JOURNAL OF PROCEEDINGS OF THE BOARD OF TRUSTEES OF THE POLICE AND FIRE RETIREMENT SYSTEM OF THE CITY OF DETROIT

Transcription

1 JOURNAL OF PROCEEDINGS OF THE BOARD OF S OF THE PRESENT 9:00 A.M. IN THE CONFERENCE ROOM OF THE RETIREMENT SYSTEMS 910 COLEMAN A. YOUNG MUNICIPAL CENTER DETROIT, MICHIGAN Janice Butler Mark Diaz James Edwards Cheryl R. Johnson Brenda Jones James Moore Sean P. Neary George Orzech Jeffrey Pegg Fred D. Wheeler Walter Stampor Cynthia A. Thomas Janet S. Lenear Ronald Zajac Joe Turner Ex/Officio Trustee Elected Trustee Ex/Officio Trustee Ex/Officio Trustee/Treasurer Ex/Officio Trustee/Council Member Elected Trustee Elected Trustee/Chairman Elected Trustee Elected Trustee Ex/Officio Trustee Executive Secretary Assistant Executive Secretary Recording Secretary Legal Counsel Special Legal Counsel EXCUSED Matthew Gnatek Ryan C. Bigelow Elected Trustee/Vice Chairman Investment Analyst ABSENT Joseph Martinico Ex/Officio Trustee/Labor Relations Director

2 2 CHAIRPERSON Sean P. Neary VICE CHAIRPERSON Matthew Gnatek ROLL CALL WAS TAKEN AT 9:05 A.M. BY THE BOARD S RECORDING SECRETARY AND THE MEETING WAS CALLED TO ORDER. CONFIRMATIONS BY WHEELER SUPPORTED BY ORZECH RESOLVED, THAT THE RECEIPTS AND DISBURSEMENTS WHICH ARE DESIGNATED BELOW BE CONFIRMED: CONFIRMATIONS Meeting # 2875 February 9, 2012 REMITTER / PAYEE NAME WIRE DATE DESCRIPTION AMOUNT RECEIPTS-BNY RREEF America 01/31/12 Remittance 590, MayfieldGentry Realty Advisors 01/31/12 Remittance 628, BRM Florida Holdings, LLC 02/01/12 Remittance 52, Inland Amercan Reit 02/01/12 Remittance for Dec & Jan 133, Alex Brown Realty-Beethoven Apt. 02/01/12 Remittance 10, MMA P-Float 02/02/12 Extension fee, January, , Alex Brown Realty-College Park MOB 02/02/12 Remittance 38, City of Detroit 02/03/12 Weekly annuity contribution 92, Behringer Harvard Reit 02/03/12 Remittance 8, TOTAL RECEIPTS $ 1,575, DISBURSEMENTS-BNY First Independence Bank 01/30/12 Retired Payroll, January, 2012-direct deposits 20,857, MayfieldGentry Realty Advisors 01/30/12 Servicing fee, January , Neopost 01/31/12 Postage 4, First Independence Bank 02/01/12 Retired Payroll-checks, January, ,368, Programmers 02/03/12 Fees, January, , TOTAL DISBURSEMENTS $ 23,503, YEAS S BUTLER, DIAZ, ORZECH, WHEELER AND CHAIRMAN NEARY 5 NAYS NONE ENTERED THE MEETING AT 9:08 A.M.

