Book 1 Page 464 03-26-2025 9:00 a.m. MINUTES OF THE CITY OF SARASOTA FIREFIGHTERS PENSION PLAN BOARD OF TRUSTEES MEMBERSHIP MEETING OF MARCH 26, 2025 Present: Chair Michael Hartley, Vice Chair Charles Joseph, Trustee Scott Snow, and Trustee Heather Mushrush. Others: Attorney Madison Levine (telephonic), Pension Plans Administrator Debra Martin, and Pension Specialist Peter Gottlieb. Absent: Secretary/Treasurer: Shayla Griggs 1. CALL MEETING TO ORDER: Presenter(s): Chair Hartley. Chair Hartley called the City of Sarasota (City), Firefighters' Pension Plan (Plan) Board of Trustees Membership meeting to order at 9:01 a.m. 2. PLEDGE OF ALLEGIANCE: Presenter(s): Debra Martin, Pension Plans Administrator Vice Chair Joseph led the Board and meeting attendees in the Pledge of Allegiance. 3. PLEDGE OF CIVILITY: Presenter(s): Chair Hartley. Chair Hartley 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." 4. ROLL CALL: Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin called roll; Secretary/Treasurer Griggs was absent. 5. PUBLIC INPUT: None. 6. APPROVAL OF MINUTES: 6.1. Approval Re: Minutes of the Firefighters' Pension Plan Board of Trustees Regular Meeting of February 26, 2025. Presenter(s): Chair Hartley Vice Chair Joseph made a motion to approve the minutes of the Regular Meeting of February 26, 2025; Trustee Mushrush seconded the motion. The motion passed unanimously (4-0). Book 1 Page 465 03-26-2025 9:00 a.m. 7. BOARD OF TRUSTEE REPORTS. 7.1. Presentation and Discussion Re: Annual Board Report for 2024. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin presented the Annual Board Report for 2024 for the Board's information. 7.2. Presentation and Discussion Re: Proposed Annual Budget for Fiscal Year 2025 - 2026. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin presented the Proposed Annual Budget for Fiscai Year 2025-2026. The overall budget increased 4.65% from the previous fiscal year and it is still adjusting to the general wage increase in Fiscal Year 2024.To Vice Chair Joseph's question, Pension Plans Administrator Martin explained that, while projected budgets allow for wage increases, the City had announced a significant general wage increase after the Board had approved that year's budget. To Chair Hartley's question, Pension Plans Administrator Martin advised that the actual costs in Fiscal Year 2024 were less than the total approved budget for that fiscal year. She noted that postage has decreased considerably in the proposed budget because ADP, the Plan's payroll vendor, is now tasked with mailing checks and direct deposit stubs. Vice Chair Joseph made a motion to approve the Proposed Annual Budget for Fiscal Year 2025-2026; Trustee Mushrush seconded the motion. The motion passed unanimously (4-0). 8. INVESTMENT PERFORMANCE REVIEW: 8.1. Presentation and Discussion Re: Hudson Edge Investment Partners, Performance Review as of December 31, 2024. Presenter(s): Matthew Witschel, Vice President, Director National Accounts, Hudson Edge Investment Partners. Mr. Witschel of Hudson Edge Investment Partners (Hudson) appeared before the Board and introduced himself and his presentation. Mr. Witschel briefly reviewed pages 2 through 4 of the materials, noting Hudson's client with the largest holding is the City of Chicago Police Department, with approximately $200 million under management in a short-term bond strategy; it also has international and domestic equity strategies. Analyst/Equity Trader Joseph DeMauro joined the investment team to replace Jeff Hauk who left the firm. There have been no changes in the Board of Directors/Management Committee. On the Statements of Changes, Q4 2024 and Calendar Yar 2024 pages of the materials, Mr. Witschel noted underperformance relative to its benchmark, but still positive absolute performance. On the Long Term Performance, December 31, 2024 page, he explained that, for the majority of the. time the Plan has had an allocation with Hudson, the market has favored growth stocks over Hudson's value strategy; the portfolio significantly outperformed its benchmark during 2022 when both bonds and equity markets declined dramatically. While the "magnificent 7" mega-cap tech stocks, Apple, Microsoft, Alphabet, Amazon.com, Nvidia, Meta Platforms, and Tesla, led the market in 2024, all but Meta Platforms have had negative performance in 2025. The portfolio's year-to-date 2025 performance has been promising. On the Attribution Reports Fourth Quarter 2024 and YTD 2024 and Portfolio Changes Fourth Quarter 2024, he noted that many of the same sectors which added to performance for the quarier similarly aided performance for the whole year. Utilities provided strong returns because of the powerdemands needed by artificial intelligence companies. He briefly reviewed some of the top and bottom performing stocks for Q4 2024, as well as other notable holdings in the portfolio. He reviewed the Portfolio Characteristics as of December 31, 2024, noting the portfolio's lower price-to-earings (P/E) ratio and higher return on equity; while Hudson does not have dividend income in its name, the portfolio's dividend has always been at least 2.5% and a significant portion of the