Book 1 Page 457 12-10-2024 10:00 a.m. MINUTES OF THE CITY OF SARASOTA GENERAL EMPLOYEES PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING OF DECEMBER 10, 2024 Present: Chair Ryan Chapdelain, Vice Chair Mark Nicholas, Treasurer Kelly Strickiand, Secretary Shayla Griggs, Trustee Robert Reardon, Trustee Barry Keeler, and Trustee Jan Thornburg, Others: Attorney Stuart Kaufman, Pension Plans Administrator Debra Martin, and Pension Specialist Peter Gottlieb. Absent: None 1. CALL MEETING TO ORDER: Chair Chapdelain called the City of Sarasota (City), General Employees' Pension Plan (Pian) Board of Trustees Regular meeting to order at 10:00 a.m. 2. PLEDGE OF ALLEGIANCE: Presenter(s): Secretary Griggs. Secretary Griggs led the Board and meeting attendees in the Pledge of Allegiance. 3. PLEDGE OF CIVILITY: Chair Chapdelain stated for the record, "We may disagree, but we will always be respectful to one another. We will direct all comments to issues, and we will avoid personal attacks." 4. ROLL CALL: Pension Plans Administrator Martin called roll. Trustee Thornburg was not present. 5. PUBLIC INPUT: None. 6. APPROVAL OF MINUTES: 6.1. Approval Re: Minutes of the General Employees Pension Plan Board of Trustees Regular Meeting of September 30, 2024. Presenter(s): Chair Chapdelain. Trustee Thornburg joined the meeting at 10:01 a.m. Trustee Keeler made a motion to approve the minutes of the September 30, 2024, Regular Meeting; Vice Chair Nicholas seconded the motion. The motion passed unanimously (7-0). 7. APPROVAL OF RETIREMENT REQUESTIS): 7.1. Presentation and Discussion: The DROP Retirement Request of Tony Woods. Presenter: Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin advised that Mr. Woods is age 66 and has almost 18 years of service; he requests the pop-up option, 100% to joint annuitant. Secretary Griggs made a motion to approve Mr. Woods' request; Trustee Thornburg seconded the motion. The motion passed unanimously (7-0). 7.2. Presentation and Discussion: The DROP Retirement Request of Steven Rule. Presenter: Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin advised that Mr. Rule earned 20.17 years of service at age 65 and requests a normal retirement with the option to change joint annuitants at 100%. Trustee Keeler made a motion to approve Mr. Rule's request; Trustee Thornburg seconded the motion. The motion passed unanimously (7-0). 8. INVESTMENT PERFORMANCE REVIEW: 8.1. Presentation and Discussion Re: Segall Bryant, Performance Review as of September 30, 2024. Presenter(s): Mark Rewey, Director of Marketing & Business Development, Segall Bryant. Mark Rewey of Segall Bryant (SBH) appeared before the Board and introduced himself. Mr. Rewey reviewed the SBH At-a-Glance page of the materials. He advised that SBH, which has been a publicly traded company, intends to take the firm private by June 2025 with the help of a passive investment from Mubadala Capital. The passive investment means that everything currently within the SBH organization will remain intact, including its staff, senior leadership, and name. SBH has discussed this with Morgan Stanley as well as Graystone Consulting. To Attorney Kaufman's question, Mr. Rewey advised that SBH is reviewing its client contracts and will make any required amendments or revisions due to the acquisition. Mr. Rewey reviewed the pages titled An Introduction to SBH Fixed Income and Account Reconciliation and Performance. As of November 30, 2024, the portfolio is up 6 basis points absolute, and 29 basis points relative to the index for the quarter, and 4.57% absolute and 44 basis points relative year-to-date. On the Portfolio Characteristics page, Mr. Rewey noted the portfolio has a short duration; SBH is a conservative investor which looks for quality investments that will provide consistent cash flows and good liquidity. The portfolio has no redemption gates. In the Summary Statistics box as of Monday, December 9, 2024, the Yield to Worst was 4.35% and Duration was 1.5%. In the Distribution By Duration box, Mr. Rewey explained that securities which have gone beyond 3 years will be replaced as they mature with 0- to 3-year securities. Under Distribution By Sector, he explained that half the portfolio is in Treasuries and half is in Corporates. Theodore Loew of Graystone Consulting appeared before the Board and asked how reducing the portfolio's duration will change SBH outlook. Mr. Rewey explained that approximately 15% of the portfolio will mature in the coming months. The portfolio has, traditionally, been more heavily weighted in very short term and longer- term securities, with fewer in the middle; SBH is making the portfolio more neutral and closer to the index with more. 2-1 to 3-year securities. Referencing the 3Q24 Market Commentary pages, Mr. Rewey reiterated that SBH is increasing its duration to be closer to the index. Within the credit sector, SBH favors industrials, which are currently