Book 1 Page 72 6/23/17 8:15 a.m. MINUTES OF THE CITY OF SARASOTA POLICE OFFICERS' PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING OF JUNE 23, 2017 Present: Chair Ron Baty, Vice Chair Duncan Miller, Secretary/Treasurer Pamela Nadalini (arrived at 8:25 a.m.), and Trustee Demetri Konstantopoulos Others: Attorney Scott Christiansen, Senior Pension Analyst Anthony Ferrer, Senior Pension Accountant Cynthia Akersloot and Pension Specialist Lois Belle Absent: Trustee Johnathan Todd 1. CALL MEETING TO ORDER: Chair Baty called the meeting to order at 8:18 a.m. 2. PLEDGE OF CIVILITY: Chair Baty read into the record a memorandum from Mayor Willie Charles Shaw, dated February 13, 2015, entitled "City Commission and Advisory Boards Meeting Protocols and Pledge of Civility." 3. PUBLIC INPUT: No one signed up to speak. 4. APPROVAL OF THE MINUTES: 4.1. Approval Re: Minutes of the Police Officers' Pension Plan Board of Trustees Regular Meeting of May 26, 2017 A motion was made by Vice Chair Miller and seconded by Trustee Konstantopoulos to approve the Minutes of the Police Officers' Pension Plan Board of Trustees Regular Meeting of May 26, 2017. Motion carried unanimously (3-0). 5. APPROVAL OF RETIREMENT REQUESTIS): None Secretary/Treasurer Nadalini entered Chambers at 8:25 a.m. 6 INVESTMENT PERFORMANCE REVIEW: 6.1. Presentation and Discussion Re: Frontier Capital Investment Performance as of May 31, 2017 Presenter(s): Leigh Anne Yoo, Vice President, Marketing and Client Services, Frontier Capital Leigh Anne Yoo, Vice President, Marketing and Client Services, Frontier Capital, came before the Board and introduced herself. Ms. Yoo began with an organizational overview of Frontier Capital; that Frontier is focused on bottom up research and continues to add research resources. Ms. Yoo stated that the strategy that the Police Officers' Pension Fund is invested in remains closed to new investors; that the strategy closed at $1.5 billion in assets and has grown to $3.1 billion; that performance is in the top quartile for 3-, 5-, 7-, 10-year periods and since inception; that performance through May 31st is down 3,6% due to high grown stocks taking off and energy stocks (3.7% of portfolio) have been faced with some macro issues adding to underperformance. In response to a question from Secretary/Treasurer Nadalini asking for the net return, Ms. Yoo stated that she would forward that information to Pension Specialist Belle to send to the Board. In response to question from Secretary/Treasurer Nadalini requesting figures be shown by fiscal year, Ms. Yoo stated she would forward performance results by fiscal year to Pension Specialist Belle as well. Discussion ensued around performance in the current market environment. Chair Baty thanked Ms. Yoo for her presentation. Chair Baty formally welcomed Trustee Konstantopoulos to the Board, 7. UNFINISHED BUSINESS: 7.1. Discussion Re: Additional Audit Fees Invoice from Mauldin & Jenkins, LLC Presenter(s): Alison Wester, CPA & Partner, Mauldin & Jenkins, LLC Alison Wester, CPA & Partner, Mauldin & Jenkins came before the Board and introduced herself. Ms. Wester stated that the invoice being presented for discussion is related to the additional work related to the unexpected circumstances that arose due to the material weaknesses and significant deficiencies found during the audit; that staff has been working diligently to address and correct. Secretary/Treasurer Nadalini stated that she is confident that issues identified are now corrected going forward; that the Police Officers' Pension Plan received a "clean" unmodified opinion; that if there are any future additional fees due, Ms. Wester must come before the Board for approval prior to incurring fees. Discussion ensued around additional cost incurred and best practices going forward. Trustee Konstantopoulos requested a copy of the Audit and Secretary/Treasurer: Nadalini stated she would have Pension Specialist Belle send copies of the Audit to the new trustees. A motion was made by Vice Chair Miller and seconded by Secretary/Treasurer Nadalini to approve the Mauldin & Jenkins invoice of additional Audit fees incurred. Motion carried unanimously (4-0). 