CITY OF WEST MELBOURNE POLICE OFFICERS RETIREMENT PLAN ACTUARIAL VALUATION AS OF OCTOBER 1, 2015

CITY OF WEST MELBOURNE POLICE OFFICERS RETIREMENT PLAN ACTUARIAL VALUATION AS OF OCTOBER 1, 2015 CONTRIBUTIONS APPLICABLE TO THE PLAN/ FISCAL YEAR ENDING SEPTEMBER 30, 2017

February 1, 2016 Ms. Karan Rounsavall 3695 Indian River Drive Cocoa, FL 32926 Re: City of West Melbourne Police Officers Retirement Plan Dear Karan: We are pleased to present to the Board this report of the annual actuarial valuation of the City of West Melbourne Police Officers Retirement Plan. The valuation was performed to determine whether the assets and contributions are sufficient to provide the prescribed benefits and to develop the appropriate funding requirements for the applicable plan year. Please note that this valuation may not be applicable for any other purposes. The valuation has been conducted in accordance with generally accepted actuarial principles and practices, including the applicable Actuarial Standards of Practice as issued by the Actuarial Standards Board, and reflects laws and regulations issued to date pursuant to the provisions of Chapters 112 and 185, Florida Statutes, as well as applicable federal laws and regulations. In our opinion, the assumptions used in this valuation, as adopted by the Board of Trustees, represent reasonable expectations of anticipated plan experience. Future actuarial measurements may differ significantly from the current measurements presented in this report for a variety of reasons including: changes in applicable laws, changes in plan provisions, changes in assumptions, or plan experience differing from expectations. In conducting the valuation, we have relied on personnel, plan design, and asset information supplied by the Board of Trustees, financial reports prepared by the custodian bank, and the actuarial assumptions and methods described in the Actuarial Assumptions section of this report. While we cannot verify the accuracy of all this information, the supplied information was reviewed for consistency and reasonableness. As a result of this review, we have no reason to doubt the substantial accuracy of the information and believe that it has produced appropriate results. This information, along with any adjustments or modifications, is summarized in various sections of this report. The undersigned is familiar with the immediate and long-term aspects of pension valuations, and meets the Qualification Standards of the American Academy of Actuaries necessary to render the actuarial 13420 Parker Commons Blvd., Suite 104 Fort Myers, FL 33912 (239) 433-5500 Fax (239) 481-0634 www.foster-foster.com

opinions contained herein. All of the sections of this report are considered an integral part of the actuarial opinions. To our knowledge, no associate of Foster & Foster, Inc. working on valuations of the program has any direct financial interest or indirect material interest in the City of West Melbourne, nor does anyone at Foster & Foster, Inc. act as a member of the Board of Trustees of the City of West Melbourne Police Officers Retirement Plan. Thus, there is no relationship existing that might affect our capacity to prepare and certify this actuarial report. If there are any questions, concerns,, or comments about any of the items contained in this report, please contact me at 239-433-5500. Respectfully submitted, Foster & Foster, Inc. By: Patrick T. Donlan, ASA, EA, MAAA Enrolled Actuary #14-6595 PTD/lke Enclosures

TABLE OF CONTENTS Section Title Page I Introduction a. Summary of Report 5 b. Changes Since Prior Report 7 c. Comparative Summary of Principal Valuation Results 8 II Valuation Information a. Reconciliation of the Unfunded Actuarial Accrued Liability 13 b. Actuarial Assumptions and Methods 14 c. Valuation Notes 16 d. Partial History of Premium Tax Refunds 17 e. Excess State Monies Reserve 18 III Trust Fund 19 IV Member Statistics a. Statistical Data 24 b. Age and Service Distribution 25 c. Member Reconciliation 26 V Summary of Plan Provisions 27 VI Governmental Accounting Standards Board 30 Disclosure Information City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 4

SUMMARY OF REPORT The annual actuarial valuation of the City of West Melbourne Police Officers Retirement Plan, performed as of October 1, 2015, has been completed and the results are presented in this Report. The contribution amounts set forth herein are applicable to the plan/fiscal year ended September 30, 2017. The contribution requirements, compared with those developed in the October 1, 2014 actuarial valuation, are as follows: Valuation Date Applicable Plan Year End 10/1/15 9/30/17 10/1/14 9/30/16 City and State Required Contribution % of Total Annual Payroll 23.40% 26.47% State Contribution (est.) * 119,977 119,977 % of Total Annual Payroll 6.05% 6.05% Balance from City * % of Total Annual Payroll 17.35% 20.42% * Represents the amount received in fiscal 2015. Because the Board adopted the Naples interpretation of Florida Statutes effective with fiscal 2014, the City will be able to use all State Monies that come into the Plan to offset their bottom line funding requirements. The precise City requirement for fiscal 2016 will be 26.47% of the non-drop pensionable payroll realized in fiscal 2016 less the State Monies actually received in fiscal 2016. The precise City requirement for fiscal 2017 will be 23.40% of the non- DROP pensionable payroll realized in fiscal 2017 less the actual State Monies received in fiscal 2017. During the past year the actuarial experience has been more favorable than expected, relative to the Plan s actuarial assumptions. The primary sources of favorable experience included lower than expected average increases in pensionable compensation and a 7.46% investment return (Actuarial Asset Basis) that exceeded the 7.2% assumption. These gains were partially offset by the effect of no retiree mortality and lower than expected terminations. City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 5

For informational purposes, the City s funding requirement, when expressed as a percentage of payroll, including an estimate of the annual pay for DROP participants, is approximately 16.1% for the fiscal year ending September 30, 2017. It is important to note that this funding rate is for illustration purposes only. The City should budget based on the percentage shown on page 5. The balance of this Report presents additional details of the actuarial valuation and the general operation of the Plan. The undersigned would be pleased to meet with the Board of Trustees in order to discuss the Report and any pending questions concerning its contents. Respectfully submitted, FOSTER & FOSTER, INC. By: Patrick T. Donlan, ASA, EA, MAAA By: Sara E. Baumer City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 6

Plan Changes Since Prior Valuation There have been no plan changes since the prior valuation. Actuarial Assumption/Method Changes Since Prior Valuation There have been no assumption or method changes since the prior valuation. City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 7

