MINUTES OF THE CITY OF SARASOTA GENERAL EMPLOYEES' PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING OF JANUARY 24, 2020. Present: Chair Ryan Chapdelain, Secretary Shayla Griggs, Treasurer Kelly Strickland, Trustee Kari McVaugh, and Trustee Robert Reardon. Others: Attorney Scott Christiansen, Pension Plans Administrator Debra Martin, and Senior Pension Analyst Anthony Ferrer. Absent: Vice Chair Blake, and Trustee Nicholas. 1. CALL MEETING TO ORDER: Chair Chapdelain called the meeting to order at 10:00 a.m. 2. PLEDGE OF CIVILITY: Chair Chapdelain read into the record a memorandum from Mayor Willie Charles Shaw, dated February 13, 2015, entitled "City Commission and Advisory Boards Meeting Protocols and Pledge of Civility." 3. ROLL CALL: Secretary Griggs conducted the Board roll call. Secretary Griggs announced a change to the order of the day to remove item 9.3. 4. PUBLIC INPUT: None 5. APPROVAL OF THE MINUTES: 5.1. Approval Re: Minutes of the General Employees Pension Plan Board of Trustees Regular Meeting of December 2, 2019. Presenter: Chair Chapdelain. Chair Chapdelain asked to defer to the end of the meeting. A motion was made by Trustee McVaugh and seconded by Treasurer Strickland to approve the minutes of the General Employees' Pension Plan Board of Trustees Regular Meeting of December 2, 2019. Motion passed unanimously (5-0). 6. APPROVAL OF RETIREMENT REQUEST/S): 6.1. Approval Re: Normal Retirement Request of David Flatt. Presenter: Debra Martin, Pension Plans Administrator. Ms. Martin stated Mr. Flatt effectively retired November 1, 2019; that his hire date was October 23, 1989; that after 30 years of service Mr. Flatt has selected the 100% to joint annuitant benefit payment option. A motion was made by Treasurer Strickland and seconded by Trustee McVaugh to approve the retirement Book 1 Page 193 01-24-2020 10:00 a.m. Book 1 Page 194 01-24-2020 10:00 a.m. request for David Flatt. Motion passed unanimously (5-0). 6.2. Approval Re: Normal Retirement Request of George Litchfield. Presenter: Debra Martin, Pension Plans Administrator. Ms. Martin stated Mr. Litchfield started with the City on November 13, 1995 and retired December 1, 2019 after just over 24 years of service; that Mr. Litchfield has selected the lifetime option benefit payment. A motion was made by Trustee McVaugh and seconded by Treasurer Strickland to approve the retirement request for Mr. Litchfield. Motion passed unanimously (5-0). 7. INVESTMENT PERFORMANCE REVIEW: None 8. UNFINISHED BUSINESS: None 9. NEW BUSINESS: 9.1. Presentation and Discussion Re: Actuarial Valuation Report for Fiscal Year Ended September 30, 2019. Presenter(s): Pete Strong, FSA, EA, MAAA, FCA, Senior Consultant and Actuary, Gabriel, Roeder, Smith & Company, (GRS). Mr. Strong came before the Board and introduced himself. Mr. Strong stated once a year the Pension Plan is valued on an actuarial basis to calculate the amount of future benefit payments that are to be paid; that GRS calculates that total actuarial liability and compares it to the asset value to know what the unfunded liability is remaining to be paid, that unfunded liability is to be paid out over time, similar to a mortgage payment, that combined with the normal cost which is the value of benefits earned each year is basically sub tallied and the required contribution for the year; so over time the purpose is to try to fully fund the Plan over a certain number of years; that there are market gains and losses that happen every year, trying to stay on target over al long period of time to get the Plan to a fully funded status. Mr. Strong presented the Actuarial Valuation Report; that on the reconciliation of assets the cash contributions total contribution inflow was $7,485,628.00 for fiscal year 2019 versus fiscal year 2018 at $7,435,245.00; that the investment income earnings last year was $13,334,308.00 about an 8.9% investment return versus this year at -$818,083.00 about a -.5% investment return; that benefit payments totaled approximately $14.2 million which is an increase from last years $11.8 million as there were a couple of significant lump sum payments that were paid out during fiscal year 2019; that market value at the end of the year is $154,601,485.00 which is down from the previous year at $162,385,768.00 mainly because of the investment earnings. Chair Chapdelain asked for 2016, 2017, and 2018 rate of returns, Mr. Strong referenced page C10 of the presentation materials. Mr. Strong presented the Executive