Book 1 Page 84 12/6/2017 9:00 a.m. MINUTES OF THE CITY OF SARASOTA FIREFIGHTERS PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING OF DECEMBER 6, 2017 Present: Chair Michael Hartley, Vice Chair Shelia Roberson, Secretary/Treasurer Pamela Nadalini and Trustees Charles Joseph and Scott Snow Others: Attorney Pedro Herrera, Pension Plans Administrator Cynthia Akersloot, Senior Pension Analyst Anthony Ferrer, Senior Pension Accountant Aaron Brooks and Pension Specialist Lois Belle Absent: None 1. CALL THE MEETING TO ORDER: Chair Hartley called the meeting to order at 9:01 a.m. 2. PLEDGE OF CIMILITY: Trustee Snow read into the record a memorandum from Mayor Willie Charles Shaw, dated February 13, 2015, entitled "City Commission and Advisory Board Meeting Protocols and Pledge of Civility." 3. PUBLICINPUT: No one signed up to speak. 4. APPROVAL OF MINUTES: 4.1. Approval Re: Minutes of the Firefighters' Pension Plan Board of Trustees Regular Meeting of October 25, 2017 A motion was made by Vice Chair Roberson and seconded by Trustee Joseph to approve the Minutes of the Firefighters' Pension Plan Board of Trustee Regular Meeting of October 25, 2017. Motion carried unanimously (5-0). 4.2. Approval Re: Minutes of the Firefighters' Pension Plan Board of Trustees Special Meeting of November 8, 2017 A motion was made by Trustee Joseph and seconded by Trustee Snow to approve the Minutes of the Firefighters' Pension Plan Board of Trustee Special Meeting of November 8, 2017. Motion carried unanimously (5-0). 5. Investment Performance Report: 5.1. Presentation and Discussion Re: UBS Trumbull Property Fund Performance Review as of September 30, 2017 Presenter(s): Ronald Lanier, Executive Director, UBS Realty Investors Mr. Ron Lanier came before the Board and introduced himself. Chair Hartley thanked Mr. Lanier for his prior presentation on farmland and stated that the Board, by consensus, has decided not to pursue a farmland investment at this time due to the lack of liquidity that would result from that investment strategy. Mr. Lanier stated the Trumbull Property Fund investment results for the City of Sarasota General Employees' Pension Plan net return from inception, on October 1, 2014, to September 30, 2017 was 7.97%. Mr. Lanier provide a market overview of the real Gross Domestic Product and job growthunemployment figures; that core real estate really correlates to these key market drivers. Mr. Lanier discussed UBS 2017 strategy and the diversification model of property types that UBS uses in comparison to the industry benchmark (NFI-ODCE); that the Trumbull Property Fund is a lower risk alternative in the industry with a 17% leverage focusing on stable income; that the gross dividend yield is 4.2%. Mr. Lanier stated that current environment is a mature economy with lower appreciation returns and slowing net operating income growth; that the fund composition has a greater allocation of apartments with al lower allocation of office versus industry benchmark consistent with the 2017 = 2018 investment direction. Mr. Lanier talked about the Trumbull Property Fund value-added risk management strategy; that this is a solid core portfolio (96.6% of the Trumbull Property Fund consists of stabilized assets); that the remaining 3.4% is value added diversification creating value through "building to core" with experienced developers in the industrial sector. Discussion ensued around thej joint venture partnership with Becknell. The Board thanked Mr. Lanier for his time. Pension Specialist Belle teleconferenced Brad Armstrong into the Firefighters' Pension Plan Board of Trustee meeting. 6. UNFINISHED BUSINESS: 6.1. Continued Discussion Re: Assumed Rate of Return Presenter(s): Charlie Mulfinger, Managing Director, Graystone Consulting and Brad Armstrong, Senior Consultant and Actuary, Gabriel, Roeder, Smith & Company Charlie Mulfinger, Managing Director, Graystone Consulting introduced himself and Brad Armstrong, Senior Consultant and Actuary, Gabriel, Roeder, Smith & Company introduced himself. Vice Chair Roberson stated for the record the timeline and changes to the Expected Rate of Return for the Plan; that in Fiscal Year 2012 the Expected Rate of Return was reduced from 8.0% to 7.75%, that in Fiscal Year 20131 the Expected Rate of Return was reduced from 7.75% to 7.5%, that in Fiscal Year 2014 remained at 7.5% and in Fiscal Year 2015 the Expected Rate of Return was reduced a quarter percent to 7.25%, and that in Fiscal Year 2016 & 2017 the Expected Rate