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09-15-2014 City of Edgewater 104 N. Riverside Drive Y g Edgewater, FL 32132 CIIV O( EvaG"f n Meeting Agenda ,PM General Employee Pension Board Monday,September 15,2014 11:00 AM City Hall Council Chambers 104 N. Riverside Drive Edgewater, FL 32132 We respectfully request that all electronic devices are set for no audible notification. 1. CALL TO ORDER 2. ROLL CALL 3. PUBLIC COMMENTS 4. APPROVAL OF MINUTES a. AR-2014-293 Approval of June 16, 2014 Quarterly Board Meeting Minutes, June 23, 2014 Special Board Meeting, and September 3, 2014 Special Board Meeting. Attachments: 06-16-14 Regular Meeting, DRAFT Minutes.pdf 06-23-14 Special Meeting, DRAFT Minutes.pdf 09-03-14 Special Meeting, DRAFT Minutes.pdf 5. NEW BUSINESS a. AR-2014-300 Discussion of New GASB Rules and Senate Bill 534 Attachments: 09-03-14 GASB-SB534.pdf 6. OLD BUSINESS 7. REPORTS (ATTORNEY/CONSULTANTS) AR-2014-301 The Bogdahn Group, Jack Evatt, Performance Consultant. Attachments: 06-30-14 Quarterly Report, Bogdahn Group.pdf 06-30-14, Executive Summary, Bogdahn Group.pdf 07-31-14, Executive Summary, Bogdahn Group.pdf a. Quarterly Update as of June 30,2014. City of Edgewater Page 1 Printed on 911112014 General Employee Pension Board Meeting Agenda September 15,2014 AR-2014-302 Christiansen & Dehner, H. Lee Dehner, Plan Attorney a. Discussion of transition from 7 Board Trustees to 5 Board Trustees 8. PROCESSED DISBURSEMENTS/RETURN OF CONTRIBUTIONS/DEPOSITS a. AR-2014-304 Salem Trust, custodian fees for April 1, 2014 through June 30, 2014, - $1,286.96 Attachments: 07-15-14, Salem Trust.pdf b. AR-2014-306 Integrity Fixed Income Management, LLC, management fees for quarter ending June 30, 2014, invoice 1820 - $2,657.57 Attachments: 07-11-14, invoice 1820, Integrity Fixed Income.pdf C. AR-2014-307 Christiansen & Dehner, professional legal fees as of June 30, 2014, invoice 24963 - $1,499.65 Attachments: 06-30-14, invoice 24963. Lee Dehner.pdf d. AR-2014-308 Christiansen & Dehner, professional legal fees as of July 31, 2014, invoice 25106 - $151.60 Attachments: 07-31-14, invoice 25106. Lee Dehner.PDF e. AR-2014-309 The Bogdahn Group, performance evaluation and consulting services from July 1, 2014 through September 30, 2014 - $3,625.00 Attachments: 09-08-14, invoice 10778, Bogdahn Group.pdf If. AR-2014-310 Foster and Foster, plan administration services, invoice 6394 - $4,923.59 Attachments: 09-09-14, invoice 6394. Foster and Foster.pdf L AR-2014-316 Foster and Foster, actuarial consulting services, invoice 6367 - $800.00 Attachments: 09-03-14, invoice 6367, Foster and Foster.pdf g. AR-2014-311 R. Reed-Modified cash refund of$11,128.14 with a monthly benefit of $1,541.65 effective May 1, 2014, for Retiree's lifetime only. h. AR-2014-312 W. Martin- monthly benefit of$1,233.54, effective July 1, 2014. 9. STAFF REPORTS,DISCUSSION,AND ACTION AR-2014-313 Ferrell Jenne, Plan Administrator Attachments: Letter of No Impact- Edgewater General.pdf 2015 Proposed Meeting Dates.pdf City of Edgewater Page 2 Printed on 911112014 General Employee Pension Board Meeting Agenda September 15,2014 a. Update on Fiduciary Liability Insurance b. Update on proposed Ordinance 2014-0-21 c. 2015 Proposed Meeting Dates 10. TRUSTEES' REPORTS,DISCUSSION,AND ACTION 11. ADJOURN Pursuant to Chapter 286, F.S., if an individual decides to appeal any decision made with respect to any matter considered at a meeting or hearing, that individual will need a record of the proceedings and will need to ensure that a verbatim record of the proceedings is made. The City does not prepare or provide such record. In accordance with the Americans with Disabilities Act,persons needing assistance to participate in any of these proceedings should contact City Clerk Bonnie Wenzel, 104 N. Riverside Drive, Edgewater, Florida, telephone number 386-424-2400 x 1101, S days prior to the meeting date. If you are hearing or voice impaired, contact the relay operator at 1-800-955-8771 City of Edgewater Page 3 Printed on 911112014 104 N. Riverside Drive City of Edgewater Edgewater, FL 32132 EDGE4VATER Legislation Text File M AR-2014-293, Version: 1 AGENDA ITEM SUBJECT: Approval of June 16,2014 Quarterly Board Meeting Minutes,June 23,2014 Special Board Meeting, and September 3, 2014 Special Board Meeting. DEPARTMENT: SUMMARY: BUDGETED ITEM: ❑ Yes ❑ No ❑ Not Applicable BUDGET AMENDMENT REQUIRED: ❑ Yes ❑ No ❑ Not Applicable RECOMMENDED ACTION: Approve meeting minutes as presented. City of Edgewater Page 1 of 1 Printed on 9/9/2014 powered by LegistarTM CITY OF EDGEWATER GENERAL EMPLOYEES' PENSION BOARD QUARTERLY MEETING MINUTES City Hall Council Chambers Monday June 16, 2014 at 11 :OOAM TRUSTEES PRESENT: Brenda Dewees Tim Spoko John Brackin John McKinney Tyna Hilton Bobby Laramore TRUSTEES ABSENT: Gigi Bennington OTHERS PRESENT: H. Lee Dehner, Board Attorney Ferrell Jenne, Plan Administrator Jack Evatt, Investment Consultant 1. Call to Order Brenda Dewees called the meeting to order at 11:03 AM. 2. Roll Call As reflected above. 3. No Public Comments 4. Approval of Minutes The minutes from the March 17. 2014 quarterly meeting, and May 28. 2014 special meeting were approved upon motion by John McKinney and second by Bobby Laramore, motion carried 6-0. 5. New Business a. John McKinney mentions that new microphones have been ordered and will be in place for the next meeting. 6. Old Business None. 7. Reports a. The Bogdahn Group, Jack Evatt i. Quarterly update as of March 31, 2014. 1. Net earnings for the quarter were 1.58%, underperforming the policy benchmark of 1.77% by 0.19% points. 2. Since inception, the fund is at 4.71%, underperforming the policy benchmark of 5.54% by 0.83% points. 3. The Plan's gross performance of 1.58% for the quarter ranked in the 58th percentile of the public fund sample. b. Christiansen & Dehner, H. Lee Dehner i. Operating Rules & Procedures 1. Board to set a special meeting to review the finalized Operating Rules & Procedures document. 2. Lee Dehner informs the Board that he will draft the proposed ordinance to accompany the Operating Rules & Procedures document once it is approved at the special meeting. 3. Lee Dehner reviews the RMLO resolution with the Board. 1 4. Lee Dehner reminds the Board to file their financial disclosure forms by July 1St Board adopted resolution 2014-01 upon motion made by John McKinney and second by Tim Sopko, motion carried 6-0. 8. Disbursements Disbursements were approved as stated on the agenda upon motion made by John McKinney and second by Tvna Hilton, motion carried 6-0. 9. Staff Reports, Discussion, and Action a. Ferrell Jenne presents the authorized signature document form from Salem Trust a. Lee Dehner recommends that the Board leaves the requirement of needing two signatures. Board voted to add Ferrell Jenne as authorized signature and require two signatures on the Salem Trust authorized signature form, one signature must be the Finance Director, HR personnel, or Board Trustee upon motion made by John McKinney and second by Tim Sopko, motion carried 6-0. b. Ferrell Jenne presents the Cash Management Sweep Authorization form from Salem Trust. i. Jack Evatt recommends the Board to invest all cash held in the custodial account of the Plan in the Goldman Sachs Financial Square Treasury Obligations Fund (money market mutual fund). ii. Board agrees with Mr. Evatt's recommendation to utilize the Goldman Sachs Financial Square Treasury Obligations Fund as the cash management sweep vehicle 10. Trustees' Reports, Discussion, and Action a. Board discusses the use of Granicus and utilizing electronic agenda packets versus paper copies. b. Board would like to have a goal of utilizing Granicus for the next quarterly meeting. c. Board further discusses the Salem Trust Authorization form and signatures required. i. Board amends the prior motion (see below). Board votes to amend prior motion regarding two signatures on the Salem Trust Authorization form to read that one signature must be a Board member or Finance Director upon motion made by John McKinney and second by Bobby Laramore. 11. Adjournment The meeting adjourned at 12:OOPM. 12. Next Meeting September 15, 2014 at 11:OOAM. Respectfully submitted by: Approved by: Name: Ferrell Jenne Name: Title: Plan Administrator Title: Date Approved By the Pension Board: 2 CITY OF EDGEWATER GENERAL EMPLOYEES' PENSION BOARD SPECIAL MEETING MINUTES City Hall Council Chambers Monday June 23, 2014 at 8:30AM TRUSTEES PRESENT: Brenda Dewees Tim Spoko John McKinney Tyna Hilton Bobby Laramore TRUSTEES ABSENT: Gigi Bennington John Brackin OTHERS PRESENT: H. Lee Dehner, Board Attorney, by telephone Ferrell Jenne, Plan Administrator, by telephone Tracey Barlow, City Manager Donna Looney, HR Department 1. Call to Order Brenda Dewees called the meeting to order at 8:39AM. 2. Roll Call As reflected above. 3. No Public Comments 4. Old Business a. Finalize and adopt Operating Rules & Procedures document. Board voted to approve the Operating Rules & Procedures document as presented upon motion made by John McKinney and second by Tim Sopko, motion carried 5-0. b. City Manager asks the Board if by the August/September meeting the Operating Rules and Procedure document can go to Council for approval. a. Lee Dehner states that this can be accomplished. b. Board requests Mr. Dehner send the Ordinance to the Board and a special meeting be set to review the Ordinance and attachment A prior to it going to Council for first reading. i. Board also directs Lee to send the Ordinance to the City Manager for review when it is available. 5. Adjournment The meeting adjourned at 8:43AM. 6. Next Meeting September 15, 2014 at 11:OOAM. Respectfully submitted by: Approved by: Name: Ferrell Jenne Name: Title: Plan Administrator Title: Date Approved By the Pension Board: 1 CITY OF EDGEWATER GENERAL EMPLOYEES' PENSION BOARD SPECIAL MEETING MINUTES City Hall Council Chambers Wednesday September 3, 2014 at 10.30AM TRUSTEES PRESENT: Brenda Dewees Tim Spoko John McKinney Tyna Hilton TRUSTEES ABSENT: Gigi Bennington John Brackin Bobby Laramore OTHERS PRESENT: H. Lee Dehner, Board Attorney Ferrell Jenne, Plan Administrator 1. Call to Order Brenda Dewees called the meeting to order at 10:38AM. 2. Roll Call As reflected above. 3. Public Comments None 4. Old Business None 5. New Business a. Proposed Ordinance amending the General Employees' Pension Plan i. Lee Dehner explains that the ordinance's composition is a combination of the prior Ordinance, the City Manager's comments, and changes that reflect the Operating Rules & Procedures document that was approved by the Board. ii. Lee Dehner recommends the Board do a plan restatement once the new Board of Trustees is formed. iii. Ferrell Jenne explains to the Board that City paralegal has reviewed the proposed ordinance and made some comments. 1. Board and Lee Dehner review the comments made by Robin Matusick. a. Lee Dehner advises the Board to include the codification language once we do a plan restatement. Mr. Dehner also states that by Statue, the Ordinance will need to be sent to the Division of Retirement so there is not a need to provide for this language in the Ordinance. Board votes to send the proposed Ordinance (2014-0-21) to City Council for reading upon motion made by John McKinney and second by Tim Sopko, motion carried 4-0. 