COMPARATIVE SUMMARY OF PRINCIPAL VALUATION RESULTS A. Participant Data 10/1/2015 10/1/2014 Number Included Actives 35 30 Service Retirees 10 8 DROP Retirees 2 4 Beneficiaries 1 1 Disability Retirees 1 1 Terminated Vested 2 3 Total 51 47 Total Annual Payroll $1,983,685 $1,701,995 Payroll Under Assumed Ret. Age 1,983,685 1,701,995 Annual Rate of Payments to: Service Retirees 332,402 257,176 DROP Retirees 92,892 164,813 Beneficiaries 14,949 14,949 Disability Retirees 39,676 38,946 Terminated Vested 33,042 37,071 B. Assets Actuarial Value ¹ 10,795,205 9,896,324 Market Value ¹ 10,595,211 10,508,346 C. Liabilities Present Value of Benefits Actives Retirement Benefits 6,785,651 5,864,810 Disability Benefits 574,739 519,858 Death Benefits 43,005 39,020 Vested Benefits 1,262,541 1,130,746 Refund of Contributions 59,363 46,500 Service Retirees 4,577,357 3,653,702 DROP Retirees¹ 1,759,682 2,782,629 Beneficiaries 124,884 128,427 Disability Retirees 628,853 623,626 Terminated Vested 203,163 206,268 Excess State Monies Reserve 214,182 214,182 Total 16,233,420 15,209,769 City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 8

C. Liabilities - (Continued) 10/1/2015 10/1/2014 Present Value of Future Salaries (Attained Age) 17,575,743 15,381,074 Present Value of Future Member Contributions 1,492,425 1,306,693 FIL Normal Cost (Sponsor) 257,850 226,721 Present Value of Future Normal Costs (FIL Method) 2,284,587 2,048,899 Actuarial Accrued Liability (FIL) 12,456,408 11,854,178 Unfunded Actuarial Accrued Liability (UAAL) 1,661,203 1,957,854 Funded Ratio (AVA / AL) 86.7% 83.5% D. Actuarial Present Value of Accrued Benefits Vested Accrued Benefits Inactives ¹ 7,293,939 7,394,653 Actives 1,935,418 1,724,038 Member Contributions 992,947 789,993 Total 10,222,304 9,908,684 Non-vested Accrued Benefits 501,565 383,439 Total Present Value Accrued Benefits 10,723,869 10,292,123 Funded Ratio (MVA / PVAB) 98.8% 102.1% Increase (Decrease) in Present Value of Accrued Benefits Attributable to: Plan Amendments 0 Assumption Changes 0 New Accrued Benefits 366,741 Benefits Paid (652,537) Interest 717,542 Other 0 Total 431,746 City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 9

Valuation Date 10/1/2015 10/1/2014 Applicable to Fiscal Year Ending 9/30/2017 9/30/2016 E. Pension Cost Sponsor Normal Cost (with interest) $267,133 $234,883 % of Total Annual Payroll ² 13.47 13.80 Administrative Expenses (with interest) 48,068 43,400 % of Total Annual Payroll ² 2.42 2.55 Payment Required to Amortize Unfunded Actuarial Accrued Liability over 29 years (as of 10/1/2015, with interest) 149,046 172,312 % of Total Annual Payroll ² 7.51 10.12 Required City & State Contribution 464,247 450,595 % of Total Annual Payroll ² 23.40 26.47 F. Past Contributions Plan Years Ending: 9/30/2015 City and State Requirement 532,371 Actual Contributions Made: Members (excluding buyback) 151,179 City 582,408 State 119,977 Total 853,564 G. Net Actuarial (Gain)/Loss N/A ¹ The asset values and liabilities for DROP Members include accumulated DROP Balances as of 9/30/2015 and 9/30/2014. ² Contributions developed as of 10/1/2015 are expressed as a percentage of total annual payroll at 10/1/2015 of $1,983,685. City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 10

H. Schedule Illustrating the Amortization of the Total Unfunded Actuarial Accrued Liability as of: Year Projected Unfunded Accrued Liability 2015 1,661,203 2016 1,626,583 2017 1,589,470 2024 1,243,072 2031 759,442 2037 305,687 2044 0 I. (i) 3 Year Comparison of Actual and Assumed Salary Increases Actual Assumed Year Ended 9/30/2015 4.71% 6.00% Year Ended 9/30/2014 1.79% 6.00% Year Ended 9/30/2013 6.05% 6.00% (ii) 3 Year Comparison of Investment Return on Actuarial Value Actual Assumed Year Ended 9/30/2015 7.46% 7.20% Year Ended 9/30/2014 10.20% 7.40% Year Ended 9/30/2013 8.59% 7.40% (iii) Average Annual Payroll Growth (a) Payroll as of: 10/1/2015 $1,983,685 10/1/2005 1,257,674 (b) Total Increase 57.73% (c) Number of Years 10.00 (d) Average Annual Rate 4.66% City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 11

STATEMENT BY ENROLLED ACTUARY This actuarial valuation was prepared and completed by me or under my direct supervision, and I acknowledge responsibility for the results. To the best of my knowledge, the results are complete and accurate, and in my opinion, the techniques and assumptions used are reasonable and meet the requirements and intent of Part VII, Chapter 112, Florida Statutes. There is no benefit or expense to be provided by the plan and/or paid from the plan's assets for which liabilities or current costs have not been established or otherwise taken into account in the valuation. All known events or trends which may require a material increase in plan costs or required contribution rates have been taken into account in the valuation. Patrick T. Donlan, EA, ASA, MAAA Enrolled Actuary #14-6595 Please let us know when the report is approved by the Board and unless otherwise directed we will provide copies of the report to the following offices to comply with Chapter 112 Florida Statutes: Mr. Keith Brinkman Bureau of Local Retirement Systems Post Office Box 9000 Tallahassee, FL 32315-9000 Ms. Sarah Carr Municipal Police and Fire Pension Trust Funds Division of Retirement Post Office Box 3010 Tallahassee, FL 32315-3010 City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 12