favored in the economy, and utilities, which provide stability; while SBH will own financials, itis not optimistic currently because of the recent interest rate volatility. While investors in 2023 had positioned portfolios in anticipation of the Federal Reserve (Fed) aggressively cutting short-term interest rate cuts, the Fed was much more conservative. SBH believes the Fed may have 1 more cut in 2024, and then hold rates steady in 2025 considering the economy has more certainty since the recent presidential election. SBH believes the interest rate curve will normalize from its current inversion, but that the Fed will refrain from drastic interest rate cuts due to concerns of recurring inflation, and may even increase rates in 2025, although that does not currently seem probable. Book 1 Page 458 12-10-2024 10:00 a.m. Book 1 Page 459 12-10-2024 10:00 a.m. SBH is monitoring the 10-year interest rates considering the increasing national debt; as long-term rates go up, the cost of servicing the national debt increases and would require the government to issue more long-term debt; this would put more upward pressure on long-term interest rates. While this may not directly impact the portfolio, it is of concern in their macro view. To Trustee Reardon's question, Mr. Rewey advised that it is very possible for long-term interest rates to rise more rapidly than short-term rates to fall. Referencing page 30 of the materials, Mr. Rewey explained how foreign buyers had decreased their investments in US Treasuries from 2020 through the current year; to fill that void, US Treasuries must find replacement buyers or increase interest rates to become more attractive. In the short term, treasury auctions have remained encouraging, however over the long term, they need more attractive returns to encourage marginal investors to buy in. Scott Owens of Graystone Consulting appeared before the Board and noted that the Fed only controls short- term interest rates, while the longer-term rates are increasing. To Mr. Owens' question, Mr. Rewey explained that although the portfolio, with its shorter duration, could be marginally impacted by rising long-term rates, the portfolio's higher-than-index yield provides a cushion. Further, as longer duration money rolls off, SBH will reinvest ini new securities at higher rates. To Trustee Reardon's question, Mr. Rewey explained that SBH is limited to participating in pair trades at the longer end while focuses on the short end of the interest rate curve because the Investment Policy Statement (IPS)requires it to be a short-duration portfolio; it could only act outside the mandate if authorized by the Board. Mr. Owens reminded the Board that it opted to invest in a short-term bond fund as a compliment to the existing fixed income manager while short-term interest rates and yields were high to take advantage of declining rates. As yields come down, the Board may migrate into an intermediate-term, core, or a longer-term manager. Extending duration if interest rates go up would have an adverse impact on the portfolio. He explained that the change in presidential administrations may invigorate the economy which, in turn, could cause the Fed to end short-term rate cuts and instead leave them higher for longer to counterbalance inflationary pressures. Mr. Rewey noted that the portfolio is well positioned for the economic uncertainty in the shert term, and that SBH's intent was to provide as many options as possible. To Mr. Owens' question, Mr. Rewey explained that if the Board were to change the IPS to allow for longer duration, lower quality credit, or allow core investments, no other changes would be necessary for SBH to adjust the portfolio accordingly. To Chair Chapdelain's question, Mr. Owens explained that the Board should contempiate amending the IPS now SO that managers are able to restructure allocations in response to changes in the economy to any governmental policy changes; he anticipates any needed changes in weights or allocations to be completed the end of 2025. Mr. Rewey added that, while the equity market is dynamic, changes in the bond market tend to be slower, and therefore there is more time to make decisions regarding the portfolio's structure. The Board thanked Mr. Rewey for his presentation. 8.2. Presentation and Discussion Re: Invesco, Performance Review as of September 30, 2024. Presenter(s): Dane Hoard, Client Portfolio Manager; Brianna Holmes, Client Portfolio Specialist, Investments; Investments; Invesco. Due to technical issues Chair Chapdelain proposed delaying Invesco's presentation, Item 8.2. until later in the meeting; the Board approved by consent. 