MINUTES OF THE CITY OF SARASOTA POLICE OFFICERS' PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING OF SEPTEMBER 25, 2020 VIA TELECONFERENCE, which is allowable under Executive Order No. 20-69 issued by Governor DeSantis on March 20, 2020 Present: Chair Demetri Konstantopoulos, Vice Chair Johnathan Todd, Secretary/Treasurer, Ronnie K. Baty, Trustee Joseph "Jody" Hudgins, and City Auditor and Clerk Shayla Griggs Others: Attorney Scott Christiansen, Pension Plans Administrator Debra Martin, Senior Pension Analyst Anthony Ferrer, Senior Pension Accountant Lori Boyer, Pension Specialist Peter Gottlieb. Absent: None 1. CALL MEETING TO ORDER: Presenter(s): Chair Konstantopoulos, via teleconference. Chair Konstantopoulos called the meeting to order at 8:17 a.m. 2. PLEDGE OF CIVILITY: Presenter(s): Chair Konstantopoulos, via teleconference. Chair Konstantopoulos stated for the record, "We may disagree, but we will be respectful ofone another. We will direct all comments to issues. We will not engage in personal attacks. a 3. ROLL CALL: Presenter: Debra Martin, Pension Plans Administrator, via teleconference As Pension Plans Administrator Martin was disconnected, City Auditor and Clerk Griggs called Roll Call. Chair Konstantopoulos, Vice Chair Todd, Trustee Hudgins, and City Auditor and Clerk Griggs appeared telephonically. Secretary/Treasurer Baty was absent. Also appearing telephonically were Attorney Scott Christiansen, Senior Pension Analyst Anthony Ferrer, and Senior Pension Accountant Lori Boyer. Pension Specialist Gottlieb appeared in person. Pension Plans Administrator Martin rejoined the meeting telephonically at 8:19 a.m. 4. PUBLIC INPUT: None. 5. APPROVAL OF MINUTES: Book 1 Page 190 09-25-2020 9:00 a.m. Book 1 Page 191 09-25-2020 9:00 a.m. 5.1. Approval Re: Minutes of the Police Officers' Pension Plan Board of Trustees Regular Meeting of July 24, 2020. Presenter(s): Chair Konstantopoulos, via teleconference. Vice Chair Todd made a motion, seconded by Trustee Hudgins, to accept the minutes of the July 24, 2020 meeting. Attorney Christiansen noted a typo in the heading of the minutes which Pension Plans Administrator Martin stated would be corrected. Motion carried unanimously (3-0). 6. DISCUSSON ON OFFICE OF SECRETARYTREASURERK Presenter(s): City Auditor and Clerk Griggs, via videoconference. City Auditor and Clerk Griggs advised the Board she is now a resident of the City of Sarasota as required to satisfy the residency requirement to be a Board Trustee. Attomey Christiansen stated City Auditor and Clerk Griggs must still be appointed to the Board by the City Commission now that she has satisfied the residency requirement. City Auditor and Clerk Griggs stated that would be added as an agenda item for the next City Commission meeting. 7. RETIREMENT REQUESTS: None. 8. INVESTMENT PERFORMANCE REVIEW: 8.1. Presentation and Discussion Re: National Investment Services, Portfolio Review as of August 31, 2020. Presenter(s): Mark R. Anderson, CFA, Chief Strategy Officer; Raymond M. Caprio, Director, Institutional Sales, National Investment Services, via teleconference. Raymond Caprio appeared before the Board telephonically and introduced himself, Mr. Anderson, and their presentation. Mr. Caprio gave a company overview, noting it had entered into an agreement with Resolute Investment Managers in 2019 and have had a smooth transition in 2020 considering the economic volatility. He stated it had just launched its first mutual fund, the NIS Core Plus Fund. There have been no other structural changes, and no personnel changes other than additions. He thanked the Board for the opportunity to work with the Board. Attorney Christiansen asked if the partnership changed its operating name. Mr. Caprio assured the Board NIS remains intact with no changes in its name, products, staff, or decision-making autonomy. Mr. Anderson gave a performance overview, noting that as of September 23, 2020, the gross quarter-to- date was 0.98% versus 0.74%, gross year-to-date was up 6.76% with the index up 6.92%, annualized since inception to date down .01% to 4.16% with