6. Adjournment The meeting adjourned at 10:50AM. 7. Next Meeting September 15, 2014 at 11:OOAM. 1 Respectfully submitted by: Approved by: Name: Ferrell Jenne Name: Title: Plan Administrator Title: Date Approved By the Pension Board: 2 104 N. Riverside Drive City of Edgewater Edgewater, FL 32132 EDGE4VATER Legislation Text File M AR-2014-300, Version: 1 AGENDA ITEM SUBJECT: Discussion of New GASB Rules and Senate Bill 534 DEPARTMENT: SUMMARY: BUDGETED ITEM: ❑ Yes ❑ No ❑ Not Applicable BUDGET AMENDMENT REQUIRED: ❑ Yes ❑ No ❑ RECOMMENDED ACTION: Board direction on if they would like the additional calculation showing the outcome if the Fund performs 2% more than the assumed investment return. City of Edgewater Page 1 of 1 Printed on 9/9/2014 powered by LegistarT" r- FOSTER & FOSTER ACTUARIES AND CONSULTANTS September 3,2014 Ferrell Jenne,Plan Administrator City of Edgewater General Employees' Pension Board P.O. Box 100 Edgewater,FL 32132-0100 RE: New GASB Rules and Senate Bill 534 (Section 112.664,Florida Statutes)Compliance for the City of Edgewater General Employees' Pension Board Dear Board: As you are probably aware,the Governmental Accounting Standards Board(GASB) and the Florida Legislature have recently passed rules/legislation that will dramatically change the accounting and compliance requirements for Florida public pension funds. In our opinion,regardless of intent, GASB Statements No. 67 and 68 as well as Senate Bill 534(Section 112.664, Florida Statutes)will needlessly increase the costs associated with administering Florida public pension funds and will provide antagonists misleading fodder to attack defined benefit pension plans. While Foster&Foster provided testimony and wrote letters vehemently opposing the new regulations,these rules were ultimately passed, and now we are forced to comply. The purpose of this letter is to provide the Board with information regarding these new rules offer a timeline for compliance and provide an estimate of anticipated fees associated with the additional work. Brief Overview of GASB 67/68 The GASB 67 reporting requirements are effective for your Plan beginning with the fiscal year that ends on September 30,2014. This new standard replaces GASB 25, and it pertains to the Plan's financial statements. GASB 68 is required beginning with the fiscal year that ends on September 30,2015. This standard replaces GASB 27, and it details the calculations of the expense and liability that the City must record on its income statement and balance sheet. Previously,the City would record a liability on its financials that was equivalent to the cumulative differences between the actuarial minimum required contributions and actual contributions made. In 2015,they will have to record a liability that will be generally equivalent to the unfunded actuarial accrued liability,which as of October 1,2013 was $6,005,247. Additionally,the City's accounting pension expense will no longer be equal to the actuarial minimum required contribution. Instead,it will be equal to the expense calculated under GASB 68. In summary,the financial statements will become dramatically different than those which are currently produced, and the City will be required to book a much larger liability than what was previously recorded. 13420 Parker Commons Blvd., Suite 104 Fort Myers, FL 33912• (239)433-5500 • Fax(239)481-0634 •www.foster-foster.com In order to comply with the new accounting standards, substantial amounts of additional actuarial and administrative work will be needed. Attached to this letter is a template for a hypothetical Florida public entity which shows an example of the additional disclosure information required. The new disclosures include detail regarding the plan's asset allocation and the underlying capital market assumptions which support the discount rate being utilized. In order to complete this requirement,we will need input from your investment consultant. We will copy you on any correspondence that we have with your consultant. Our current action plan is to produce these additional disclosures at the same time that we produce the October 1,2014 actuarial valuation. For those plans where we typically produce the valuations in the second or third quarter of the fiscal year, the City may be accustomed to utilizing the prior year's GASB disclosures for their financial reporting. Many cities need this information in the first or second month of the calendar year, so they typically utilize information from the prior year's actuarial report if a new report has not yet been completed. If this is their current practice,then we will need to prepare GASB 67 disclosure information based upon the October 1,2013 valuation so that the City will be able to comply with the new rules on September 30,2014. Please put this topic on an upcoming agenda and ask that a person from the City's finance department be present to address this. It is important to note that the new GASB rules have ZERO impact upon the City's cash funding requirements to the Plan,but instead merely alter both the Plan's and City's financial reporting. Brief Overview of Senate Bill 534 Senate Bill 534 was passed to supposedly increase the disclosure and transparency of Florida's public pension plans. In our view,it will do nothing but increase the Plan's administrative expenses and provide irrelevant and misleading information that may be used by those looking to criticize your Plan's financial health. The requirements of Senate Bill 534 are extremely onerous. In general,they require that we replicate the accounting requirements of GASB 67/68 at least two (2) additional times using more conservative assumptions and then develop hypothetical funding requirements using those same assumptions,detailed below: • The RP-2000 Combined Healthy mortality table with full generational projection(assumes perpetual mortality improvements), • Using the mortality table described above,but pair this with an interest rate that is 2% less than the assumed rate of return. The conservatism in these assumptions may cast a poor light on your Plan and disguise its true funded level. For this reason,we suggest that you consider disclosing the results using an interest rate that is 2% greater than the assumed rate in order to provide a more balanced view. In addition to the above, Senate Bill 534 requires us to calculate the expected number of years that the fund will remain solvent if contributions and benefit accruals cease. In our view,this is akin to calculating how long any particular person would be expected to live without food or water. Of course, our concern is that the public will misconstrue the results and believe that this is how long the plan is expected to survive before going bankrupt. In reality,we all know that contributions will continue to occur and the unfunded liabilities will eventually be paid off. For this reason,we intend to also add 13420 Parker Commons Blvd., Suite 104 Fort Myers, FL 33912• (239)433-5500 • Fax(239)481-0634 •www.foster-foster.com commentary explaining that the plan will never become insolvent as long as the actuarially determined contribution is made each year. Senate Bill 534 results are due 60 days following delivery of the 2014 actuarial valuation report to the Florida State Division of Retirement. Following acceptance of the valuation report,we will provide this document to the Board and,at the same time,submit the information to the State. We have been in constant communication with the Florida Division of Retirement regarding their interpretation of this new law, and while we do not anticipate any great surprises,we do expect that they will release a template and implementation guide within the next 30-60 days. We will keep you posted regarding this issue. Anticipated Fees As you can see from the attached schedules,there is quite a bit of additional work necessary to complete these disclosures. Previously,the GASB 25/27 disclosures took very little time, and we included the minor additional work as part of the actuarial valuation fee. The new GASB rules have exponentially increased the amount of work necessary, and with the addition of the SB 534 compliance,we have been forced to substantially increase our staff to cover the extra workload. Since these disclosures are new, and we are still fine-tuning our approach(in addition to awaiting specific guidance from the State),a definitive fee is unknown at this time. Conservatively,however,we do not anticipate that the fees will exceed the amounts shown below: GASB 67: $1,250 GASB 68: $2,000(which could be paid by the City instead of the Plan) SB 534: $3,000 or$3,500(if Board wants numbers at 2% greater than assumed rate as well) We will bill in accordance with the hourly rates which exist in our contract,but the fees shown above should be considered not-to-exceed amounts for budgeting purposes. If you have any questions,concerns,or would like to discuss this further,please do not hesitate to give me a call or to ask that we discuss this at an upcoming Board meeting. Sincerest regards, 461/ - Bradley R. Heinrichs,FSA,EA President/CEO 13420 Parker Commons Blvd., Suite 104 Fort Myers, FL 33912 • (239)433-5500 • Fax (239)481-0634 •www.foster-foster.com SUNSHINE CITY RETIREMENT SYSTEM CURRENT GASB 25/27 REQUIREMENTS FOSTER & FOSTER ACTUARIES AND CONSULTANTS IL DISCLOSURE INFORMATION PER STATEMENT NO. 25 OF THE GOVERNMENTAL ACCOUNTING STANDARDS BOARD The schedule provided below has been prepared in accordance with the requirements of paragraph 37 of Statement No. 25 of the Governmental Accounting Standards Board. SCHEDULE OF FUNDING PROGRESS Actuarial Accrued UAAL as Actuarial Liability Unfunded a% of Actuarial Value of (AAL) AAL Funded Covered Covered Valuation Assets -Entry Age (UAAL) Ratio Payroll Payroll Date (a) (b) (b-a) (alb) (c) ((b-a)/c) 10/01/13 38,000,000 66,000,000 28,000,000 57.58% 6,300,000 444.44% 10/01/12 33,000,000 62,000,000 29,000,000 53.23% 6,000,000 483.33% 10/01/11 31,000,000 61,000,000 30,000,000 50.82% 6,500,000 461.54% 10/01/10 28,000,000 50,000,000 22,000,000 56.00% 8,000,000 275.00% 10/01/09 26,000,000 43,500,000 17,500,000 59.77% 7,500,000 233.33% 10/01/08 22,500,000 39,500,000 17,000,000 56.96% 7,000,000 242.86% The schedule provided below has been prepared in accordance with the requirements of paragraph 38 of Statement No. 25 of the Governmental Accounting Standards Board. SCHEDULE OF CONTRIBUTIONS FROM THE EMPLOYER AND OTHER CONTRIBUTING ENTITIES Year Annual Ended Required District State Percentage September 30 Contribution Contribution Contribution Contributed 2013 3,800,000 3,300,000 500,000 100.00% 2012 3,600,000 3,100,000 500,000 100.00% 2011 3,000,000 2,500,000 500,000 100.00% 2010 3,000,000 2,500,000 500,000 100.00% 2009 2,400,000 2,000,000 550,000 * 106.25% 2008 2,000,000 1,500,000 550,000 * 102.50% * Frozen per Chapter 175, F.S., as amended. DISCLOSURE INFORMATION PER STATEMENT NO. 27 OF THE GOVERNMENTAL ACCOUNTING STANDARDS BOARD ANNUAL PENSION COSTS AND RELATED INFORMATION Contribution rates as of 9/30/13 District& State 63.0% Plan Members 7.0% Annual Pension Cost 3,900,000 Contributions made 3,800,000 Actuarial valuation date 10/1/2011 Actuarial cost method Entry Age Normal Amortization method Level Percentage of Pay, Closed Remaining amortization period 28 Years (as of 10/1/11) Asset valuation method 4 Year Smooth Actuarial assumptions: Investment rate of return 8.0% Projected salary increase* 6.0% *Includes inflation at 3.0% Post Retirement COLA 3.0% for 17 years THREE YEAR TREND INFORMATION Annual Percentage Net Year Pension of(APC) Pension Ending Cost(APQ Contributed Obli ag tion 9/30/13 3,900,000 97% (511,282) 9/30/12 3,800,000 95% (611,282) 9/30/11 2,600,000 115% (638,506) 9/30/10 2,500,000 120% (666,943) Beginning with the year ending 9/30/12 the APC and contributions made include State Money. DISCLOSURE INFORMATION PER STATEMENT NO. 27 OF THE GOVERNMENTAL ACCOUNTING STANDARDS BOARD DEVELOPMENT OF NET PENSION OBLIGATION(NPO) This municipal Defined Benefit Plan has been subject to the minimum funding standards since the adoption of the "Florida Protection of Public Employee Retirement Benefits Act" (Part VII of Chapter 112, Florida Statutes) in 1980. Accordingly, the sponsor has funded the actuarially determined required contributions for all years from October 1, 1987, through the transition date,October 1, 1997. Thus, the NPO on October 1, 1997, is 0. The development of the Net Pension Obligation to date is as follows: 9/30/10 9/30/11 9/30/12 9/30/13 Actuarially Determined Contribution(A) 2,300,000 2,500,000 3,600,000 3,800,000 Interest on NPO (55,732) (53,355) (51,080) (48,903) Adjustment to(A) 85,435 81,792 78,304 74,966 ---------- ---------- ---------- ---------- Annual Pension Cost 2,500,000 2,600,000 3,800,000 3,900,000 Contributions Made 300,000 3,000,000 3,600,000 3,800,000 ---------- ---------- ---------- ---------- Increase in NPO (500,000) (400,000) 200,000 100,000 NPO Beginning of Year (696,646) (66,943) (638,506) (611,282) ---------- ---------- ---------- ---------- NPO End of Year (666,943) (638,506) (611,282) (511,282) Beginning with the fiscal year ending September 30, 2012 the Actuarially Determined