MIAMI SHORES VILLAGE DRAFT

POLICE OFFICERS’ RETIREMENT SYSTEM BOARD MEETING

The Miami Shores Village General Employee Pension Board and Police Retirement Board
jointly met on Tuesday, January 29, 2019, at the C. Lawton McCall Community Center.
The General Employee Pension Board meeting called to order at 8:18 AM. The following
individuals were present for the meeting:

PRESENT: ABSENT:
Alice Burch, Chairwoman
John Bolton, Secretary
Christopher McDonald, Trustee
Shmueal Mauda, Trustee
Jonathan Meltz, Trustee

Also present were Pension Plan Administrators, Doug Falcon and Yolanda Shea FHA-TPA
Benefit Administrators, Inc., Dave West, AndCo Consulting, and Pension Attorney Adam
Levinson, Klausner Kaufman Jensen & Levinson.

APPROVAL OF MINUTES
The Chairman asked if anyone had any questions regarding the minutes of the meeting on October
30, 2018, there being no questions,

A motion made by Trustee Bolton seconded by Trustee McDonald to approve the October
30, 2018 minutes motion passed unanimously.

PUBLIC COMMENTS:
Mr. Gibbons advised the board that he is general counsel attorney for the Miami Shores
Village FOP Lodge 63. There is an issue regarding a proposed pension ordinance that has
not yet been approved. He finds helpful when a retirement board is made aware of
certain ordinances that are coming up that directly affect the retirement fund. The
proposed ordinance in service distribution, this ordinance would allow police officers who
have separated from the village as a result of retirement to be able to come back to the
village as a new employee. Chapter 185 may be disrupted by this ordinance. In addition
if the ordinance passes the rehired retiree police would come back to the village and
would be eligible to start a new pension benefit.

The Chairman asked attorney Levinson what his thoughts are on this matter. Attorney
Levinson advised the board that while his office is not involved in collective bargaining
agreements, He will assist the board in any way that he can. In order for an ordinance to
pass an impact statement is required. It is his understanding that an impact statement
has already been prepared by the actuary Gabriel Roeder Smith (GRS). Attorney
Levinson advised that it is not uncommon for this situation of rehiring retired police
officers as a result of the recent events for example Stoneman Douglas. The ordinance
discussed here today is not something the board can write or make changes. The Boards
responsibility is to administer the plan, make sure the money is invested make
recommendations from time to time but not write ordinances.

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Trustee Bolton asked if the Village requested the impact statement as he sees it listed as
one of the items in the Warrant presented today. Mr. Benton responded affirmatively.

Attorney Levinson pointed the information stated by GRS on their correspondence dated
November 14, 2018 as follows:

As requested, we have reviewed the proposed ordinance that would amend the Miami
Shores Village Police Officers’ Retirement System (“Plan”) by adding Section 18-110
which clarifies that retired members who subsequently return to work for the Village
continue receiving monthly pension benefits and do not accrue additional benefits.
Section 18-110 also clarifies that members are 100% vested upon reaching normal
retirement eligibility.

In our opinion, these proposed changes would have no actuarial impact on the cost of
the Plan. Because these changes will not have an actuarial impact, it is our opinion
that a formal Actuarial Impact Statement is not required. However, a copy of this
letter and the ordinance should be sent to the Division of Retirement before the final
public hearing on the ordinance.

Trustee Bolton pointed out that how can it not have a cost impact on the plan if the officer
is rehired and is able to begin a new pension benefit. Attorney Levinson advised trustee
Bolton that GRS letter is stating no cost impact based on the basis that the rehired
member is not accruing additional benefits.

A police officer also present at the meeting spoke to the Board about going around this
matter a different way. They Village should focus on keeping employees longer, promoting
from within so that they do not have to rehire those who have retired already.

Mr. Gibbons concluded that the way he interprets the ordinance is that the rehired
member will collect two pension benefits and the actuary’s comments are not based on
that situation.

This concluded the public comment section.

APPROVAL OF PAYMENT WARRANT: 2019-0001- $2,400.00

The Chairman asked if there were any questions regarding Warrant 2019-0001 for $3,075.00, trustee
Bolton pointed out that the Warrant amount does not match the invoices. After reviewing the
attachment, Ms. Shea pointed out that the attached invoices were for the Police Pension plan totaling
$2,400.00 and an error was made on both the agenda and the cover page of the Warrant. The
trustees reviewed the invoices and agreed that $2,400.00 is the correct amount due to Klausner
Kaufman, as a result of their findings,

A motion made by Trustee Bolton seconded by trustee Meltz to approve the payment of
Warrant number 2019-0001 for $2,400.00 as amended motion passed unanimously.

RATIFY PAYMENT WARRANTS: 2019-0002 - $13,172.00

The Chairman asked if anyone had any questions regarding Warrant 2019-0002 for $13,172.00 there
being no questions,

A motion made by Trustee Bolton seconded by Trustee Mauda to ratify payment Warrant
2019-0002 as stated above the motion passed unanimously.