3 3 REFUNDS OF ACCUMULATED CONTRIBUTIONS BY BUTLER SUPPORTED BY DIAZ RESOLVED, THAT THE CONTRIBUTIONS TO THE ANNUITY SAVINGS FUND BY MEMBERS OF THE POLICE AND FIRE RETIREMENT SYSTEM OF THE CITY OF DETROIT, AS SET FORTH ON LIST NUMBER, IN THE AMOUNT OF, INCLUDING INTEREST, BE REFUNDED PENDING AUDIT BY RETIREMENT SYSTEM ACCOUNTING STAFF: YEAS S BUTLER, DIAZ, EDWARDS, ORZECH, WHEELER AND CHAIR- MAN NEARY 6 NAYS NONE MINUTES OF JANUARY 19, 2012 BY WHEELER SUPPORTED BY ORZECH RESOLVED, THAT THE MINUTES OF THE MEETING HELD THURSDAY, JANUARY 19, 2012 BE APPROVED AS RECORDED AND SUBMITTED BY THE BOARD S RECORDING SECRETARY: YEAS S BUTLER, DIAZ, EDWARDS, ORZECH, WHEELER AND CHAIR- MAN NEARY 6 NAYS NONE CAPITAL CALLS, FEES AND EXPENSES BY ORZECH SUPPORTED BY BUTLER WHEREAS, THE BOARD HAS BEEN PRESENTED WITH THE SUMMARY OF CAPITAL CALLS AND FEES AND EXPENSES WHICH IS REFERENCED BELOW, AND WHEREAS, THE BOARD HAS BEEN REQUESTED TO APPROVE FUNDING OF SAID CAPITAL CALLS AND PAYMENT OF SAID FEES AND EXPENSES, THEREFORE BE IT RESOLVED, THAT SUBJECT TO FINAL APPROVAL OF ALL TRANSACTION DOCUMENTS BY THE BOARD S LEGAL COUNSEL AND SUBJECT TO STAFF

4 4 CAPITAL CALLS, FEES AND EXPENSES - CONTINUED AUDIT, THE BOARD APPROVES FUNDING OF SAID CAPITAL CALLS AND PAYMENT OF SAID FEES AND EXPENSES: CAPITAL CALLS, FEES AND EXPENSES ENTERED THE MEETING AT 9:11 A.M. YEAS S BUTLER, DIAZ, EDWARDS, ORZECH, PEGG, WHEELER AND CHAIRMAN NEARY 7 NAYS NONE ASSISTANT EXECUTIVE SECRETARY S REPORTS ASSISTANT EXECUTIVE SECRETARY DISCUSSED VARIOUS MATTERS WITH THE BOARD, INCLUDING THE REQUEST OF THE CENTER FOR RETIREMENT RESEARCH AT BOSTON COLLEGE.

5 5 CENTER FOR RETIREMENT RESEARCH AT BOSTON COLLEGE BY ORZECH SUPPORTED BY DIAZ WHEREAS, HAS PRESENTED THE BOARD WITH A FEBRUARY 7, 2012 COMMUNICATION WHEREIN MR. HURWITZ REQUESTS THAT THE RETIREMENT SYSTEM PARTICIPATE IN THE CENTER FOR RETIREMENT RESEARCH AT BOSTON COLLEGE S SURVEY BY COMPLETING THE COLLEGE S QUESTIONNAIRE WHICH WILL BE RELEASED WITHIN THE NEXT COUPLE OF WEEKS, AND WHEREAS, THE BOARD HAS DISCUSSED THIS MATTER, THEREFORE BE IT RESOLVED, THAT UPON THE SYSTEM S RECEIPT OF SAID QUESTIONNAIRE, SAID QUESTIONNAIRE BE COMPLETED AND RETURNED TO THE CENTER FOR RETIREMENT RESEARCH AT BOSTON COLLEGE, ATTENTION: JOSH HURWITZ: YEAS S BUTLER, DIAZ, EDWARDS, ORZECH, PEGG, WHEELER AND CHAIRMAN NEARY 7 NAYS NONE INVESTMENT MANAGER ACCOUNT WITHDRAWALS BY ORZECH SUPPORTED BY PEGG The Board must periodically make withdrawals from the Board s investment management accounts to pay the benefits and expenses of the System, as well as fund capital calls, and The Board has reviewed the cash forecast prepared by staff wherein the Board notes that must be withdrawn from the managed accounts prior to to pay the benefits and expenses of the System, as well as fund capital calls, and The Board has reviewed the of its consultant, North Point Advisors, and recommendation be it The Board has discussed this matter with staff this date, therefore That the following withdrawals be made available no later than :

