirement benefits ended their career with a normal retirement and that is an irrevocable election. Attorney Herrera added that one of Book 1 Page 252 09-22-2021 9:00 a.m. Book 1 Page 253 09-22-2021 9:00 a.m. the requirements to receive disability benefits is for a firefighter to separate from employment because a disabling condition prevents them from performing the duties of a firefighter. On the other hand, a firefighter who is receiving retirement benefits had voluntarily separated from employment and did not separate because they were unable to perform their duties due to a disabling condition. In that context, a person who voluntarily resigns and elects to receive retirement benefits based on age and/or service is no longer eligible to request disability benefits due to a disabling condition. Chair Hartley clarified his question was related to a cancer diagnosis. Attorney Herrera stated the state and local provisions qualifying cancer as a disabling condition are only applicable to firefighters who are on-the-job and working. 9. NEW BUSINESS: 9.1. Presentation and Discussion: Consulting Fees. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin suggested this item be postponed until a later meeting as she had identified a December 2017 addendum to Graystone Consulting's contract, effective January 2018, which incorporated an increase to its fees based on the Consumer Price Index which has not been reflected on Graystone's invoices. Scott Owens of Graystone Consulting is reviewing its invoice history and will bring proposals for resolution to a future meeting. Vice Chair Roberson asked for information to be added to the supporting materials to show the total of assets under management for each Plan at specific dates. 9.2. Presentation and Discussion: Proposal to Provide Professional Auditing Services. Presenter(s): Alison Wester, CPA, Partner, Mauldin & Jenkins. Alison Wester appeared before the Board telephonically and introduced herself. Ms. Wester thanked the Board for the opportunity to present its proposal for auditing services. She stated the proposal contains more in-depth, historical, and firm information than prior proposals; she noted that after submitting the current proposal, Jennifer Cook left the firm to pursue other opportunities. She stated Daniel Anderson and Jennifer Trotter would assist in Ms. Cook's departure. Trustee Snow left the meeting at 10:00am and returned at 10:03am. In response to Chair Hartley's questions, Ms. Wester noted that Mauldin & Jenkins' fee for Fiscal Year 2020 was $10,000, and that Sarasota County has paid for the GASB 68 Report. Although the fee is increasing by $500 in 2021 and 2022, and an additional $500 in 2023, Ms. Wester explained there have been some reporting standards changes effective with the Fiscal Year Ending September 30, 2022, which will change the appearance of the engagement letter and audit opinion. Chair Hartley and Ms. Wester discussed additional audit services and how they would be invoiced. Pension Plans Administrator Martin confirmed Pension Administration did not have any issues with the engagement letter. Attorney Sugarman noted he had no issues with the engagement letter and asked Mauldin & Jenkins to provide confirmation it conforms with E-Verify, the State acknowledgement for the No Crimes Affidavit, and the State acknowledgement for public records law. He also noted the letter addressed to Sarasota County stated all work would be performed in Bradenton, Florida, but the letter addressed to the Board did not. He asked Mauldin & Jenkins to include a similar statement in the letter to the Board. Attorney Herrera stated he had suggested language he could forward to Ms. Wester. Vice Chair Roberson made a motion to give authorization and management to the Chair to sign Mauldin & Jekins' letter, subject to the requests stated by Attorney Sugarman, for the engagement of audit services. Trustee Snow seconded the motion. The motion carried unanimously (4-0). Chair Hartley clarified the motion applied to the engagement letter to the Plan and to Sarasota County. 10. ATTORNEY MATTERS: 10.1. Presentation and Discussion Re: Potential Claims Against Inovalon Holdings, Inc. Presenter(s): Pedro Herrera, Partner, Sugarman Susskind. Attorney Herrera introduced attorney Darren Check, of Kessler, Topaz, Meltzer, & Check, which had previously performed monitoring services for the Plan; Attorney Check appeared telephonically. Mr. Check explained Inovalon Holdings is a cloud-based healthcare data management company; the Plan owns 3,569 shares of through Oakridge Investments. The founder and CEO of Inovalon Holdings, Keith Dunleavy, has partnered with private equity firms and has offered to buy out minority shareholders to take the company private. Kessler Topaz asserts the buyout price and process are unfair as, frequently, majority shareholders and private equity buyers use a good performance report to take a company private and personally profit at the detriment of minority shareholders. Kessler Topaz requests the Board authorize it to file a "books and records" request; this would allow Kessler Topaz to receive and evaluate Inovalon Holdings' documentation to confirm if the offered price and buyout process were properly evaluated by outside consultants for fairness and reasonability for all shareholders. Mr. Dunleavy is offering Class A shareholders $41 per share; Kessler Topaz believes there is more value for shareholders. If Kessler Topaz determines a more favorable price to shareholders is possible, it would file a class action lawsuit in Delaware Chancery Court to engage the company to seek a better price for shareholders. Mr. Check clarified they also would request Oakridge Investment maintain some position in Inovalon Holdings until litigation was completed; if the buyout were to be completed, Oakridge would be able to tender those shares and Kessler Topaz would seek a post-closing payment sO that Oakridge would not be required to hold these shares in perpetuity. At Chair Hartley's request, Attorney Sugarman and Attorney Check explained that if the Board were to approve litigation, the motion would include direction to Oakridge via Graystone Consultants to retain 100 shares of Inovalon Holdings, in the event Oakridge intended to sell its position, pending the result of the investigation and any possible itigation. Attorney Herrera added that the Plan has previously been involved in several class action cases regarding securities fraud which were under Securities and Exchange Commission Rule 10b; this case is considered a derivative action which claims a board of directors is breaching its fiduciary responsibility to its shareholders. If the Board approved engagement, Oakridge