Contribution and the Contributions Made include State Money. SUNSHINE CITY RETIREMENT SYSTEM NEW GASB 67/68 REQUIREMENTS (replaces GASB 25/27) FOSTER & FOSTER ACTUARIES AND CONSULTANTS IL SUNSHINE CITY RETIREMENT SYSTEM GASB 67 EXAMPLE FOSTER & FOSTER STATEMENT OF FIDUCIARY NET POSITION GASB 67 SEPTEMBER 30,2014 ASSETS MARKET VALUE Cash and Cash Equivalents: Short Term Investments 0.00 Checking Account 0.00 Savings Account 0.00 Prepaid Expenses 0.00 Money Market 346,603.00 Cash 22,432.41 Receivables: 0.00 Total Cash and Equivalents 369,035.41 Receivables: Member Buy-Back Contributions 0.00 District Contributions in Transit 0.00 District Contributions for Members 0.00 Additional District Contributions 0.00 State Contributions 0.00 From Police Officers'Trust Fund 0.00 From Firefighters'Trust Fund 0.00 From Broker for Investments Sold 0.00 Tax Reclaims 0.00 Investment Income 120,135.56 Investments: 0.00 Total Receivable 120,135.56 Investments: Federal Agency Guaranteed Securities 0.00 Corporate Bonds 10,209,331.34 Stocks 20,372,850.93 Mutual Funds: 0.00 Fixed Income Equity 6,435,188.46 Fixed Income Equity 0.00 Real Estate 3,561,295.79 Assets Held by Insurance Company 0.00 Total Investments 42,556,364.32 LIABILITIES 0.00 Total Assets 43,045,535.29 STATEMENT OF FIDUCIARY NET POSITION GASB 67 SEPTEMBER 30,2014 LIABILITIES Payables: Benefit Payments 0.00 Investment Expenses 0.00 Administrative Expenses 0.00 To Firefighters'Trust Fund 0.00 To General Employees'Trust Fund 0.00 To Broker for Investments Purchased 0.00 Prepaid Member Contribution 0.00 Prepaid District Contribution 63,820.81 RECEIPTS 0.00 Member Contributions 0.00 Total Liabilities 63,820.81 NET POSITION RESTRICTED FOR PENSIONS 42,981,714.48 GASB 67 STATEMENT OF CHANGES IN FIDUCIARY NET POSITION FOR THE YEAR ENDED SEPTEMBER 30,2014 Market Value Basis ADDITIONS Contributions: Member 431,931.11 Buy-Back 5,632.27 District 3,334,847.58 State 552,532.41 Total Contributions 4,324,943.37 Investment Income: Net Increase in Fair Value of Investments 5,540,131.41 Interest&Dividends 882,699.37 Less Investment Expense' (241,207.39) Net Investment Income 6,181,623.39 Other 0.00 Total Additions 10,506,566.76 DEDUCTIONS Total Distributions 2,474,812.60 Administrative Expense 33,134.69 Other 0.00 Total Deductions 2,507,947.29 Net Increase in Net Position 7,998,619.47 NET POSITION RESTRICTED FOR PENSIONS Beginning of the Year 34,983,095.01 End of the Year 42,981,714.48 'Investment Related expenses include investment advisory,custodial and performance monitoring fees. GASB 67 NOTES TO THE FINANCIAL STATEMENTS (For the Year Ended September 30,2014) Plan Description Plan Administration The Plan is administered by a Board Of Trustees comprised of a. Two District appointees b. Two Members of the Department elected by the membership, and c. Fifth Member elected by other 4 and appointed by the District. Plan Membership as of September 30, 2014: Inactive Plan Members or Beneficiaries Currently Receiving Benefits 43 Inactive Plan Members Entitled to but Not Yet Receiving Benefits 2 Active Plan Members 76 121 Benefits Provided The Plan provides retirement,disability and death benefits. Retirement benefits are calculated as 3.58% (3.00% for Firefighters hired after June 1, 2010) of Average Final Compensation times Credited Service. Normal Retirement: Earlier of age 55 and 10 years of Credited Service,or age 50 and 25 years of Credited Service Early Retirement: Age 50 and 10 Years of Credited Service. Disability Retirement: Service Incurred: Covered from Date of Employment Non-Service Incurred: 10 years of Credited Service. Benefit accrued to date of disability but not less than 42% of Average Final Compensation(Service Incurred). Death Benefits: Vested: Monthly accrued benefit payable to designated beneficiary for 10 years. Non-Vested: Refund of accumulated contributions without interest. Cost of Living Adjustment: Normal and Early service Retirees after January 1,2000 receive 3% annual benefit increases for 17 years (12 years for Firefighters hired after June 1,2010),commencing 1 year after retirement. Contributions. Remaining amount required in order to pay current costs and amortize unfunded past service cost, if any, as provided in Chapter 112,Florida Statutes. GASB 67 Investments Investment Policy: The following was the Board's adopted asset allocation policy as of September 30,2014: Asset Class Target Allocation Domestic Equity 45% International Equity 19% Fixed Income 25% Real Estate 10% Cash 1% Other 0% 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 30,2014 the annual money-weighted rate of return on Pension Plan investments,net of pension plan investment expense,was 13.9 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 Satisfaction of Normal Retirement requirements (earlier of(1)Age 55 with 10 years of Credited Service, or(2) Age 50 with 25 years of Credited Service). At the Member's election: (1) 6.5% annual rate,or(2) actual net rate of investment return(total return net of brokerage commissions,management fees, and transaction costs). The DROP balance as September 30,2014 is$1,037,020. GASB 67 NET PENSION LIABILITY OF THE SPONSOR The components of the net pension liability of the sponsor on September 30,2014 were as follows: Total Pension Liability $ 72,552,197 Plan Fiduciary Net Position $ (42,981,714) Sponsor's Net Pension Liability $ 29,570,483 Plan Fiduciary Net Position as a percentage of 59.24% Total Pension Liability Actuarial Assumptions: The total pension liability was determined by an actuarial valuation as of October 1,2013 updated to September 30,2014 using the following actuarial assumptions applied to all measurement periods. Inflation 3.00% Salary Increases 6.00% Investment Rate of Return 8.00% Mortality rates were based on the RP-2000 Table with no projection for Males and Females, as appropriate. The actuarial assumptions used in the October 1,2013 valuation were based on the results of an actuarial experience study for the period 2003-2013. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate 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 30,2014 are summarized in the following table: Long Term Expected Real Rate Asset Class of Return Domestic Equity 5.4% International Equity 5.5% Fixed Income 1.3% Real Estate 4.5% Cash 0.0% GASB 67 Discount Rate: The discount rate used to measure the total pension liability was 8.00 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. Current Discount 1% Decrease Rate 1% Increase 7.00% 8.00% 9.00% Sponsor's Net Pension Liability $ 32,533,874 $ 29,570,483 $ 22,504,126 GASB 67 SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS Last 10 Fiscal Years (Dollar Amounts in Thousands) 9/30/14 Total Pension Liability Service Cost 1,736,946 Interest 5,415,856 Changes of Benefit Terms Differences Between Expected and Actual Experience 675,546 Changes of Assumptions Benefit Payments,Including Refunds of Employee Contributions (2,474,813) Net Change in Total Pension Liability 5,353,536 Total Pension Liability-Beginning 67,198,662 Total Pension Liability-Ending (a) 72,552,197 Plan Fiduciary Net Position Contributions- Employer 3,334,848 Contributions- State 552,532 Contributions- Employee 437,563 Net Investment Income 6,181,623 Benefit Payments,Including Refunds of Employee Contributions (2,474,813) Administrative Expense (33,135) Other - Net Change in Plan Fiduciary Net Position 7,998,619 Plan Fiduciary Net Position -Beginning 34,983,095 Plan Fiduciary Net Position -Ending (b) $ 42,981,714 Net Pension Liability-Ending (a) - (b) $ 29,570,483 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 59.24% Covered Employee Payroll $ 6,170,444 Net Pension Liability as a Percentage of covered Employee Payroll 479.23% GASB 67 SCHEDULE OF CONTRIBUTIONS Last 10 Fiscal Years (Dollar Amounts in Thousands) 09/30/14 Actuarially Determined Contribution 4,504,424 Contributions in Relation to the Actuarially Determined Contributions 3,887,380 Contribution Deficiency(Excess) $ 617,044 Covered Employee Payroll $ 6,170,444 Contributions as a Percentage of Covered Employee Payroll 63.00% Notes to Schedule Valuation Date: 10/1/2012 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: Actuarial Cost Method: Entry Age Normal Amortization Method: Level Percentage of Pay, Closed Remaining Amortization Period: 28 Years(as of 10/l/11) Asset Valuation Method: 4 Year Smooth Inflation: 3.0% Salary Increases: 6.0% per year until retirement age Investment Rate of Return: 8.0% per year,compounded annually,net of investment Normal Retirement: Earlier of age 55 and 10 years of Credited Service,or age 50 Early Retirement: Age 50 and 10 Years of Credited Service. Disability Retirement: Service Incurred: Covered from Date of Employment Non-Service Incurred: 10 years of Credited Service. Benefit accrued to date of disability but not less than 42% of Average Final Compensation(Service Incurred). Mortality: RP-2000 Table with no projection- Based on a study of over 650 public safety funds,this table reflects a 10% margin for future morality improvements. (Disabled lives set forward 5 years). Other Information: GASB 67 SCHEDULE OF INVESTMENT RETURNS 09/30/14 Annual Money-Weighted Rate of Return Net of Investment Expense 13.90% SUNSHINE CITY RETIREMENT SYSTEM GASB 68 EXAMPLE FOSTER & FOSTER GASB 68 NOTES TO THE FINANCIAL STATEMENTS (For the Year Ended September 30,2014) General Information about the Pension Plan Plan Description The Plan provides pensions for all full-time employees of the District who are classified as full-time Firefighters. The Plan is a single-employer defined benefit pension plan administered by the Plan's Board of Trustees comprised of: a. Two District appointees b. Two Members of the Department elected by the membership, and c. Fifth Member elected by other 4 and appointed by the District. Plan Membership as of September 30, 2014: Inactive Plan Members or Beneficiaries Currently Receiving Benefits 43 Inactive Plan Members Entitled to but Not Yet Receiving Benefits 2 Active Plan Members 76 121 Benefits Provided The Plan provides retirement,disability and death benefits. Retirement benefits are calculated as 3.58% (3.00% for Firefighters hired after June 1,2010) of Average Final Compensation times Credited Service. Normal Retirement: Earlier of age 55 and 10 years of Credited Service,or age 50 and 25 years of Credited Service Early Retirement: Age 50 and 10 Years of Credited Service. Disability Retirement: Service Incurred: Covered from Date of Employment Non-Service Incurred: 10 years of Credited Service. Benefit accrued to date of disability but not less than 42% of Average Final Compensation(Service Incurred). Death Benefits: Vested: Monthly accrued benefit payable to designated beneficiary for 10 years. Non-Vested: Refund of accumulated contributions without interest. Cost of Living Adjustment: Normal and Early service Retirees after January 1,2000 receive 3% annual benefit increases for 17 years (12 years for Firefighters hired after June 1,2010),commencing 1 year after retirement. Contributions. Remaining amount required in order to pay current costs and amortize unfunded past service cost, if any, as provided in Chapter 112,Florida Statutes. GASB 68 Net Pension Liability The Sponsor's net pension liability was measured as of September 30,2014. The total pension liaiblity 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 1,2013 updated to September 30,2014 using the following actuarial assumptions applied to all measurement periods. Inflation 3.00% Salary Increases 6.00% Investment Rate of Return 8.00% Mortality rates were based on the RP-2000 Table with no projection for Males and Females, as appropriate. The actuarial assumptions used in the October 1,2013 valuation were based on the results of an actuarial experience study for the period 2003-2013. The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate 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 2014 are summarized in the following table: Long Term Expected Asset Class Target Allocation Real Rate of Return Domestic Equity 45% 5.4% International Equity 19% 5.5% Fixed Income 25% 1.3% Real Estate 10% 4.5% Cash 1% 0.0% Other 0% 0.0% 100% Discount Rate: The discount rate used to measure the total pension liability was 8.00 