8.3. Presentation and Discussion Re: Graystone Consulting, Quarterly Performance Review as of September 30, 2024. Presenter(s): Scott Owens CFA, CIMA, Managing Director - Wealth Management, Institutional Consulting Director, Corporate Retirement Director, Impact Investing Director, Alternative Investment Director; Theodore Loew, CFA, Vice President, Institutional Consultant; Graystone Consulting. Mr. Loew provided a market and economic outlook, noting the strong overall returns for the second consecutive year. Political and economic uncertainty is alleviating since the conclusion of the presidential election, although as of the end of Q3 2024, the market leadership has changed in that Energy, Technology and Communication Services, all prior market leaders, have the lowest returns. He reminded the Board of the investment adage, "buy on the rumor, sell on the news, . and in Q32024, the rest oft the market is catching up to the market leaders. The Russell 3000 Value index outperformed the Growth index by nearly 300%; further, the mid- and small-cap indexes outperformed their respective large cap counterparts. International equities outperformed domestics, largely due to thel US Dollar's weakening from low demand; Mr. Loew added that since the presidential election and the incoming administration's declared protectionist policies, that weakening has reversed and domestic equities have rallied. Mr. Owens added that the Board should anticipate international investments to have negative relative performance in 2025. In Fixed Income, Mr. Loew noted the strong returns over the last 12 months have brought the 3-year annualized returns into positive territory. Graystone anticipates unpredictability over the short term for the asset class. Secretary Griggs left the meeting at 10:41 a.m. and returned at 10:45 a.m. Mr. Loew advised that the market expects the incoming presidential administration to have economic growth- oriented policies which may encourage the Fed to maintain higher interest rates to counterbalance potential inflation; the Federal Open Market Committee will have 1 more meeting in 2024 which may provide more clarity. Mr. Owens reminded the current market forecasts are clouded by the pro-growth incoming president, a cautious Fed, and an inverted interest rate yield curve; he reiterated the importance of a neutrally weighted portfolio. Mr. Loew reviewed the pages titled US Economic Indicators, US Equity Performance VS. Earnings Performance, and US Stock Valuation Metrics, and explained that market volatility will be found in price-to-earings ratios (P/E). The S&P's P/E is currently more than 1 standard deviation from its historic norm; when that's happened previously, such as during the early 2000s and in 2020, corrections followed. Graystone expects the market to be sensitive to adverse news which will favor active managers. The page titled Impact cf Rate Change on Fixed Income Prices demonstrates the value of a "barbell" structured fixed income allocation. Mr. Owens discussed the portfolio, starting with the Total Fund - Executive Summary. Considering the portfolio has a higher retum with less risk than the index for the quarter, it is performing well. He discussed how the portfolio is more conservative than the policy index, which explains why the portfolio slightly underperformed relatively fiscal year to date; as the portfolio has less risk than the index, it will gain less in up markets and lose less in down markets. The portfolio continues to outperform thei index over the 3-, 5-, 7-, 10-, and since-inception periods because of the significant market loss in 2022 when the portfolio relatively outperformed; that outperformance is now factoring into the longer performance periods. He reviewed the Total Fund Risk / Return Analysis page of the materials noting the portfolio is satisfying its requirement of providing a sufficient return with less risk. On the Asset Allocation Compliance by asset class page, he advised that the portfolio is underweight in alternatives which are mostly illiquid real estate. When the amount held in Cash & Equivalents is added to the Fixed Income balance, it satisfies the Fixed Income target, and cash is not affected byi interest rate change; if fixed income rates come down, the fixed income returns will go up. To Chair Chapdelain's question, Mr. Owens discussed further underweighting the real estate allocation. UBS anticipates fully paying out the redemption queue in 3.5 years; if the Plan were to request additional redemptions, they would not likely be made until 2027 or 2028. The redemption requests notwithstanding, some investors and analysts believe the real estate market is reaching the bottom of its cycle and may begin to perform. He discussed alternative investments within the real estate sector, including Real Estate Investment Trusts (REITs), which corollate to equities; investing in REITS will require additional discussion and education. Mr. Owens discussed re-balancing the real estate allocation between UBS and AEW, although requesting additional redemptions would not speed up payment of the redemption. To Mr. Owens' question, Pension Plans Administrator Martin advised