thei index up 4.35%, which reflect some uncertainty in the market. He believes the market is emerging from a trough where the fund trails the index. Mr. Anderson discussed sector weighting, noting some underweighting compared to the index in government debt and agency mortgages, which has not helped the portfolio's performance but have removed some risk. Mr. Anderson discussed the Fixed Income Market Commentary, comparing the S&P 500 Index and the 10 year T-bill, which may indicate uncertainty in the Treasuries market, an informal investment manager survey by Barrons which shows where participants believe the 10 year Treasury note yield will be in one year, and noted the Barclays aggregate index carries bonds for approximately 6.05 years, and NIS carries bonds for approximately 95% of that time. Chair Konstantopoulos thanked Mr. Caprio and Mr. Anderson for their presentation. 8.2. Presentation and Discussion Re: Wells Fargo Asset Management, Investment Performance Review as of. June 30, 2020. Presenter(s): Douglas Basile, Senior Portfolio Specialist, Heritage Growth Equity, Dann Smith Business Develpmen/Relationsnp Management, Institutional Asset Management, Wells Fargo Asset Management, via teleconference. Dann Smith appeared before the Board telephonically and introduced himself and Mr. Basile. He gave an institutional overview and a firm portfolio overview. Mr. Basile noted the volatility in the market this year and stated Wells is trying to position the portfolio to positively respond to as many scenarios as possible. He stated that year-to-date through September 23, 2020, the portfolio was up about 17%, and up 25% over a trailing one-year. He discussed how monetary and fiscal stimulus supported the market's recovery, how equity returns are correlated with those of fixed income, that consumers are better positioned now than during the Great Recession, how low interest rates support higher equity valuations, and how the fund has performed during the last recession. Mr. Basile discussed the Plan's portfolio allocation, noting the plan has largely performed consistently with the benchmark, and reviewed some of the stocks which contributed and detracted from performance. Larry Cole of Burgess Chambers & Associates asked for the quarter-to-date performance. Mr. Basile stated that the portfolio was up 7%, and the benchmark up about 8%; month-to-date, the portfolio was down 7%, but the benchmark down 9%. Mr. Smith referred to the portfolio Performance slide in the presentation materials noting the performance since inception and thanked the Board for the opportunity to work on behalf of the Plan. Chair Konstantopoulos thanked Mr. Basile and Mr. Smith for their presentation. 8.3. Presentation and Discussion Re: Burgess Chambers & Associates, Investment Performance Review as of June 30, 2020. Presenter(s): Larry Cole, Burgess Chambers & Associates, via teleconference. Mr. Cole appeared before the Board telephonically and introduced himself. Book 1 Page 192 09-25-2020 9:00 a.m. Book 1 Page 193 09-25-2020 9:00 a.m. He began by estimating the portfolio quarter-to-date performance through September 24, 2020 was up approximately 3.8%, and a fiscal year-to-date up 9%, but expressed concern considering a recent tech sell- off as well as the market's reactions to numerous events. Turning to BCA's presentation materials, Mr. Cole reviewed the market's quarterly performance, the Investment Policy Compliance Review noting Franklin Templeton has since reduced its foreign securities holdings to under 5%, the net investment performance, and actual versus target asset allocation remarking growth equities are overweighted and he recommends rebalancing. Mr. Cole discussed the portfolio's gross performance by asset allocation noting it ranks amongst the top 8% in a national ranking of public funds, and by fund manager pointing out the Plan is in the disbursement queue for JPMCB Strategic Property Fund to liquidate $10 million to reduce exposure in the real sector. Mr. Cole noted significant uncertainty in real estate regarding valuation and activity. Trustee Hudgins