MINUTES OF THE CITY OF SARASOTA POLICE OFFICERS' PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING OF OCTOBER 25, 2024 Present: Chair Johnathan Todd, Vice Chair Ronnie K. Baty, Secretary/Treasurer Shayla Griggs, Trustee Joseph Jody" Hudgins, and Trustee Tyler Rossnagle. Others: Attorney Stuart Kaufman, Pension Plans Administrator Debra Martin, Senior Pension Analyst Anthony Ferrer, and Pension Specialist Peter Gottlieb. Absent: None. 1. CALL MEETING TO ORDER: Presenter(s): Chair Todd. 2. PLEDGE OF ALLEGIANCE: Presenter(s): Secretary/lreasurer Griggs. 3. PLEDGE OF CIVILITY: Presenter(s): Chair Todd. "We may disagree, but we will be respectful of 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. All trustees were present. 5. PUBLIC INPUT: None. 6. APPROVAL OF MINUTES: 6.1. Approval Re: Minutes of the Police Officers' Pension Plan Board of Trustees Regular Meeting of June 28, 2024. Presenter(s): Chair Todd. Vice Chair Baty made a motion to approve the minutes of the Board's Regular Meeting on June 28, 2024; Secretary/Treasurer: Griggs seconded the motion. The motion passed unanimously (5-0). 6.2. Approval Re: Minutes of the Police Officers' Pension Plan Board of Trustees Regular Meeting of July 26, 2024. Presenter(s): Chair Todd. Vice Chair Baty made a motion to approve the minutes of the Board's Regular Meeting on July 26, 2024; Chair Todd seconded the motion. The motion passed unanimously (5-0). Book 1 Page 422 10-25-2024 8:15 a.m. Book 1 Page 423 10-25-2024 8:15 a.m. 6.3. Approval Re: Minutes of the Police Officers' Pension Plan Board of Trustees Special Meeting of September 30, 2024. Presenter(s): Chair Todd. Trustee Hudgins made a motion to approve the minutes of the Board's Special Meeting on September 30, 2024; Vice Chair Baty seconded the motion. The motion passed unanimously (5-0). 7. RETIREMENT REQUESTS: 7.1. Presentation and Discussion: The DROP Retirement Request of Jeffrey Steiner. Presenter: Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin advised that Officer Steiner requests to enter the DROP effective October 1, 2024, with 24 years of service; he has elected the 75% to Joint Annuitant option. Vice Chair Baty made a motion to approve the DROP request of Officer Steiner; Trustee Rossnagle seconded the motion. The motion passed unanimously (5-0). 7.2. Presentation and Discussion: The Disability Retirement Request from Takiya Ainscoe. Presenter: Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin advised that the Board declared, at its September 30, 2024, Special Meeting, that Ms. Ainscoe met the requirements for line-of-duty disability benefits. Ms. Ainscoe requests a normal benefit; Gabriel, Roeder and Smith, the Plan's actuary, has certified the benefit computation. Trustee Hudgins made a motion to approve Disability Benefits for Ms. Ainscoe; Secretary/Treasurer Griggs seconded the motion. The motion passed unanimously (5-0). Chair Todd asked the Board to change the order of the day to hear item 10.2. out of order. The Board approved by consensus. 10. NEW BUSINESS: 10.2. Presentation and Discussion Re: Proposal to Provide Audit Services for Fiscal Year Ending September 30, 2024. Presenter(s): Daniel Anderson, CPA, Mauldin & Jenkins. Daniel Anderson and Jennifer Trotter of Mauldin & Jenkins appeared before the Board and introduced themselves. Mr. Anderson presented the engagement letter for the Board's review, noting there have been no significant changes in the letter format since the auditing standards were last updated. He advised that the letter identifies a significant risk, as now required by auditing standards, due to management's ability to override internal controls regarding financial reporting. If Mauldin & Jenkins identifies any additional risks during the audit process, they will communicate them appropriately. The letter specifies both the auditor's and management's responsibilities through the audit process. There are no anticipated changes to the audit timeline as compared to prior years' audits, and Mauldin & Jenkins anticipates, at this point and assuming the Plan's actuarial valuation is timely completed, being able to deliver the audited financial statements by early February 2025. Trustee Hudgins made a motion to approve the engagement with Mauldin & Jenkins to provide audit services to the Plan for fiscal year ending September 30, 2024; Trustee Rossnagle seconded the motion. The motion passed unanimously (5-0). 