RECONCILIATION OF UNFUNDED ACTUARIAL ACCRUED LIABILITIES (1) Unfunded Actuarial Accrued Liability as of October 1, 2014 $1,957,854 (2) Sponsor Normal Cost developed as of October 1, 2014 226,721 (3) Expected administrative expenses for the year ended September 30, 2015 41,892 (4) Expected interest on (1), (2) and (3) 158,798 (5) Sponsor contributions to the System during the year ended September 30, 2015 702,385 (6) Expected interest on (5) 21,677 (7) Unfunded Actuarial Accrued Liability as of September 30, 2015 (1)+(2)+(3)+(4)-(5)-(6) 1,661,203 (8) Change to UAAL due to Assumption Change 0 (9) Unfunded Accrued Liability as of October 1, 2015 1,661,203 Date Years 10/1/2015 Amortization Established Remaining Amount Amount 10/1/1997 12 $137,982 $16,379 10/1/2000 15 15,246 1,581 10/1/2003 18 (215) (20) 10/1/2004 19 275,304 25,221 10/1/2005 20 55,382 4,953 10/1/2005 20 128,661 11,506 10/1/2008 23 120,036 10,104 10/1/2009 24 458,148 37,919 10/1/2009 24 (169,177) (14,002) 10/1/2011 26 (56,072) (4,505) 10/1/2011 26 194,958 15,664 10/1/2012 27 152,002 12,053 10/1/2012 27 (104,215) (8,264) 10/1/2013 28 191,322 14,990 10/1/2014 29 261,841 20,288 1,661,203 143,867 City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 13

ACTUARIAL ASSUMPTIONS AND METHODS Mortality Rate RP-2000 Table, fully generational using scale AA. Disabled lives are set forward 5 years. Based upon other studies of municipal Police Officers, we feel this assumption sufficiently accommodates future mortality improvements. Interest Rate 7.2% per year, compounded annually. This is supported by the target asset class allocation of the trust and the expected long-term return by asset class. Normal Retirement Rates Number of Years after First Eligibility for Normal Retirement % Retiring During the Year 0 60% 1 40% 2 40% 3 40% 4 40% 5 or more 100% The assumed rates of Normal Retirement were utilized and carried over from the prior actuary. We feel these rates are reasonable based on long-term expectations and based upon plan provisions. Early Retirement Rate Salary Increases Payroll Growth Expenses Commencing upon eligibility for Early Retirement, Members are assumed to retire with an immediate benefit at the rate of 5.0% per year. The assumed rates of Early Retirement were utilized and carried over from the prior actuary. We feel these rates are reasonable based on long-term expectations and based upon plan provisions. 6.0% per year until the assumed retirement age. The assumed salary increases were utilized and carried over from the prior actuary. None assumed for amortization of the Unfunded Actuarial Accrued Liability. $46,398 annually. This is equal to the actual noninvestment-related expenses paid out of the trust during the year. City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 14

Asset Smoothing Method Funding Method Termination Rates All assets are valued at market value with an adjustment made to uniformly spread actuarial investment gains and losses (as measured by actual market value investment return against expected market value investment return) over a five-year period. Frozen Entry Age Actuarial Cost Method Age % Terminating During the Year 20 12.4% 25 11.7% 30 10.5% 35 8.3% 40 5.7% 45 3.5% 50 1.5% 55 0.6% 60 0.5% The assumed rates of termination were utilized and carried over from the prior actuary. We feel these rates are reasonable based on long-term expectations. Disability Rates Age % Becoming Disabled During the Year 25 0.15% 30 0.18% 35 0.23% 40 0.30% 45 0.51% 50 1.00% 55 1.55% It is assumed that 75% of disablements and active Member deaths are service related. The assumed rates of disablement were utilized and carried over from the prior actuary. We feel these rates are consistent with those utilized for plans containing other Florida municipal firefighters. City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 15

VALUATION NOTES Total Annual Payroll is the projected annual rate of pay as of the valuation date of all Covered Members. Present Value of Benefits is the single sum value on the valuation date of all future benefits to be paid to current Members, Retirees, Beneficiaries, Disability Retirees, DROP Participants, and Vested Terminations. Normal (Current Year's) Cost is the current year's cost for benefits yet to be funded. Frozen Initial Liability Funding Method (Level Dollar) is the method used to determine required contributions under the Plan. The use of this method involves the systematic funding of the Normal Cost (described above) and the Unfunded Actuarial Accrued Liability (UAAL). The UAAL is reconciled each valuation with charges and credits as follows: (a) Charges: the Normal Cost for the prior year, in addition to interest (at the valuation assumption) on the Normal Cost and prior year s UAAL balance. (b) Credits: Sponsor contributions with interest at the valuation assumption. New UAAL bases will be created only for changes in methods, assumptions, or benefits. Actuarial gains and losses are funded as part of the Normal Cost. Total Required Contribution is equal to the Normal Cost plus an amount sufficient to amortize the Unfunded Accrued Liability over no more than 30 years. The required amount is adjusted for interest according to the timing of contributions during the year. City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 16

PARTIAL HISTORY OF PREMIUM TAX REFUNDS Received During Increase from Fiscal Year Amount Previous Year 1998 18,285.14 N/A 1999 21,154.02 15.7% 2000 22,506.98 6.4% 2001 24,675.95 9.6% 2002 30,740.59 24.6% 2003 37,910.92 23.3% 2004 52,220.69 37.7% 2005 62,272.75 19.2% 2006 68,527.63 10.0% 2007 82,617.01 20.6% 2008 77,699.02-6.0% 2009 94,583.32 21.7% 2010 95,519.74 1.0% 2011 96,152.64 0.7% 2012 106,212.35 10.5% 2013 110,916.63 4.4% 2014 117,718.08 6.1% 2015 119,977.48 1.9% City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 17