Summary; that the total required contribution for the year beginning 10-01- 2020 is $7,053.657.00 that compares to $6,766,262.00 for the year beginning 10-01-2019; that a dollar based calculation is used versus a percentage of pay method that was used prior to the Plan being closed; that the funded ratio this year is 74.2% which is a decrease from last year at 75% due to smoothing. Discussion ensued regarding the investment assumption return rate and the new Florida Retirement System (FRS) mortality table. Mr. Strong added a brief overview of contributions to finance benefits of the Pension Fund. Discussion regarding continuing to lower the amortization period by one year until get to ten years; that this will be noted in GRS reports for further discussion later. Mr. Strong concluded with an overview of historical returns. A motion was made by Treasurer Strickland and seconded by Trustee McVaugh to approve the Actuarial Valuation Report for Fiscal Year Ended September 30, 2019. Motion passed unanimously (5-0). The Board thanked Mr. Strong for his presentation 9.2. Presentation and Discussion Re: GASB No. 67 Plan Reporting and Accounting Schedules for Fiscal Year Ended September 30, 2019. Presenter(s): Pete Strong, FSA, EA, MAAA, FCA, Senior Consultant and Actuary, Gabriel, Roeder, Smith & Company. Mr. Strong came before the Board and introduced himself. Mr. Strong presented the GASB No. 67 Plan Reporting and Accounting Schedules for Fiscal Year Ended September 30, 2019; that it is an accounting compliance requirement that started in 2014; that another requirement is to do a sensitivity analysis on the unfunded liability and for GASB purposes this is called the net pension liability; that there is a ten-year history requirement. The Board thanked Mr. Strong for his presentation. 9.3. Presentation and Discussion Re: Large Capitalization Value Manager Search Presenter(s): Scott Owens, CFA, CIMA, Associate Vice President, Institutional Consultant and Andy Mcilvaine, Institutional Consultant, Graystone Consulting. Change to the Order of the Day, Item 9.3. removed. 9.4. Presentation and Discussion Re: A securities fraud action alleging violations of sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (The "Exchange Act") filed against Green Dot Corporation. Presenter(s): Atara Hirsch, Esq. Director of Institutional Investor Services, Abraham, Fruchter & Twersky, LLP via Teleconference. Ms. Hirsch came before the Board via teleconference and introduced herself. Book 1 Page 195 01-24-2020 10:00 a.m. Book 1 Page 196 01-24-2020 10:00 a.m. Ms. Hirsch gave an overview of a securities fraud action alleging violations of sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") filed against Green Dot Corporation; that the Sarasota General Employees' Defined Benefit Pension Plan lost approximately $108,000.00 in Green Dot Stock' and the recommendation is to move forward as lead plaintiff; that this is a "pump and dump case" where insiders of companies pump up the stock or inflate the price of the stock artificially SO that they can sell their own stock at a high value; that investors who purchased base on this artificial inflation are left holding stocks that have heavily declined in value. Ms. Hirsch gave a brief overview of Green Dot Corporation operations. Ms. Hirsch recommended moving forward as lead plaintiff, reviewed the process and requested authority to consider teaming up with other funds to move forward as a group. Treasurer Strickland noted, as she has previously mentioned, is this entire function beyond the purpose of the Board. Discussion ensued. A motion was made by Trustee Reardon and seconded by Trustee McVaugh to approve engaging Abraham, Fruchter Twersky, LLP (AFT) as securities counsel in respect to the Green Dot litigation and proceeding with filing for lead plaintiff status as co-plaintiffs with The City of Sarasota Firefighters Pension Plan. Motion passed unanimously (5-0). The Board thanked Ms. Hirsch for her presentation. The Board revisited Item 5.1. 10. ATTORNEY MATTERS: Attorney Christiansen sated that he has reviewed the USB contract and will execute the documents upon receipt. 11. OTHER MATTERS: Chair Chapdelain asked when Graystone would be presenting on infrastructure investments, Ms. Martin noted the presentation would be at the March 23, 2020 meeting. 12. ADJOURN: Chair Chapdelain adjourned the General Employees' Pension Plan Board of Trustees Regular Meeting at 11:02 a.m. 2KA 1/ Chair Ryan Chapdelain, Secretary Shayla Griggs