total return. To Chair Hartley's questions, Mr. Witschel advised that the weighted average market cap rate of $109 billion is typical for the portfolio, and that a style analysis will show the strategy stays within the large cap box. Stock selection generally drives the portfolio's performance, and that although the portfolio has high active share, meaning that it has similar sector weightings as the benchmark, the portfolio only holds 50 stocks compared to the benchmark's 1000 stocks. On the Top Ten Holdings as of December 31, 2024, Mr. Witschel explained that Financials dominate the portfolio because of their weighting in the benchmark as well as that sector's strong performance in 2024. He suggested that the portfolio could change dramatically in the future depending on how the market performs. Mr. Witschel provided a brief market commentary. Referring to the chart on page 17 of the materials in the Portfolio Commentary Fourth Quarter 2024 section, he explained how the market has been extremely concentrated since 2022. Noting that such concentration is not sustainable, Hudson had anticipated the broadening away from the magnificent 7 as the remaining 493 stocks in the S&P 500 have been catching up. The charts on page 18 of the materials demonstrate how the magnificent 7's earnings growth projections are declining, and profit growth estimates for the remaining 493 stocks are improving. Year- to-date in 2025 has been promising; Hudson expects continued similar performance for the remainder of the calendar year. Mr. Witschel concluded his presentation by reviewing the Trailing one-year correlations graph, noting that Hudson pairs well with large cap growth managers to provide stability and diversity to a portfolio. He noted that Hudson is dedicated to staying within the value space, even when the market favors growth stocks and the portfolio underperforms, because that is the role its clients expect. The Board thanked Mr. Witschel for his presentation. 8.2. Presentation and Discussion Re: Wedge Capital Management, Performance Review as of December 31, 2024. Presenter(s): Richard Wells, General Partner, Wedge Capital Management. Richard Wells of Wedge Capital Management (Wedge) appeared before the Board and introduced himself and his presentation. Mr. Wells advised that Wedge's partnership agreement requires partners to step down by age 65; as he reached that age in January 2025, he will step down as partner on March 31, 2025, but will remain with thet firm and as the Plan's primary contact. There are no other changes at the firm, and none of the current partners will reach the age of 65 for several years. Mr. Wells briefly reviewed the Assets Across Strategies page of the materials, noting the Plan is in the QVM Large Cap strategy, as well as the Systematic Investment Process, and reminded the Board that after dividing the stock universe into 8 sectors, it equally weights each identified stock. Referring to the QVM Large Cap Value Performance Updates, Mr. Wells noted the strong absolute and relative performance as of December 31, 2024. Performance from January 1, 2025, through February 28, 2025, however, has been negative on both absolute and relative bases in part due to tariffs, poor earnings guidance and projections, and declining consumer sentiment. Market cap weighting was especially damaging to performance because Wedge has small allocations to a large number of stocks. He also explained that the market is currently favoring stocks with high P/E ratios yet Wedge buys companies with low P/E ratios. Mr. Wells advised that the portfolio has survived periods during which the market favored other styles as indicated by its strong relative performance over the 3, 5, 10, and since inception timeframes. Book 1 Page 466 03-26-2025 9: Book 1 Page 467 03-26-2025 9:00 a.m. Mr. Wells reviewed the Performance Overviews. On the Activity Summary as of December 31, 2024, he noted that Inception-to-date, the portfolio has returned more than the Plan has withdrawn. On the Active Summary as of February 28, 2025, the portfolio has gained back more than it lost in Q4 2024, and the since inception return remains strong both relatively and absolutely. On the page titled Wedge QVM Large Cap Value: Presented net of fee, the chart titled Distribution of Quarterly Relative Return shows Wedge's' "batting average, " ori its history ofc outperforming its benchmark; Mr. Wells asserted that a batting average of 60.3% is very high. He also explained that Wedge's Up- Market Capture Ratio of 137.63% and Down-Market Capture Ratio of 97.86% show that, in bull markets the portfolio goes up more than the rest of the market, and in bear markets, the portfolio drops less than the rest of the market. The page titled Consistency Across Time and Environments shows the portfolio outperformed its benchmark on every listed date since inception; he noted that only even-numbered years are shown because the strategy is 31 years old. The page titled, QVM LCP Peer Comparison: "All Weatherness," shows the portfolio in a similarly positive light; the chart compares the portfolio to 85 large cap value managers since January 2003. He clarified that the