MINUTES OF THE MAY 16, 2016 CITY OF SARASOTA GENERAL EMPLOYEES' PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING Present: Chair Gretchen Schneider, Vice Chair Barry Keeler, Treasurer John Lege, and Trustees Ryan Chapdelain, Bonnie Wagner, and Kari McVaugh Others: Attorney Scott Christiansen, Pension Plans Administrator Harry Ramphal, Senior Pension Analyst Anthony Ferrer, and Pension Specialist Chinyere Deehan Absent: Secretary Pamela Nadalini 1. CALL THE MEETING TO ORDER: Chair Gretchen Schneider called the meeting to order at 8:30 a.m. 2. PLEDGE OF CIVILITY: Chair Schneider 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 PUBLIC INPUT: None 4. APPROVAL OF MINUTES: 4.1. Approval Re: Minutes of the April 18, 2016 General Employees' Pension Plan Board of Trustees Regular Meeting A motion was made by Vice Chair Keeler, seçonded by Trustee Wagner to approve the April 18, 2016, General Employees' Pension Plan Board of Trustees Regular E Meeting minutes. Motion carried unanimously (6-0). 5. APPROVAL OF RETIREMENT REQUEST/S): 5.1. Approval Re: DROP Retirement Request of James Godshall Pension Plans Administrator Ramphal stated that James Godshall requested to enter the DROP effective May 1, 2016; that Mr. Godshall is 65 years of age, has 28.53 years of service, and elected the 50% to Joint Annuitant with the Pop Up Option. A motion was made by Vice Chair Keeler, seconded by Treasurer Lege, to approve the Retirement Request of James Godshall. Motion carried unanimously (6-0). 6. ÇOMMITTEE APPOINTMENTS: 6.1. Appointment Re: Selection of Chair Pension Plans Administrator Ramphal requested nominations from the Board members for the appointment of the Chair. A motion was made by Trustee Chapdelain, seconded by Treasurer Lege, to approve the appointment of Vice Chair Keeler as Chair of the General Employees' Pension Plan Board of Trustees. Motion carried unanimously (6-0). Book 1 Page 18 05/16/16 8:30 A.M. Book 1 Page 19 05/16/16 8:30 A.M. 6.2. Appointment Re: Selection of Vice Chair Pension Plans Administrator Ramphal requested nominations from the Board members for the appointment of the Vice Chair. A motion was made by Chair Schneider, seconded by Treasurer Lege, to approve the appointment of Trustee Chapdelain as Vice Chair of the General Employees' Pension Plan Board of Trustees. Motion carried unanimously (6-0) 7. BOARD OF TRUSTEES REPORT(S): 7.1. Presentation Re: Treasurer's Report for the Fiscal Year Ending September 30, 2015 Treasurer Lege 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. 8. INVESTMENT REVIEW: 8.1. Presentation and Discussion Re: Center Coast Capital Advisors Investment Performance Joe Herman, Vice President and Greg Falzone, Vice President of Investor Relations and Head of Distribution, Center Coast Capital Advisors, came before the Board to present a market update and an overview of the company's investment portfolio. Mr. Herman briefly discussed how the energy market has peaked since the last fiscal quarter and the effect this has had on crude oil and natural gas prices. In response to a question by Treasurer Lege regarding the decrease in oil prices and the subsequent decrease in the investment portfolio, Mr. Herman stated that the decrease in the portfolio is frustrating; that demand continues to be strong SO low profits cannot be explained; that the outlook going forward is better and the crude market is showing signs of entering equilibrium, which will create more price stability. 8.2. Presentation and Discussion Re: Graystone Consulting Investment Performance Charles Mulfinger, Managing Director, and Scott Owens, Institutional Consultant, Graystone Consulting, came before the Board to present an overview of the company's investment performance. Mr. Mulfinger stated that he has provided the letters requested by the Board regarding Center Coast Capital Advisors and Graystone Consulting; that the letters detail that both companies support staying with the current investment portfolio. Mr. Owens gave an update on the market, and stated that it has been a quarter with muted returns due to market volatility; that unemployment has gone up slightly, partly due to an increase in wages; that the economy is still on solid footing; that the small cap growth index was down 4.68%, which had a negative impact on the overall index which was down by 1.52%. Mr. Mulfinger gave a brief overview of the investment portfolio's performance and the breakdown of returns among the investment managers, and stated that there was a gain of $66,437.00; that the total equity is at 64.12% versus the policy target of 65% which is within the set ranges; that Master Limited Partnerships (MLPs) are underweighted mostly due to a loss in value; that real estate is above target at 11.46% versus 10%. 9. UNFINISHED BUSINESS: 9.1. Continued Discussion Re: Proposed Annual Budget for Fiscal Year 2016 = 17 Pension Plans Administrator Ramphal presented the proposed Annual Budget for fiscal year (FY) 2016/17, and stated that there has been an increase in payroll administration due to more employees retiring with the City of Sarasota, Florida. In response to a question from Chair Schneider regarding the additional amount of retirees, Pension Plans Administrator Ramphal stated that approximately 50 retirees are anticipated as employees are coming of age and are eligible to retire in the next year. Trustee Chapdelain stated that he would like a breakdown of the employees who are eligible for retirement in the next few years, for actuarial purposes and to make decisions going forward. A motion was made by Trustee Chapdelain, seconded by Trustee McVaugh, to approve the proposed annual budget for fiscal year 2016-17. Motion carried (5-1) with Chair Schneider voting no. 10. NEW BUSINESS: None 11. ATTORNEY MATTERS: Attorney Christiansen stated that one of the requirements for state law is for the Board to declare an expected rate of investment return; that a recommendation must be received from the Consultant who would look at the Plan's asset allocation and give a reasonable expectation for the Board to use to make a motion. Mr. Mulfinger, Managing Director, Graystone Consulting came before the Board and stated that the current 7% rate of return assumption is an acceptable rate of return assumption for the short, intermediate, and long term. A motion was made by Vice Chair Keeler, seconded by Treasurer Lege, to approve the assumed rate of return of 7%. Motion carried (5-1) with Trustee Chapdelain voting no. 12. OTHER MATTERS: Trustee McVaugh stated that she would not be in attendance at the Board meeting scheduled for July as she will be recovering from back surgery. Chair Schneider stated that the Plan's policies and procedures should be reviewed to ensure that it is in keeping with the City code, and Pension Plans Administrator Ramphal stated that the and item will be placed on the next Agenda for discussion. 13. ADJOURN. Chair Schneider adjourned the General Employees' Pensions Board of Trustees Regular meeting at 10:15 a.m. Emslnuler Hlauphel Chair Gretchen M. Schneider Pension Plans Administrator Harry Ramphal Book 1 Page 20 05/16/16 8:30 A.M.