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. GASB 68 CHANGES IN NET PENSION LIABILITY Increase (Decrease) Total Pension Plan Fiduciary Net Pension Liability Net Position Liability (a) (b) (a)-(b) Balances at September 30,2013 $ 67,198,662 $ 34,983,095 $ 32,215,567 Changes for a Year: Service Cost 1,736,946 1,736,946 Interest 5,415,856 5,415,856 Differences Between Expected and Actual Experience 675,546 675,546 Contributions- Employer 3,334,848 (3,334,848) Contributions-State 552,532 (552,532) Contributions- Employee 437,563 (437,563) Net Investment Income 6,181,623 (6,181,623) Benefit Payments,Including Refunds of Employee Contributions (2,474,813) (2,474,813) - Administrative Expense (33,135) 33,135 Other Changes - - - New Changes 5,353,536 7,998,619 (2,645,084) Balances at September 30,2014 $ 72,552,197 42,981,714 29,570,483 Sensitivity of the net pension liabilty to changes in the discount rate. Current Discount 1% Decrease Rate 1% Increase 7.00% 8.00% 9.00% Sponsor's Net Pension Liability $ 32,533,874 $ 29,570,483 $ 22,504,126 Pension plan fiduciary net position. Detailed information about the pension plan's fiduciary net position is available in a separately issue Plan financial report. GASB 68 PENSION EXPENSE AND DEFERRED OUTFLOWS OF RESOURCES AND DEFERRED INFLOWS OF RESOURCES RELATED TO PENSIONS For the year ended September 30,2015 the Sponsor recognized pension expense of$4,107,206. On September 30,2015 the Sponsor reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferred Deferred Outflows of Inflows of Resources Resources Differences Between Expected and Actual Experience - (554,913) Changes of Assumptions - - Net Difference Between Projected and Actual Earnings on Pension Plan Investments - 2,648,237 Total $ - $ 2,093,324 Amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows: Year ended September 30: 2016 $ (541,426) 2017 $ (541,426) 2018 $ (541,426) 2019 $ (541,426) 2020 $ 72,380 Thereafter $ - GASB 68 SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS Last 10 Fiscal Years (Dollar Amounts in Thousands) 09/30/14 Total Pension Liability Service Cost 1,736,946 Interest 5,415,856 Changes of Benefit Terms Differences Between Expected and Actual Experience 675,546 Changes of Assumptions - Benefit Payments,Including Refunds of Employee Contributions (2,474,813) Net Change in Total Pension Liability 5,353,536 Total Pension Liability-Beginning 67,198,662 Total Pension Liability-Ending (a) 72,552,197 Plan Fiduciary Net Position Contributions- Employer 3,334,848 Contributions- State 552,532 Contributions- Employee 437,563 Net Investment Income 6,181,623 Benefit Payments,Including Refunds of Employee Contributions 2,474,813 Administrative Expense (33,135) Other - Net Change in Plan Fiduciary Net Position 12,948,245 Plan Fiduciary Net Position -Beginning 34,983,095 Plan Fiduciary Net Position -Ending (b) $ 42,981,714 Net Pension Liability-Ending (a) - (b) $ 29,570,483 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 59.24% Covered Employee Payroll $ 6,170,444 Net Pension Liability as a Percentage of covered Employee Payroll 479.23% GASB 68 SCHEDULE OF CONTRIBUTIONS Last 10 Fiscal Years (Dollar Amounts in Thousands) 9/30/14 Actuarially Determined Contribution 4,504,424 Contributions in Relation to the Actuarially Determined Contributions 3,887,380 Contribution Deficiency(Excess) $ 617,044 Covered Employee Payroll $ 6,170,444 Contributions as a Percentage of Covered Employee Payroll 63.00% Notes to Schedule Valuation Date: 10/1/2012 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: Actuarial Cost Method: Entry Age Normal Amortization Method: Level Percentage of Pay, Closed Remaining Amortization Period: 28 Years (as of 10/l/11) Asset Valuation Method: 4 Year Smooth Inflation: 3.0% Salary Increases: 6.0% per year until retirement age Investment Rate of Return: 8.0% per year,compounded annually,net of investment related expenses Normal Retirement: Earlier of age 55 and 10 years of Credited Service,or age 50 and 25 years of Credited Service Early Retirement: Age 50 and 10 Years of Credited Service. Disability Retirement: Service Incurred: Covered from Date of Employment Non-Service Incurred: 10 years of Credited Service. Benefit accrued to date of disability but not less than 42% of Average Final Compensation(Service Incurred). Mortality: RP-2000 Table with no projection- Based on a study of over 650 public safety funds,this table reflects a 10% margin for future morality improvements. (Disabled lives set forward 5 years). Other Information: GASB 68 COMPONENTS OF PENSION EXPENSE FISCAL YEAR SEPTEMBER 30,2015 Deferred Net Pension Liability Deferred Inflows Outflows Pension Expense Beginning balance (32,215,567) - 3,334,848 Total pension liability factors: Service cost (1,736,946) 1,736,946 Interest (5,415,856) 5,415,856 Changes in benefit terms - - Differences between expected and actual experience with regard to economic or demographic assumptions (675,546) (675,546) - Current year amortization 120,633 - 120,633 Changes in assumptions about future economic or demographic factors or other inputs - - - Current year amortization - - - Benefit payments 2,474,813 (2,474,813) Net change (5,353,536) (554,913) - 4,798,623 Plan fiduciary net position: Contributions-employer 3,334,848 (3,334,848) Contributions-state 552,532 (552,532) Contributions-employee 437,563 (437,563) Net investment income 2,871,327 (2,871,327) Difference between projected and actual earnings on pension plan investments 3,310,296 3,310,296 - Current year amortization (662,059) - 662,059 Benefit payments (2,474,813) 2,474,813 Administrative expenses (33,135) 33,135 Other - - Net change 7,998,619 2,648,237 (3,334,848) (691,417) Ending Balance (29,570,483) 2,093,324 4,107,206 SUNSHINE CITY RETIREMENT SYSTEM SENATE BILL 534 (SECTION 112.664, FLORIDA STATUTES) REQUIREMENTS EXAMPLE Aoplo- FOSTER & FOSTER ACTUARIES AND CONSULTANTS SECTION I - GASB 67 Senate Bill No. 534 SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS Last 10 Fiscal Years (Dollar Amounts in Thousands) ACTUAL HYPOTHETICAL 8.00% 8.00% 6.00% 10.00% RP-2000 RP-2000 RP-2000 RP-2000 Static Generational Generational Generational 9/30/14 9/30/14 9/30/14 9/30/14 Total Pension Liability Service Cost 1,736,946 1,834,469 2,941,826 1,176,223 Interest 5,415,856 5,559,050 5,488,531 5,458,949 Changes of Benefit Terms Differences Between Expected and Actual 675,546 675,546 682,240 668,852 Experience Changes of Assumptions Benefit Payments,Including Refunds of (2,474,813) (2,474,813) (2,474,813) (2,474,813) Employee Contributions Net Change in Total Pension Liability 5,353,536 5,594,253 6,637,784 4,829,211 Total Pension Liability-Beginning 67,198,662 68,891,065 89,771,095 54,650,671 Total Pension Liability-Ending(a) $ 72,552,197 $ 74,485,317 $ 96,408,879 $ 59,479,882 Plan Fiduciary Net Position Contributions-Employer 3,334,848 3,334,848 3,334,848 3,334,848 Contributions-State 552,532 552,532 552,532 552,532 Contributions-Employee 437,563 437,563 437,563 437,563 Net Investment Income 6,181,623 6,181,623 6,181,623 6,181,623 Benefit Payments,Including Refunds of (2,474,813) (2,474,813) (2,474,813) (2,474,813) Employee Contributions Administrative Expense (33,135) (33,135) (33,135) (33,135) Other - - - - Net Change in Plan Fiduciary Net Position 7,998,618 7,998,618 7,998,618 7,998,618 Plan Fiduciary Net Position-Beginning 34,983,095 34,983,095 34,983,095 34,983,095 Plan Fiduciary Net Position-Ending(b) $ 42,981,714 $ 42,981,714 $ 42,981,714 $ 42,981,714 Net Pension Liability-Ending(a)-(b) $ 29,570,483 $ 31,503,603 $ 53,427,165 $ 16,498,168 Plan Fiduciary Net Position as a Percentage of the 59.24% 57.70% 44.58% 72.26% Total Pension Liability Covered Employee Payroll $ 6,170,444 $ 6,170,444 $ 6,170,444 $ 6,170,444 Net Pension Liability as a Percentage of covered 479.23% 510.56% 865.86% 267.37% Employee Payroll 1 I Foster&Foster SECTION II - ASSET SUSTAINABILITY Senate Bill No. 534 PROJECTION OF THE NUMBER OF YEARS ASSETS WILL SUSTAIN BENEFIT PAYMENTS Table 1 Plan's Assumptions: 8.00%and RP-2000 Static Mortality Year Projected Beginning Projected Total Projected Benefit Projected Projected Investment Projected Ending Fiduciary Net Position Contributions Payments* Administrative Expense Earnings Fiduciary Net Position 2014 42,981,714 - 4,124,217 - 3,273,568 42,131,066 2015 42,131,066 - 3,313,328 - 3,237,952 42,055,690 2016 42,055,690 - 3,457,595 - 3,226,151 41,824,247 2017 41,824,247 - 3,616,847 - 3,201,266 41,408,665 2018 41,408,665 - 3,773,589 - 3,161,750 40,796,827 2019 40,796,827 - 4,048,090 - 3,101,823 39,850,559 2020 39,850,559 - 4,602,327 - 3,003,952 38,252,184 2021 38,252,184 - 4,928,433 - 2,863,037 36,186,789 2022 36,186,789 - 5,106,615 - 2,690,679 33,770,852 2023 33,770,852 - 5,245,295 - 2,491,856 31,017,414 2024 31,017,414 - 5,557,874 - 2,259,078 27,718,618 2025 27,718,618 - 6,031,821 - 1,976,217 23,663,013 2026 23,663,013 - 6,417,902 - 1,636,325 18,881,436 2027 18,881,436 - 7,424,904 - 1,213,519 12,670,051 2028 12,670,051 - 8,038,956 - 692,046 5,323,140 2029 5,323,140 - 8,688,923 - 78,294 (3,287,489) *All DROP Balances paid in 2014. Number of Years Expected Benefit Payments Sustained: 15 This projection assumes no further contributions,assumes no further benefit accruals,and assumes Market Value of Assets earn 8.00%interest. It is important to note that as long as the Actuarially Determined Contribution is made each year,the Plan will never become insolvent. 2 1 Foster&Foster SECTION II - ASSET SUSTAINABILITY Senate Bill No. 534 PROJECTION OF THE NUMBER OF YEARS ASSETS WILL SUSTAIN BENEFIT PAYMENTS Table 2 Bill 534 Assumptions: 8.00%and RP-2000 Generational Mortality Year Projected Beginning Projected Total Projected Benefit Projected Projected Investment Projected Ending Fiduciary Net Position Contributions Payments* Administrative Expense Earnings Fiduciary Net Position 2014 42,981,714 - 4,124,520 - 3,273,556 42,130,750 2015 42,130,750 - 3,315,046 - 3,237,858 42,053,563 2016 42,053,563 - 3,460,886 - 3,225,850 41,818,526 2017 41,818,526 - 3,622,118 - 3,200,597 41,397,006 2018 41,397,006 - 3,781,236 - 3,160,511 40,776,280 2019 40,776,280 - 4,058,337 - 3,099,769 39,817,713 2020 39,817,713 - 4,618,413 - 3,000,680 38,199,980 2021 38,199,980 - 4,949,084 - 2,858,035 36,108,931 2022 36,108,931 - 5,134,197 - 2,683,347 33,658,081 2023 33,658,081 - 5,288,073 - 2,481,124 30,851,131 2024 30,851,131 - 5,612,714 - 2,243,582 27,481,999 2025 27,481,999 - 6,106,335 - 1,954,307 23,329,971 2026 23,329,971 - 6,509,893 - 1,606,002 18,426,080 2027 18,426,080 - 7,538,230 - 1,172,557 12,060,407 2028 12,060,407 - 8,176,496 - 637,773 4,521,684 2029 4,521,684 - 8,857,978 - 7,416 (4,328,879) *All DROP Balances paid in 2014. Number of Years Expected Benefit Payments Sustained: 15 This projection assumes no further contributions,assumes no further benefit accruals,and assumes Market Value of Assets earn 8.00%interest. It is important to note that as long as the Actuarially Determined Contribution is made each year,the Plan will never become insolvent. 3 1 Foster&Foster SECTION II - ASSET SUSTAINABILITY Senate Bill No. 534 PROJECTION OF THE NUMBER OF YEARS ASSETS WILL SUSTAIN BENEFIT PAYMENTS Table 3 Bill 534 Assumptions: 6.00%and RP-2000 Generational Mortality Year Projected Beginning Projected Total Projected Benefit Projected Projected Investment Projected Ending Fiduciary Net Position Contributions Payments* Administrative Expense Earnings Fiduciary Net Position 2014 42,981,714 - 4,124,520 - 2,455,167 41,312,361 2015 41,312,361 - 3,315,046 - 2,379,290 40,376,606 2016 40,376,606 - 3,460,886 - 2,318,770 39,234,489 2017 39,234,489 - 3,622,118 - 2,245,406 37,857,777 2018 37,857,777 - 3,781,236 - 2,158,030 36,234,571 2019 36,234,571 - 4,058,337 - 2,052,324 34,228,558 2020 34,228,558 - 4,618,413 - 1,915,161 31,525,306 2021 31,525,306 - 4,949,084 - 1,743,046 28,319,268 2022 28,319,268 - 5,134,197 - 1,545,130 24,730,201 2023 24,730,201 - 5,288,073 - 1,325,170 20,767,298 2024 20,767,298 - 5,612,714 - 1,077,656 16,232,240 2025 16,232,240 - 6,106,335 - 790,744 10,916,650 2026 10,916,650 - 6,509,893 - 459,702 4,866,459 2027 4,866,459 - 7,538,230 - 65,841 (2,605,930) *All DROP Balances paid in 2014. Number of Years Expected Benefit Payments Sustained: 13 This projection assumes no further contributions,assumes no further benefit accruals,and assumes Market Value of Assets earn 6.00%interest. It is important to note that as long as the Actuarially Determined Contribution is made each year,the Plan will never become insolvent. 