EXCESS STATE MONIES RESERVE Actual Applicable Excess State State Contribution "Frozen" Amount Monies Reserve 1998 $18,285.14 $18,285.14 $0.00 1999 21,154.02 18,285.14 2,869.00 2000 22,506.98 18,285.14 4,222.00 2001 24,675.95 18,285.14 6,391.00 2002 30,740.59 18,285.14 12,455.00 2003 37,910.92 18,285.14 19,626.00 2004 52,220.69 28,663.14 23,558.00 2005 62,272.75 35,440.14 26,833.00 2006 68,527.63 48,666.14 19,862.00 2007 82,617.01 48,666.14 33,951.00 2008 77,699.02 48,666.14 29,033.00 2009 94,583.32 70,127.14 24,456.00 2010 95,519.74 70,127.14 25,393.00 2011 96,152.64 70,127.14 26,026.00 2012 106,212.35 63,350.14 42,862.21 2013 110,916.63 58,161.14 52,755.49 2014 117,718.08 117,718.08 0.00 2015 119,977.48 119,977.48 0.00 Total Excess State Monies 350,292.70 Less Excess Used for Benefits (136,111.00) Equals Current State Monies Reserve $214,181.70 City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 18

STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2015 ASSETS COST VALUE MARKET VALUE Cash and Cash Equivalents: Money Market 171,457.64 171,457.64 Total Cash and Equivalents 171,457.64 171,457.64 Receivables: Investment Income 16,283.51 16,283.51 Total Receivable 16,283.51 16,283.51 Investments: Fixed 3,584,492.00 3,546,129.21 Equities 5,242,724.49 6,861,340.87 Total Investments 8,827,216.49 10,407,470.08 Total Assets 9,014,957.64 10,595,211.23 LIABILITIES Total Liabilities 0.00 0.00 NET POSITION RESTRICTED FOR PENSIONS 9,014,957.64 10,595,211.23 City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 19

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEAR ENDED SEPTEMBER 30, 2015 Market Value Basis ADDITIONS Contributions: Member 151,178.95 City 582,408.16 State 119,977.48 Total Contributions 853,564.59 Investment Income: Net Realized Gain (Loss) 43,620.62 Unrealized Gain (Loss) (375,943.65) Net Increase in Fair Value of Investments (332,323.03) Interest & Dividends 295,126.27 Less Investment Expense¹ (30,567.63) Net Investment Income (67,764.39) Total Additions 785,800.20 DEDUCTIONS Distributions to Members: Benefit Payments 365,011.29 Lump Sum DROP Distributions 247,234.73 Refunds of Member Contributions 40,290.92 Total Distributions 652,536.94 Administrative Expense 46,397.62 Total Deductions 698,934.56 Net Increase in Net Position 86,865.64 NET POSITION RESTRICTED FOR PENSIONS Beginning of the Year 10,508,345.59 End of the Year 10,595,211.23 ¹Investment related expenses include investment advisory, custodial and performance monitoring fees. City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 20

CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS SEPTEMBER 30, 2015 Actuarial Asset Basis REVENUES Contributions: Member 151,178.95 City 582,408.16 State 119,977.48 Total Contributions 853,564.59 Earnings from Investments: Interest & Dividends 295,126.27 Net Realized Gain (Loss) 43,620.62 Change in Actuarial Value 436,072.35 Total Earnings and Investment Gains 774,819.24 EXPENDITURES Distributions to Members: Benefit Payments 365,011.29 Lump Sum DROP Distributions 247,234.73 Refunds of Member Contributions 40,290.92 Total Distributions 652,536.94 Expenses: Investment related¹ 30,567.63 Administrative 46,397.62 Total Expenses 76,965.25 Change in Net Assets for the Year 898,881.64 Net Assets Beginning of the Year 9,896,323.59 Net Assets End of the Year² 10,795,205.23 ¹Investment related expenses include investment advisory, custodial and performance monitoring fees. ²Net Assets may be limited for actuarial consideration. City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 21

ACTUARIAL ASSET VALUATION September 30, 2015 Actuarial Assets for funding purposes are developed by recognizing the total actuarial investment gain or loss for each Plan Year over a five year period. In the first year, 20% of the gain or loss is recognized. In the second year 40%, in the third year 60%, in the fourth year 80%, and in the fifth year 100% of the gain or loss is recognized. The actuarial investment gain or loss is defined as the actual return on investments minus the actuarial assumed investment return. Actuarial shall not be less than 80% nor greater than 120% of Market Value of Assets. Gains/Losses Not Yet Recognized Plan Year Amounts Not Yet Recognized by Valuation Year Ending Gain/(Loss) 2015 2016 2017 2018 2019 09/30/2011 (578,822) 0 0 0 0 0 09/30/2012 637,370 127,474 0 0 0 0 09/30/2013 363,024 145,210 72,605 0 0 0 09/30/2014 318,780 191,268 127,512 63,756 0 0 09/30/2015 (829,932) (663,946) (497,959) (331,973) (165,986) 0 Total (199,994) (297,842) (268,217) (165,986) 0 Development of Investment Gain/Loss Market Value of Assets, 09/30/2014 10,508,346 Contributions Less Benefit Payments & Admin Expenses 154,630 Expected Investment Earnings* 762,168 Actual Net Investment Earnings (67,764) 2015 Actuarial Investment Gain/(Loss) (829,932) *Expected Investment Earnings = 0.072 * (10,508,346 + 0.5 * 154,630) Development of Actuarial Value of Assets (1) Market Value of Assets, 09/30/2015 10,595,211 (2) Gains/(Losses) Not Yet Recognized (199,994) (3) Actuarial Value of Assets, 09/30/2015, (1) - (2) 10,795,205 (A) 09/30/2014 Actuarial Assets: 9,896,324 (I) Net Investment Income: 1. Interest and Dividends 295,126 2. Realized Gains (Losses) 43,621 3. Change in Actuarial Value 436,072 4. Investment Expenses (30,568) Total 744,252 (B) 09/30/2015 Actuarial Assets: 10,795,205 Actuarial Assets Rate of Return = 2I/(A+B-I): 7.46% Market Value of Assets Rate of Return: -0.65% 10/01/2015 Limited Actuarial Assets: 10,795,205 Actuarial Gain/(Loss) due to Investment Return (Actuarial Asset Basis) 26,150 City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 22

DEFERRED RETIREMENT OPTION PLAN ACTIVITY October 1, 2014 to September 30, 2015 Beginning of the Year Balance 401,933.38 Plus Additions 103,635.60 Investment Return Earned 16,306.75 Less Distributions (247,234.73) End of the Year Balance 274,641.00 City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 23