6 6 INVESTMENT MANAGER ACCOUNT WITHDRAWALS - CONTINUED MANAGER: RHUMBLINE S&P 500 INDEX ACCOUNT NUMBER(S): (FORMERLY ) WITHDRAWAL AMOUNT: $30,000, That a copy of this resolution be sent to Rhumbline; The Bank of New York Mellon Asset Servicing (the Board s master securities custodian); and North Point Advisors (the Board s retained consultant), and be it further its records: That the Retirement System retain a copy of this resolution for WAYNE T. OWEN RHUMBLINE 30 ROWES WHARF SUITE 420 BOSTON, MASSACHUSETTS KIM HENRY THE BANK OF NEW YORK MELLON ASSET SERVICING ONE BNY MELLON CENTER ROOM 0625 PITTSBURGH, PENNSYLVANIA ADRIAN ANDERSON NORTH POINT ADVISORS 28 WEST ADAMS STREET SUITE 1700 DETROIT, MICHIGAN Yeas Trustees Butler, Diaz, Edwards, Orzech, Pegg, Wheeler and Chair- Man Neary 7 Nays None GENERAL COUNSEL ENTERED THE MEETING AT 9:23 A.M. AND SPECIAL COUNSEL

7 7 MUNIMAE PROVIDED THE BOARD WITH STATUS UPDATES REGARDING THE FOLLOWING: MUNIMAE (BUSINESS) ENTERED THE MEETING AT 9:50 A.M. ENTERED THE MEETING AT 9:55 A.M. POLICE AND FIRE RETIREMENT SYSTEM S EXPOSURE TO MMA MMA S BUSINESS PLAN TO REDUCE THE POLICE AND FIRE RETIREMENT SYSTEM S EXPOSURE TO MMA IN 2012 PRIOR TO EXCUSING HIMSELF, MR. COLE ASKED THE BOARD TO APPROVE MMA S FORBEARANCE AGREEMENT EXTENSION REQUEST. EXCUSED HIMSELF AT 10:11 A.M. EXCUSED HERSELF AT 10:11 A.M. ORACLE PARTNERS OF GRAYSTONE JOINED THE BOARD IN LISTENING TO AND DISCUSS FUND OVERVIEW; THE CURRENT ENVIRONMENT; INVESTMENT ACTIVITY; MOBILE MODULAR EXPRESS II; A & D TECHNOLOGIES; MIST INNOVATIONS; MIST TECHNOLOGY HOLDINGS; AND COST MANAGEMENT. RE-JOINED THE MEETING AT 11:05 A.M. COURTLAND PARTNERS AND DISCUSSED 2011 THIRD QUARTER REAL ESTATE PORTFOLIO PERFORMANCE; REAL ESTATE ALLOCATIONS; AND MAYFIELD GENTRY REALTY ADVISORS (EACH BOARD MEMBER WAS PRESENTED WITH COURTLAND S FEBRUARY 8, 2012 RECOMMENDATIONS REGARDING MAYFIELD GENTRY S SUMMARY LETTER, RE: PFRS SEPARATE ACCOUNT).