4 1 Foster&Foster SECTION II - ASSET SUSTAINABILITY Senate Bill No. 534 PROJECTION OF THE NUMBER OF YEARS ASSETS WILL SUSTAIN BENEFIT PAYMENTS Table 4 Bill 534 Assumptions: 10.00%and RP-2000 Generational Mortality Year Projected Beginning Projected Total Projected Benefit Projected Projected Investment Projected Ending Fiduciary Net Position Contributions Payments* Administrative Expense Earnings Fiduciary Net Position 2014 42,981,714 - 4,124,520 - 4,091,945 42,949,139 2015 42,949,139 - 3,315,046 - 4,129,162 43,763,255 2016 43,763,255 - 3,460,886 - 4,203,281 44,505,650 2017 44,505,650 - 3,622,118 - 4,269,459 45,152,991 2018 45,152,991 - 3,781,236 - 4,326,237 45,697,993 2019 45,697,993 - 4,058,337 - 4,366,882 46,006,538 2020 46,006,538 - 4,618,413 - 4,369,733 45,757,859 2021 45,757,859 - 4,949,084 - 4,328,332 45,137,106 2022 45,137,106 - 5,134,197 - 4,257,001 44,259,910 2023 44,259,910 - 5,288,073 - 4,161,587 43,133,424 2024 43,133,424 - 5,612,714 - 4,032,707 41,553,417 2025 41,553,417 - 6,106,335 - 3,850,025 39,297,107 2026 39,297,107 - 6,509,893 - 3,604,216 36,391,430 2027 36,391,430 - 7,538,230 - 3,262,232 32,115,432 2028 32,115,432 - 8,176,496 - 2,802,718 26,741,654 2029 26,741,654 - 8,857,978 - 2,231,267 20,114,943 2030 20,114,943 - 9,095,751 - 1,556,707 12,575,899 2031 12,575,899 - 9,980,388 - 758,570 3,354,081 2032 3,354,081 - 10,742,201 - (201,702) (7,589,823) *All DROP Balances paid in 2014. Number of Years Expected Benefit Payments Sustained: 18 This projection assumes no further contributions,assumes no further benefit accruals,and assumes Market Value of Assets earn 10.00%interest. It is important to note that as long as the Actuarially Determined Contribution is made each year,the Plan will never become insolvent. 5 1 Foster&Foster SECTION III - FUNDING REQUIREMENTS Senate Bill No. 534 ACTUAL AND HYPOTHETICAL CONTRIBUTIONS APPLICABLE TO THE FISCAL YEAR ENDING SEPTEMBER 30,2016 Valuation Date: 10/1/2014 ACTUAL HYPOTHETICAL 8.00% 8.00% 6.00% 10.00% RP-2000 RP-2000 RP-2000 RP-2000 Static Generational Generational Generational 9/30/14 9/30/14 9/30/14 9/30/14 Total Required Contribution $4,934,719 $5,225,814 $7,466,260 $3,411,059 Expected Member Contribution 472,802 472,802 472,802 472,802 Expected State Money 552,532 552,532 552,532 552,532 Expected Sponsor Contribution(Fixed$) $3,909,385 $4,200,480 $6,440,926 $2,385,725 Expected Sponsor Contribution(%of Payroll) 57.8% 62.1% 95.4% 35.3% ASSETS Actuarial Value 38,677,586 38,677,586 38,677,586 38,677,586 Market Value 42,981,714 42,981,714 42,981,714 42,981,714 LIABILITIES Present Value of Benefits Active Members Retirement Benefits 37,227,360 39,442,308 62,368,065 26,186,910 Disability Benefits 415,619 435,010 621,682 317,486 Death Benefits 225,054 158,211 219,149 116,628 Vested Benefits 2,035,933 2,135,882 3,540,649 1,343,347 Refund of Contributions 144,183 144,183 144,183 144,183 Service Retirees 30,657,536 31,619,385 39,403,392 26,173,238 Beneficiaries 89,003 91,946 104,872 81,681 Terminated Vested 258,298 269,616 409,650 183,668 Disability Retirees 0 0 0 0 DROP Members 11,734,987 12,188,777 14,811,191 10,318,804 Excess State Monies Reserve 0 0 0 0 Total: 82,787,973 86,485,318 121,622,833 64,865,945 Present Value of Future Salaries 61,538,263 61,624,045 69,784,820 55,044,711 Present Value of Future Member Contributions 4,307,678 4,313,683 4,884,937 3,853,130 Total Normal Cost(Entry Age Method) 1,736,946 1,834,469 2,941,826 1,176,223 Present Value of Future Normal Costs(Entry Age) 15,924,009 16,891,930 31,149,417 9,512,951 Total Actuarial Accrued Liability 66,863,964 69,593,388 90,473,416 55,352,994 Unfunded Actuarial Accrued 28,186,378 30,915,802 51,795,830 16,675,408 Normal Costs(Entry Age) 6 1 Foster&Foster SECTION III - FUNDING REQUIREMENTS Senate Bill No. 534 ACTUAL AND HYPOTHETICAL CONTRIBUTIONS APPLICABLE TO THE FISCAL YEAR ENDING SEPTEMBER 30,2016 Valuation Date: 10/1/2014 ACTUAL HYPOTHETICAL 8.00% 8.00% 6.00% 10.00% RP-2000 RP-2000 RP-2000 RP-2000 Static Generational Generational Generational 9/30/14 9/30/14 9/30/14 9/30/14 PENSION COST Normal Cost(with interest) 1,914,809 2,022,319 3,211,886 1,309,136 Administrative Expenses(with interest) 36,528 36,528 36,177 36,879 Payment Required To Amortize UAAL 2,983,382 3,166,967 4,218,198 2,065,044 Total Required Contribution $4,934,719 $5,225,814 $7,466,260 $3,411,059 7 1 Foster&Foster 104 N. Riverside Drive City of Edgewater Edgewater, FL 32132 EDGEWATER Legislation Text File M AR-2014-301 , Version: 1 AGENDA ITEM SUBJECT: The Bogdahn Group,Jack Evatt, Performance Consultant. DEPARTMENT: SUMMARY: Quarterly Report as of June 30, 2014. BUDGETED ITEM: ❑ Yes ❑ No ❑ Not Applicable BUDGET AMENDMENT REQUIRED: ❑ Yes ❑ No ❑ Not Applicable RECOMMENDED ACTION: None. City of Edgewater Page 1 of 1 Printed on 9/9/2014 powered by LegistarT" City of Edgewater General Employees' Pension Plan Investment Performance Review 2nd Quarter 2014 THE BOGDAHN GRoup W W W.B O G D A H N G R O U P.C O M simplifying your in veshnent and fiduciarp decisions 2nd Quarter 2014 Market Environment Tt BOGDAHN GROUP. The Market Environment Major Market Index Performance As of June 30,2014 • It was a remarkably uneventful quarter across markets despite political Quarter Performance concerns (Middle East discourse) and economic worries (-2.9% restated US MSCI ACWxUS 5.2% GDP growth in the first quarter) that would seemingly have a larger impact MSCI EAFE 4.3% 6.7% on overall volatility. The CBOE Volatility Index (VIX) finished the quarter at MSCI Emerg Mkts 11.6, its lowest quarterly close since December 2006. The Q1 growth slowdown, largely weather related, benefitted both emerging markets and S&P 500 5.2% domestic fixed income in Q2 as it contributed to a flatter, lower yield curve. Russell 3000 4.9% This naturally benefits bond holders, but also helped support emerging Russell 1000 5.1% markets, which experienced a sell off earlier this year on lower liquidity and Russell MidCap 5.0% concerns regarding higher rates. As a result, all major markets were positive Russell 2000 12.0% during the quarter. Barclays US Agg 2.0% • The S&P 500 appreciated 5.2% during the period, which marked the sixth Barclays US Govt 1.3% consecutive positive quarter for the index. This is the first time the S&P has Barclays US TIPS 3.8% had a quarterly run this strong since 1998. In addition, the index has Barclays MBS 2.4% appreciated in each of the past five months. The market seems to be Barclays Corp IG 2.7% shrugging off the significant decline in GDP growth in the first quarter, instead focusing on impressive job growth numbers (+500,000 new jobs 3-Month T-Bill 0.0% added in April and May) and continued overall declines in the unemployment rate, which ended the quarter at 6.3%. Finally, the housing market continues 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% to show improvement with a 5.1% year-over-year gain in median home 1-Year Performance prices and continued tight supply (5.6 months of inventory). MSCI ACWxUS 22.3% • Emerging market equities surged to the head of the asset classes during the MSCI EAFE 24.1% second quarter, after struggling on a relative basis for a majority of the past MSCI Emerg Mkts 14.7% year and a half. Developed international equity markets lagged domestic large cap equities slightly, but were up strongly on an absolute basis. For the S&P 500 24.6% trailing one-year period, emerging equities lagged their developed Russell 3000 25.2°x° counterparts by 9.4%. Russell 1000 25.4°x° Russell MidCap 126.9% • After a strong start to the year, domestic bonds continued to move higher in Russell 2000 23.6% the second quarter, rising 2.0%. The strong performance pushed the trailing, one-year return back into positive territory (+4.4%). The quarterly Barclays US Agg 4.4% performance was aided by positive returns from each major sector of the Barclays US Govt 2.1% market, led by a 3.8% return from TIPS. After dropping 8.6% in 2013, TIPS Barclays US TIPS 4.4% have rebounded in 2014, moving their return over the past twelve months to Barclays MBS 4.7% 4.4%. Despite a number of economic and political concerns, Corporate Barclays Corp IG 7.7% Bonds also move sharply higher, followed by MBS and Government issues. 3-Month T-Bill 0.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Source:Investment Metrics Tt 2 BOGDAHN GROUP. The Market Environment Domestic Equity Style Index Performance As of June 30,2014 Quarter Performance - Russell Style Series • The decline in overall volatility in the midst of a long-standing bull market 3000 Value 4.9% would suggest that small cap stocks should outperform their large cap 30001ndex 4.9% brethren, but that was not the case during the quarter. On average, large 3000 Growth 4.9% caps were the best performing segment, but the dispersion across mid and large capitalizations was minimal. Mid Cap Value was the single best performing area. Small caps were largely hurt by the reemergence of 1000 Value s.1�%o investor preference towards higher yielding sectors, which favor larger, more 1000 Index 1 5.1% established dividend paying companies. However, small cap stocks had a 1000 Growth 5.1% resurgence in June, which suggests market leadership could be changing. Value stocks outperformed growth stocks in the mid and small MidCap Value 5.6% capitalizations, but there was no similar skew in the larger cap segment. MidCap Index 5.0% • As of June 2014, intra stock correlations (-0.28) continue to fall. While MidCap Growth 4.4% slightly above the long-term average (-0.26 since 1926), the current level is very favorable for stock picking and suggests the future success of actively 2000 Value 2.4% managed strategies remains bright. 2000 Index 2.0 2000 Growth 1.7% • Current valuations remain fair. As of June 30, 2014, the S&P 500 traded at 1,960. While this represents a 25% premium to the October 9, 2007 0.0% 1.0% 2.0% 3.0% 4.0% s.o% 6.0% inflection point valuation of 1,565, the forward looking P/E multiples are virtually identical (15.2x in 2007, 15.6x in 2014). The current P/E multiple is 1-Year Performance - Russell Style Series in line with the 25-year average. 3000 Value 23.7% • On average, markets experience an intra-year pullback of approximately 30001ndex 25.2% 14.4% (using S&P 500 data back to 1980). In 2013, the largest decline was 3000 Growth 26.8% 6%, which has been repeated so far in 2014. Despite many pundits continuing to speculate that we are overdue for a "typical" market correction 1000 Value 23.8% of 10% or greater, relative valuations, generally positive economic growth, and benign macro factors continue to favor domestic equities over 1000 Index zs.a�%o international and fixed income alternatives in the minds of most investors. 1000 Growth 26.9% • On an absolute basis, small cap stocks are more expensive relative to their MidCap Value 27.8% mid and large cap counterparts (18.5x PE versus 18.4x, and 15.6x, MidCap Index 26.9% respectively). However, relative to their long term averages, small cap MidCap Growth 26.0% valuations are in-line with mid cap. Both are slightly expensive relative to large caps, especially on the value side. 2000 Value 22.5% 2000 Index 23.6% 2000 Growth 24.7% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Source:Investment Metrics Tt 3 BOGDAHN GROUP. The Market Environment GICS Sector Performance & (Sector Weight) As of June 30,2014 • During the quarter, the Commerce Department's downward revision of first Russell 1000 1 ■Quarter 01-Year quarter GDP to a surprising -2.9% had a strong impact on equity sector Consumer Disc(12.7%) 3.3% returns. The lower economic growth number contributed to a surprising z1.s% decline in interest rates across most points on the yield curve. Given a lower Consumer Staples(8.9%) 4.8% 15.9% yield environment, investors again returned to higher yielding sectors such ° as Energy and especially Utilities. This preference for dividends, last seen to Energy(9.9%) 30.7% a significant degree in 2012, helped contribute to 12.3% and 6.8% quarterly 2.5% Financials(16.9%) returns for these sectors, respectively. 