STATISTICAL DATA 10/1/2012 10/1/2013 10/1/2014 10/1/2015 Actives - Hired before 1/1/2011 Number 21 19 16 16 Average Current Age 37.3 37.9 37.9 38.9 Average Age at Employment 27.1 26.8 26.0 26.0 Average Past Service 10.2 11.1 11.9 12.9 Average Annual Salary $55,331 $59,216 $60,866 $63,232 Actives - Hired on or after 1/1/2011 Number 9 10 14 Average Current Age 36.2 36.1 34.9 Average Age at Employment 35.3 34.3 32.8 Average Past Service 0.9 1.7 2.1 Average Annual Salary $47,458 $53,642 $52,010 19 33.7 31.4 2.3 $51,156 Service Retirees Number 7 7 8 10 Average Current Age 57.0 58.0 57.9 58.7 Average Annual Benefit $32,048 $32,412 $32,147 $33,240 DROP Retirees Number 3 3 4 2 Average Current Age 53.6 54.6 53.1 50.1 Average Annual Benefit $39,496 $39,163 $41,203 $46,446 Beneficiaries Number 1 1 1 1 Average Current Age 70.8 71.8 72.8 73.8 Average Annual Benefit $14,949 $14,949 $14,949 $14,949 Disability Retirees Number 1 1 1 1 Average Current Age 45.7 46.7 47.7 48.7 Average Annual Benefit $38,946 $38,946 $38,946 $39,676 Terminated Vested ¹ Number 1 2 1 1 Average Current Age 48.2 45.4 42.7 43.7 Average Annual Benefit $30,030 $31,536 $2,753 $2,753 ¹ Excludes non-vested terminated Members awaiting a refund of Member contributions. City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 24

AGE AND SERVICE DISTRIBUTION PAST SERVICE AGE 0 1 2 3 4 5-9 10-14 15-19 20-24 25-29 30+ Total 15-19 0 0 0 0 0 0 0 0 0 0 0 0 20-24 2 0 0 0 0 0 0 0 0 0 0 2 25-29 2 0 3 1 1 0 0 0 0 0 0 7 30-34 2 1 0 0 1 5 1 0 0 0 0 10 35-39 0 1 0 1 1 2 0 1 0 0 0 6 40-44 0 0 0 0 0 0 2 0 1 0 0 3 45-49 0 0 0 0 1 0 1 1 1 0 0 4 50-54 0 0 0 1 0 0 0 0 0 1 0 2 55-59 0 0 0 1 0 0 0 0 0 0 0 1 60-64 0 0 0 0 0 0 0 0 0 0 0 0 65+ 0 0 0 0 0 0 0 0 0 0 0 0 Total 6 2 3 4 4 7 4 2 2 1 0 35 City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 25

VALUATION PARTICIPANT RECONCILIATION 1. Active lives a. Number in prior valuation 10/1/2014 30 b. Terminations i. Vested (partial or full) with deferred benefits 0 ii. Non-vested or full lump sum distribution received (1) c. Deaths i. Beneficiary receiving benefits 0 ii. No future benefits payable 0 d. Disabled 0 e. Retired 0 f. DROP 0 g. Continuing participants 29 h. New entrants 6 i. Total active life participants in valuation 35 2. Non-Active lives (including beneficiaries receiving benefits) Service Retirees, Vested Receiving Receiving Receiving DROP Death Disability Vested Benefits Benefits Benefits Benefits Deferred Total a. Number prior valuation 8 4 1 1 3 17 Retired 2 (2) 0 0 0 0 DROP 0 0 0 0 0 0 Vested Deferred 0 0 0 0 0 0 Death, With Survivor 0 0 0 0 0 0 Death, No Survivor 0 0 0 0 0 0 Disabled 0 0 0 0 0 0 Refund of Contributions 0 0 0 0 (1) (1) Rehires 0 0 0 0 0 0 Expired Annuities 0 0 0 0 0 0 Data Corrections 0 0 0 0 0 0 b. Number current valuation 10 2 1 1 2 16 City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 26

SUMMARY OF PLAN PROVISIONS (Through Ordinance 2013-15) Eligibility Credited Service Salary Average Final Compensation All full-time Police Officers, except those who as of October 1, 1997 were not in the Plan and elected not to enter the Plan, participate in the Plan as a condition of employment. Total years and fractional parts of years of employment with the City as a Police Officer. Salary means fixed amount of pay for services rendered to the City, including overtime payments up to 300 hours, incentive pay, and differential wages for members deployed to active military duty, but excluding bonuses or other special compensation. After July 1, 2011, sick leave and vacation leave buybacks are excluded. Average Salary for the best 5 years during the 10 years immediately preceding retirement or termination, not including lump sum payment of unused leave. Member Contributions 8.44% of Salary if hired on or after January 1, 2011. 8.54% of Salary if hired before January 1, 2011. City and State Contributions Remaining amount required in order to pay current costs and amortize unfunded past service cost, if any, as provided in Part VII of Chapter 112, Florida Statutes. Normal Retirement Date Monthly Benefit Form of Benefit Earlier of 1) Age 55 and 10 years of Credited Service, or 2) 25 years of Credited Service, regardless of age. 3.0% of Average Final Compensation for each year of Credited Service. Ten Year Certain and Life Annuity (options available). City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 27

Early Retirement Eligibility Benefit Age 50 and 10 Years of Credited Service. Accrued benefit, reduced 3% for each year from the otherwise Normal Retirement Date. Vesting Schedule Benefit Amount Disability 20% after 6 years of Credited Service plus 20% per year thereafter up to 100% after 10 years. Member will receive an unreduced benefit payable at the later of age 55 or when the Member would have attained 10 years of service. Reduced benefits are payable at the later of age 50 or when the Member would have attained 10 years of service. Eligibility Service Incurred Non-Service Incurred Exclusions Covered from date of employment. 10 years of Credited Service. Disability resulting from use of drugs, illegal participation in riots, service in military, etc. Benefit Service Incurred Non-Service Incurred Accrued benefit but not less than 42% of Average Final Compensation. Accrued benefit but not less than 25% of Average Final Compensation. Duration Payable for life with 10 years certain, or until recovery (as determined by the Board). Options are available. City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 28

