BOARD S COMMUNICATION TO THE CITY COMMISSION. Chairman Bucci called the meeting to order at 9:00 am. Roll call was taken.

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1 CITY OF FORT LAUDERDALE GENERAL EMPLOYEES RETIREMENT SYSTEM BOARD OF TRUSTEES MEETING 316 NE FOURTH STREET, SUITE 2, FORT LAUDERDALE, FL Thursday, April 4, :00 A.M. BOARD S COMMUNICATION TO THE CITY COMMISSION Items Requiring City Commission Action None at this time Items That May Be Of Interest To The City Commission None at this time Items Submitted For City Commission Consideration None at this time Chairman Bucci called the meeting to order at 9:00 am. Roll call was taken. Present: Absent: Also Present: John LeRoy Le Bucci, Chairman Mark Darmanin, Vice Chairman Sean Jones, Secretary Julie Cameron, Trustee Greg Slagle, Trustee Paul Tanner, Trustee Doug Wood, Ex-Officio Darlene Pfeiffer, Trustee Robert Dunckel, Assistant City Attorney Bob Oelke, City Resident Jonathan Woodruff, City Resident David Desmond, Pension Administrator Jane Dyar, Pension & Recording Secretary Chairman Bucci asked the Board to review the March 7, 2013 minutes. Mr. Darmanin made a motion to accept the minutes as presented. Mr. Jones seconded the motion. Ms. Pfeiffer made note of a grammatical correction. Ms. Pfeiffer made a motion to accept the minutes as amended. Mr. Darmanin seconded the motion. The amended minutes were accepted unanimously. REAL ESTATE COMMITTEE REPORT Mr. Darmanin reviewed several issues on the real estate front in the last month. He explained that Pro-Built construction was under going a name change and a split within the company, however that everything was under control and should be resolved within 2-4 weeks. Mr. Darmanin felt that because Mr. Owen brought the information to him in person he felt that there was no intent to defraud. He added that this has set back

2 2 finalization of planned work with the 4800 and the 300 properties, but not within an unreasonable time. Mr. Darmanin then discussed the parking at the 4800, reviewing the estimated price to expand and extend parking for employees. A discussion ensued and the Board unanimously felt that other options should be considered. Mr. Slagle pointed out that the landscape of the 4800 Building was a part of the property Plan. He asked if there was a way, before spending $2,500.00, to take the original drawing over to the Building Department to have them review and ensure that a permit would be given for the parking expansion. He felt it didn t make sense to spend $2, for the drawing and then find that they would not issue a permit because that would change the square footage for drainage or whatever. He then asked, since it was a tenant requested improvement, was the tenant going to be paying anything towards this request. Mr. Darmanin replied negative. Further discussion ensued. The Board consensus was to have Mr. Vordermeier come back with a cheaper or no cost option. Mr. Darmanin then reviewed the leases: 1. Dr. Bockter and Dr. Garcia have split up their partnership and an addendum to the lease is being reviewed for their lease in the 4800 Building. 2. Internal Affairs lease is being reviewed for renewal through November 30, Mr. Dunckel is crafting the new lease. Mr. Jones made a motion to give Mr. Vordermeier to negotiate the lease with IA under the existing terms. Ms. Pfeiffer seconded the motion. The motion passed unanimously. Mr. Slagle noted for the Board that he contacted OK Tire and they might be willing to rent the available Bay in the 316 Building as storage for cars on a month-to-month basis. The Board asked Mr. Slagle to give the information to Mr. Darmanin and Mr. Vordermeier. AUDIT COMMITTEE REPORT Ms. Pfeiffer presented the minutes to the Board. Mr. Slagle made the motion to approve the Committee minutes. Mr. Jones seconded the motion and the minutes were accepted unanimously. Ms. Pfeiffer reviewed the idea of electronic voting with the approach of how to phase it in slowly. She added that it would save costs and labor and would come back to the Board with figures. Additionally, she suggested a possible survey for interest and Ordinance review for possible changes. Mr. Wood suggested that someone also check with the City to see if they already have the kind of software needed to assist, since as the City recently used with Health Benefits. An in-depth discussion ensued. ANNUAL POLICY REVIEW Ms. Pfeiffer stated the Audit Committee reviewed the Educational Travel Policy. She presented the Board with the proposed changes. Covered travel days: 1. The day prior to the beginning of any approved educational program 2. Under number 2, travel advance payment, the word staff in place of travel manager 3. In the sentence above staff, take out the words and finance charges.