8 8 RE-JOINED THE MEETING AT 12:07 P.M. LEGAL COUNSEL S REPORTS LEGAL COUNSEL DISCUSSED VARIOUS MATTERS WITH THE BOARD, INCLUDING HALLIBURTON (HE PROVIDED THE BOARD WITH A FEBRUARY 6, 2012 COMMUNICATION FROM GRANT & EISENHOFER REGARDING SAME); JERRY Q. FRANKS; AND THE NEW CITY CHARTER S ETHICAL STANDARDS (HE PROVIDED THE BOARD WITH A COPY OF THE NEW DETROIT CITY CHARTER ETHICS RULES EFFECTIVE JANUARY, 2012). CITY ETHICS RULES BY EDWARDS SUPPORTED BY JONES WHEREAS, THE BOARD OF S IS AWARE OF THE CITY OF DETROIT JANUARY 1, 2012 CHARTER PROVISIONS REGARDING CITY ETHICS RULES, AND WHEREAS, THE RETIREMENT SYSTEM S GENERAL COUNSEL HAS INDICATED THAT HIS PRELIMINARY REVIEW OF THE CITY S ETHICS RULES, ALTHOUGH PER DEFINITION OF PUBLIC SERVANT, APPEARS TO INCLUDE S, THE TERMS OF THE CITY S ETHICS RULES APPLY TO THE CITY (AND THE RETIREMENT SYSTEM IS AN INDEPENDENT ENTITY PER LAW), AND WHEREAS, THE ISSUE OF WHETHER THE BOARD SHOULD RE-VISIT ITS ETHICS POLICY IS NOT A LEGAL ISSUE, BUT IS A PHILOSOPHICAL ISSUE (AS ALSO INDICATED BY GENERAL COUNSEL), AND WITHIN THE AUTHORITY OF THE BOARD OF S, AND WHEREAS, THE BOARD DEEMS IT APPROPRIATE TO HAVE PREPARED A PROPOSED REVISED RETIREMENT SYSTEM ETHICS POLICY FOR CONSIDERATION BY THE BOARD OF S, WHICH PROPOSED REVISED RETIREMENT SYSTEM ETHICS POLICY WOULD BE CONSISTENT WITH THE SUBSTANCE AND THRUST OF THE CITY S ETHICS RULES, AND WHEREAS, THE BOARD OF S HAS DISCUSSED THIS MATTER, THEREFORE BE IT RESOLVED, THAT THE RETIREMENT SYSTEM S LEGAL COUNSEL PROVIDE PROPOSED REVISIONS TO THE RETIREMENT SYSTEM S ETHICS POLICY (AND ANY RELATED APPLICABLE POLICY) FOR CONSIDERATION BY THE BOARD OF S:

9 9 CITY ETHICS RULES CONTINUED Yeas Trustees Butler, Diaz, Edwards, Jones, Orzech, Wheeler and Chairman Neary - 7 Nays Trustee Pegg 1 Abstain Trustee Moore 1 Re: PFRS Yamato Corp.: (i) Authority to Execute Documents in Connection with the Operation of the Project and (ii) Affidavit of Authority By Trustee Pegg Supported by Trustee Wheeler WHEREAS, the Board is the sole shareholder of the corporation, and WHEREAS, the Board has been requested to approve the execution of (i) a resolution confirming the authority of Mayfield Gentry Realty Advisors, LLC to execute documents in connection with the operation of the Yamato Office Building Project and (ii) an Affidavit of Authority, dated February 9, 2012, by an officer of the corporation, and WHEREAS, the execution of said documents has been recommended by the Board s real estate advisor, Mayfield Gentry Realty Advisors, LLC, and the Board s special legal counsel, F. Logan Davidson, and WHEREAS, the execution of said documents has been reviewed and approved as to form by the Board s legal counsel and the execution of said document is consistent with prior action of the Board, therefore be it RESOLVED, that said documents be executed by the appropriate corporate officers on behalf of the corporation: Yeas Trustees Butler, Diaz, Edwards, Jones, Moore, Orzech, Pegg, Wheeler and Chairman Neary 9 Nays None