Death Benefits Pre-Retirement Eligibility Benefit Post-Retirement Cost-of-Living Adjustments Supplemental Benefit 10 years of Credited Service Accrued benefit paid as 50% of the actuarially equivalent 50% Joint and Survivor form of benefit. Benefits payable to Beneficiary in accordance with option selected at retirement. For Members hired before January 1, 2011, the base benefit is increased annually by a pro-rated portion of 2.0% each October 1 beginning 5 years after retirement. The pro-ration will be years of service prior to February 19, 2013 over total years of service at retirement. Minimum COLA for those hired before January 1, 2011 will be 1.0%. Members hired before January 1, 2011 receive a monthly supplemental benefit equal to $10 for each year of Credited Service. This supplemental benefit is not subject to cost-of-living adjustments, and is not provided to vested terminated Members. Deferred Retirement Option Plan Eligibility Members hired before January 1, 2011 who are eligible for Normal Retirement. Participation Earlier of a) 60 months in the DROP program, or b) 31 years of employment with the City as a Police Officer. Rate of Return Board of Trustees 6.5% per annum, compounded monthly and credited quarterly for those who entered DROP prior to February 19, 2013. 2.0% per annum for those who enter on or after February 19, 2013. a. Two Council appointees, b. Two Members of the Department elected by the Membership, and c. Fifth Member elected by other 4 and appointed by Council. City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 29

GASB 67 STATEMENT OF FIDUCIARY NET POSITION SEPTEMBER 30, 2015 ASSETS Cash and Cash Equivalents: Money Market Total Cash and Equivalents Receivables: Investment Income Total Receivable Investments: Fixed Equities Total Investments Total Assets Total Liabilities NET POSITION RESTRICTED FOR PENSIONS MARKET VALUE 171,458 171,458 16,284 16,284 3,546,129 6,861,340 10,407,469 10,595,211 0 10,595,211 City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 30

GASB 67 STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEAR ENDED SEPTEMBER 30, 2015 Market Value Basis ADDITIONS Contributions: Member 151,179 City 582,408 State 119,977 Total Contributions 853,564 Investment Income: Net Increase in Fair Value of Investments (332,321) Interest & Dividends 295,126 Less Investment Expense¹ (30,568) Net Investment Income (67,763) Total Additions 785,801 DEDUCTIONS Distributions to Members: Benefit Payments 365,011 Lump Sum DROP Distributions 247,235 Lump Sum Share Distributions 0 Refunds of Member Contributions 40,291 Total Distributions 652,537 Administrative Expense 46,398 Total Deductions 698,935 Net Increase in Net Position 86,866 NET POSITION RESTRICTED FOR PENSIONS Beginning of the Year 10,508,345 End of the Year 10,595,211 ¹Investment related expenses include investment advisory, custodial and performance monitoring fees. City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 31

GASB 67 NOTES TO THE FINANCIAL STATEMENTS (For the Year Ended September 30, 2015) Plan Description Plan Administration The Plan is a single-employer defined benefit pension plan administered by the Plan's Board of Trustees comprised of: a. Two Council appointees, b. Two Members of the Department elected by the Membership, and c. Fifth Member elected by other four and appointed by Council. Plan Membership as of October 1, 2014: Inactive Plan Members or Beneficiaries Currently Receiving Benefits 14 Inactive Plan Members Entitled to But Not Yet Receiving Benefits 3 Active Plan Members 30 47 Benefits Provided The Plan provides retirement, termination, disability and death benefits. Normal Retirement: Date: Earlier of 1) Age 55 and 10 years of Credited Service, or 2) 25 years of Credited Service, regardless of age. Monthly Benefit: 3.0% of Average Final Compensation for each year of Credited Service. Early Retirement: Eligibility: Age 50 and 10 Years of Credited Service. Benefit: Accrued benefit, reduced 3% for each year from the otherwise Normal Retirement Date. Vesting: Schedule: 20% after 6 years of Credited Service plus 20% per year thereafter up to 100% after 10 years. Benefit Amount: Member will receive an unreduced benefit payable at the later of age 55 or when the Member would have attained 10 years of service. Reduced benefits are payable at the later of age 50 or when the Member would have attained 10 years of service. Disability: Eligibility Service Incurred: Covered from Date of Employment. Eligibility Non-Service Incurred: 10 years of Credited Service. Benefit Service Incurred: Accrued benefit but not less than 42% of Average Final Compensation. Benefit Non-Service Incurred: Accrued benefit but not less than 25% of Average Final Compensation. Pre-Retirement Death Benefits: Eligibility: 10 years of Credited Service. Benefit: Accrued benefit paid as 50% of the actuarially equivalent 50% Joint and Survivor form of benefit. Cost of Living Adjustments: For Members hired before January 1, 2011, the base benefit is increased annually by a pro-rated portion of 2.0% each October 1 beginning 5 years after retirement. The pro-ration will be years of service prior to February 19, 2013 over total years of service at retirement. Minimum COLA for those hired before January 1, 2011 will be 1.0%. Supplemental Benefit: Members hired before January 1, 2011 receive a monthly supplemental benefit equal to $10 for each year of Credited Service. This supplemental benefit is not subject to cost-of-living adjustments, and is not provided to vested terminated Members. Contributions Member Contributions: 8.44% of Salary if hired on or after January 1, 2011. 8.54% of Salary if hired before January 1, 2011. City and State Contributions: Remaining amount required in order to pay current costs and amortize unfunded past service cost, if any, as provided in Part VII of Chapter 112, Florida Statutes. City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 32