Max Relative DD column shows, on the QVM (Gross) line, that the maximum drawdown was -8.34% which took 1.75 years which is at the highest end of the top percentile. Mr. Wells reviewed thel Performance Attribution Analysis by QVM Sector. In 2024, Technology, Consumer Staples, and Consumer Cyclicals all contributed significantly to the portfolio's outperformance for the year. He noted that the Financials sector outperformed in the index, however the portfolio was underweighted to that sector. Year-to-date in 2025, however, the portfolio has been underperforming across every sector; he asserted the portfolio's equal weighting and the market's preference for growth stock caused the underperformance. In 2024, the market was driven by momentum, however tariffs, consumer sentiment, and poor earnings projections have disrupted that momentum. Mr. Wells advised he would provide the Board with supplemental information on Wedge's historical performance after periods of market disruption. He reviewed the Characteristics as of 12/31/24 and explained that, under Sector Weightings, the portfolio has traditionally been overweighted to Technology because of how it defines that sector, which includes many defense companies. To Chair Hartley's question, Mr. Wells explained that the Sector Weightings shows percentages of the portfolio, and that the portfolio contains close to 140 individual stocks. On the page titled Balancing Value with other Characteristics, Mr. Wells asserted the portfolio is positioned ideally when measured by valuation metrics because the portfolio's trailing and forward P/E ratios and price/cashfiow are all discounted compared to the benchmark, while profitability, growth, and momentum are all significantly higher than the benchmark. This shows the portfolio is buying inexpensive companies which are growing and outperforming the benchmark. He expressed confidence in the portfolio's long-term performance. While Wedge anticipates announcements regarding tariffs to be additionally disruptive, it also anticipates deregulation which will benefit investors and the portfolio. To Chair Hartley's and Trustee Mushrush's questions, Mr. Wells advised there have been no changes to Wedge's leadership and investment team, nor do they anticipate any. The Board thanked Mr. Wells for his presentation. 9. UNFINISHED BUSINESS: None. 10. NEW BUSINESS: None. 11. ATTORNEY MATTERS: Attorney Madison Levine of Sugarman Susskind appeared telephonically and advised she has no updates for the Board. To her question, Chair Hartley advised there was no update from the investment consultant at this meeting. 12. OTHER MATTERS 12.1. Presentation and Discussion Re: Administrative Expense Budget for October 1, 2024, through December 31, 2024. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin presented the Administrative Expense Budget for the period listed. She noted that the items with no expenditure are due to the timing of the invoices. The Board had no questions regarding this item. 12.2. Presentation and Discussion Re: Check Register for October 1, 2024, through December 31, 2024. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin presented the check register for the period listed. She noted that payments to the General Employees Pension Plan are reimbursements for shared suppiies, and that the erratic payments for postage were due to the active hurricane season in 2024 which delayed the receipt of invoices. The Board had no questions regarding this item. 12.3. Presentation and Discussion Re: Asset Allocation as of March 17, 2025. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin presented the asset allocation as of March 17, 2025, for the Board's information. The Board had no questions regarding this item. Pension Plans Administrator Martin advised that the Annual Report required by the Bureau of Local Retirement Systems, Division of Retirement for Chapters 175 or 185 defined benefit plans, was timely filed and approved. To Chair Hartley's request, Pension Plans Administrator Martin advised she will forward a copy of Morgan Stanley's contract to the Trustees for their review, and add to the agenda for the Board's April 24, 2025, meeting. At Vice Chair Joseph's request, the Board informally agreed to continue, at its April 24, 2025 meeting, its discussion of Graystone's core manager search. Chair Hartley advised he needs to attend the summer FPPTA event tomaintain his certification and asked Pension Administration to advise as soon as the event is announced. The Board and Pension Plans Administrator Martin noted that the FPPTA does not typically issue event agendas until after event registration, making it difficult for trustees to gauge their interest in any event until there is limited availability. To Chair Hartley's question, Pension Plans Administrator Martin advised that, currently, there are no scheduling conflicts for the remainder of the 2025 Board meeting calendar, however events have been known to be scheduled as needed. Book 1 Page 468 03-26-2025 9:n Book 1 Page 469 03-26-2025 9:00 a.m. 13. ADJOURN. Chair Hartley adjourned the meeting at 10:03 a.m. Chair Michael Hartley Secretaryfr freasurer Shayla Griggs