MINUTES OF THE MAY 25, 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 9:03 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 9:01 a.m. 2. PLEDGE OF CIVILITY: Trustee Snow 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: None 4. APPROVAL OF MINUTES: 4.1. Approval Re: Minutes of the Firefighters' Pension Board of Trustees Regular Meeting of April 27, 2016 A motion was made by Trustee Snow, seconded by Trustee Joseph, to approve the April 27, 2016, Firefighters' Pension Plan Board of Trustees Regular Meeting minutes. Motion carried unanimously (4- 0). 5. BOARD APPOINTMENTS: 5.1. Appointment Re: Selection of Chair Secretary/Treasurer: Nadalini requested nominations from the Board members for the appointment of the Chair. There was consensus that Chair Hartley would remain as Chair of the Firefighters' Pension Plan Board of Trustees. 5.2. Appointment Re: Selection of Vice Chair Secretary/Treasurer Nadalini requested nominations from the Board members for the appointment of the Vice Chair. There was consensus that Vice Chair Roberson would remain as Vice Chair of the Firefighters' Pension Plan Board of Trustees. 6. BOARD OF TRUSTEES REPORT(S): 6.1. Presentation and Discussion Re: Treasurer's Report for the Fiscal Year Ending September 30, 2015. Secretary/Treasurer Nadalini presented the Treasurer's Report for the fiscal year (FY) ending September 30, 2015 to the Board along with detailed revenues, expenditures, net-income of the Plan and a summary of investments. A motion was made by Trustee Snow, seconded by Vice Chair Roberson, to approve the Treasurer's Report for the fiscal year ending September 30, 2015. Motion carried unanimously (5-0). Book 1 Page 31 05/25/16 9:00 A.M. Book 1 Page 32 05/25/16 9:00 A.M. CHANGE TO THE ORDER OF THE DAY: Secretary/Treasurer: Nadalini sought Board consensus to add under New Business, Agenda Item 9, Item No. 3. Presentation and Discussion Re: La Quinta Holdings Inc. Securities Litigation, per the request of Attorney Herrera. Chair Hartley noted Board consensus to accept the Change to the Order of the Day. 7. INVESTMENT REVIEW: 7.1. Presentation and Discussion Re: DePrince, Race & Zollo Investment Performance Brian J. Casey, Marketing/Client Service and Randy A. Renfrow, CFA = Partner, DePrince, Race & Zollo, Inc. came before the Board to present the performance of the investment portfolio. Mr. Casey provided an update on the firm's makeup. He stated that the rate of return for the year, as of April 30, 2016, was up by 5.3%; that at the ten year mark the rate of return was 3% over the benchmark. Mr. Renfrow discussed the details of the portfolio and the list of holdings. 8. UNFINISHED BUSINESS: 8.1. Continued Discussion Re: Brian Beauchamp's Entitlement to Distribution from Share Account Attorney Herrera stated that he is requesting that certain direction be taken by the Board with respect to an interpretation of the language in the ordinance that was in effect at the time of Mr. Beauchamp's separation from service with the City of Sarasota. He stated that Mr. Beauchamp and all retirees that are vested participants are entitled to benefits at the time of their departure from service with the City of Sarasota or at the time of their retirement, whichever occurs first; that the terms outlined in the ordinance provision provides for two classes of recipients, either an active member or a benefit recipient; and that the shares are allocated to the two classes of recipient. Attorney Herrera further stated that the ordinance does not speak to vested deferred participants, which is the group in which Mr. Beauchamp falls; that the intention of the code was that the term retirement was used consistently to mean separation from service as a firefighter as well as eligibility for benefits. He continued that the Board is charged with administering the fund and interpreting any ambiguity in the plan's language; that it would be the decision of the Board as to how retirement is defined in the code; that his position is that if the entirety of the ordinance is considered, the intention of the collective bargaining agreement at that time was that the term retirement meant termination of employment and eligibility for benefits; that if that definition is used, then Mr. Beauchamp is not entitled to annual share distributions until he is eligible for benefits. Attorney Herrera stated that if the term retirement is defined to mean separation from employment then the Board would have to go back and verify who else was a vested member who terminated employment with the City of Sarasota and was not yet eligible for benefits. Secretary/Treasurer Nadalini stated that in terms of the reference to the Board interpreting the language of the code, the Board does not have the authority to adopt and establish the code; that the Board can only make recommendations and she would like clarification on how the responsibility lies with the Board to interpret a legal document. Attorney Herrera agreed, stating that the Board does not have the authority to amend the ordinance; that solely lies with the City legislature, but where there is an ambiguity in the plan, it is the Board's responsibility to interpret what the language means. Secretary/Treasurer: Nadalini stated that if the code is incorrect then it must be changed and the attorneys can collaborate and determine what the interpretation of the code may be legally, then perhaps the Board can agree to present it to the City Commission. Discussion ensued regarding the interpretation of the code. Brian Beauchamp and Attorney George Dramis, Band, Gates & Dramis, came to the Board and Attorney Dramis stated that according to the code, retired and retirement meant the cessation of employment as a firefighter; which is neither ambiguous nor subject to reason; that the ordinance is very clear in stating