3 3 A discussion ensued. Mr. Darmanin made the motion to table the policy until next month. Mr. Jones seconded the motion. Further discussion ensued. The motion passed unanimously. Mr. Darmanin asked that Ms. Pfeiffer send a copy out to the Board members prior to the next meeting. Ms. Pfeiffer affirmed. ATTORNEY S REPORT Chairman Bucci explained that Mr. Dunckel would be available by phone if needed, and Ms. Williams-Persad was unable to attend due to a previous commitment. Chairman Bucci began by reviewing the meeting held on February 27, 2013 with City Manager Lee Feldman, Doug Wood, Linda Logan-Short, Norm Mason, David Desmond, John Herbst, and himself to discuss the amortization period of the Bonus Retirement Program (BRIP). The BRIP liability in the Plan Actuary s report for fiscal year ending September 30, 2011 was originally amortized over five years. Sometime subsequent to this report when proceeds from the Pension Obligation Bond (POB) were applied to the Plan s Unfunded Actuarial Accrued Liability (UAAL), the amortization period for the BRIP liability was included with all GERS liabilities and amortized over approximately 17 years. The reason for this change was unclear but new information had recently come to light. Chairman Bucci cited an supplied by the Plan s Actuary, which was from the City s Actuary on July 25, The stated in part, An objective of the proposed POB is to fund 75% of the unfunded liability of the plan as of the most recent valuation date (October 2011). Chairman Bucci said he interpreted this as instructions for the Plan s Actuary to adjust all UAAL s, which they did. He referred to a chart in the e- mail that cited the total UAAL amount; including the BRIP liability and said the indicated the POB proceeds were to be applied to all liabilities. Chairman Bucci said that he believed the matter should be addressed between the City and their Actuary. Mr. Wood questioned the analysis and said he would have to review the matter further. Chairman Bucci then asked for input from the City to clarify how they would like the remaining BRIP liability amortized. He said there were probably three viable options for the City to consider and asked the Board if they were okay with sanctioning corrections to the September 30, 2012 Actuarial Valuation Report. The consensus was positive and Mr. Wood will discuss the matter at the next GERS Board meeting. Mr. Desmond stated that Mr. Dunckel was still reviewing the possible pending disability. He also mentioned that the paperwork for additional contributions for American Realty was still pending review. ADMINISTRATOR S REPORT 1. Mr. Desmond presented the Board with the April benefit payment reconciliation. 2. He presented the Board with the 4800 Building report and photographs regarding the parking area. 3. He said the September 30, 2012 data sent by IT to the Actuary was in error and that the missing data was sent to Gabriel Roeder this week.

4 4 4. The communication problem between the Emerging Market manager OFI and the Bank of New York Mellon was corrected allowing for a faster flow of information. 5. He presented the Board with the VMC income and expense book for February 2013 for review. ADMINISTRATOR S REVIEW AND PRELIMINARY DISCUSSION Chairman Bucci asked the Trustees to turn in the evaluation sheets he handed out for Mr. Desmond at the last meeting. He reviewed that Mr. Desmond was hired on September 18, 2000, his current base salary being $105,144.00, he receives a monthly car allowance of $250.00, a cell phone allowance of $30.00 a month, he receives longevity pay, and the Pension Board contributes $ a month towards his health, dental and life insurance. Additionally, Mr. Desmond is a member of the Pension Plan. In June 2011, Mr. Desmond received a satisfactory rating, in June 2012 he received a satisfactory rating, and this most recent evaluation was above satisfactory rating. Chairman Bucci stated he received some very positive comments from other departments regarding Mr. Desmond. He then asked Ms. Pfeiffer to report on the Audit Committee s review of the contract. Ms. Pfeiffer stated the Committee had a few questions for Mr. Dunckel to opine on several points that seemed redundant and that the Committee thought should be clarified. Chairman Bucci thanked the Committee for it s hard work. Chairman Bucci then asked Mr. Desmond to address the Board with his concerns and comments at the moment. Mr. Desmond explained that he reviewed the contract and it has become somewhat convoluted over time. Originally, the salary and benefits were a negotiated amount but, over time, the salary came from the City s range and step pay scale. His request was to return to a negotiated salary figure under a two-year contract. He said that paragraphs C, D, and E of Section 7 should be eliminated. He also pointed out the language regarding vacation and sick leave needs to be updated. Mr. Desmond said that the job of Pension Administrator is one of two unique positions to the City and that the other Administrator position has, over the years, continued to see salary improvements over his salary level. Additionally, he stated that the comparisons to the position should be against other Administrators within South Florida. He noted he has presented the Board with various salary and benefits studies from other cities over the years with the latest one from 2012 showing his salary is the third lowest in the region, just ahead of two newly hired Administrators. He reminded the Board that he has served as an Administrator in Florida for over 20 years and that the GERS has now reached a remarkable valuation of more than one-half billion dollars. A discussion began regarding various aspects of the position and the contract. Mr. Wood reviewed the comparison between the two Fort Lauderdale Administrators and made several valid points that there is little differential in the two positions. Ms. Pfeiffer stated that the Audit Committee advised to hire a consultant take a look at the position differential among Pension Administrators within Florida. Mr. Darmanin wanted some clarity and asked that Mr. Desmond have figures on hand for the next meeting showing the number of retirees per month or per year, the number of disabilities per month or per