10 10 Re: PFRS Yamato Corp.: (i) Authority to Execute Documents in Connection with the Operation of the Project and (ii) Affidavit of Authority - Continued The Board of Trustees has been made aware of the execution of (i) a resolution confirming the authority of Mayfield Gentry Realty Advisors, LLC to execute documents in connection with the operation of the Yamato Office Building Project and (ii) an Affidavit of Authority, dated February 9, 2012, by an officer of the corporation. SPECIAL LEGAL COUNSEL S REPORTS SPECIAL LEGAL COUNSEL DISCUSSED VARIOUS MATTERS WITH THE BOARD, INCLUDING FIELDS VERSUS CITY OF DETROIT, ET AL; PFRS, ET AL, VERSUS WATKINS, ET AL; CIAGLO VERSUS PFRS; AND THE LIFE ASSURANCE FUND. LIFE ASSURANCE FUND BY PEGG SUPPORTED BY EDWARDS WHEREAS, the Police and Fire Retirement System of the City of Detroit ( PFRS ) and General Retirement System of the City of Detroit ( GRS ) have made loans to The Life Assurance Fund, L.P., a Delaware limited partnership ( LAF ), in the approximate aggregate amount of $295,191, with each of GRS and PFRS having loaned 50% of such amount, and WHEREAS, the Board of Trustees (the Board ) has been advised by its Investment Analyst that premiums in the aggregate amount of $45, (the Premiums Due Amount ) are due in February and March of 2012 on certain life insurance policies owned by LAF, and WHEREAS, it has been proposed that GRS and PFRS each loan to LAF 50% of the Premiums Due Amount so that LAF can pay such premiums, and WHEREAS, the Board has considered this matter, THEREFORE BE IT RESOLVED, the Board, subject to the approval of its Investment Analyst, General Counsel and Special Counsel, hereby approves the additional loan of $45, to LAF for an aggregate approved loan amount of approximately $340,240.92, subject to PFRS making a loan

11 11 LIFE ASSURANCE FUND - CONTINUED to LAF in the same amount at the same time with each pension fund disbursing its allocated amount to enable LAF to pay premiums due in February and March on certain life insurance policies that it owns, and be it further RESOLVED, PFRS will disburse $22, and GRS will disburse $22,523.14, and be it further RESOLVED, that the foregoing resolution is also subject to LAF s continued full cooperation with the requests of the Board s Investment Analyst, General Counsel and Special Counsel and SRR (the Board s Special Consultant), and be it further RESOLVED, that the Board ratifies the disbursement of loan proceeds for the payment of life insurance premiums, as noted above, and approves the loan documents, and be it further RESOLVED, that the Board (i) authorizes the disbursement of future loan proceeds consistent with the preceding resolutions, and (ii) the execution of loan documents prepared or recommended by Special Counsel, subject to General Counsel s review and approval, and be it further RESOLVED, that a copy of this resolution shall be provided to the General Retirement System of the City of Detroit; Board s Investment Analyst; the Board s Special Consultant; the Board s General Counsel; the Board s Special Counsel; and LAF: Yeas Trustees Butler, Diaz, Edwards, Jones, Moore, Orzech, Pegg, Wheeler and Chairman Neary 9 Nays None RECESS THE BOARD RECESSED FOR LUNCH AT 12:40 P.M. AND RECONVENED AT 1:18 P.M.

12 12 GRAYSTONE CONSULTING-SMITH BARNEY OF GRAYSTONE AND OF SMITH BARNEY DISCUSSED 2011 THIRD QUARTER AND JANUARY, 2012 MANAGER PERFORMANCE, AND PROVIDED THE BOARD WITH AN INVESTMENT MANAGER FEE COMPARISON SCHEDULE. EXCUSED HIMSELF AT 2:30 P.M. ENTERED THE MEETING AT 2:40 P.M. FEES PAID TO ALTERNATIVE INVESTMENT MANAGERS BY ORZECH SUPPORTED BY DIAZ WHEREAS, THE BOARD OF S IS MINDFUL OF THE COSTS OF MANAGEMENT FEES AND NOTES THE POSSIBILITY OF MODIFICATION OF FEES IF THE PARTIES DEEM SAME APPROPRIATE, AND WHEREAS, THE BOARD HAS DISCUSSED THIS MATTER WITH CRAIG DOBBS OF GRAYSTONE THIS DATE, THEREFORE BE IT RESOLVED, THAT GRAYSTONE ) REVIEW ALL ALTERNATIVE INVESTMENT MANAGEMENT FEES; ) DISCUSS/NEGOTIATE POSSIBLE MODIFICATIONS WITH ALTERNATIVE INVESTMENT MANAGERS; AND ) MAKE RECOMMENDATIONS TO THE BOARD OF S FOR FUTURE ACTION REGARDING THIS MATTER, AND BE IT FURTHER RESOLVED, THAT ALL ALTERNATIVE INVESTMENT MANAGERS ARE REQUESTED TO DISCUSS THESE MATTERS WITH GRAYSTONE, AND BE IT FURTHER RESOLVED, THAT A COPY OF THIS RESOLUTION BE FORWARDED TO GRAYSTONE AND ALL ALTERNATIVE INVESTMENT MANAGERS, AND BE IT FURTHER RESOLVED, THAT THE RETIREMENT SYSTEM RETAIN A COPY OF THIS RESOLUTION FOR ITS RECORDS: Yeas Trustees Butler, Diaz, Edwards, Johnson, Jones, Moore, Orzech, Pegg and Chairman Neary 9 Nays None