that the Board requested $2.4 million from AEW in August 2022, of which $1.7 million has been paid, and $2.5 million from UBS in August 2022, of which $775 thousand has been paid. Turning to the Asset Allocation Compliance by manager page, Mr. Owens reiterated the underweights in real estate and overweights in equities and cash. Book 1 Page 460 12-10-2024 10:00 a.m. Book 1 Page 461 12-10-2024 10:00 a.m. Mr. Owens reviewed the fund managers. He discussed Hudson Edge's (Hudson's) performance history and noted that a large cap manager search is on the agenda; although Hudson's performance this year has been an anomaly, he feels less urgency in proposing a replacement because it outperformed in a more normal market. The portfolio has 2 large cap growth managers: Polen and Clearbridge. Polen is highly conçentrated with 20 stocks and will out- or under-perform the market depending on the environment. Clearbridge holds 50% of its portfolio in core and balances the remaining 50% between momentum and defensive stocks depending on what is favored at the time. Clearbridge is a recent investment that is performing well for the market conditions. While Polen is performing well on an absolute basis, it has consistently underperformed relatively, and significant underperformed over the 1-, 3-, and 5-year timeframes; Mr. Owens explained that Polen's performance in Q3 was especially disappointing considering the market has broadened out, and he had expected it to outperform. To Trustee Reardon's and Attorney Kaufman's comments, Mr. Owens agreed that Polen's underperformance is attributable to its underweight to the tech stocks which have been driving the market; considering the amount of growth those market-driving stocks have experienced, he found it difficult to justify a growth manager underweighting or omitting those stocks. Mr. Owens explained that passive investments provide no down-side protection while an active manager may rebalance their portfolio to remove underperforming stocks. Many of Graystone's clients have 1 active and 1 passive manager in this space to gain more exposure to market-leading stocks in which an index may become concentrated. Active managers are typically prohibited by Investment Policy Statements (IPSs) from having such concentrated holdings; he noted that the concentration rule does not apply to index funds. Returning to the fund managers, Mr. Owens explained that NFJ and Geneva are performing well and with low risk, which is tol be expected. He advised that Geneva Portfolio Manager Bill Priebe stepped down in September 2024; Graystone's Global Investment Manager Analysis group is still reviewing the transition but does not have any concerns or recommendations at this time. Franklin Templeton is also performing consistently with its mandate, and it is providing a higher return with less risk. Renaissance, with a 2% position in 50 stocks, has slightly more risk, is also performing as intended. He characterized Renaissance's slight underperformance as being consistent with its philosophy that comes in and out of favor in the market; Polen however, appears to be failing to take advantage of market conditions which do not appear to be changing any time soon. Invesco had more than 10% of outperformance fiscal year-to-date, which is exceptional for fixed income. Turning to AEW, Mr. Owens noted that the 10-year return was 6.73%, while Invesco's fixed income return for that timeframe was 1.92%; while real estate may be currently underperforming as an asset class, it has provided a significant long- term return far beyond those of bonds. He discussed how, in a diversified portfolio with negatively correlated asset classes, there will be at least 1 class which is underperforming: with equities outperforming, real estate is currently the underperforming class. Mr. Owens explained that UBS is now suffering because it had, for the last 20 to 30 years, been heavily invested in highly profitable galleria malls; the COVID-19 pandemic and higher interest rates in the early 2020s destroyed that space, leaving UBS's portfolio decimated. UBS has undergone extensive restructuring, including offering a loyalty program and changes in management, however satisfaction of the redemption queue has been painfully slow. To Chair Chapdelain's comment, Mr. Owens agreed that the portfolio's redemption requests are being satisfied by AEW which is outperforming, but not UBS which is underperforming. That notwithstanding. the redemptions are going into equities which are relatively outperforming. Chair Chapdelain asked Mr. Owens if the Board should suspend a portion of its redemption request to AEW to preserve some of that allocation if it is beginning to perform. Mr. Owens explained that the Board recently liberalized its investment criteria to allow for a wider range of investments, and that it may wish to consider different, non-correlating alternatives than real estate, such