8. INVESTMENT PERFORMANCE REVIEW: 8.1. Presentation and Discussion Re: National Investment Services, Investment Performance Review for Period Ending September 30, 2024. Presenter(s): Ray Caprio, Director, Institutional Salas; Mark Anderson, CFA, Chief Strategy Officer (Telephonic), National Investment Services. Mark Anderson of National Investment Services (NIS) appeared before the Board telephonically and introduced himself. Beginning on the Firm Highlights page of the materials, Mr. Anderson noted that NIS has had significant recent growth, and it added a municipal research analyst, and an additional trader for cash and Treasury bonds; both positions interact with the portfolio. NIS has received increased cash inflows as investors transition away from equities and alternatives and into fixed income, which has also greatly improved liquidity. Mr. Anderson reviewed the Performance Overview page, noting fixed income investors who carried duration have been rewarded as inflation declines. The market rewarded risk-taking in fixed income, as reflected in the Annualized Latest 1 Year margin versus the Latest 3 year; the relatively flat performance over the 3- and 5-year periods were largely caused by uncontrolled inflation which resulted from the massive federal stimulus during the COVID-19 pandemic. Turning to the quarter returns, corporate bonds outperformed and the underweight to treasuries benefitted the portfolio; the portfolio's slight underweight to duration had less interest rate sensitivity and dragged performance. Broadly speaking, the portfolio is well positioned going forward and performing in line with expectations through the rest of the year. On the Asset Allocations page, Mr. Anderson explained that the Target Allocations are those of the Bloomberg Aggregate Bond Index and labeled as such due to a function of NIS's software. The portfolio is intentionally under weight to US Treasuries due to the national economic environment; NIS believes there will be more issuance in that space, but less investor demand. The portfolio is balancing the US Treasury underweight with overweighted positions in Asset Backed and Municipal securities. Mr. Anderson reviewed the Weighted Averages and Distribution by Ratings Designation charts on the Portfolio Characteristics page. The margin is slightly higher today as interest rates have ticked up slightly in Q4 2024, and that the portfolio remains very high quality; he expects to be cautious regarding credit quality over the short term as the market is fully valued. Mr. Anderson briefly discussed the Investment Review sections of the materials and provided a market outlook. Corporates performed the strongest, and it is weighted close to the benchmark. The yield curve is normalizing which will improve NIS's ability to find value at the farther end of the curve; the previously inverted yield curve made it difficult to add to the portfolio's duration. The Bond Spreads chart shows the market is rich, or fully valued; the green Bloomberg US Agg Corporate Avg OAS and blue Bloomberg US Corporate High Yield Average OAS are at their lowest rates in 25 years, which indicates a strong economy. Further, job openings remain comparatively high in the context of the last 10 years and suggests inflation may remain stickier than the Federal Reserve (Fed) and bond markets anticipate. If the) job market remains strong while inflation remains high, the Fed may not lower rates as quickly as some analysts hope. NIS anticipates interest rates to remain stable in the near term, for credit to remain expensive, and for interest rates to remain steady if not slightly increase; the portfolio is slightly under weight to duration to lower its sensitivity to rates. The Board had no questions and thanked NIS for their presentation. Book 1 Page 424 10-25-2024 8:15 a.m. Book 1 Page 425 10-25-2024 8:15 a.m. 8.2. Presentation and Discussion Re: Granite Partners, Investment Performance Review for Period Ending September 30, 2024. Presenter(s): Erik U. Rollé, CFA, Principal, Lead Portfolio Manager; Doug Morse, Principal; Granite Partners. Erik Rollé and Doug Morse of Granite Partners (Granite) appeared before the Board and introduced themselves. Mr. Morse reviewed the Firm Overview, noting the portfolio is managed through a fundamental, bottom-up research approach. There have been no changes in the firm, however Andrew Magill was hired as a Research Analyst on the investment team. Mr. Rollé explained that Granite invests in high quality growth companies