18.6% • In this interest rate environment, it is no surprise that REITs also fared well, Health Care(12.9%) 4.6% 30.5% appreciating 7.2% during the quarter. This brings the sector's year-to-date Industrials(11.3%) 3.8% 29.3% gain to a robust 18.2% (as measured by the Dow Jones US Select REIT Index). However, this performance was not enough to buoy the Financials Info Technology(18.1%) 6.1% 32.4% sector as a whole, as Financials were the worst performing sector within the 5.5% S&P 500, appreciating a meager 2.3% during the period. Materials(3.8%) 32.0% • Similar to the first quarter, Consumer Discretionary was once again a Telecom Services(2.3%) 4.3%6.5% relative underperformer in both the small and large cap benchmarks during Utilities(3.1%) 7.7% 21.1% the period. Again, most of the impact could be weather related. Many analysts related the soft retail numbers to the effects of a brutal winter that 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% extended well into the second quarter reporting period. Most analysts see Russell 2000 ■Quarter ❑1-Year brighter times ahead as they believe that the now lower inventory levels will promote accelerated growth in the second half of the year as retailers Consumer Disc(12.8%) 1.3% 15.6% replenish depleted stock. Consumer Staples(3.8%) 1.1% 23.4% • On an absolute valuation basis, when viewed across a ten-year trailing 11.5% period ending June 30, 2014, Financials and Telecom were the most Energy(5.8%) 40.5% attractive) valued areas within the S&P 500. Each sector traded at ° y Financials(23.5%) 1.9 r° 19.3% approximately 12.5x-14.0x. Consumer Staples appear the most overvalued at the moment. Staples trade at approximately 17.5x on an absolute basis, Health Care(13.1%) 1.3% 33.9% which is very near the top of its ten-year range. Relative to the ten-year ° average, only two sectors currently trade at or below average valuations: Industrials(14.7%) 10,.3 ro 267% Telecom and Information Technology. Info Technology(17.5%) 1.9% zs.9°ro Materials(4.9%) 1.9% -3.1% 1 25.6% Telecom Services(0.7%) 17.0% Utilities(3.3%) 8.9% 23.7% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% 40.0% 45.0% Source:Morningstar Direct THk 4 BOGDAHN GROUP. The Market Environment Top 10 Index Weights& Quarterly Performance for the Russell 1000 &2000 As of June 30, 2014 Top 10 Weighted Stocks Top 10 Weighted Stocks Russell �� 000 Return Return Apple Inc 2.78% 21.9% 68.0% Information Technology Pharmacyclics,Inc. 0.33% -10.5% 12.9% Health Care Exxon Mobil Corporation 2.15% 3.8% 14.5% Energy Ocwen Financial Corporation 0.32% -5.3% -10.0% Financials Microsoft Corp 1.71% 2.4% 24.3% Information Technology Starwood Property Trust,Inc. 0.30% 2.8% 28.6% Financials Johnson&Johnson 1.47% 7.2% 25.4% Health Care Genesee&Wyoming,Inc.Class A 0.27% 7.9% 23.8% Industrials General Electric Co 1.31% 2.3% 17.1% Industrials 3D Systems Corporation 0.27% 1.1% 36.2% Information Technology Wells Fargo&Co 1.25% 6.4% 30.9% Financials Alaska Air Group,Inc. 0.27% 2.4% 85.4% Industrials Chevron Corp 1.23% 10.7% 14.1% Energy Two Harbors Investment Corp 0.27% 4.8% 13.7% Financials Berkshire Hathaway Inc Class B 1.15% 1.3% 13.1% Financials oStar Group Inc 0.26% -15.3% 22.5% Information Technology JPMorgan Chase&Co 1.08% -4.5% 12.2% Financials Dril-Quip,Inc. 0.26% -2.6% 21.0% Energy Procter&Gamble Co 1.06% -1.7% 5.3% Consumer Staples Gulfport Energy Corporation 0.26% -11.8% 33.4% Energy Top r e r Quarter) Russell e Weight 1 rrr e rrr Return Return Return Return Hillshire Brands Co 0.04% 67.8% 91.9% Consumer Staples Idenix Pharmaceuticals Inc 0.02% 299.7% 567.6% Health Care Zillow Inc 0.02% 62.2% 153.9% Information Technology Dolan Co 0.00% 281.3% -96.3% Industrials Platform Specialty Products Corp 0.01% 47.1% NA Materials MannKind Corp 0.06% 172.6% 68.5% Health Care Golar LNG Ltd 0.01% 45.5% 97.2% Energy Quest Resource Holding Corp 0.00% 145.8% 77.2% Industrials Williams Companies Inc 0.20% 44.7% 86.6% Energy RadNet Inc 0.00% 133.5% 150.2% Health Care Questcor Pharmaceuticals Inc 0.03% 43.5% 108.1% Health Care Achillion Pharmaceuticals Inc 0.04% 130.1% -7.5% Health Care Targa Resources Corp 0.03% 41.5% 123.1% Energy Sypris Solutions,Inc. 0.00% 102.1% 77.9% Consumer Discretionary Newfield Exploration Co 0.03% 40.9% 85.0% Energy Medical Action Industries 0.00% 97.0% 78.3% Health Care Polypore International,Inc. 0.00% 39.5% 18.4% Industrials American Apparel Inc 0.00% 79.6% -53.1% Consumer Discretionary Micron Technology Inc 0.18% 39.3% 129.9% Information Technology Repligen Corp 0.02% 77.2% 176.6% Health Care Bottom r e r Quarter) e e Weight- rrr - rrr 1-Year Sector Return Return Return Return Nil Holdings Inc 0.00% -53.8% -91.7% Telecommunication Services GSE Holding Inc 0.00% -79.3% -99.0% Materials Molycorp, Inc. 0.00% -45.2% -58.5% Materials L&L Energy, Inc. 0.00% -79.2% -90.1% Energy ITT Educational Services,Inc. 0.00% -41.8% -31.6% Consumer Discretionary Corinthian Colleges Inc 0.01% -78.6% -86.8% Consumer Discretionary FireEye Inc 0.02% -34.1% NA Information Technology Endocyte Inc 0.03% -72.3% -49.8% Health Care Coach Inc 0.05% -30.6% -38.4% Consumer Discretionary EveryWare Global Inc 0.00% -71.5% -89.3% Consumer Discretionary Intercept Pharmaceuticals Inc 0.01% -28.2% 427.7% Health Care Parkervision Inc 0.03% -69.2% -67.5% Information Technology Walter Energy Inc 0.00% -27.8% -47.4% Materials OncoGenex Pharmaceuticals Inc 0.01% -68.3% -61.9% Health Care Cliffs Natural Resources Inc 0.01% -25.8% -4.8% Materials Global Geophysical Services,Inc. 0.01% -66.6% -99.2% Energy Zynga Inc Class 0.01% -25.3% 15.5% Information Technology Education Management Corp 0.01% -65.3% -69.9% Consumer Discretionary Whole Foods Market Inc 0.07% -23.6% -24.3% Consumer Staples PowerSecure International Inc 0.00% -58.4% -35.2% Industrials Source:Momingstar Direct Div 5 B©GDAHN GROUP. The Market Environment International and Regional Market Index Performance (Country Count) As of June 30,2014 • Volatility declined during the quarter, and monthly returns for all of the Quarter Performance ■USD ❑Local Currency diversified non-US equity indexes were positive. This is very different AC World x US(45) 5.3% from last quarter, when the final return appeared that nothing had 4.2% happened, but the intra-quarter path resembled a roller coaster. WORLD x US(22) 4.9% 3.9% • The range of returns for the individual countries outside of the U.S. was EAFE 21 4.3% wide. The best developed return was Norway at +10.8% and the worst 3.7% developed return was Ireland at -9%. On the emerging county side, p 9 9 Y Europe&ME(16) Turkey was the strongest performer at+15.4% and Greece was the worst 3.4% at-10.7°/x. Pacific(5) 5 3% ° o • Qatar and the UAE were added to the MSCI EM Index during the second Emerging Mkt(23) ° 0 quarter (May). Both countries' equities were down for the quarter, which 5.3% seems counterintuitive given the likelihood that many index funds added EM EM EA(10) 4.5% capital to stocks within the two countries (or even more likely to ETFs). 4.3% 5.6% EM Asia(8) 7.3% • Currency moves for the quarter were favorable for U.S. investors overseas, as the USD depreciated versus a majority of European, Asian EM Latin Amer(5) s.z 7.0% °%o and Latin American currencies. The few exceptions were France, Germany and India. 0.0% 2.0% 4.0% 6.0% 8.0% 1-Year Performance ■USD El Local Currency • Energy (+11.6%) and Utilities (+7.1%) were the top two performing sectors in developed equities, followed by defensive sectors, Consumer AC World x US(45) 22.3% 1s.z Staples (+6.3%) and Health Care (+5.7%). Within emerging equities, °%o ° Information Technology(+11.2%) took top sector honors, followed closely WORLD x US(22) 193% ° by Utilities (+10.5%)and Energy (+10.2%). EAFE(21) 24.1% 18.4% • Value again outperformed growth in developed equities. The trend 30.0% reversed in emerging equities from last quarter and value outperformed Europe&ME(16) zo.9°ro growth there as well. Small cap stocks underperformed large caps among Pacific(5) 25.1% both developed and emerging market indices. 25.2% Emerging Mkt(23) 14.7% 14.1% EM EM EA(10) 12.9% 17.3% EM Asia(8) 17.0% 14.7% EM Latin Amer(5) 9.3% 9.7% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% 35.0% Source:MSCI Global Index Monitor(Returns are Gross) Tt1k 6 BOGDAHN GROUP. The Market Environment U.S. Dollar International Index Attribution &Country Detail As of June 30, 2014 Country Weight Weight Return Return IVISCI-EAFE Sector Weight Quarter Return I-Year Return MSCI-EAFE MSCI-ACWIxUS Quarter 1-Year Consumer Discretionary 11.9% 3.6% 21.1% United Kingdom 21.4% 15.3% 6.1% 26.6% Consumer Staples 11.1% 6.3% 18.2% Japan 20.3% 14.4% 6.7% 10.1% Energy 7.3% 11.6% 34.0% France 10.1% 7.2% 2.4% 29.3% Germany 9.3% 6.6% 2.3% 30.2% Financials 25.3% 2.7% 22.5% Switzerland 9.0% 6.4% 2.4% 23.0% Health Care 10.5% 5.7% 27.5% Australia 7.7% 5.5% 2.9% 21.0% Spain 3.7% 2.6% 7.4% 57.9% Industrials 12.7% 2.6% 23.9% Sweden 3.0% 2.2% -0.3% 24.5% Information Technology 4.4% 1.3% 20.3% Hong Kong 2.8% 2.0% 8.3% 17.7% Materials 8.0% 3.6% 23.5% Netherlands 2.7% 1.9% 0.7% 27.0% Italy 2.6% 1.9% 0.3% 52.4% Telecommunication Services 4.9% 4.0% 33.9% Denmark 1.5% 1.1% 3.3% 50.9% Utilities 1 3.9% 1 7.1% 1 27.8% Singapore 1.4% 1.0% 5.7% 10.4% Total 100.0% Belgium 1.2% 0.9% 5.6% 32.8% Norway 0.9% 0.6% 10.8% 30.9% Finland 0.9% 0.6% 5.6% 50.0% Quarter Israel 0.5% 0.4% 2.4% 32.5% Consumer Discretionary 10.8% 3.9% 21.4% Ireland 0.3% 0.2% -9.0% 35.4% Consumer Staples 9.9% 6.0% 14.8% Austria 0.3% 0.2% -0.2% 19.5% Portugal 0.2% 0.1% -1.9% 20.8% Energy 9.6% 11.6% 28.3% New Zealand 0.1% 0.1% -1.0% 30.4% Financials 26.5% 3.9% 20.2% Total EAFE Countries 100.0% Health Care 8.2% 5.5% 272% Canada 7.6% 10.1% 27.2% Total Developed Countries 78.7% 4.9% 24.4% Industrials 11.0% 3.4% 23.4% China 3.9% 5.7% 15.9% Information Technology 6.9% 6.5% 28.1% Korea 3.3% 6.4% 24.7% Taiwan 2.6% 10.4% 20.8% Materials 8.5% 4.2% 19.7% Brazil 2.3% 7.7% 13.5% Telecommunication Services 5.2% 4.4% 23.8% South Africa 1.6% 4.6% 22.4% Utilities 3.6% 7.7% 25.7% India 1.5% 12.7% 27.4% Russia 1.2% 10.8% 8.2% Total 100.0% Mexico 1.1% 6.6% 7.7% Malaysia 0.8% 3.5% 5.4% MSCI-Emerging Mkt Sector Weight Quarter Return 1-Year ReturA Indonesia 0.5% 0.8% -11.4% Consumer Discretionary 9.1% 4.2% 21.1% Thailand 0.5% 7.8% -1.6% Consumer Staples 8.3% 4.1% 0.9% Poland 0.4% -0.8% 25.7%0 0 0 Turkey 0.4/0 15.4/o -3. /o 1 Energy 10.8% 10.2% 13.6% Chile 0.3% 2.7% -11.6% Financials 27.0% 5.4% 9.8% Colombia 0.2% 7.9% 10.3% Philippines 0.2% 9.2% 8.6% Health Care 1.8% 8.1% 17.5% Greece 0.2% -10.7% 55.1% Industrials 6.5% 4.9% 15.6% Peru 0.1% 8.5% 12.3% Information Technology 17.3% 11.2% 36.1% United Arab Emirates 0.1% -5.5% 57.9% Qatar 0.1% -5.4% 20.6% Materials 8.8% 3.9% 11.7% Czech Republic 0.1% 1.9% 25.4% Telecommunication Services 7.0% 5.7% 2.8% Egypt 0.1% 1.1% 48.4% Utilities 3.6% 10.5% 20.50%. Hungary 0.0% 4.6% -14.9% Total Emerging Countries 21.3% Total 100.0% 100.0% riririri;r Source:MSCI Global Index Monitor(Returns are Gross in USD) [H.k 7 B©GDAHN GROUP. The Market Environment Domestic Bond Sector& Broad/Global Bond Market Performance (Duration) As of June 30,2014 Quarter Performance • Amid lackluster economic news and geopolitical concerns in Ukraine, AAA(5.05) 1.8% domestic bonds continued their strong performance in the second AA(5.67) 1.9% quarter, rising 2.0%. Bond markets began the quarter on a bullish note, A(7.11) 2.4% moving higher on a surprisingly weak first quarter US GDP report and Baa(7.44) 3.4% concerns over the Ukraine-Russia conflict. In May, weak economic news U.S.High Yield(4.04) 2.4% from China and Europe, along with lower revisions to first quarter GDP, pushed bonds higher, especially in maturities ten years or greater. Late U.S.Treasury(5.26) 1.4% in the quarter, volatility fell and credit spreads moved lower, resulting in a U.S.Mortgage(5.06) 2.4% positive return for the month of June. Overall, it was a good quarter for U.S.Corporate IG(7.12) 2.7% 3.8% bond investors, especially in light of the fact that the Federal Reserve U.S.TIPS(7.22) remains on pace to end their quantitative easing program by year-end. • For the second consecutive quarter, all investment grade sectors posted Aggregate(5.60) 2.0% positive returns. Though small in size, TIPS were the top performing area Intermediate Agg(4.27) 1.6% of the market (3.8%). Among the major sectors, Corporate Bond prices Global Agg x US(6.93) 2.7% continued to grind higher and were the strongest performing segment (2.7%), followed by MBS (2.4%) and Treasuries (1.4%). Multiverse(6.24) z.s°%° 0.0% 1.0% 2.0% 3.0% 4.0% • The trend of lower quality bonds outperforming higher quality securities within investment grade credit continued for yet another quarter. Bonds rated Baa rose 3.4%, followed by A-rated (2.4%), AA-rated (1.9%), and AAA-rated(1.8%). 