GASB 67 Investments Investment Policy: The following was the Board's adopted asset allocation policy as of September 30, 2015: Asset Class Target Allocation Domestic Equity 45% International Equity 15% Broad Market Fixed Income 25% Non-Core Fixed Income 5% Real Estate 10% Total 100% Concentrations: The Plan did not hold investments in any one organization that represent 5 percent or more of the Pension Plan's Fiduciary Net Position. Rate of Return: For the year ended September 30, 2015, the annual money-weighted rate of return on Pension Plan investments, net of Pension Plan investment expense, was -0.65 percent. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Deferred Retirement Option Program Eligibility: Members hired before January 1, 2011 who are eligible for Normal Retirement. Participation: Earlier of a) 60 months in the DROP program, or b) 31 years of employment with the City as a Police Officer. Rate of Return: 6.5% per annum, compounded monthly and credited quarterly for those who entered DROP prior to February 19, 2013. 2.0% per annum for those who enter on or after February 19, 2013. The DROP balance as September 30, 2015 is $274,641. City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 33

GASB 67 NET PENSION LIABILITY OF THE SPONSOR The components of the Net Pension Liability of the Sponsor on September 30, 2015 were as follows: Total Pension Liability $ 12,400,304 Plan Fiduciary Net Position $ (10,595,211) Sponsor's Net Pension Liability $ 1,805,093 Plan Fiduciary Net Position as a percentage of Total Pension Liability 85.44% Actuarial Assumptions: The Total Pension Liability was determined by an actuarial valuation as of October 1, 2014 updated to September 30, 2015 using the following actuarial assumptions: Inflation 3.00% Salary Increases 6.00% Discount Rate 7.20% Investment Rate of Return 7.20% Mortality Rate: RP-2000 Table, fully generational (previously projected to the valuation date) using scale AA. Disabled lives are set forward 5 years. Based upon other studies of municipal Police Officers, we feel this assumption sufficiently accommodates future mortality improvements. The Long-Term Expected Rate of Return on Pension Plan investments was determined using a building-block method in which bestestimate ranges of expected future real rates of return (expected returns, net of Pension Plan investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the Long-Term Expected Rate of Return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the Pension Plan's target asset allocation as of September 30, 2015 are summarized in the following table: Long Term Expected Real Asset Class Rate of Return Domestic Equity 7.5% International Equity 8.5% Broad Market Fixed Income 2.5% Non-Core Fixed Income 2.5% Real Estate 4.5% Discount Rate: The Discount Rate used to measure the Total Pension Liability was 7.20 percent. The projection of cash flows used to determine the Discount Rate assumed that Plan Member contributions will be made at the current contribution rate and that Sponsor contributions will be made at rates equal to the difference between actuarially determined contribution rates and the Member rate. Based on those assumptions, the Pension Plan's Fiduciary Net Position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the Long-Term Expected Rate of Return on Pension Plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability. 1% Decrease Current Discount Rate 1% Increase 6.20% 7.20% 8.20% Sponsor's Net Pension Liability $ 3,591,139 $ 1,805,093 $ 350,750 City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 34

GASB 67 SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS Last 10 Fiscal Years 09/30/2015 09/30/2014 09/30/2013 Total Pension Liability Service Cost 373,517 349,217 325,155 Interest 852,748 802,323 753,170 Changes of benefit terms - - - Differences between Expected and Actual Experience (184,074) - - Changes of assumptions - 304,099 - Benefit Payments, including Refunds of Employee Contributions (652,537) (304,307) (572,002) Net Change in Total Pension Liability 389,654 1,151,332 506,323 Total Pension Liability - Beginning 12,010,650 10,859,318 10,352,995 Total Pension Liability - Ending (a) $ 12,400,304 $ 12,010,650 $ 10,859,318 Plan Fiduciary Net Position Contributions - Employer 582,408 606,424 605,565 Contributions - State 119,977 117,718 110,917 Contributions - Employee 151,179 139,016 135,524 Net Investment Income (67,763) 1,003,043 948,930 Benefit Payments, including Refunds of Employee Contributions (652,537) (304,307) (572,002) Administrative Expense (46,398) (41,892) (36,475) Net Change in Plan Fiduciary Net Position 86,866 1,520,002 1,192,459 Plan Fiduciary Net Position - Beginning 10,508,345 8,988,343 7,795,884 Plan Fiduciary Net Position - Ending (b) $ 10,595,211 $ 10,508,345 $ 8,988,343 Net Pension Liability - Ending (a) - (b) $ 1,805,093 $ 1,502,305 $ 1,870,975 Plan Fiduciary Net Position as a percentage of the Total Pension Liability 85.44% 87.49% 82.77% Covered Employee Payroll* $ 1,938,150 $ 1,635,200 $ 1,599,176 Net Pension Liability as a percentage of Covered Employee Payroll 93.13% 91.87% 117.00% Notes to Schedule: Changes of Assumptions: For the 2014 Fiscal year, amounts reported as changes of assumptions were resulted from lowering the investment rate of return from 7.40% to 7.20%. *For the Fiscal years 2013 and 2014, the Covered Employee Payroll figures were based on Pensionable Salary. City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 35

GASB 67 SCHEDULE OF CONTRIBUTIONS Last 10 Fiscal Years 09/30/2015 09/30/2014 09/30/2013 Actuarially Determined Contribution 532,371 567,905 588,816 Contributions in relation to the Actuarially Determined Contributions 702,385 724,142 663,726 Contribution Deficiency (Excess) $ (170,014) $ (156,237) $ (74,910) Covered Employee Payroll* $ 1,938,150 $ 1,635,200 $ 1,599,176 Contributions as a percentage of Covered Employee Payroll 36.24% 44.28% 41.50% *For the Fiscal years 2013 and 2014, the Covered Employee Payroll figures were based on Pensionable Salary. Notes to Schedule Valuation Date: 10/01/2013 Actuarially determined contribution rates are calculated as of October 1, two years prior to the end of the fiscal year in which contributions are reported. Methods and assumptions used to determine contribution rates: Funding Method: Amortization Method: Remaining Amortization Period: Mortality Rate: Inflation: Interest Rate: Normal Retirement Rates: Early Retirement Rate: Salary Increases: Payroll Growth: Asset Smoothing Method: Frozen Entry Age Actuarial Cost Method. Level dollar, closed. 30 Years (as of 10/01/2013 valuation). RP-2000 Table, fully generational using scale AA. Disabled lives are set forward 5 years. 3.0% per year. 7.4% per year, compounded annually. Number of Years after First Eligibility for Normal Retirement 0 1 % Retiring During the Year 60% 40% 2 40% 3 40% 4 40% 5 or more 100% Commencing upon eligibility for Early Retirement, Members are assumed to retire with an immediate benefit at the rate of 5.0% per year. 6.0% per year until the assumed retirement age. None assumed for amortization of the Unfunded Actuarial Accrued Liability. All assets are valued at market value with an adjustment made to uniformly spread actuarial investment gains and losses (as measured by actual market value investment return against expected market value investment return) over a five-year period. City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 36

