MINUTES OF THE CITY OF SARASOTA FIREFIGHTERS PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING OF SEPTEMBER 26, 2018 Present: Chair Michael Hartley, Vice Chair Shelia Roberson, Secretary/Treasurer Pamela M. Nadalini, Trustee Charles Joseph, and Trustee Scott Snow Others: Senior Pension Analyst Anthony Ferrer and Pension Specialist Serena Martinez Absent: None 1. CALL THE MEETING TO ORDER: Chair Hartley called the meeting to order at 9:02 a.m. 2. PLEDGE OF CIVILITY: Vice Chair Roberson read into the record a memorandum from Former Mayor Willie Charles Shaw, dated February 13, 2015, entitled "City Commission and Advisory Board Meeting Protocols and Pledge of Civility." 3. PUBLICINPUT: No one signed up to speak. Secretary/Treasurer: Nadalini entered Chambers at 9:07 a.m. 4. APPROVAL OF MINUTES: 4.1. Approval Re: Minutes of the Firefighters' Pension Plan Board of Trustees Regular Meeting of July 25, 2018 Vice Chair Roberson noted the misspelling of her surname in the minutes of the July meeting. Senior Pension Analyst acknowledged this and stated that this would be corrected. A motion was made by' Vice Chair Roberson and seconded by Trustee Joseph to approve the Minutes of the Firefighters' Pension Plan Board of Trustee Regular Meeting of June 25, 2018. Motion carried unanimously (5-0). 5. RETIREMENT REQUESTS: None 6. INVESTMENT PERFORMANCE REPORT: 6.1. Presentation and Discussion Re: Renaissance Investment Management, Performance Review as of. June 30, 2018 - Presenter(s): Michael Schroer, CFA, Managing Partner/Chief Investment Officer, Renaissance Investment Management Mr. Michael Schroer came before the Board and stated he was going to provide a detailed report on the Plan's Large Cap Growth and International Portfolios. Mr. Schroer added there has been no change to the Renaissance portfolio management staff since his last presentation. Attorney Herrera entered Chambers at 9:17 a.m. Mr. Schroer explained there has been a struggle in performance in the past few years in the Large Cap Growth portfolio. FY 9/30/17-6/30/18 is up about 7% versus 15% for the Russell 1000 benchmark. Overall absolute returns have been adequate, but the relative returns have been poor by the firm's standards. Mr. Schroer stated that he believes the economy is in a cycle, which has been seen before but believe returns Book 1 Page 115 9/26/18 9:00 a.m. Book 1 Page 116 9/26/18 9:00 a.m. will be improving in the future. Mr. Schroer provided insight by looking at the FANGMA (Facebook, Apple, Netflix, Google, Microsoft and Amazon) stocks. Explaining that when these stocks do well they can tilt the entire index. SecretaryTreasurer Nadalini stated on the record that in light of this Plan being a closed Plan, similar to the City of Sarasota General Employees' Pension Plan, she is concemed with the underperformance of the Plan's portfolios with Renaissance. Secretary/Treasurer Nadalini further questioned why should the Firefighters' Pension Plan not undertake an investment manager search for a replacement investment firm for the Large Cap and International portfolios, similar to what the General Employees' Pension Plan Board of Trustees has authorized at the October 15, 2018 meeting of the Board of Trustees. Mr. Schroer responded by stating that Renaissance has not changed its investment style, and has not deviated from its mandate, that Renaissance provides down-side protection in volatile markets, and that any active manager will experience periods of underperformance relative to its benchmark. In response to a question from Chair Hartley, Mr. Schroer commented that Renaissance maintains an equal weighting of approximately 2% for each position in the portfolio and that this strategy provides risk management in the event of declines in the price of a single stock or market sector. Mr. Schroer subsequently provided a summary of the International portfolio for the current Fiscal Year to date, stating there has been under performance in the past two years of about 1.6 verses a positive 1% for the index, that the biggest issue in the International market is the strength of the dollar; It tends to erode the value of International securities. Mr. Schroer added that Renaissance believes that in the long term, there will be opportunities in the emerging markets. The concept of trade and trade tariffs are also affecting the International markets. Secretary/Treasurer Nadalini stated that she would like to see improved performance but is willing to give Renaissance time to demonstrate its capabilities. Chair Hartley stated that he, too, is not interested