13 13 POLICE AND FIRE RETIREMENT SYSTEM INVESTMENT MANAGERS GRAYSTONE REQUESTS TO ATTEND ONE OF THE BOARD S MARCH, 2012 MEETINGS, PRESENT THE BOARD WITH A PERFORMANCE-BASED FEE SCHEDULE AND OBTAIN THE BOARD S APPROVAL TO IMPLEMENT SAID FEE SCHEDULE WITH ALL OF THE BOARD S INVESTMENT MANAGERS. EXCUSED HIMSELF AT 3:16 P.M. EXCUSED HERSELF AT 3:19 P.M. Re: Romulus Deep Disposal Well, Romulus, Michigan: Renewal of Letters of Credit for RDD Investment Corp. By Trustee Edwards Supported by Trustee Butler WHEREAS, the Police and Fire Retirement System is the sole shareholder of RDD Investment Corp. (the Corporation ), and WHEREAS, on December 17, 2009 the Board approved the issuance of Letters of Credit through First Independence Bank in favor of the Corporation in connection with the closure bonds required by the State of Michigan and the United States Environmental Protection Agency for the Deep Disposal Well Project in Romulus, Michigan, and WHEREAS, in connection with the issuance of the Letters of Credit the Corporation entered into the following documents: (i) Letter of Credit and Loan Agreement with First Independence Bank, (ii) Promissory Note in the amount of $1,533, payable to First Independence Bank, (iii) Standby Trust Agreement with First Independence Bank, and WHEREAS, in support of the Letters of Credit issued by First Independence Bank for the Corporation the Retirement System entered into a Triparty Pledge Agreement with First Independence Bank and The Bank of New York Mellon whereby the Retirement System pledged certain United States Treasury securities as security for the payment by the Corporation of any amounts that First Independence Bank would be called on to pay under any of the Letters of Credit, and WHEREAS, the Letters of Credit are to expire on February 11, 2012, and WHEREAS, the Corporation has requested the Board (i) approve the execution of: (a) an allonge dated February 10, 2012 to the Promissory Note payable to First Independence Bank by the appropriate officers of the corporation to reflect a reduction in the total amount of the Letters of Credit to $1,093,710.50, and (b) a closing statement dated February 10, 2012 by the

14 14 Re: Romulus Deep Disposal Well, Romulus, Michigan: Renewal of Letters of Credit for RDD Investment Corp. - Continued Retirement System and (ii) authorize the payment of $11, as the Fees, Expenses and Costs of First Independence Bank in connection with the renewal of the Letters of Credit as set forth on the closing statement and (iii) the payment of the $4,000 Annual Administration Fee of The Bank of New York Mellon under the Tri-party Pledge Agreement, and WHEREAS, said documents have been approved as to form by the Board s special legal counsel, F. Logan Davidson, and WHEREAS, this resolution has been approved as to form by the Board s legal counsel, and the execution of said documents is consistent with prior action of the Board, therefore be it RESOLVED, that the allonge to the Promissory Note dated February 10, 2012 be executed by the appropriate corporate officers on behalf of the corporation, and further RESOLVED, that the closing statement dated February 10, 2012 be executed by two authorized signatories on behalf of the Retirement System, and further RESOLVED, that said the foregoing amounts be paid to each respective bank in accordance with this resolution. Yeas Trustees Butler, Diaz, Edwards, Jones, Moore, Orzech, and Chairman Neary - 7 Nays None Entry in Minutes Re: Romulus Deep Disposal Well, Romulus, Michigan: Renewal of Letters of Credit for RDD Investment Corp. The Board of Trustees has been made aware of the execution of an allonge dated February 10, 2012 to the Promissory Note payable to First Independence Bank by an appropriate corporate officer on behalf of the corporation.