as private equity or private credit, however there is no urgency to this because of the redemption queue timeline. He further recommended against selling illiquid assets at their trough. He asserted that alternatives aren't intended to drive a portfolio's returns, but instead, generate income and diversity without increasing risk. He recommended no changes until the entire real estate redemptions are satisfied. To Trustee Thornburg's question, Mr. Owens reminded the Board that UBS's estimated timeframe to satisfy the redemption request is not guaranteed. Chair Chapdelain, Attorney Kaufman, Pension Plans Administrator Martin, and Mr. Owens discussed the real estate allocation. Mr. Owens recommended against adding to AEW, that the Board should continue to accept AEW's redemption payments and reinvest those proceeds in equities which are outperforming. Approximately 67% of the portfolio is currently in equities, with the maximum being 70%. Approximately $1.2 million is owed to satisfy the current AEW redemption request; AEW has been consistently making quarterly redemption payments since November 2022, while UBS has not made payments during some quarters. Mr. Owens concluded his discussion of the managers; Lazard is a liquid global infrastructure fund; it tends to invest in monopoly-like vehicles such as bridges or toll roads and collects revenues. Wilile Lazard has provided steady returns, iti is a diversifying agent, and if the world were to experience another pandemic which shut down commerce, funds like Lazard would suffer. To Chair Chapdelain's question, Mr. Owens reiterated that, because equities and fixed income are outperforming, he does not recommend reallocating more monies to alternatives. Attorney Kaufman reminded the Board that he will present the draft ordinance to amend the investment criteria in item 11.2. which will allow a wider range of asset classes in the portfolio. 9. UNFINISHED BUSINESS: None. 10. NEW BUSINESS: 10.1. Presentation and Discussion Re: Graystone Consulting, Large Cap Manager Search. Presenter(s): Scott Owens CFA, CIMA, Managing Director - Wealth Management, Institutional Consulting Director, Corporate Retirement Director, Impact Investing Director, Alternative Investment Director; Theodore Loew, CFA, Vice President, Institutional Consultant; Graystone Consulting. Referencing the Large Cap Value Manager Search Summary provided at the meeting, Mr. Owens presented the risk and returns for each of the managers, noting that each have had periods of out- and under-performance. He compared each of the funds' respective fees, risks, and performances. On the Manager Style Analysis, he noted that while Hudson stayed true to its value philosophy, the remaining managers increased their respective returns by migrating into growth. Because Hudson's underperformance. relative to its peers was related to the market favoring growth instead of value, and the portfolio already has large cap growth managers, Mr. Owens feels less urgency to recommend replacing Hudson at this time. Turning to the Large Cap Growth Manager Search Summary, Mr. Owens compared the returns of each of the managers, and reiterated the difficulties active managers will have matching the pace of the benchmark when the market is being led by a concentrated, select group of companies which continue to grow domestically and internationally; he added that because the benchmark and each of the managers all have similar standard deviations, a passive investment in this space would not add risk to the portfolio. He recommended either Clearbridge or a passive investment until the market environment changes. To Chair Chapdelain's question, he noted that Polen has the highest fees, while the Russell 1000 Growth is 8 basis points, and Polen has underperformed in the most recent quarter when it was expected to outperform. In that context, replacing Polen becomes an easier discussion. To Chair Chapdelain's question regarding the next step in the search process, Mr. Owens explained that he could invite any of the managers to present to the Board, although is no manager for passive funds. To Chair Chapdelain's and Vice Chair Nicholas's questions, Mr. Owens stated that a passive manager invests only in the stocks included in a specific market index; an active manager has a portfolio manager who decides to buy, hold, and sell every stock in that portfolio. Putting funds in a passive manager is considerably quicker adding a new active manager. He asserted that, over the long term, iti is difficult for large cap active managers to outperform the respective index, however putting the entire portfolio in passive investments removes the downside protection which is prudent for a closed retirement plan. Comparatively, Polen has been carrying higher risk with lower return, which indicates transitioning out of that manager would be appropriate. He proposes leaving Polen in favor of a