that have robust management teams, growing cash flows, and strong catalysts for change within their respective markets. He reviewed the Performance page of the materials, noting that both the market and economy have been challenged since the Plan first invested with Granite, considering the economic aftermath of the COVID-19 pandemic and geopolitical issues. Since Granite's last presentation to the Board, the economy has begun to normalize in which interest rates and inflation are elevated but within historic averages. The market has been driven by select mega-cap companies which are beneficiaries of artificial intelligence (AI) or producers of GLP-1 drugs; Nvidia and Ely Lily are respective examples these leaders, and they are amongst the portfolio's largest positions. The market has continued to concentrate in in the magnificent 7 (Mag 7) mega-cap tech companies. In 2023, the Mag 7 comprised 30% of the Russell 1000 Growth Index; since Q2 2024, 3 tech stocks, Nvidia, Apple, and Microsoft, make up over 35% of that index. Granite manages concentration risk by maintaining a diversified portfolio which is structurally underweighted to the big cap companies which had historically benefitted the portfolio, but not over the last 2 years as the index further concentrates. While the market has experienced periods of severe concentration, they have been transitory periods. On the YTD Portfolio Review page, Mr. Rollé advised that the market has begun to broaden; Granite had anticipated this, positioned the portfolio accordingly, and has been rewarded. It has been investing in growth industrials, and outperformed in Q1 2024, Q3 2024, and Q4 to date, 2024. There was a pause in this broadening in Q2 2024 due to a risk off-trade in the market, giving concems of a weaker economy and a slow response from the Fed to lower interest rates. Granite expects this broadening to continue into 2025 with a re- acceleration of growth driven by productivity leading to sizable gains in per capita Gross Domestic Product (GDP) as well as infrastructure re-shoring capital expenditure spending from both private sector and government agencies. The employment environment remains healthy, with wage growth continuing to outpace inflation. Granite maintains their outlook of a growth normalization with reacceleration. Mr. Rollé discussed the YTD Portfolio Attribution page of the materials; the portfolio's top contributors are mainly the growth industrials he referenced while discussing the YTD Portfolio Review. Interest rate cuts, a positive economic outlook, strong earnings and bookings growth, driven by their catalysts for changes in their individual markets continue to drive the market momentum. In reviewing the pages titled A Supercycle of Industrial Growth, A Technology Driven Revolution in Productivity is at Hand, and Innovation and Demand Driving Growth in Health Care, Mr. Rollé discussed the theme that corporate earnings and GDP growth momentum willl be driven by an acceleration in business productivity gains over the next several years. He reviewed the bullet points on the Outlook for 2025 page. As the market broadens from the Mag 7 stocks into new areas, Granite has been focusing its newi investments in these areas. Granite anticipates being able to quickly digest any new headwinds from geopolitical issues, as well as tariff and tax policies, and believes growth equities will be rewarded in the market. The Board thanked Mr. Rollé and Mr. Morse for their presentation. 8.3. Presentation and Discussion Re: Newton Investment Management, Investment Performance Review for Period Ending September 30, 2024. Presenter(s): Marielle Gallant, Associate Relationship Partner, Newton Investment Management. Marielle Gallant of Newton Investment Management (Newton) appeared before the Board and introduced herself. Ms. Gallant provided a brief firm overview as listed on the Newton Investment Management Group page of the materials; Newton's Global Research group supports every strategy sO that none are siloed. To Trustee Hudgins' question, Ms. Gallant stated that Newton's headquarters is in London, England, the portfolio is based in Boston, MA, and the firm also has offices in New York, NY, and San Francisco, CA. She reviewed the Dynamic Value page, noting Newton took in an additional $2.5 billion in new mandates over the last year. There have been no changes in the investment team, philosophy, or process. She added that each of Newton's strategies has a