15 15 NORTH POINT ADVISORS AND ASSOCIATE FOLLOWING MATTERS WITH THE BOARD: DISCUSSED THE THE SYSTEM S CASH REQUIREMENTS FOR FEBRUARY, 2012 NORTH POINT S CAPITAL MARKET EXPECTATIONS FOR NON-U.S. STOCKS TOTAL PORTFOLIO REVIEW: ALLOCATION LARGE-CAP VERSUS SMALL-MID-CAP EURO ZONE ISSUES CLOSED SESSION BY DIAZ SUPPORTED BY BUTLER Resolved, That the Board enter into Closed Session for the purpose of discussing litigation matters: A Roll Call vote was taken as follows: Yeas Trustees Butler, Diaz, Edwards, Jones, Moore, Orzech, and Chairman Neary - 7 Nays None The Board entered into Closed Session at 3:50 P.M. EXCUSED HERSELF DURING CLOSED SESSION (AT 3:55 P.M.). RE-JOINED THE MEETING NEARING THE CONCLUSION OF CLOSED SESSION (AT 4:05 P.M.). OPEN SESSION BY DIAZ SUPPORTED BY ORZECH Resolved, That the Board return to Open Session: A Roll Call vote was taken as follows:

16 16 OPEN SESSION - CONTINUED Yeas Trustees Butler, Diaz, Edwards, Jones, Moore, Orzech, and Chairman Neary - 7 Nays None The Board returned to Open Session at 4:08 P.M. SERVICE RETIREMENT APPLICATIONS BY DIAZ SUPPORTED BY ORZECH RESOLVED, THAT THE SERVICE RETIREMENT APPLICATIONS WHICH ARE REFERENCED BELOW BE APPROVED: SERVICE RETIREMENT APPLICATIONS NAME, TITLE, DEPARTMENT: DAVID ROSEN FIRE FIGHTER FIRE DEPARTMENT RETIREMENT TYPE, PLAN: SERVICE RETIREMENT NEW PLAN SERVICE CR./EFFECTIVE DATE: NAME, TITLE, DEPARTMENT: DARRELL SAULSBY SENIOR FIRE PREVENTION INSPECTOR FIRE DEPARTMENT RETIREMENT TYPE, PLAN: SERVICE RETIREMENT NEW PLAN SERVICE CR./EFFECTIVE DATE: Yeas Trustees Butler, Diaz, Edwards, Jones, Moore, Orzech, and Chairman Neary - 7 Nays None MMA BY ORZECH SUPPORTED BY DIAZ WHEREAS, the Police & Fire Retirement System of the City of Detroit ("P&F") is a participant, together with the General Retirement System of the City of Detroit, w it h re spe c t to ce rta in obligations of Municipal Mortgage and Equity, LLC and its subsidiaries (collectively, "MMA") to P&F, and WHEREAS, a formal request has been made to the Board of Trustees of P&F by MMA on February 9, 2012, relating to certain of its