GASB 67 Termination Rates: Age % Terminating During the Year 20 25 30 35 40 45 50 55 60 12.4% 11.7% 10.5% 8.3% 5.7% 3.5% 1.5% 0.6% 0.5% Disability Rates: Age 25 30 35 40 45 50 55 % Becoming Disabled During the Year 0.15% 0.18% 0.23% 0.30% 0.51% 1.00% 1.55% It is assumed that 75% of disablements and active Member deaths are service related. City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 37

GASB 67 SCHEDULE OF INVESTMENT RETURNS Last 10 Fiscal Years 09/30/2015 09/30/2014 09/30/2013 Annual Money-Weighted Rate of Return Net of Investment Expense -0.65% 10.96% 11.98% City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 38

GASB 68 NOTES TO THE FINANCIAL STATEMENTS (For the Year Ended September 30, 2016) General Information about the Pension Plan Plan Description The Plan is a single-employer defined benefit pension plan administered by the Plan's Board of Trustees comprised of: a. Two Council appointees, b. Two Members of the Department elected by the Membership, and c. Fifth Member elected by other four and appointed by Council. All full-time Police Officers, except those who as of October 1, 1997 were not in the Plan and elected not to enter the Plan, participate in the Plan as a condition of employment. Plan Membership as of October 1, 2014: Inactive Plan Members or Beneficiaries Currently Receiving Benefits 14 Inactive Plan Members Entitled to But Not Yet Receiving Benefits 3 Active Plan Members 30 47 Benefits Provided The Plan provides retirement, termination, disability and death benefits. Normal Retirement: Date: Earlier of 1) Age 55 and 10 years of Credited Service, or 2) 25 years of Credited Service, regardless of age. Monthly Benefit: 3.0% of Average Final Compensation for each year of Credited Service. Early Retirement: Eligibility: Age 50 and 10 Years of Credited Service. Benefit: Accrued benefit, reduced 3% for each year from the otherwise Normal Retirement Date. Vesting: Schedule: 20% after 6 years of Credited Service plus 20% per year thereafter up to 100% after 10 years. Benefit Amount: Member will receive an unreduced benefit payable at the later of age 55 or when the Member would have attained 10 years of service. Reduced benefits are payable at the later of age 50 or when the Member would have attained 10 years of service. Disability: Eligibility Service Incurred: Covered from Date of Employment. Eligibility Non-Service Incurred: 10 years of Credited Service. Benefit Service Incurred: Accrued benefit but not less than 42% of Average Final Compensation. Benefit Non-Service Incurred: Accrued benefit but not less than 25% of Average Final Compensation. Pre-Retirement Death Benefits: Eligibility: 10 years of Credited Service. Benefit: Accrued benefit paid as 50% of the actuarially equivalent 50% Joint and Survivor form of benefit. Cost of Living Adjustments: For Members hired before January 1, 2011, the base benefit is increased annually by a pro-rated portion of 2.0% each October 1 beginning 5 years after retirement. The pro-ration will be years of service prior to February 19, 2013 over total years of service at retirement. Minimum COLA for those hired before January 1, 2011 will be 1.0%. Supplemental Benefit: Members hired before January 1, 2011 receive a monthly supplemental benefit equal to $10 for each year of Credited Service. This supplemental benefit is not subject to cost-of-living adjustments, and is not provided to vested terminated Members. Contributions Member Contributions: 8.44% of Salary if hired on or after January 1, 2011. 8.54% of Salary if hired before January 1, 2011. City and State Contributions: Remaining amount required in order to pay current costs and amortize unfunded past service cost, if any, as provided in Part VII of Chapter 112, Florida Statutes. City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 39

GASB 68 Net Pension Liability The measurement date is September 30, 2015. The measurement period for the pension expense was October 1, 2014 to September 30, 2015. The reporting period is October 1, 2015 through September 30, 2016. The Sponsor's Net Pension Liability was measured as of September 30, 2015. The Total Pension Liability used to calculate the Net Pension Liability was determined as of that date. Actuarial Assumptions: The Total Pension Liability was determined by an actuarial valuation as of October 1, 2014 updated to September 30, 2015 using the following actuarial assumptions: Inflation 3.00% Salary Increases 6.00% Discount Rate 7.20% Investment Rate of Return 7.20% Mortality Rate: RP-2000 Table, fully generational (previously projected to the valuation date) using scale AA. Disabled lives are set forward 5 years. Based upon other studies of municipal Police Officers, we feel this assumption sufficiently accommodates future mortality improvements. The Long-Term Expected Rate of Return on Pension Plan investments was determined using a building-block method in which bestestimate ranges of expected future real rates of return (expected returns, Net of Pension Plan investment expenses and inflation) are developed for each major asset class. These ranges are combined to produce the Long-Term Expected Rate of Return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of return for each major asset class included in the Pension Plan's target asset allocation as of September 30, 2015 are summarized in the following table: Asset Class Target Allocation Long Term Expected Real Rate of Return Domestic Equity 45% 7.50% International Equity 15% 8.50% Broad Market Fixed Income 25% 2.50% Non-Core Fixed Income 5% 2.50% Real Estate 10% 4.50% Total 100% Discount Rate: The Discount Rate used to measure the Total Pension Liability was 7.20 percent. The projection of cash flows used to determine the Discount Rate assumed that Plan Member contributions will be made at the current contribution rate and that Sponsor contributions will be made at rates equal to the difference between actuarially determined contribution rates and the Member rate. Based on those assumptions, the Pension Plan's Fiduciary Net Position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the Long-Term Expected Rate of Return on Pension Plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability. City of West Melbourne Police Officers' Retirement Plan FOSTER & FOSTER 40