portfolio manager and co-portfolio manager to provide redundancy and equitable workload distribution. Ms. Gallant reviewed the Client Performance page, noting that while the portfolio slightly underperformed relatively in the most recent quarter, it has outperformed, both gross and net, year-to-date, as well as over the 3-, 5-, 10-year and since inception periods. She noted the Fed's s interest rate cut, geopolitics, energy liquidity, and US presidential election have all caused additional volatility in the market. The US Dynamic Large Cap Value active positioning page shows Newton's convictions in the noted sector. Ms. Gallant reviewed the US Dynamic Large Cap Value one-year sector attribution, noting factors which influenced the performance of each sector. Downward energy process drove stock values down. The Financial sector was dragged by weak bank performance and banking executives' concerns for the projected recovery of the domestic economy; in LPL Financial, the CEO left the firm due to misconduct. Newton does not see these as long-term concerns which warrant reallocating these positions. In Materials, Newmont Corporation outperformed due to record high prices for gold. In Consumer Staples, Kenvue, Inc, which has product lines such as Band-Aid and Aveeno and is partly owned by Johnson & Johnson, reported higher than expected earnings. In Industrials, GE Vernova and Howmet Aerospace outperformed. Newton does not foresee significant changes to the-portfolio in the near future. It does, however, anticipate higher-for-longer short-term interest rates, as well as for value stocks to continue to be favored while the Mag 7 growth stocks, remain overpriced. The last time tech stocks were this expensive was during the 1990s tech bubble, and Newton is accordingly staying close to its process of scrutinizing fundamentals, valuations, and capital appreciation. The Board had no questions for Ms. Gallant and thanked her for her presentation. 8.4. Presentation and Discussion Re: Garcia Hamilton, Investment Performance Review for Period Ending September 30, 2024. Presenter(s): Jeff Detweiler, Partner, Deputy CIO; Yvette Duenas, Partner, Portfolio Manager Garcia Hamilton. Yvette Duenas and Jeff Detweiler of Garcia Hamilton (Garcia) appeared before the Board and introduced themselves. Ms. Duenas announced that Jana Hamilton has retired April 30, 2024; Chief Compliance Officer Beth McWilliams will retire effective December 31, 2024, and will be replaced by the Deputy Chief Compliance Officer. Investment Analyst Connie Davis and Ms. Duenas are the Plan's client representatives. Garcia has approximately $23 billion in assets under management, with nearly $2.6 billion being added in the last year. Justo Gonzales has joined Garcia's investment team; he previously worked for Invesco and is well known amongst Garcia's staff. She noted that thet firm bought back Ms. Hamilton's and Ms. McWilliams shares, which totaled nearly 15%, and have been spread proportionately amongst the partners, although that may change over the next few weeks. Mr. Detweiler reviewed the 3Q24 Performance page of the materials; he asserted the outperformance in both the 1- Year and Last 3-Years shows the portfolio outperforms in both up and down markets. He attributed the negative returns to consequences of the economic reactions to the COVID-19 pandemic during which the low- interest rate environment and liquidity being pumped into the economy led to inflationary pressures; the Fed Book 1 Page 426 10-25-2024 8:15 a.m. Book 1 Page 427 10-25-2024 8:15 a.m. missed the opportunity to control rising inflation, as it had to then aggressively hike interest rates up which led to negative returns in the bond market. Similarly, Garcia believes the Fed has again waited too long to start cutting short term interest rates as inflation comes down, which could have a disastrous impact on the employment market. He reviewed the page titled Fed's Subpar Track Record, noting that the Fed's own forecasted Fed Funds Rate for 2024 is already wrong because it is currently below 5%; he asserted that the Fed's claims that inflation would be transitory and that interest rates would be higher for longer were false flags to the markets, and that the Fed's erred both at the outset and conclusion of the pandemic. The page titled Housing Demand Has Collapsed shows that high interest rates are having a sizable negative impact on consumers' demands for big ticket items. The page titled