17 17 MMA - CONTINUED obligations to P&F as more fully described in a letter to P&F by MMA dated February 6, 2012, and W H E R E A S, M M A a n d P & F e n t e r e d i n t o f o u r ( 4 ) p r i o r f o r b e a r a n c e agreements ("Forbearance Agreements") as memorialized and a s de s c r ib e d in p r io r r e s o l u t ion s is s u e d by P & F (" P & F Resolutions") dated November 13, 2008, June 25, 2009, June 10, 2010, June 2, 2011, and W H E R E A S, per prior Resolution P&F agreed to grant a forbearance ("Forbearance") until June 30, 2012 and to resolve certain other matters, all as set forth in the P&F Resolutions, and WHEREAS, the maturity date of the Forbearance set forth in the Forbearance Agreement is June 30, 2012 and MMA has requested that P&F extend the maturity date of the Forbearance until June 30, 2013 (" M a t u r i t y D a t e " ), in a c c o r d a n c e w i t h a l l o t h e r t e r m s a n d c o n d it i o n s o f t h e F o r b e a r a n c e Ag r e e m e n t, a n d WHEREAS, in addition to the extension of the Maturity Date and subject to the terms of the Forbearance Agreement, P&F will forbear from enforcing any direct or indirect obligations of MMA to P&F (which include, without limitation, obligations of MMA to or through the Walker Dunlop Balanced Fund) so long as MMA is satisfying the Concessions (as defined below), and WHEREAS, in exchange for such extension of the Maturity Date, MMA agrees to the following terms: (i) P&F will continue to receive 7.5% as to all rates of interest pertaining to applicable loan obligations owed by MMA to P&F (i.e. Red River, Cavan and Sheffield ) as set forth in the prior Forbearance Agreement; (ii) MMA will continue to pay all interest due on all loan obligations owed to P&F on a current basis; (iii) MMA will not declare bankruptcy; (iv) there will be no monetary de f aul ts u n de r a n y o ther l o an, l o a n e xtension or l oan restr u cture agreements with MMA s other

18 18 MMA - CONTINUED creditors; and (v) MMA will inform Detroit P&F of any monetary default should one occur (collectively, "Concessions"), and WHEREAS, the Board of Trustees of P&F have discussed the foregoing matters, and WHEREAS, the Board is willing to appro ve MMA's propo sed course of action relating to the extension of the Maturity Date of the Forbearance through June 30, 2013, and to receive the Concessions as set forth above, therefore be it RESOLVED, that subject to the continuation of the terms of the prior Forbearance Agreements as provided herein and receiving the Concessions, the Board of Trustees approves the following: (i) the proposed action by MMA as outlined above relating to the extension of the Maturity Date of the Forbearance to June 30, 2013 with all other terms and conditions under the Forbearance Agreement remaining in full force and effect, and be it further RES O L V ED, that the Board of Trustees of P&F by any two authorized signatories execute any and all instruments, in connection with the foregoing terms sub ject to approval of d o c u m e n t a t io n b y S p e c ia l L e g a l C o u n s e l a n d G e n e r a l Counsel, and be it further RESOLVED, that a copy of this resolution be forwarded to MMA; Special Legal Counsel, F. Logan Davidson; the Board of Trustees of the General Retirement System; and the Accounting Division of the Retirement System: EARL COLE MUNIMAE 621 E. PRATT STREET SUITE 600 BALTIMORE, MARYLAND 21202

19 19 MMA - CONTINUED F. LOGAN DAVIDSON, P.C. 28 WEST ADAMS SUITE 300 DETROIT, MICHIGAN MARILYN BERDIJO ASSISTANT EXECUTIVE SECRETARY GENERAL RETIREMENT SYSTEM OF THE CITY OF DETROIT 908 COLEMAN A. YOUNG MUNICIPAL CENTER DETROIT, MICHIGAN Yeas Trustees Butler, Diaz, Edwards, Jones, Orzech and Chairman Neary - 6 Nays None Abstain Trustee Moore - 1 EXCUSED HERSELF AT 4:16 P.M. PUBLIC FORUM AT, CHAIRMAN NEARY DECLARED THE MEETING IN OPEN FORUM FOR GENERAL DISCUSSION BY THE PUBLIC ATTENDING THE MEETING. ADJOURNMENT THERE BEING NO FURTHER BUSINESS BEFORE THE BOARD, CHAIRMAN NEARY THE MEETING AT UNTIL THURSDAY, AT 9:00 A.M., IN ROOM 910 OF THE COLEMAN A. YOUNG MUNICIPAL CENTER, DETROIT, MICHIGAN RESPECTFULLY SUBMITTED, ASSISTANT EXECUTIVE SECRETARY