5 5 year, as well as the number of DROP applicants that are handled in the office. Additionally, Mr. Darmanin asked if the Audit Committee made any recommendations for Mr. Desmond s contract. Ms. Pfeiffer said that if Mr. Desmond were not at the maximum of the M038 salary range, they would recommend a 1% COLA increase retroactive to October Mr. Darmanin said that he would recommend Mr. Desmond stay in the M038 salary range and he agrees with eliminating certain areas discussed in the contract. He continued that cleaning up the contract language for the vacation and sick leave would be acceptable. Mr. Slagle felt a comparison with other salaries would be better, with a comparable index valued every five years or so, and he favors a one-year contract. Ms. Cameron felt that a two-year contract would be better, however she was not against a one-year contract. Mr. Tanner felt he is very familiar with the Administrator operations, tasks, and knowledge that Mr. Desmond must have to do his job, and found it interesting in how they had approached constructing his contract versus the private sector. He felt that confidence and security usually followed a 2-year contract. Chairman Bucci thanked everyone for his or her input and stated the contract would be finalized at the May meeting. BUSINESS IN PROCESS UPDATE - American Realty, contract still being reviewed. - Green Mountain Coffee and Verisign still outstanding. - Disabilities still pending; Dannenhaur, Stenger. MONTHLY FUND ASSET MIX Chairman Bucci noted there was a little difference in the cash of almost $14 million. Mr. Desmond noted that $3 million was still awaiting disbursement to American Realty. Mr. Desmond will review to verify the figures. BENEFIT REVIEW April 2013 RETIREMENT Name Date Service Time Type Albert Carbon 12/01/14 8y, 3m, 22d Vested Public Works Nick Trotogott 3/25/13 5y, 6m, 22d Normal Finance Steven Vamvakis Fire Support 3/22/13 12y, 10m, 21d Vested BENEFIT CHANGES Name Vested Date / Change Service Time William Kraemer 7/17/04 6/01/13 6y, 6m, 6d Yvonne Simon 10/14/94 4/01/13 8y, 9m, 9d Michael Foster 4/06/07 4/01/13 9y, 3m, 30d Sherri Adams 12/09/11 5/01/13 10y, 1m, 11d

6 6 Kenneth Clark 1/26/06 5/01/13 20y, 1m, 10d DROP RETIREMENT Name Date Department Daniel Rozelle 5/01/13 Public Works Carol Whitman 5/01/13 Police Support DROP TERMINATION Name Date John McDowell 4/30/13 POST RETIREMENT DEATH Name Date Kenneth Tillman 3/14/13 Eddie May Robinson 3/04/13 Charlie Johnson 4/17/12 Albert Stephens 3/13/13 Kathryn Kesler 3/29/13 Chairman Bucci noted an incorrect spelling of the name of a retiree. Mr. Darmanin made the motion to accept the benefit review as presented. Mr. Slagle seconded the motion. After some discussion, Mr. Darmanin made the motion to accept the amended benefit review. Ms. Cameron seconded. The amended benefit review was accepted unanimously. EDUCATIONAL CALENDAR Mr. Desmond stated that there were no new educational seminars on this month s calendar. The Board accepted the calendar as information. BILLS Mr. Darmanin made the motion to accept the bills as presented. Mr. Tanner seconded the motion. An additional bill was presented. Mr. Darmanin made a motion to accept the amended bills. Ms. Pfeiffer seconded the amended motion. The amended motion was accepted unanimously. PLEASURE OF THE BOARD Mr. Darmanin reviewed his due diligence visit to Aberdeen Asset Management in Jersey City, NJ. He was very impressed with their open access layout for their offices. He reported how well they worked together and thought the office design promoted the unity. They were very informative and outstanding hosts.

7 7 Chairman Bucci reminded the Board that Mr. Desmond has information from Mr. Dahab regarding Private Equity for consideration at the next meeting, May 2, Mr. Oelke noted for the Board that the Audit Advisory Board, on which he serves, wanted to assure any alternative assets, for instance timber, were properly verified. Chairman Bucci said the timber manager verified them; there is a third party that does their verification. BOARD COMMUNICATION TO THE CITY COMMISSION There was nothing to report to the Commission at this time. Mr. Darmanin made the motion to adjourn. Ms. Cameron seconded the motion. The meeting adjourned unanimously at 12:05 PM.