Cumulative Excess Savings Cushion Has Been Spent shows that consumers have had to shift from cash-spending to credit spending. As retail interest rates have remained high, delinquency and losses have begun to increase. Referencing the page titled US Credit Card Losses Are Rising Rapidly, Mr. Detweiler asserted the current economic circumstances are similar to those in 2007 prior to the Great Recession when charge-offs were rising, and that all indications point towards a slowing economy. Accordingly, Garcia has positioned the portfolio with more duration than the benchmark and an underweight to Corporate Bonds. Pension Plans Administrator Martin left the meeting at 9:07 a.m. and returned at 9:12 am. To Trustee Hudgins' question, Mr. Detweiler asserted that credit card losses always impact the lower end companies first because poorer consumers feel economic pressures faster than more affluent consumers. High end credit card companies, such as Chase Bank and American Express, have not yet begun to experience the losses that Discover and Capital One have. He further clarified that credit card charge offs are one component in the larger narrative that the Fed erred in acting too aggressively when inflation was rising and consumers had the protection of higher savings; now that consumer savings are depleted and they lack protection, Fed is acting too slowly to speed up the economy. Mr. Detweiler reviewed the page titled Corporate Excess Returns for Different Starting Spread Levels, noting that buying an inexpensiye stock will lead to better returns in the future, while buying an expensive stock will produce less returns. Corporate spreads are now in the 5th quintile, meaning their returns relative to treasuries will be negative, and therefore Garcia is underweighted to corporate bonds. On the page titled MBS Market Trading Near Historically Low Prices he noted that the dollar price on mortgage-backed securities (MBSs) tends to be capped, as homeowners can pay off loans early by refinancing or selling, which leads to negative convexity. MBSs with low coupon rates were created during the low interest-rate, post-COVID environment; as yields rose due to inflation, the dollar prices plummeted, and Garcia was able to overweight the portfolio in the sector. As yields decline, the dollar prices increase, giving the allocation a second tailwind; should borrowers prepay their loans, the balance is paid back at par. He reviewed the Fixed Income Portfolio Characteristics page, noting that all of the Corporates in the portfolio are rated A or higher by 2 rating agencies. Within the mortgage space, Garcia favors 30-year maturity dates. The portfolio's longer average duration relative to the benchmark was a considerable driver of performance over the last 12 months. Both duration and the overweighted position in mortgages were drivers of alpha and are expected to continue; Garcia expects its the underweight to credit to benefit the portfolio within the next 12 months because, as yields fall, the yield curve will steepen as the Fed continues to cut rates, and spreads will widen. The Board thanked Mr. Detweiler and Ms. Duenas for their presentation. 8.5. Presentation and Discussion Re: Burgess, Chambers, and Associates, Quarterly Performance Review for Period Ending June 30, 2024. Presenter(s): Larry Cole, Executive Vice President, Burgess, Chambers, and Associates (Telephonic). Larry Cole of Burgess, Chambers, and Associates (BCA) appeared before the Board telephonically and introduced himself. Mr. Cole noted that although he is presenting the June 30, 2024, report, he would present and discuss preliminary Q3 2024 returns; a final Q3 2024 report will be presented at the December 20, 2024, meeting. Mr. Cole briefly reviewed the Quarterly Market Summary page of the June 30, 2024, report, noting that the S&P 500 Index's 4.3% return was not representative of the broader market due to the extreme concentration in select mega-cap tech stocks. On the Asset Allocation & Performance Gross page, he noted the portfolio underperformed the benchmark only due to the benchmark's extreme concentration, which is an environment that punishes diversity; in Q3 2024, the market broadened, and accordingly, the portfolio performed better. Mr. Cole cautioned against concentrating the portfolio to be closer to the index. While he was disappointed by the Q2 2024 pertormance, it was understandable, and he has no recommendations to changes to the portfolio. While