1-Year Performance AAA(5.05) 3.2% • Amid the strong demand for longer-dated Treasuries, the broad-based AA(5.67) a.7°%° Barclays Aggregate Index outperformed short and intermediate bonds for the second consecutive quarter. The bullish sentiment in 2014, has A(7.11) 7.0% benefitted The Barclays Aggregate Index, which has outpaced shorter- Baa(7.44) 9.4% dated bonds by a wide margin over the past twelve months. U.S.High Yield(4.04) • The continued appetite for income resulted in strong demand for U.S.Treasury(5.26) 2.0% 11.7% Corporate Bonds, regardless of credit quality. For the first time in eight U.S.Mortgage(5.06) 4.7% quarters, high yield issuers trailed investment grade credits, but U.S.Corporate IG(7.12) 7.7% remained well ahead over the past twelve months. U.S.TIPS(7.22) 4.4% • For the second consecutive quarter, International bonds, represented by the Barclays Global Aggregate ex US Index, surpassed their domestic Aggregate(5.60) 4.4% bond counterparts (2.7% versus 2.0%). The strong showing pushed Intermediate Agg(4.27) 3.5% international bonds ahead of the US market by 5.0% on a trailing, one- Global Agg x US(6.93) 9.4% year basis. Multiverse(6.24) 7.7% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% Source:Barclays Capital Live Tt 8 BOGDAHN GROUP. The Market Environment Market Rate &Yield Curve Comparison As of June 30,2014 1-Year Trailing Market Rates 4.00 • Domestic bonds markets continued their strong performance in 2014, Fed Funds Rate TED Spread 3-Month Libor returning 2.0% in the second quarter. The bullish tone of the market 3.50 BAA OAS 1Oyr Treasury 10yr TIPS was due, in part, to a surprising weak first quarter US GDP report, overall 3.00 weakness in China and Europe, and geopolitical concerns in Ukraine. 2.50 • The strong year-to-date performance occurred despite little change in policy by the Federal Reserve, which remains on course to end its 2.00 quantitative easing program by year-end. As we move towards year end, investors will increasingly focus their attention on the timing and 1.50 magnitude of any potential interest rate increases. 1.00 • Despite numerous macro and geopolitical concerns, sentiment in the credit markets remained positive, resulting in BAA option adjusted 0.50 spreads tightening 17 basis points (bps). 0.00 • Aside from modest weakness in June, yield levels for maturities ten -0.50 years and greater declined sharply during the second quarter. Yields on 10 and 30-year maturities declined 20 and 22 bps, respectively, during -1.00 the period. Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 • Although the yield curve continued to flatten in the second quarter, it still 4.00 Treasury Yield Curve provides investors a sizable yield gain for extending maturities, especially 9/30/2013 --o--12/31/2013 in the intermediate part of the yield curve. The spread between key 3.50 - X3/31/2014 -- --on the yield curve is shown below. 2-5 Year U.S. Treasury 115 bps 3.00 - 5-10 Year U.S. Treasury 91 bps 10-30 Year U.S. Treasury 81 bps 2.50 - • Since rising to more attractive yields in mid-to-late 2013, the yield curve 2.00 - has flattened, spreads have narrowed and interest rates have declined, particularly in longer-dated maturities. While this has resulted in strong 1.50 returns over the past twelve months, we believe the return outlook going forward is poor. Furthermore, the low nominal yields and narrow credit spreads offer only a modest amount of income to offset the amount of 1.00 interest rate risk assumed by investors. 0.50 0.00 1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 yr 30 yr Source:US Department of Treasury,FRED(Federal Reserve of St.Louis) Fli F 9 BOGDAHN GROUP. Asset Allocation Summary Total Fund As of June 30,2014 Asset Allocation By Segment as of Asset Allocation By Segment as of March 31,2014:$12,689,470 June 30,2014:$12,911,051 i i Allocation Allocation Segments Market Value Allocation Segments Market Value Allocation Domestic Equity 6,391,535 50.4 Domestic Equity 6,468,895 50.1 International Equity 1,897,656 15.0 International Equity 1,894,508 14.7 M Domestic Fixed Income 4,136,029 32.6 ■ Domestic Fixed Income 3,995,302 30.9 Cash Equivalent 264,251 2.1 IF Cash Equivalent 552,346 4.3 THE 10 BOGDAHN GROUP. Asset Allocation Summary Total Fund As of June 30,2014 Asset Allocation By Manager as of Asset Allocation By Manager as of March 31,2014:$12,689,470 June 30,2014:$12,911,051 4 41 a+ Allocation Allocation Market Value Allocation Market Value Allocation • Integrity Fixed Income 4,260,997 33.6 ■ Integrity Fixed Income 4,119,488 31.9 Vanguard Extended Mkt Index(VEMSX) 2,175,858 17.1 Vanguard Extended Mkt Index(VEMSX) 2,188,372 16.9 • Wells Fargo Advantage Large Cap R6(EKJFX) 2,131,390 16.8 E Wells Fargo Advantage Large Cap R6(EKJFX) 2,142,732 16.6 Ridgeworth Large Cap Value(STVTX) 2,084,287 16.4 Ridgeworth Large Cap Value(STVTX) 2,137,791 16.6 • American Funds EuroPacific Gr R6(RERGX) 1,897,656 15.0 ■ American Funds EuroPacific Gr R6(RERGX) 1,894,508 14.7 • R&D 139,283 1.1 ■ R&D 428,160 3.3 THE 11 BOGDAHN GROUP. Historical Asset Allocation by Segment Total Fund October 1,2013 To June 30,2014 Historical Asset Allocation by Segment 96.0 88.0 80.0 72.0 64.0 56.0 c 0 0 48.0 a 40.0 32.0 24.0 16.0 8.0 0.0 9/13 10/13 11/13 12/13 1/14 2/14 3/14 4/14 5/14 6/14 Domestic Equity International Equity Domestic Fixed Income Cash Equivalent Tt 12 BOGDAHN GROUP. Asset Allocation Total Fund As of June 30,2014 Asset Allocation Attributes Jun-2014 Mar-2014 Dec-2013 Sep-2013 Total Domestic Equity 6,468,895 50.10 6,391,535 50.37 6,289,482 49.83 5,858,510 48.31 Vanguard Total Stock Mkt Index Inst(VITSX) - 0.00 - 0.00 - 0.00 - 0.00 American Funds EuroPacific Gr R6(RERGX) 1,894,508 14.67 1,897,656 14.95 1,838,732 14.57 1,749,085 14.42 Ridgeworth Large Cap Value(STVTX) 2,137,791 16.56 2,084,287 16.43 2,045,546 16.21 1,895,880 15.63 Vanguard Extended Mkt Index(VEMSX) 2,188,372 16.95 2,175,858 17.15 2,112,328 16.74 1,974,417 16.28 Wells Fargo Advantage Large Cap R6(EKJFX) 2,142,732 16.60 2,131,390 16.80 2,131,608 16.89 1,988,213 16.40 Total International Equity 1,894,508 14.67 1,897,656 14.95 1,838,732 14.57 1,749,085 14.42 Vanguard Total Intl Stock Ix Signal(VTSGX) - 0.00 - 0.00 - 0.00 - 0.00 Total Fixed Income 4,119,488 31.91 4,260,997 33.58 4,230,269 33.52 4,219,126 34.79 Integrity Fixed Income 4,119,488 31.91 4,260,997 33.58 4,230,269 33.52 4,219,109 34.79 Vanguard Total Bond Mkt Idx Signal(VBTSX) - 0.00 - 0.00 - 0.00 17 0.00 Principal Real Estate Fund Portfolio - 0.00 - 0.00 - 0.00 - 0.00 R&D 428,160 3.32 139,283 1.10 262,571 2.08 300,001 2.47 Total Fund 12,911,051 100.00 12,689,470 100.00 12,621,054 100.00 12,126,722 100.00 Tt 13 BOGDAHN GROUP. Financial Reconciliation Total Fund 1 Quarter Ending June 30,2014 Financial Reconciliation Quarter to Date Market Value Net Management Other Apprec.1 Market Value 04/01/2014 Transfers Contributions Distributions Fees Expenses Income Deprec. 06/30/2014 Total Domestic Equity 6,391,535 -176,921 254,280 6,468,895 Ridgeworth Large Cap Value(STVTX) 2,084,287 -58,974 112,477 2,137,791 Vanguard Extended Mkt Index(VEMSX) 2,175,858 -58,974 71,487 2,188,372 Wells Fargo Advantage Large Cap R6(EKJFX) 2,131,390 -58,974 70,316 2,142,732 Total International Equity 1,897,656 -58,974 55,826 1,894,508 American Funds EuroPacific Gr R6(RERGX) 1,897,656 -58,974 - - - 55,826 1,894,508 Total Fixed Income 4,260,997 -221,550 -2,649 -633 47,385 35,938 4,119,488 Integrity Fixed Income 4,260,997 -221,550 -2,649 -633 47,385 35,938 4,119,488 Vanguard Total Bond Mkt Idx Signal(VBTSX) - - - - - - - - - R&D 139,283 457,444 182,350 -338,779 - -12,140 2 - 428,160 Total Fund 12,689,470 - 182,350 -338,779 -2,649 -12,773 47,387 346,044 12,911,051 Tt 14 BOGDAHN GROUP. Financial Reconciliation Total Fund October 1,2013 To June 30,2014 Financial Reconciliation Fiscal Year to Date Market Value Net Management Other Apprec./ Market Value 1010112013 Transfers Contributions Distributions Fees Expenses Income Deprec. 0613012014 Total Domestic Equity 5,858,510 -252,449 - 271,001 591,832 6,468,895 Vanguard Total Stock Mkt Index Inst(VITSX) - - - - - Ridgeworth Large Cap Value(STVTX) 1,895,880 -84,150 247,333 78,727 2,137,791 Vanguard Extended Mkt Index(VEMSX) 1,974,417 -84,150 23,667 274,437 2,188,372 Wells Fargo Advantage Large Cap R6(EKJFX) 1,988,213 -84,150 - 238,669 2,142,732 Total International Equity 1,749,085 -58,974 - 23,319 181,078 1,894,508 American Funds EuroPacific Gr R6(RERGX) 1,749,085 -58,974 - - 23,319 181,078 1,894,508 Total Fixed Income 4,219,126 -288,704 -5,323 -1,262 152,504 43,148 4,119,488 Integrity Fixed Income 4,219,109 -288,687 -5,323 -1,262 152,504 43,148 4,119,488 Vanguard Total Bond Mkt Idx Signal(VBTSX) 17 -17 - - - - - - - R&D 300,001 600,126 514,221 -954,051 - -32,144 6 - 428,160 Total Fund 12,126,722 - 514,221 -954,051 -5,323 -33,406 446,830 816,058 12,911,051 Tt 15 BOGDAHN GROUP. Comparative Performance Total Fund As of June 30,2014 Comparative Performance Trailing Returns QTR FYTD 1 YR 3 YR 5 YR Inception Inception Date Total Fund(Net) 3.12 10.60 17.34 10.54 12.96 4.86 10/01/2000 Total Fund Policy 3.80 11.07 16.18 10.15 11.98 5.72 Difference -0.68 -0.47 1.16 0.39 0.98 -0.86 Total Fund(Gross) 3.15 (78) 10.65 (69) 17.39 (33) 10.56 (27) 12.98 (30) 4.89 (91) 10/01/2000 Total Fund Policy 3.80 (26) 11.07 (57) 16.18 (63) 10.15 (41) 11.98 (75) 5.72 (57) Difference -0.65 -0.42 1.21 0.41 1.00 -0.83 All Public Plans-Total Fund Median 3.54 11.27 16.80 9.94 12.51 5.82 Total Equity 3.76 14.11 25.35 13.76 17.45 4.54 10/01/2000 Total Equity Policy 4.97 16.03 24.51 14.44 17.77 4.65 Difference -1.21 -1.92 0.84 -0.68 -0.32 -0.11 Total Domestic Equity 4.01 14.83 26.24 15.62 18.87 4.66 10/01/2000 Russell 3000 Index 4.87 17.75 25.22 16.46 19.33 4.t Difference -0.86 -2.92 1.02 -0.84 -0.46 -0.09 Ridgeworth Large Cap Value(STVTX) 5.41 (13) 17.31 (50) 25.68 (11) N/A N/A 25.68 (11) 07/01/2013 Russell 1000 Value Index 5.10 (26) 19.12 (12) 23.81 (29) 16.92 (13) 19.23 (11) 23.81 (29) Difference 0.31 -1.81 1.87 N/A N/A 1.87 IM U.S. Large Cap Value Equity(MF)Median 4.39 17.30 22.38 15.29 17.08 22.38 Vanguard Extended Mkt Index(VEMSX) 3.32 (40) 15.22 (35) 26.98 (14) N/A N/A 26.98 (14) 07/01/2013 S&P Completion Index 3.29 (42) 15.20 (36) 26.89 (14) 15.92 (17) 21.85 (15) 26.89 (14) Difference 0.03 0.02 0.09 N/A N/A 0.09 IM U.S. SMID Cap Core Equity(MF)Median 2.92 14.19 24.07 13.72 19.61 24.07 Wells Fargo Advantage Large Cap R6(EKJFX) 3.32 (82) 12.07 (91) 25.95 (55) N/A N/A 25.95 (55) 07/01/2013 Russell 1000 Growth Index 5.13 (24) 17.40 (20) 26.92 (41) 16.26 (17) 19.24 (15) 26.92 Difference -1.81 -5.33 -0.97 N/A N/A -0.97 IM U.S. Large Cap Growth Equity(MF)Median 4.42 15.39 26.29 14.45 17.43 26.29 Total International Equity 2.96 11.68 22.35 6.88 12.06 4.83 10/01/2000 Total International Policy 5.25 10.99 22.27 6.32 10.85 4.43 Difference -2.29 0.69 0.08 0.56 1.21 0.40 American Funds EuroPacific Gr R6(RERGX) 2.96 (72) 11.68 (24) 22.35 (27) N/A N/A 17.06 (28) 06/01/2013 MSCI AC World ex USA 5.25 (15) 10.99 (37) 22.27 (28) 6.21 (59) 11.59 (55) 15.60 (47) Difference -2.29 0.69 0.08 N/A N/A 1.46 IM International Large Cap Growth Equity(MF)Median 3.89 9.88 20.01 6.71 11.69 15.27 Returns for periods greater than one year are annualized. Tti.E Returns are expressed as percentages. 16 � BOGDAHN GROUP. Comparative Performance Total Fund As of June 30,2014 QTR FYTD 1 YR 3 YR 5 YR Inception Inception Date Total Fixed Income 1.99 4.74 4.98 4.77 7.26 4.72 10/01/2000 Total Fixed Income Policy 2.04 3.78 4.37 3.66 4.85 5.56 Difference -0.05 0.96 0.61 1.11 2.41 -0.84 Integrity Fixed Income 1.99 (78) 4.74 (27) 5.03 (45) N/A N/A 5.03 (45) 07/01/2013 Barclays Aggregate Index 2.04 (71) 3.78 (79) 4.37 (77) 3.66 (87) 4.85 (89) 4.37 (77) Difference -0.05 0.96 0.66 N/A N/A 0.66 IM U.S. Broad Market Core Fixed Income(SA+CF)Median 2.13 4.22 4.87 4.38 5.74 4.87 Returns for periods greater than one year are annualized. Tti.E Returns are expressed as percentages. 