passive fund. Book 1 Page 462 12-10-2024 10:00 a.m. Book 1 Page 463 12-10-2024 10:00 a.m. To. Attorney Kaufman's questions, Mr. Owens was less enthusiastic regarding Fred Alger, even considering its 1-year return was 1500 basis points higher than the benchmark. He explained that the 3-, 5-, and 10-year returns being consistent with the benchmark suggests it will perform similarly to the benchmark over the long term, yet Fred Alger charges considerably more and has more risk than the index fund; if it outperformed the index by 50 or 60 basis points over the long term, he would be more enthusiastic about it. To Chair Chapdelain's question, Mr. Owens stated that Nuveen's performance and price are similar to Fred Alger's, although Nuveen underperformed over the 5- and 10-year timeframes. Each' of the presented active managers are respectable and will have periods of relative out- and under-performance; because the active managers' long-term returns are similar enough to index's, the index fund is a more cost-effective investment. On the other hand, index funds can have concentrations which can cause more volatility and active managers do not typically hold high concentrations. To Trustee Thornburg's question, Mr. Owens advised the Board could decide quickly to change the portfolio. On the 3- and 5-Year Risk/Return Analysis pages, he noted all the active managers except for Waycross have negative alpha. Waycross is more of an S&P 500 or core manager and value oriented, but can lean into growth, as shown on the Manager Style Analysis; it has outperformed over the S&P over the 3-, 5-, and 10-year periods, as well as the growth benchmark over the 3- and 5-years. Iti is a growth manager that should perform well in a value environment. While a passive index fund is a good decision for the current environment, if the Board preferred an active manager, Waycross outperforms and is less expensive than Polen. To Chair Chapdelain's questions, Mr. Owens estimated that 50% of his clients have passive investments, of which some have only passive investments; the remaining 50% of his clients have only active managers; Attorney Kaufman's clients are similarly allocated. Mr. Owens explained that although he does not expect the market to collapse in the immediate future, when it eventually does turn, passive investments will go down the most. That notwithstanding, a passive manager in the large cap space is a reasonable investment. Trustee Reardon and Mr. Owens discussed alternatives to the mega-cap domestic tech stocks. Mr. Owens asserted that historically, when the market declines, equities also decline and the stocks with the most stretched valuations decline the most; currently, valuations are a standard deviation outside their historic average. However, some of the domestic, mega-cap tech stocks have considerable earnings power and potential, remain innovative, and their inflows would likely continue even in economic hard times. Mr. Owens explained that all the presented managers except Polen hold some amounts of the leading mega cap tech stocks. While the index fund provides the most cost-effective returns over the long term, if Graystone were to identify a less expensive active manager with comparable returns, he would bring that to the Board. Trustee Reardon expressed support for an index fund as being the least expensive, but concern that now may be the top of that sector's market cycle. Mr. Loew and Mr. Owens asserted passive managers tend to recover from declines more quickly than active managers, and the Plan may rebalance the portfolio to take advantage of any cycle ati that time. Mr. Owens advised he would only recommend adding to the large cap growth allocation after there had been a pullback in that space. He reiterated confidence in the presented managers. Attorney Kaufman asked Mr. Owens to discuss liquidating Polen and dividing the proceeds between an active manager and a passive manager. Mr. Owens explained that each of the fund managers performs a specificjob. Polen should provide a reasonable return risk management, however it has been providing a lower retum with higher risk; if Polen had considerably less risk, it may have been an asset worth keeping. Chair Chapdelain and Trustee Reardon expressed support for moving Polen's alloçation to the Vanguard Russell 1000 Growth Index fund. To Chair Chapdelain's question, Attorney Kaufman and Mr. Owens explained that a transition from Polen to the Russell 1000 Growth Index fund would not require any contracts or amendments to the Plan. To Trustee Thornburg's question, Mr. Owens explained that he would have confidence maintaining passive management as long as the economy and market are expected to perform well; when there are indicators of longer-term negative growth, such as high unemployment, he may recommend moving to an active manager. As stated by Attorney Kaufman, Trustee Reardon made a motion to terminate the