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INVESTMENT
Mr. West reminded the board of AndCo’s mission statement as it relates to their fees,
organization structure, investment strategy etc. He thanked the board for allowing AndCo
the opportunity to serve them in this capacity. He illustrated the results of the S&P Total
Return Index History. He reported to the Board that Salem Trust did a wonderful job with
respect to the process involved in terminating Insight Investment. The transition was not
the smoothest and he thanked Salem for stepping up and making the process very
successful. He discussed the Miami Shores Village Police Officers Pension Fund Investment
Performance Review Period Ending December 31, 2018 and pointed out that the
investment is recovering since the last quarter which was very negative.

A few of the market observations were as follows:

Markets were volatile to end the 2018 calendar year. Both international and domestic equity
markets had considerable losses during the 4th quarter while fixed income returns were
muted but outperformed relative to equities. Within equities, domestic stocks trailed
international markets, reversing the 2018 trend of US market strength.

Similar to US equities, international equity index returns finished the quarter in negative
territory with the MSCI ACWI ex US Index returning -11.5%. International markets faced
headwinds from softening global macroeconomic data, tightening global monetary policy,
uncertainty around Brexit negotiations, turmoil surrounding global trade relation, falling
commodity prices and continued US Dollar (USD) strength.

Fixed income securities outperformed equities through both the 4th quarter and calendar
year 2018 with the broad market Bloomberg Barclays Aggregate Index returning 1.6% and
0.0% respectively.

US equity index returns were strongly negative across the style and capitalization spectrum
during the 4th quarter of 2018. Despite these negative results there was positive data in
GDP, unemployment, wage growth, retail factors were offset by softening data in housing,
consumer confidence and manufacturing, tightening monetary policy, negative guidance for
future corporate earnings and signs of slowing global growth which all contributed to the
heavy selling in equities.

During the quarter, large cap stocks outperformed mid and small cap equities across
growth, value and core indices. The large cap Russell 1000 Index fell 13.8% during the 4th
quarter versus a -20.2% drop for the Russell 2000 Index.

Value indices outperformed growth indices across the market cap spectrum during the 4th
quarter, reversing a year-to-date trend of growth stock outperformance.

Both S& P Dow Jones indices and MSCI made changes to the Global Industry Classification
Standard (GICS) sector configurations of their indices, creating a new GICS sector
classification called Communication Services which replaced the Telecommunications sector
on September 28, 2018.

Sector performance was broadly negative across large cap sectors for the 4th quarter. All
sectors which the Russell 1000 Index with the exception of the utilities sector posted
negative returns for the period with seven sectors outpacing the return on the index.

Quarterly results for small cap sectors were generally lower relative to their large
capitalization counterparts.

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Using S&P 500 sector valuations as a proxy for the market, forward P/E ratios for three of
the eleven GICS sectors were higher than their long-term averages at quarter-end.

Mr. West advised the Board that at this time there are no recommendations.

This concluded the investment report.

ATTORNEY REPORT
Mr. Levinson reported that the Division of Retirement released their annual report for the
state of Florida. The report was reviewed by his firm, a memorandum illustrating some of
the results will be circulating to all its trustees. Some of the results he discussed were
that Statewide which include all municipal plans almost 62% of investments were on
equities, 7% invested in real estate. Investment assumption returns in Florida were
7.5%.

He discussed House Bill 265 which would require all municipal boards whenever there is
an agenda, the documents to be discussed must be included in the agenda package. If
this bill is adopted the administrators will have to make available all the documents to be
discussed at the meeting at least 3 days prior to the meeting and has to be posted on the
city’s or Village website.
This concluded the attorney report.

ADMINISTRATOR REPORT
Mr. Falcon discussed the Signature Authorization forms required by both Salem Trust and
Integrity for the purposes of moving forward when letters of direction are needed for
example investing within funds or moving funds from one account to another, retirement
applications, invoices, etc.

In the July meeting, he provided the actuary a copy of the collective bargaining
agreement that was executed retroactive to October 1, 2018. He followed up with the
actuary regarding the establishment of the share accounts. The establishment of share
accounts is in response to recent legislative actions, under guidelines of “mutual consent”.
There are two individuals who retired after the collective bargaining agreement was
signed who may also be eligible for the share account, as well as all actively working
participants.

The Village shares with the participants the excess funds of the contribution from the
State of Florida. The excess is whatever is left after the State minimum benefits are
provided, and the State contribution is posted.

GRS the Plan actuary asked the police board for a motion to approve expenses of the
calculation itself.

A motion is made by trustee Bolton seconded by trustee Mauda to authorize GRS

to do the calculation of the share account motion passed unanimously.

There being no further business,

A motion made, seconded and passed unanimously to adjourn the meeting at

9:38 a.m.

The next pension meeting is scheduled for April 30, 2019.