he previously raised concerns regarding Garcia in light of Ms. Hamilton's and Ms. McWilliams' retirements, Mr. Detweiler has been retained to manage the portfolio, he has had conversations with Managing Partner and Chief Investment Officer Gilbert Garcia, and Ms. Duenas and Ms. Davis are both experienced professionals; Mr. Cole does not currently have any concerns regarding the allocation with Garcia. On the Asset Allocation & Performance Gross, September 30, 2024, Mr. Cole explained that the market broadened and rotated to favoring value stocks, and the portfolio had a better quarter return; he cautioned that the percentile ranking may change by up to 5 points, however absolute returns are final. He reviewed each of the managers, noting that Allspring outperformed its benchmark despite concentration limitations; he reiterated the importance of diversity, especially within the large cap growth space, to protect against volatility. He had no concerns for the relative underperformance in Domestic Equities or International Equities. Global Infrastructure continues to perform well as average returns outpace their benchmark; he expressed confidence in the asset class due to the global need for infrastructure spending. Convertibles managers performed as expected. In Real Estate, the Plan has a significant portion of its redemption in queue to be paid; Mr. Cole will bring an update to the December 20, 2024, Board meeting. Bonds finally have a good return. He concluded by expressing satisfaction in the portfolio's fiscal year return considering the market's concentration. He will bring updated market values and additional information to the December 20, 2024, meéting. The Board thanked Mr. Cole for his presentation. 9. UNFINISHED BUSINESS: 10. NEW BUSINESS: 10.1. Presentation and Discussion Re: Draft Addendum to Statement of Investment Policy for Frontier. Presenter(s): Larry Cole, Executive Vice President, Burgess, Chambers, and Associates (Telephonic). Mr. Cole explained that Frontier had advised its addendum to the Investment Policy Statement (ISP) limited its average market cap to $5 Billion. Since its original addendum was executed, their benchmark, the Russell 2000 Value, has since doubled, and they have requested their average market cap to be increased; Mr. Cole advised that an average market cap of $10 Billion is reasonable. Trustee Hudgins made a motion to approve the draft Addendum to the Statement of Investment Policy for Frontier; Chair Todd seconded the motion. The motion passed unanimously (5-0). 11. ATTORNEY MATTERS: 11.1. Presentation and Discussion: Professional Services Agreement. Presenter(s): Stuart Kaufman, Klausner, Kaufman, Jensen & Levinson. Attorney Kaufman advised that he drafted a new professional services agreement (PSA) between Klausner, Kaufman, Jensen & Levine (Klausner) and the Plan instead of working under the assigned PSA between Christiansen & Dehner (Christiansen) and the Plan. He reviewed the terms of the PSA as presented. He noted that the PSA with Klausner removed the annual cost-of-living adjustment present in the Christiansen PSA to provide a stable rate for at least 3 years, if not longer. Book 1 Page 428 10-25-2024 8:15 a.m. Book 1 Page 429 10-25-2024 8:15 a.m. Trustee Hudgins noted that Klausner's PSA requests compensation at rates less than those paid to Attorney Christiansen; Attorney Kaufman advised that the rates as specified in Klausner's PSA arê acceptable. Trustee Hudgins, Secretary/Treasurer: Griggs, Attorney Kaufman, and Pension Plans Administrator Martin discussed how the 2025 Board meetings have been scheduled to be held on the same days and immediately prior to the General Employees' Pension Plan Board of Trustees' meetings, which Klausner also represents, to allow the two plans to share Klausner's travel expenses. Trustee Hudgins asked for the PSA to be amended to state that Klausner will bill the Plan for travel at 50% of its customary rate, and the General Employees' Pension Plan at 50%, of its customary rate, when both Boards hold meetings on the same date and consecutive times. To Trustee Hudgins' request, Attorney Kaufman advised that item 1.g. will be corrected to state that the attorney will attend any and all meetings. Trustee Hudgins asked for the last sentence in item 2., "Any work performed on behalf of the BOARD in securities litigation matters shall be compensated solely on a contingent fee basis derived from a portion of any fee approved by the