8. NEW BUSINESS: 8.1. Approval Re: JPMorgan Asset Management = New Standard Fee Schedule Presenter(s): Larry Cole, Senior Consultant, Burgess Chambers and Associates (via telephone) Larry Cole, Senior Consultant, Burgess Chambers and Associates was teleconferenced into the Police Officers' Pension Plan Board of Trustees regular meeting of June 23, 2017. Mr. Cole stated that the New Standard Fee Schedule provided by JPMorgan reduces fees charged for cash and cash equivalents to 0.15% and is consistent among JP Morgan's clients; that he recommends the Board approve. A motion was made by Secretary/Treasurer Nadalini and seconded by Trustee Konstantopoulos to approve the JPMorgan new standard fee schedule. Motion carried unanimously (4-0). Book 1 Page 73 6/23/17 8:15 a.m. Book 1 Page 74 6/23/17 8:15 a.m. The Board requested Mr. Cole attend or be available via telephone for the Police Officers' Pension Plan Board of Trustee regular meeting of October 28, 2017 and Mr. Cole stated that he would be available fori the meeting as requested. 8.2. Approval Re: Addendum to the Investment Management Agreement between the Board of Trustees of the City of Sarasota Police Officers' Pension Fund and Wells Capital Management, Inc. Presenter(s): Attorney Scott Christiansen, Christiansen & Dehner Attorney Christiansen stated that Wells Capital Management is providing a fee reduction to the Police Officers' Pension Plan and that Christiansen & Dehner has prepared an Addendum to the Investment Management Agreement. In response to a question by Secretary/Treasurer: Nadalini asking if the fee reduction is consistent across clients, Attorney Christiansen stated that the proposed fee reduction is consistent with what is offered to other clients. The addendum drafted adds subsection Q, Public Records, in accordance with amendment to Section 119.0701(2)(a), Florida Statutes. A motion was made by Secretary/Treasurer Nadalini and seconded by Trustee Miller to approve the Addendum to the Investment Management Agreement between the Board of Trustees of the City of Sarasota Police Officers' Pension Fund and Wells Capital Management Inc. Motion carried unanimously (4-0). 9. ATTORNEY MATTERS: Attorney Christiansen stated that he is currently reviewing an addendum prepared for Fifth Third; that Fifth Third is currently only paying the Investment Managers and only that information should be added to the addendum. There was Board consensus for Attorney Christiansen to bring addendum before the Board again for approval to execute. Attorney Christiansen reminded the Board that Financial Disclosure forms are due July 1s+; that new Trustees must file within 30 days of taking the Oath of Office. Attorney Christiansen provided an update on the Disability Claim for Mr. David Van Gostein; that the claimant requests a full hearing before the Board of Trustees of the City of Sarasota Police Officers' Pension Fund regarding the issues presented at the hearing on February 24, 2017; that ai full deposition will be scheduled and then a final hearing thereafter. Discussion ensued around the proper method to ensure confidential material is handled appropriately and how such material must be coded to be safeguarded. 10. OTHER MATTERS: Vice Chair Miller asked for status of outstanding question regarding timing of the Deferred Retirement Option Plan (DROP) payments. Attorney Christiansen stated that no interest is due on DROP payments; that the timing of DROP payment is being made timely and in accordance with plan code. Secretary/Treasurer: Nadalini concurred that the timing of DROP payment is being made timely and in accordance with Plan Code. Secretary/Treasurer: Nadalini stated that the Police Officers' Pension Plan Board of Trustees does not have the ability to change the Code; that the board does have the ability to propose recommended changes to the City Commission for its consideration. There was consensus by the Board to request Staff prepare a flow chart of DROP payment process as of the official date of separation, for Board review. Discussion ensued around interim process of attorney coverage in Attorney Lee Dehner's absence. 11. ADJOURN. Chair Baty adjourned thel Police Officers' Pension Board of Trustees Regular meeting at 9:53 a.m. CE Chaip Ron Baty Secretay/reasurer Pamela Nadalini Book 1 Page 75 6/23/17 8:15 a.m.