MINUTES OF THE CITY OF SARASOTA POLICE OFFICERS' PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING OF FEBRUARY 23, 2018 Present: Chair Ron Baty, Secretary/Treasurer Pamela Nadalini, Trustee Demetri Konstantopoulos and Trustee Johnathan Todd Others: Attorney Lee Dehner and Pension Specialist Lois Belle Absent: None 1. CALL MEETING TO ORDER: Chair Baty called the meeting to order at 8:16 a.m. Board consensus to approve Change to the Order of the Day Memorandum 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. January 26, 2018 A motion was made by Trustee Konstantopoulos and seconded by Trustee Todd to approve the Minutes of the Police Officers' Pension Plan Board of Trustees Regular Meeting of January 26, 2018. Motion carried unanimously (4-0). 5. APPROVAL OF RETIREMENT REQUESTIS): None 6. BOARD APPOINTMENTS: 6.1. Appointment Re: Selection of Vice Chair Presenter(s): Secretary/Treasurer Nadalini Secretary/Treasurer Nadalini stated that due to the resignation of Vice Chair Miller the board must designate a new vice chair. Trustee Todd nominated Trustee Konstantopoulos for the position of Vice Chair; there being no other nominations the Board agreed by consensus on the nomination of Trustee Konstantopoulos to Vice Chair. Book 1 Page 97 2/23/18 8:15 a.m. Book 1 Page 98 2/23/18 8:15 a.m. 7. INVESTMENT PERFORMANCE REVIEW: 7.1. Presentation and Discussion Re: Burgess Chambers & Associates Investment Performance as of December 31, 2018 Presenter(s): Larry Cole, Senior Consultant, Burgess Chambers & Associates Larry Cole, Senior Consultant, Burgess Chambers & Associates came to the dais and introduced himself for the record. Mr. Cole provided an overview of the market; that there were no compliance issues from investment managers; that the fund beat benchmark for the quarter, one-year, and three-year marks; that for the quarter the fund was 4.1% and for the year was 16.0%, net of fees; that the asset allocation is overweight in domestic equity and that he recommends the following rebalancing strategy: move $1M out of domestic equity ($500,000 from The Boston Company and $500,000 from iShares Russell 1000 Growth Fund) and put that into bonds ($500,000 to Garcia Hamilton, $250,000 to Sawgrass and $250,000 to NIS). In response to a question from Secretary/Treasurer Nadalini asking about convertibles, Mr. Cole stated that the actual convertibles are very close to target allocation and that the MLP market is struggling to find a vehicle with less risk; that he recommends taking a more conservative approach to be prudent; that the current rationale is to remove some volatility and the MLPs have not responded yet. Mr. Cole discussed each Investment Managers' performance; that there are no manager concerns at this time; that the fund's managers compliment each other very well to smooth fund performance; that 85% of the time on a rolling five (5) year basis the plan has ranked in the top quartile. In response to a question from Secretary/Treasurer Nadalini asking about the Plan's expected rate of return, Mr. Cole stated that the Police Officers' Pension Plan at an expected rate of return of 7.0% is at the low end of the Plans he works. A motion was made by Secretary/Treasurer Nadalini, and seconded by Trustee Todd to rebalance the portfolio based on the recommendation provided by the Plan's consultant. Motion carried unanimously (4-0). 8. UNFINISHED BUSINESS: None 9. NEW BUSINESS: 9.1. Presentation and Discussion Re: Independent Auditor's Report for the Fiscal Year Ending September 30, 2017 Presenter(s): Ms. Alison Wester, CPA Partner, Mauldin & Jenkins, LLC Alison Wester, CPA Partner, Mauldin & Jenkins, LLC came to the dais and introduced herself. Ms. Wester presented the independent Auditor's Report for the Fiscal Year Ending September 30, 2017; that she is pleased to present another year with a clean, unmodified opinion of the financial statement; that there was a $22.8 million increase in total assets and net position during the year; that contributions and investment returns primarily were driving the increases; the decreases were primarily related to benefits and some administrative and investment expenses; total investments at the end of the year were approximately $225 million. Ms. Wester provided a high-level overview on the structure of the report and described each Note to the Financial Statements; that there were no subsequent events that required disclosure; that there is now four (4) years of supplementary information showing the summary of the net pension liability and the net pension liability as a percentage of covered payroll; that there were no material weaknesses identified this year; that the follow-up of prior finding is resolved. Ms. Wester stated that the Auditors' Discussion & Analysis Report provides background on the firm; that the report discusses the different components of auditors' opinions and the required communications and responsibillties. There were no audit adjustments proposed to the Plan, very clean this year; there were no uncorrected misstatements and reaffirms independence; lastly, for educational purposes, the report provides a walk through some of the upcoming GASB; that Mauldin & Jenkins offers complimentary continuing education for clients and if any trustee is interested in attending to please contact the offices to enroll. The Board thanked Ms. Wester for her presentation. 10. ATTORNEY MATTERS: 10.1. Presentation and Discussion Re: Mini-Conference for Trustees Presenter(s): Attorney Lee Dehner, Law Offices = Christiansen & Dehner, P.A. Attorney Dehner stated that Christiansen & Dehner is hosting a mini conference in Auburndale, FL designed to meet statutory, continuing education requirements if a Trustee is unable to get to an FPPTA conference; that if trustees attend an Investment Manager hosted event that would meet the investment portion of required continuing education but not the legal portion. Attorney Dehner provided an update on the legislative session; that the session will adjourn March 9, 2018 but that there are no bills pre-filed which would impact pension funds; that the only bill is SB980 and as previously discussed, if passed, would require Plan's actuary to set the assumed rate of return for the fund for the board to adopt 10. OTHER MATTERS: Secretary/Treasurer Nadalini reminded Trustees that the Financial disclosure filing deadline is approaching and Attorney Dehner stated that the deadline for filing forms is July 1st and forms must be submitted to the Supervisor of Elections where the Trustee resides. Secretary/Treasurer Nadalini stated that the current open board seat has one applicant thus far and that it is important to have several applicants for bring before the City Commission for consideration; that the seat requires a city resident applicant. 11. ADJOURN. Chair Baty adjourned the Police Officers' Pension Board of Trustees Regular meeting at 9:20 a.m. 0do - Amede w Chaif Baty Secrelary/Treasurer Nadalini Book 1 Page 99 2/23/18 8:15 a.m.