Court for the lead securities counsel," to be removed from the PSA, and state that any work performed by Klausner in securities litigation will be billed as determined by Klausner, and not on contingent basis. He noted the Board's current reluctance to move for lead plaintiff. To Attorney Kaufman's question, Senior Pension Analyst Anthony Ferrer appeared before the Board and introduced himself; he advised that the Board has an agreement with the securities monitoring firm Robbins, Geller, Rudman and Dowd. Attorney Kaufman advised that he had no objections to deleting the last sentence of item 1.g., sO that the Board and Klausner could determine compensation in each case individually. Trustee Hudgins reminded the Board of prior litigation cases in which there were undisclosed referral fees, or that the Plan's attorney was compensated at a significantly lower rate than the security monitoring firm's attorneys. Attorney Kaufmani noted that each case would involve a separate retainer with the securities firm, and compensation would be discussed at that point. Trustee Hudgins made a motion to approve the Professional Services Agreement with Klausner, Kaufman, Jensen & Levinson, after removing the last sentence in item 2., correcting item 1.g. to state "any and all meetings," and attaching a memorandum from Klausner confirming they will allow tne Plan to share the attorney's travel expenses with the General Employees' Pension Plan when meetings are held consecutively on the same day; Vice Chair Baty seconded the motion. The motion passed unanimously (5-0). 10.3 Presentation and Discussion: Disability Benefit Options for DROP Participants. Presenter(s): Stuart Kaufman, Klausner, Kaufman, Jensen & Levinson. Attorney Kaufman noted the Board previously received public input regarding offering disability benefits to DROP participants. He advised that neither he, nor the partners at Klausner, knew of any Florida municipal pension plans which offer disability benefits to DROP participants; there may be a plan in California which does, however the Florida Retirement System does not. Under Florida law, a participant who enters the DROP, is considered, for all pension-related purposes, a retiree and a member who reaches a normal retirement age is protected by the entitlement to a normal retirement benefit. In considering whether to expand disability benefit eligibility, the Board must consider the cost to the Plan. Chair Todd reminded the Board that a current DROP participant provided public input at a previous Board meeting and advised they were injured in the line of duty, now on light duty, and may not be able to return to full duty to complete their DROP schedule. The Officer had inquired about the likelihood of being allowed to apply for a disability pension instead of leaving the DROP early. Trustee Rossnagle noted that the Officer was concerned with the monetary difference between the full DROP amount, as forecasted when the Officer entered, and the amount he would receive if he were to leave the DROP early. Trustee Hudgins noted that, while he is sympathetic to the Officer's circumstance, members enter the DROP knowing that disability benefits are not available, and that a job-threatening injury could force a DROP participant to leave the DROP early. Attorney Kaufman advised that, although expanding disability eligibility to include DROP participants does not violate state law, it would need to be first analyzed by the Plan's actuary to determine the cost to the Plan, and then the City Commission would need to approve changes to the controlling ordinances. Secretary/Treasurer Griggs noted that there is an upcoming election which could result in new City Commissioners. Trustee Hudgins advised that the Board could direct the actuary to prepare a cost analysis of expanding the eligibility for disability benefits, or summarily dismiss the item. Vice Chair Baty and Trustee Hudgins discussed tabling the item until the Board received additional information which would allow for a more informed decision. Vice Chair Baty explained that, while he is also sympathetic to DROP participants who are injured, members should be fully aware that DROP participants are not eligible for disability benefits, and any lack of awareness is the fault of the member/DROP participant. Further, as fiduciaries, the Trustees are obligated to protect the financial health of the Plan. The Board, Attorney Kaufman, and Pension Plans Administrator Martin discussed how to provide information to members regarding the DROP and retirement benefits, as documents, or in seminar or conference format which could also include other information relevant to retirement, such as deferred compensation options. By consensus, the Board agreed to table this item until such time that the aforementioned Officer may appear before the full Board to present any additional, relevant information. Pension Administration advised they would invite the Officer to a meeting when the full Board is expected to be in attendançe. 