explained that travel, hospitality, and retail fields are most at-risk sectors within real estate, with hospitality being the most conceming, but that is holding at 17% to 29% across the industry; he clarified that valuations were made using discounted cash flow and revenue methods, and are not based on square footage or sales. Mr. Cole discussed the bond market, noting the dramatic reversal from Treasuries to corporates during the earlier part of the year with a fiscal year-to-date return rate of 6.3%, and expects rates to go up in the next year. He discussed net performances, rates of return noting that as of September 25, 2020, the total fund return is 9% over a rolling five years, and requested the Board consider moving $5 million from Fidelity Large Cap Growth Index to Boston Company to remove some risk from the portfolio by rebalancing growth versus value. He also suggested the Board search for another manager to complement Wells Fargo's Large Cap Growth fund due to the concentration of tech stocks in the index. Attorney Christiansen asked if the Plan had received $718,233 from the State of Florida; Pension Plans Administrator Martin confirmed it was deposited into its operating account approximately one month ago. Mr. Cole noted the portfolio market value as of September 23, 2020 was approximately $264 million. Trustee Hudgins made a motion to move $5 million from the Fidelity Large Cap Growth Index into Boston Company; Vice Chair Todd seconded. Motion carried unanimously (3-0). Chair Konstantopoulos thanked Mr. Cole for his presentation. 9. UNFINISHED BUSINESS: None. 10. NEW BUSINESS: None. 11. ATTORNEY MATTERS: Attorney Christiansen asked Pension Administration if it would present a proposed meeting calendar for 2021 at the next Board meeting; Pension Plans Administrator Martin stated she would. Attorney Christiansen stated that in David Van Gostein's disability case, he and opposing counsel have asked for a status hearing with the judge on October 16, 2020 to inquire if any additional information is needed to render a decision. Attorney Christiansen recommended the Board approve the Mauldin & Jenkins engagement letter and fee regarding the 2020 audit, noting the fee is the same as last year. He explained that even though the Board had approved a three-year engagement letter, Mauldin & Jenkins issued a one year engagement letter. Vice Chair Todd made a motion to approve the Mauldin & Jenkins engagement letter regarding the 2020 audit; Trustee Hudgins seconded. Motion carried unanimously (3-0). Attorney Christiansen stated he had no update regarding the Con Agra case; the defendants filed a motion to dismiss with a hearing in June 2020, but the judge has not issued a decision to date. 12. OTHER MATTERS: 12.1. Presentation and Discussion Re: Administrative Expense Budget Analysis Presenter(s): Debra Martin, Pension Plans Administrator, via teleconference. Pension Plans Administrator presented the Expense Budget Analysis as of June 30, 2020, noting it is at 73.4% for the year. 12.2. Presentation and Discussion Re: Pension Fund Check Register, April 1, 2020 to June 30, 2020. Presenter(s): Debra Martin, Pension Plans Administrator, via teleconference. Pension Plans Administrator Martin presented the check register as of June 30, 2020, explaining that Pension Administration now remits vendor payments using an automated clearing house which does not issue check copies. Pension Plans Administrator Martin noted the payment to Daniel Furner was a refund of post-tax contributions to purchase service time. Further, when the Plan divested from Salient Capital Advisors, insufficient funds had been in the account to pay the pro-rated fund manager fees and were instead paid from the operating account. Lastly, the disbursement to the GE Pension Fund was to reimburse payments to Staples for supplies which had been purchased by the other Plans on behalf of all the Sarasota pension plans. 13. ADJORN. Chair Konstantopoulos adjourned the meeting at 9.22 a.m. dact Chair Demetri Konstantopoulos Vice-Chair Johnathan Todd Book 1 Page 194 09-25-2020 9:00 a.m.