in discussing an investment manager search and added that Renaissance has provided the Plan many periods of out-performance. There were no further questions from the Board and the Board thanked Mr. Schroer for his time. 6.2. Presentation and Discussion Re: Richmond Capital Management, Performance Review as of June 30, 2018 - Presenter(s): Howard Bos, President, Richmond Capital Management Mr. Howard Bos came before the Board and announced that there had been no personnel changes within Richmond Capital Since his last visit in September of 2017. Mr. Bos continued by stating the firm is monitoring the interest rate market, that the market expects the Federal Reserve to raise interest rates 2 more time this calendar year. He further added that the value of the Plan's portfolio decreases as interest rates rise, that while the Plan had experienced a negative return in the past quarter, the Plan's holdings outperformed the benchmark. Mr. Bos elaborated that the Barclays Government Credit Index experienced a 1.43% loss for the quarter, while the Plan's portfolio lost 1.11% net of fees. He further added that this is primarily due to the portfolio having a duration of 6.25 years while the index has a duration of over 8 years. Discussion ensued regarding the inverse relationship between interest rates and bond prices and interest rate expectations. The Board thanked Mr. Bos for his time and commitment to the Plan. 7. UNFINISHED BUSINESS: None 8. NEW BUSINESS: 8.1. Presentation and Discussion Re: Portfolio Monitoring Services of Kessler, Topaz, Meltzer, and Check, LLP Presenter(s): Jonathan Davidson, Esquire, Kessler, Topaz, Meltzer, and Check,, LLP Mr. Jonathan Davidson came before the Board and introduced herself. Mr. Davidson provided an overview of his firm and its procedures around portfolio monitoring services; that the firm has numerous avenues to recover funds; that the firm has developed an expertise in the antitrust arena; that all monitoring services are performed in-house and that the firm has built a specialized platform specific to monitoring services. In response to a question from Secretary/Treasurer Nadalini asking about costs, Mr. Davidson stated that Kessler Topaz monitors the Plan's investment portfolio at no charge and that the fund is never obligated to move forward on cases. Mr. Davidson further stated that the firm would get all information from the fund custodian, not the investment managers; that the firm would have current and historical holding information, that the monitoring service is for equities rather than securities, because equities is where the firm is able to recover money. In response to a question from Attorney Herrera asking if claims filing costs are not included in monitoring, Mr. Davidson clarified that claims filing will be free for smaller clients, including the City of Sarasota. Attorney Herrera clarified for the Board that the current custodian, Salem Trust, will soon begin charging for claims filing services. In response to a question from Secretary/Treasurer Nadalini asking if Kessler Topaz would have any issues with the Board retaining multiple companies that provide portfolio monitoring services, Mr. Davidson responded that the firm would have no issue, and that he recommends that the fund have more than one portfolio monitoring service provider. The Board thanked Mr. Davidson for his presentation. 8.2. Presentation and Discussion Re: Proposed Engagement letter to provide professional auditing services between Mauldin and Jenkins and the City of Sarasota Firefighters' Pension Plan Presenter(s): Alison Wester, CPA, CGMA, Partner, Mauldin & Jenkins, LLC Ms. Alison Wester came before the Board via teleconference and provided an overview of the Engagement Letter for the Fiscal Year 2018 Audit of the Plan's Financial Statements. Discussion ensued regarding the GASB 68 Report requested by the County and the Audit of the Fiscal Year 2018 Plan financial statements. A motion was made by Vice Chair Roberson and seconded by Secretary/Treasurer Nadalini to approve the GASB 68 Engagement. Motion carried unanimously (5-0). A motion was made by Vice Chair Roberson and seconded by SecretaryTreasurer: Nadalini to approve the Fiscal Year 2018 Audit Engagement. Motion carried unanimously (5-0). 9. ATTORNEY MATTERS: Book 1 Page 117 9/26/18 9:00 a.m. Book 1 Page 118 9/26/18 9:00 a.m. None 10. OTHER MATTERS None 11. ADJOURN. Chair Hartley adjourned the Firefighters' Pension Plan Board of Trustee Regular Meeting at 11:39 a.m. a Chair Michael Brver Hartley' A SecretaryTreasurer PamélaM. Nadalini