10.2. Presentation and Discussion: Florida Statutes, Sections 287.138 and 787.06. Presenter(s): Stuart Kaufman, Klausner, Kaufman, Jensen & Levinson. Attorney Kaufman explained that Florida Statute 787.06 requires, any time a governmental entity enters into a new contract or renews an existing contract with a non-governmental entity, which includes the Plan's contracts with its actuary, investment managers, investment consultant, and attorneys, the entity must certify in an affidavit that it does not engage in human trafficking. A blank affidavit, as well as Klausner's executed affidavit, are in the materials. Statute 287.138 requires, when the Plan enters into contract with a vendor which willl have access to Personally Identifiable Information (PII), such as home addresses, e-mail addresses, or phone numbers, the vendor must certify in an affidavit that the vendori is not owned by, nor conducts business with a' "foreign country of concern. " AI blank affidavit, as well as Klausner's executed affidavit, are in the materials. While fund managers would not need to sign this affidavit, the attorney, actuary, and auditor must sign as they have access to PII. This document is required for all applicable vendors, and not just new vendors. 10. OTHER MATTERS: 10.3. Presentation and Discussion Re: 2025 Proposed Board Meeting Dates. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin presented the 2025 Proposed Board meeting dates, noting they are scheduled on Thursdays, sO that the General Employees' Pension Plan Board may hold meetings consecutively to the Board's, and the attorney may attend both during the same travel. Vice Chair Baty made a motion to approve the 2025 Proposed Board Meeting Dates as presented; Chair Todd seconded the motion. The motion passed unanimously (5-0). Book 1 Page 430 10-25-2024 8:15 a.m. Book 1 Page 431 10-25-2024 8:15 a.m. 10.4. Presentation and Discussion Re: Administrative Budget Analysis for July 1, 2024, through September 30, 2024. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin presented the Administrative Budget Analysis for July 1, 2024, through September 30, 2024. Legal and Judicial exceeded the budgeted amount due to the 2 disability hearings; she added that some of the expenses in this item are due to costs paid through the attorey, such as for independent medical examinations, or record copying fees from medical providers. She requested a budget line adjustment for Legal and Judicial in the amount of $25,000. She also requested a line adjustment for salaries in the amount of $8,000 as the City had announced salary increases after the Board approved its 2024 fiscal year budget. To Trustee Hudgins' question, Pension Plans Administrator Martin clarified that she requests an increase in the annual Legal and Judicial budget line item to $60,000, Trustee Hudgins made a motion to increase the 2024 fiscal year budget lines for Legal and Judicial to $60,000 and Salaries to $151,102. Secretary/Treasurer: Griggs seconded the motion. The motion passed nanimously (5-0). 10.5. Presentation and Discussion 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 for July 1, 2024, through September 30, 2024. Payments to individuals were refunds of contributions to former members who elected to do so. Trustee Hudgins and Pension Plans Administrator Martin discussed the budgeted amount for actuarial services, noting it is 97% expended as of June 30, 2024. Pension Plans Administrator Martin clarified that, an individual line item may exceed its respective budgeted amount, and that the budget remains acceptable if the total expended amount is less than the total budget approved by the Board. She did not believe the total expenditures as of fiscal year end will exceed the total approved budget amount as amended under item 10.4. 11. ADJOURN. Chair Todd adjourned the meeting at 9:56 a.m. CE -. Chair. Johnathan Todd SEhg Secretary/Treasurer Shayla Griggs