that any firefighter who terminated employment with at least ten years of credited service prior to April 2003, shall be entitled to such multiplier and benefits as in effect of the date of his termination and that Mr. Beauchamp falls under this category. He further stated that Mr. Beauchamp qualifies for pension benefits because of the termination section of the code, which states that any firefighter that terminates employment and has at least ten years of creditable service, may elect to receive an early retirement pension at any age after age 50; that firefighters who terminated employment with the City of Sarasota on or after October 1998 and prior to the effective date of the ordinance, which Mr. Beauchamp did, shall be eligible for the 13th share payment and that this is not subject to interpretation. In response to a question from Vice Chair Roberson regarding Mr. Beauchamp's eligibility for the 13th share payment that would have been distributed in September or October 2002, Attorney Dramis stated that the payment would be prorated for that year and the amount of interest gained on the payment was discussed. Discussion ensued regarding Mr. Beauchamp's entitlement to distribution from the share account. A motion was made by Vice Chair Roberson, seconded by SecretaryTreasurer Nadalini, to approve the share distribution request for Brian Beauchamp. Motion carried unanimously (5-0). Vice Chair Roberson left the Chambers at 11:01 a.m. and returned at 11:03 a.m. 8.2. Continued Discussion Re: Proposed Trustee Education and Travel Expenses Policy Statement Attorney Herrera discussed the proposed policy statement with the Board. Secretary/Treasurer Nadalini stated that if any of the Board members have any comments that they may forward them to Attorney Herrera for discussion in a subsequent meeting. Discussion ensued regarding travel expenses and trustee education. 8.3. Continued Discussion Re: Retiree Benefit Plan Payments Pension Plans Administrator Ramphal stated that if an individual has 457 Account, they may be able to use those funds to pay for their health insurance premiums, if their individual plan allows these payments. In response to a question from Secretary/Treasurer Nadalini regarding the ability of either VALIC, Mass Mutual or ICMA to make payments directly to a participant's healthcare provider, Pension Plans Administrator Ramphal stated that the payment would go directly from an individual's pre-existing deferred compensation account to the health insurance company. Secretary/Treasurer Nadalini that this payment would be a matter outside of the pension fund; that the Pension Administration would only be involved in directing the participants to the 457 Plan Financial Advisor. 9. NEW BUSINESS: 9.1. Presentation and Discussion Re: FPPTA 2016 Board of Directors Election Procedure Chair Hartley advised the Board that the election for the FPPTA Board of Directors was coming up in June and discussed election procedure with the Board. Secretary/Treasurer Nadalini stated that whoever attends the FPPTA conference can report back to the Board. There was consensus that the Board members who attend the FPPTA will report to the Board regarding the FPPTA election at the next Board meeting. 9.2. Presentation and Discussion Re: Designated Benefit Plan Fiduciary Liability Coverage for the period of September 1, 2015 through September 1, 2016 Pension Plans Administrator Ramphal stated that the plan's designated benefit plan fiduciary liability coverage expires on September 1, 2016 and will be renewed at that time. Secretary/Treasurer Nadalini requested that Attorney Herrera research wraparound insurance coverage for trustee's travel. Attorney Book 1 Page 33 05/25/16 9:00 A.M. Book 1 Page 34 05/25/16 9:00 A.M. Herrera stated that he has reached out to other administrators and that they are in the process of sending information to him, which he will forward to Plans Administrator Ramphal once received. 9.3. Presentation and Discussion Re: La Quinta Holdings Inc. Securities Litigation NOTE: Item No. 9.3 added under Change to the Order of the Day Attorney Herrera advised the Board that the plan's securities portfolio monitoring firm has alerted the Board to alleged violations of the Securities Act by La Quinta Holdings; that La Quinta Holdings had misrepresented earnings and facts about their company which has detrimentally affected the share price. Attorney Herrera stated that it is recommended that the Board proceed with action against La Quinta Holdings by filing a complaint, which must be approved by the Board. A motion was made by Secretary/Treasurer Nadalini, seconded by' Vice Chair Roberson, to serve as the lead plaintiff in the La Quinta Holdings Inc. securities litigation. Motion carried unanimously (5-0). Chair Hartley left the Chambers at 11:09 a.m. BOARD OF TRUSTEES TO RECESS UNTIL 11:15 AM VICE CHAIR REÇONVENED MEETING AT 11:15 AM 10. ATTORNEY MATTERS: Attorney Herrera stated that he has a conflict with the June board meeting date and he will be unable to attend the meeting. Secretary/Treasurer: Nadalini recommended to the Board that the June 22"d meeting be cancelled and to move everything to the July 27"h meeting and schedule a special meeting if necessary. There was consensus for the June meeting to be cancelled and matters moved to the July meeting. 11. OTHER MATTERS: Secretary/Treasurer Nadalini requested that the Board members email any changes that they may have to the historical year end summary sheet to Pension Plans Administrator Ramphal and that she will ensure that the sheet is updated and included in the meeting agenda packages. 12. ADJOURN: Vice Chair Roberson adjourned the Firefighters' Pension Plan Board of Trustees Regular meeting at 12:00 p.m. ulih Rohero Chwyo W. Vice Chair Shelia Roberson Secretary/Treasurer Pamela M. Nadalini