services and make a redemption request of Polen Capital and invest the proceeds in the Vanguard Russell 1000 Growth ETF; Vice Chair Nicholas seconded the motion. The motion passed unanimously (7-0). The Board thanked Mr. Owens and Mr. Loew for their presentation. By consensus, the Board agreed to table Invesco's presentation until a subsequent meeting date. 11. ATTORNEY MATTERS: 11.2. Presentation and Discussion Re: Proposed Ordinance Change. Presenter(s): Stuart Kaufman, Klausner, Kaufman, Jensen & Levinson. Attorney Kaufman reminded the Board that the proposed ordinance mirrors an ordinance which the City Commission previously approved for the Police Officer's Pension Plan, albeit without reference to Chapter 185 of Florida Statutes (FS). Both ordinances expand each respective Boards' investment authority. Secretary Griggs advised that, if the Board approves the proposed ordinance, the City Auditor and Clerk would then assign an ordinance number, and the ordinance would then likely be presented to the City Commission at its February 3, 2025, meeting. Chair Chapdelain noted corrections on page 3 to update the Vice Mayor and add the new Commissioner. Chair Chapdelain, Vice Chair Nicholas, and Secretary Griggs discussed how the proposed ordinance would be presented to the City Commission considering the. previously approved ordinance for the Police Officers' Pension Plan. Secretary Griggs anticipated no issues. Secretary Griggs made a motion to approve the proposed ordinance with the noted corrections; Treasurer Strickland seconded the motion. The motion passed unanimously (7-0). 11.1. Presentation and Discussion Re: New Withholding Requirements. Presenter(s): Stuart Kaufman, Klausner, Kaufman, Jensen & Levinson. Attorney Kaufman explained that, effective January 1, 2026, the Internal Revenue Service requires Pension Administration to withhold taxes on benefits paid to retirees who reside outside of the United States; prior to that date, retirees living abroad could request no taxes to be withheld. Pension Plans Administrator Martin advised that the Plan has 3 retirees who reside. abroad; 2 have federal taxes being withheld, and the remaining benefit is less than the lowest taxable amount,however that pensioner did not select "no taxes withheld" and taxes will be withheld ift the benefit reaches a taxable threshold. 11.3. Presentation and Discussion: Florida Statutes, Sections 287.138 and 787.06. Presenter(s): Stuart Kaufman, Klausner, Kaufman, Jensen & Levinson. Attorney Kaufman explained that FS 787.06., effective July 1, 2024, requires any non-governmental agency which executes a new contract, or renews or extends an existing contract with a government agency, including the Plan, must attest that it does not engage in human trafficking. This provision is not retroactive, and only applies to new or renewing contracts; it will impact the Plan's attorney, auditor, and actuary. Book 1 Page 464 12-10-2024 10:00 a.m. Book 1 Page 465 12-10-2024 10:00 a.m. FS 287.138 prohibits government entities, including the Plan, from contracting with entities which are owned by, controlled by, or organized under the laws of a government or "foreign country of concern," if that entity would have access to personally identifiable information. Personally identifiable information includes participants' names, home addresses, telephone numbers, or e-mail addresses, and the countries of concern are stated in the materials. This statute is retroactive, and all vendors will need to attest to their compliance. Attorney Kaufman advised that he has been working with Pension Plans Administrator Martin to resolve an issue in which a divorced member was required by court order to elect a specific retirement option, however the member indicated they may not select the required option; Attorney Kaufman has notified the appropriate parties to resolve the matter SO that no party is in contempt of the court order. Secretary Griggs expressed her appreciation to Pension Administration for identifying this issue so that it could be resolved with minimal impact to the Plan. 12. OTHER MATTERS: 12.1. Approval Re: Administrative Budget Analysis for July 1, 2024, through September 30, 2024. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin oresented the Administrative Budget for the Board's information, noting that although some individual lines exceed their respective budgeted amount, the total expended budget is 94.7%. The Board had no questions on this item. 12.2. Approval Re: Check Register for July 1, 2024, through September 30, 2024. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin presented the Check Register fori the Board's infornation as most payments are made by ACH. The Board had no questions on this item. 1. ADJOURN. Chair Chapdelain adjourned the General Employees' Pension Plan Board of Trustees meeting at 12:07 p.m. / 1/ - - Chair Ryan Chapdelain Secrétary,Shayla Griggs