of Return was reduced to 7.0%. Mr. Armstrong stated that actuarial standards support changing the assumed rate of return from 7.0% to 6.75%; that the reduction to the assumed rate of return would increase contribution by $1.253M for fiscal year 2019. Mr. Mulfinger stated that he could support either 7.0% or 6.75% recommendation. Ms. Kimberly Radkte and Chief Mike Regnier, Sarasota County, came before the Board and requested that the Board consider leaving the assumed rate of return at 7.0% for the current fiscal year to allow the County to properly budget for the increase the change to the assumed rate of return would create. Discussion ensued around the assumed rate of return. A motion was made by Trustee Joseph and seconded by Secretary/Treasurer: Nadalini to leave the Plan's assumed rate of return at 7.0% and revisit in October 2018. Motion carried unanimously (5-0). Book 1 Page 85 12/6/2017 9:00 a.m. Book 1 Page 86 12/6/2017 9:00 a.m. 6.2. Presentation and Discussion Re: Graystone Contract Renewal Options Presenter(s): Charlie Mulfinger, Managing Director, Graystone Consulting Charlie Mulfinger, Managing Director, Graystone Consulting remained at the dais and distributed a three- page document of contract renewal options along with historical values and hypothetical fees to the Board for discussion. Prior to the discussion of the contract renewal, Mr. Mulfinger requested to address the real estate allocation with UBS; not required to rebalance at this time or move money from real estate to bonds; that he would not recommend adding to real estate that this time; that he would recommend any distributions be directed back to the Plan. There was Board consensus to cancel the $50,000 placeholder at UBS. Mr. Mulfinger recommended proposed consulting fee option #2 to the Board which proposes the current $50,000 fee plus $5,000 increase plus a Consumer Price Index increase January 1st of each year; that the $55,000i is thel Hard Dollar Fee covering the period of service from October 1, 2017 through December 31, 2018; that the Consumer Price Indexi increase would be applied beginning January 1, 2019. A motion was made by Vice Chair Roberson and seconded by Secretary/Treasurer Nadalini to accept option #2 contract renewal option. Motion carried unanimously (5-0). 6.3. Presentation and Discussion Re: Operating Rules and Procedures = Credit Card Amendment Presenter(s): Attorney Herrera Attorney Herrera stated that the Operating Rules and Procedures document was updated with a Credit Card amendment section to allow Trustees to keep their personalized Firefighters' Pension Plan credit card on their person for board related travel use. The Board requested that Attomey Herrera add language to clarify responsibility if there are discrepancies. Attomey Herrera stated he will update and bring back before the Board in January 2018. 6.4. Approval Re: Proposed 2018 Regular Meeting Schedule for the Firefighters' Pension Plan Board of Trustees Presenter(s): Secretary/lreasurer Nadalini A motion was made by Vice Chair Roberson and seconded by Trustee Joseph to adopt the proposed 2018 Regular Meeting Schedule for the Firefighters' Pension Plan Board of Trustees. Motion carried unanimously (5-0). 7. NEW BUSINESS: 7.1. Discussion Re: Federal Income Tax Withholding on Share Distribution Checks Presenter(s): Chair Hartley Chair Hartley stated for the record the Share Distribution is a monetary distribution subject to a flat 25% tax withholding regardless of any individual exemption status; that any issues should be resolved through personal tax filings. 8. ATTORNEY MATTERS: Attorney Herrera reminded Board that gifts valued at $100 or more cannot be accepted by an individual trustee and that any gift under $25 does not need to be reported; that the new tax bill removes tax exemptions for public pension funds and the Plan will need to start filing taxi returns for unrelated business income. Attorney Herrera will draft the Graystone fee addendum and sent to Graystone for review and execution. 9. OTHER MATTERS: Vice Chair Roberson stated she may be attending the FTTPA winter conference; that many trustees have wardrobe or business cards displaying the City and Board they serve; that she would like staff to provide options to Board for January meeting. 10. ADJOURN. Chair Hartley adjournedthel Regular Meeting of the Firefighters' Pension Plan Board of Trustees at 11:53 a,. ONG ay Chai/Michagl Hartley Secretary/Treasurer Pamela Nadalini Book 1 Page 87 12/6/2017 9:00 a.m.