would be required to maintain some position in Inovalon Holdings for the Board to retain its standing. Attorney Check further explained that if the books and records request led to Kessler Topaz filing a class action lawsuit, the Plan would be considered a lead plaintiff however the deadlines associated with federal Book 1 Page 254 09-22-2021 9:00 a.m. Book 1 Page 255 09-22-2021 9:00 a.m. securities class action would not apply. Vice Chair Roberson asked if attorneys fees would be paid from any proceeds from the case, and that if the defendant were to prevail, Kessler Topaz would not charge any fee to the Plan. Attorney Check confirmed this statement. Attorneys Sugarman, Herrera, and Check explained that if the Board were to decide today to authorize Kessler Topaz to investigate Inovalon Holdings' books and records, Kessler Topaz would, at some later point, return with a report and recommendation for the Board to decide at that time if it wished to pursue litigation against Inovalon Holdings. Trustee Joseph made a motion to accept the recommendation as noted in the letter dated September 15, 2021 for Kessler, Topaz, Meltzer, & Check, referencing the shares of Inovalon Holdings. Vice Chair Roberson seconded the motion. The motion carried unanimously (4-0). By consensus, the Board agreed, in accordance with its previous motion directing Kessler Topaz to request books and reçords from Inovalon Holdings to also direct Attomey Herrera to instruct Oakridge Investments to retain at least 100 shares of Invalon Holding stock if Oakridge decides to sell its position in Inovalon Holdings. Vice Chair Roberson asked if the Board should authorize the Chair to execute necessary documents between Board meetings. Attorney Herrera stated that Kessler Topaz will return with an engagement letter which will include a power of attorey to be signed by the chair, and therefore that authorization is inherent in the Board's motion. Attorney Herrera noted there will be an educational opportunity offered by the FPPTA at Sawgrass starting on October 3rd and he will be presenting on that Monday. Also, the State of Florida Division of Retirement trustee school will be offered from November 3 through 6 at the Renaissance Hotel in Orlando. The Chair thanked Attorneys Sugarman and Herrera for their presentations. 11. OTHER MATTERS: 11.1. Presentation and Discussion Re: Ratification of Investment Consultant's Recommended Reallocation. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin explained that in August 2020, the Board approved a withdrawalredemption from the UBS TPF fund in the amount of $3.6 Million, which takes a considerable amount of time to occur. $1.5 Million had been redeemed and was placed in the Receipts & Disbursements: account. at Salem Trust; Pension Plans Administrator Martin contacted Graystone Consulting, the supporting documentation shows their recommendation and associated balances, and the reallocations have been completed by Pension Administration. 11.2. Presentation and Discussion Re: Administrative Budget Expense Report, April 1, 2021, through June 30, 2021. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin explained this is reported quarterly. The Board had no questions. 11.3. Presentation and Discussion Re: Check Register. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin explained this is presented as payments are now made via ACH. She noted the payment to the General Employees' Pension Plan was for reimbursement of supplies purchased from that fund but shared by each of the defined benefit pension plans administered for the City. She also noted payment to Chubb is for the travel policy, and payment to the Police Officers' Pension Plan was reimbursement to that plan as it had paid the tuition costs for Secretary/Treasurer Griggs and Pension Plans Administrator Martin to attend the trustee school. Pension Plans Administrator Martin raised an issue regarding the operating rules related to the trustee election process in consideration that Trustee Joseph's seat expires January 31, 2022. She stated that the operating rules, which were written in November 2000 when the Plan had more active members, require nominations for trustees to include the signatures of 5 members. Chair Hartley explained he believed that requirement had been removed previously, but that if it hadn't, he was comfortable removing it. Pension Plans Administrator Martin also stated that the operating procedures require ballots cast in elections to be returned to Pension Administration within 7 days of distribution. This was easier to accommodate when the Plan had more active members, however now that all participants are retired, she requests they be allowed 20 or 30 days to return ballots. By consensus, the Board agreed to allow 20 calendar days for retirees to return election ballots. Trustee Joseph explained the last time he ran, he received calls from other retirees who questioned if he was vacating his position. He asked if Pension Administration could clarify the language on the ballot to indicate a trustee is elected to a 4-year term, and that an announcement of an election or request for nominations to the Board was not confirmation that the incumbent trustee would not run again for their held seat. 11.4. Presentation and discussion Re: 2022 Proposed Meeting Calendar. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin explained there is no meeting scheduled for August 2022 in the event the City Auditor and Clerk decides to hold a State of the Pension Workshop, although one is not scheduled at this time. If a workshop is not scheduled and the Board wished to convene, it could request a special meeting. By consensus, the Board agreed to accept the proposed calendar. Trustee Joseph explained that for at least the next two Board meetings, it was possible that COVID-19 could cause staffing issues which required his presence at his work and would therefore preclude his attendance at those Board meetings with little to no advance notice. He anticipated this will not last beyond the calendar Book 1 Page 256 09-22-2021 9:00 a.m. Book 1 Page 257 09-22-2021 9:00 a.m. year. Chair Hartley stated he viewed unexpected work issues such as those Trustee Joseph described to be excusable absences. Vice Chair Roberson thanked Pension Administration for including the Historical Summary in the presentation materials. Chair Hartley asked Pension Administration to thank the investment consultant for reminding fund managers to bring updated pages to their presentation materials as well as summary pages formatted to the Board's specifications for consistency. 12. ADJOURN. Chair Hartley adjourned the meeting at 10:42 a.m. Cne - Chair Michae! Hartley SecretanyTreasurer Shayla Griggs