17 (� B©GDAHN GROUP. Comparative Performance Total Fund As of June 30,2014 Comparative Performance Fiscal Year to Date Oct-2012 Oct-2011 Oct-2010 Oct-2009 Oct-2008 Oct-2007 Oct-2006 Oct-2005 Oct-2004 Oct-2003 To To To To To To To To To To Sep-2013 Sep-2012 Sep-2011 Sep-2010 Sep-2009 Sep-2008 Sep-2007 Sep-2006 Sep-2005 Sep-2004 Total Fund(Net) 14.28 18.27 -0.40 10.31 -3.04 -15.68 10.35 7.83 9.72 8.82 Total Fund Policy 11.22 15.63 2.24 9.40 3.90 -10.45 11.63 7.87 9.77 9.75 Difference 3.06 -2.64 0.91 -6.94 -5.23 -1.28 -0.04 -0.05 -0.93 Total Fund(Gross) 14.28 (20) 18.27 (42) -0.40 (66) 10.31 (43) -2.90 (89) -15.60 (79) 10.46 (95) 7.83 (66) 9.72 (77) 8.82 (81) Total Fund Policy 11.22 (73) 15.63 (81) 2.24 (16) 9.40 (66) 3.90 (24) -10.45 (9) 11.63 (90) 7.87 (65) 9.77 (77) 9.75 (70) Difference 3.06 2.64 -2.64 0.91 -6.80 -5.15 -1.17 -0.04 -0.05 -0.93 All Public Plans-Total Fund Median 12.55 17.93 0.29 9.98 1.32 -13.67 14.39 8.65 12.34 10.97 Total Equity 24.73 26.64 -4.05 8.37 -9.56 -26.08 18.03 11.39 18.69 15.36 Total Equity Policy 20.52 27.33 -0.89 9.91 -4.90 -22.82 17.84 11.62 16.30 15.47 Difference 4.21 -0.69 -3.16 -1.54 -4.66 -3.26 0.19 -0.23 2.39 -0.11 Total Domestic Equity 26.60 28.87 -2.31 8.80 -11.41 -24.99 15.32 10.36 16.64 14.09 Russell 3000 Index 21.60 30.20 0.55 10.96 -6.42 -21.52 16.52 10.22 14.57 14.26 Difference 5.00 -1.33 -2.86 -2.16 -4.99 -3.47 -1.20 0.14 2.07 -0.17 Vanguard Total Stock Mkt Index Inst(VITSX) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Vanguard Total Stock Market Index Hybrid 21.60 (61) 30.28 (18) 0.71 (25) 11.16 (40) -6.03 (63) -21.19 (25) 16.98 (52) 10.38 (32) 14.70 (57) 14.77 (41) Difference N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A IM U.S. Multi-Cap Equity(MF)Median 23.08 26.09 -2.11 10.20 -4.22 -23.67 17.16 8.77 15.45 13.28 Ridgeworth Large Cap Value(STVTX) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Russell 1000 Value Index 22.30 (50) 30.92 (13) -1.89 (25) 8.90 (24) -10.62 (81) -23.56 (50) 14.45 (43) 14.62 (15) 16.69 (26) 20.52 (14) Difference N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A IM U.S. Large Cap Value Equity(MF)Median 22.24 28.18 -3.73 6.91 -6.66 -23.61 13.90 12.32 13.19 17.03 Vanguard Extended Mkt Index(VEMSX) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A S&P Completion Index 31.34 (22) 30.37 (26) -2.06 (35) 15.92 (26) -3.92 (44) -20.04 (74) 18.39 (30) 7.86 (55) N/A N/A Difference N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A IM U.S. SMID Cap Core Equity(MF)Median 27.97 28.13 -3.44 13.91 -4.40 -17.25 15.71 8.22 20.46 19.40 Wells Fargo Advantage Large Cap R6(EKJFX) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Russell 1000 Growth Index 19.27 (52) 29.19 (34) 3.78 (18) 12.65 (24) -1.85 (40) -20.88 (38) 19.35 (59) 6.04 (26) 11.60 (61) 7.51 (52) Difference N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A IM U.S. Large Cap Growth Equity(MF)Median 19.37 27.03 0.58 10.27 -2.74 -21.92 20.10 4.03 12.52 7.57 Principal Large Cap Value Portfolio N/A 28.89 (47) -4.78 (82) 4.13 (93) -15.14 (98) -26.01 (84) 13.20 (78) 13.20 (41) 16.73 (50) 17.10 (72) Russell 1000 Value Index 22.30 (61) 30.92 (27) -1.89 (61) 8.90 (55) -10.62 (84) -23.56 (73) 14.45 (68) 14.62 (24) 16.69 (50) 20.52 (39) Difference N/A -2.03 -2.89 -4.77 -4.52 -2.45 -1.25 -1.42 0.04 -3.42 IM U.S. Large Cap Value Equity(SA+CF)Median 23.88 28.41 -1.00 9.32 -5.87 -20.60 16.16 12.62 16.61 19.70 Returns for periods greater than one year are annualized. Tti.E Returns are expressed as percentages. 18 � BOGDAHN GROUP. Comparative Performance Total Fund As of June 30,2014 Oct-2012 Oct-2011 Oct-2010 Oct-2009 Oct-2008 Oct-2007 Oct-2006 Oct-2005 Oct-2004 Oct-2003 To To To To To To To To To To Sep-2013 Sep-2012 Sep-2011 Sep-2010 Sep-2009 Sep-2008 Sep-2007 Sep-2006 Sep-2005 Sep-2004 Principal Large Cap Growth Portfolio N/A 29.09 (38) -1.58 (77) 10.89 (55) -8.48 (84) -24.59 (100) 18.10 (67) 8.20 (34) 16.09 (38) 10.32 (48) Russell 1000 Growth Index 19.27 (1) 29.19 (38) 3.78 (29) 12.65 (36) -1.85 (38) -20.88 (100) 19.35 (57) 6.04 (57) 11.60 (71) 7.51 (74) Difference N/A -0.10 -5.36 -1.76 -6.63 -3.71 -1.25 2.16 4.49 2.81 IM U.S. Large Cap Growth Equity(SA+CF)Median -38.55 27.57 1.30 11.30 -2.98 13.57 20.27 6.80 14.29 10.05 Principal Small Cap Equity Portfolio N/A 32.80 (45) -3.03 (76) 13.30 (72) -12.16 (76) -19.55 (65) 12.36 (71) 7.25 (58) 19.05 (73) 18.34 (82) Small Cap Policy 30.05 (71) 31.92 (54) -3.57 (77) 13.34 (72) -9.38 (64) -14.55 (25) 12.37 (71) 9.91 (32) 17.88 (82) 18.68 (78) Difference N/A 0.88 0.54 -0.04 -2.78 -5.00 -0.01 -2.66 1.17 -0.34 IM U.S. Small Cap Core Equity(SA+CF)Median 32.26 32.35 -0.24 14.58 -7.80 -17.69 14.85 8.14 21.89 20.50 Principal Mid Cap Value Portfolio N/A 31.04 (19) -1.24 (50) 16.21 (41) -3.69 (56) N/A N/A N/A N/A N/A Russell Midcap Value Index 27.77 (59) 29.28 (40) -2.36 (57) 16.93 (28) -7.12 (89) -20.50 (52) 13.75 (74) 12.27 (30) 26.13 (29) 25.62 (24) Difference N/A 1.76 1.12 -0.72 3.43 N/A N/A N/A N/A N/A IM U.S. Mid Cap Value Equity(SA+CF)Median 28.47 27.93 -1.33 15.46 -3.18 -20.33 16.01 10.16 23.39 22.84 Principal Mid Cap Growth Portfolio N/A 20.55 (78) 1.95 (43) 16.05 (61) -0.22 (43) N/A N/A N/A N/A N/A Russell Midcap Growth Index 27.54 (45) 26.69 (42) 0.80 (50) 18.27 (49) -0.40 (44) -24.65 (62) 21.22 (76) 7.03 (50) 23.47 (44) 13.68 (58) Difference N/A -6.14 1.15 -2.22 0.18 N/A N/A N/A N/A N/A IM U.S. Mid Cap Growth Equity(SA+CF)Median 27.00 26.15 0.53 17.73 -1.81 -22.76 25.94 6.97 22.75 14.50 Principal Large Cap S&P 500 N/A 28.77 (57) 0.91 (55) 9.67 (48) N/A N/A N/A N/A N/A N/A S&P 500 Index 19.34 (63) 30.20 (45) 1.14 (51) 10.16 (41) -6.91 (64) -21.98 (67) 16.44 (60) 10.79 (48) 12.25 (78) 13.87 (58) Difference N/A -1.43 -0.23 -0.49 N/A N/A N/A N/A N/A N/A IM U.S. Large Cap Core Equity(SA+CF)Median 20.67 29.72 1.16 9.45 -5.78 -20.48 16.98 10.75 15.11 14.26 Total International Equity 18.81 17.77 -11.30 6.58 -0.94 -31.49 32.06 17.98 32.27 23.48 Total International Policy 16.98 14.23 -8.94 3.71 3.80 -30.13 25.38 19.65 26.32 22.52 Difference 1.83 3.54 -2.36 2.87 -4.74 -1.36 6.68 -1.67 5.95 0.96 American Funds EuroPacific Gr R6(RERGX) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A MSCI AC World ex USA 16.98 (63) 15.04 (77) -10.42 (44) 8.00 (48) 6.43 (13) -29.97 (64) 31.06 (29) 19.36 (24) 29.48 (13) 23.15 (7) Difference N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A IM International Large Cap Growth Equity(MF)Median 18.05 18.00 -10.82 7.63 0.75 -28.39 28.10 17.83 25.57 18.10 Principal International Equity Portfolio N/A 17.77 (40) -11.30 (79) 6.58 (52) -0.94 (82) -31.49 (59) 32.10 (20) 17.98 (73) 32.27 (24) 23.48 (42) Total International Policy 16.98 (90) 14.23 (85) -8.94 (53) 3.71 (88) 3.80 (53) -30.13 (45) 25.38 (70) 19.65 (57) 26.32 (63) 22.52 (45) Difference N/A 3.54 -2.36 2.87 -4.74 -1.36 6.72 -1.67 5.95 0.96 IM International Core Equity(SA+CF)Median 22.88 17.30 -8.84 6.79 4.03 -30.45 26.93 19.92 28.06 22.26 Vanguard Total Intl Stock Ix Signal(VTSGX) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A MSCI AC World ex USA 16.98 (81) 15.04 (53) -10.42 (42) 8.00 (22) 6.43 (25) -29.97 (36) 31.06 (6) 19.36 (35) 29.48 (7) 23.15 (19) Difference N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A IM International Multi-Cap Core Equity(MF)Median 20.82 15.16 -11.05 4.95 1.99 -31.22 24.92 18.41 25.29 20.13 Returns for periods greater than one year are annualized. Tti.E Returns are expressed as percentages. 19 � B©GDAHN GROUP. TnE 20 � BAG ou Comparative Performance Total Fund As of June 30,2014 Oct-2012 Oct-2011 Oct-2010 Oct-2009 Oct-2008 Oct-2007 Oct-2006 Oct-2005 Oct-2004 Oct-2003 To To To To To To To To To To Sep-2013 Sep-2012 Sep-2011 Sep-2010 Sep-2009 Sep-2008 Sep-2007 Sep-2006 Sep-2005 Sep-2004 Total Fixed Income -0.20 10.52 2.80 11.82 4.69 -6.71 3.83 3.75 2.16 4.26 Total Fixed Income Policy -1.68 5.16 5.26 8.16 10.56 3.65 5.14 3.67 2.80 3.68 Difference 1.48 5.36 -2.46 3.66 -5.87 -10.36 -1.31 0.08 -0.64 0.58 Principal Fixed Bond Funds Portfolio N/A 10.52 (2) 2.80 (100) 11.82 (9) 4.69 (100) -6.71 (96) 3.82 (98) 3.75 (63) 2.16 (95) 4.26 (24) Total Fixed Income Policy -1.68 (81) 5.16 (91) 5.26 (49) 8.16 (87) 10.56 (80) 3.65 (32) 5.14 (51) 3.67 (76) 2.80 (81) 3.68 (60) Difference N/A 5.36 -2.46 3.66 -5.87 -10.36 -1.32 0.08 -0.64 0.58 IM U.S. Broad Market Core Fixed Income(SA+CF)Median -1.24 6.61 5.26 9.20 12.32 2.56 5.14 3.85 3.10 3.79 Vanguard Total Bond Mkt Idx Signal(VBTSX) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Barclays U.S.Aggregate Float Adjusted -1.68 (55) 5.26 (80) 5.24 (14) 8.32 (74) N/A N/A N/A N/A N/A N/A Difference N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A IM U.S. Broad Market Core Fixed Income(MF)Median -1.57 6.86 4.27 9.46 11.54 -1.68 4.40 3.13 2.40 3.29 Integrity Fixed Income N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A Barclays Aggregate Index -1.68 (81) 5.16 (91) 5.26 (49) 8.16 (87) 10.56 (80) 3.65 (32) 5.14 (51) 3.67 (76) 2.80 (81) 3.68 (60) Difference N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A IM U.S. Broad Market Core Fixed Income(SA+CF)Median -1.24 6.61 5.26 9.20 12.32 2.56 5.14 3.85 3.10 3.79 Total Real Estate Composite NIA 16.38 13.42 10.43 -31.25 -1.77 14.54 18.11 20.93 13.96 Real Estate Policy 13.04 11.35 16.10 5.84 -22.09 5.27 17.31 17.62 19.19 12.41 Difference N/A 5.03 -2.68 4.59 -9.16 -7.04 -2.77 0.49 1.74 1.55 Principal Real Estate Fund Portfolio N/A 16.38 (24) 13.42 (93) 10.43 (18) -31.25 (31) -1.77 (81) 14.54 (94) 18.11 (52) 20.93 (40) 13.96 (34) Total Real Estate Policy 13.04 (51) 11.35 (71) 16.10 (78) 5.84 (52) -22.09 (5) 5.27 (28) 17.31 (69) 17.62 (56) 19.19 (69) 12.41 (54) Difference N/A 5.03 -2.68 4.59 -9.16 -7.04 -2.77 0.49 1.74 1.55 IM U.S. Open End Private Real Estate(SA+CF)Median 13.09 12.90 16.62 6.09 -35.27 3.47 18.53 18.17 19.98 12.59 Returns for periods greater than one year are annualized. Tti.E Returns are expressed as percentages. 21 , (� B©GDAHN GROUP. Performance Review Total Fund Portfolio (Gross) As of June 30,2014 Financial Reconciliation 1 Quarter Market Value Net Management Other Apprec./ Market Value 0410112014 Transfers Contributions Distributions Fees Expenses Income Deprec. 0613012014 Total Fund Portfolio(Gross) 12,689 - 182 -339 -3 -13 47 346 12,911 Financial Reconciliation October 1,2013 To June 30,2014 Market Value Net Management Other Apprec./ Market Value 1010112013 Transfers Contributions Distributions Fees Expenses Income Deprec. 0613012014 Total Fund Portfolio(Gross) 12,127 514 -954 -5 -33 447 816 12,911 Peer Group Analysis-All Public Plans-Total Fund Cumulative Performance 25M $250.00 20.00 S214.97 O $200.00 $192.80 15.00 O O / O ` 00 0 O ! 10.00 O O O $150.00 v K 5.00 00 S 100.00 0.00 -5.00 S50.00 QTR FYTD 1 YR 2 YR 3 YR 4 YR 5 YR 9/00 6/02 3/04 12/05 9/07 6/09 3/11 12/12 6/14 • Total Fund Portfolio(Gross) 3.15 (78) 10.65 (69) 17.39 (33) 15.23 (35) 10.56 (27) 12.58 (56) 12.98 (30) • Total Fund Policy 3.80 (26) 11.07 (57) 16.18 (63) 13.64 (74) 10.15 (41) 11.96 (73) 11.98 (75) Total Fund Portfolio(Gross) Median 3.54 11.27 16.80 14.61 9.94 12.72 12.51 Total Fund Policy Comparative Performance 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr Ending Ending Ending Ending Ending Ending Mar-2014 Dec-2013 Sep-2013 Jun-2013 Mar-2013 Dec-2012 Total Fund Portfolio(Gross) 1.58 (62) 5.60 (50) 6.09 (10) 1.12 (7) 4.86 (70) 1.59 (56) Total Fund Policy 1.77 (43) 5.14 (68) 4.61 (64) -0.16 (63) 5.36 (54) 1.08 (75) All Public Plans-Total Fund Median 1.70 5.60 4.91 0.09 5.47 1.72 Tti k 22 (� B©GDAHN GROUP. Performance Review Total Fund Portfolio (Gross) As of June 30,2014 3 Yr Rolling Under/Over Performance-5 Years 3 Yr Rolling Percentile Ranking-5 Years y OM N 20 0 Over c 00 O ° Performance f0 C7 w. •• «v' Q 250 e e 00 O O O 100 6 O O Q 500 O O O 0 o.o O O O O v • E 75.00 O -10.0 Under w O Q O O O O O LL Performance �+ 100.00 00 -16.0 -12.0 -8.0 -4.0 0.0 4.0 8.0 12.0 16.0 20.0 24.0 9/09 3/10 9/10 3/11 9/11 3/12 9/12 3/13 9/13 6/14 Total Fund Policy(%) Total Period 5-25 25-Median Median-75 75-95 Over Performance • Under Performance Count Count Count Count O Total Fund Portfolio(Gross) 20 2 (10%) 6 (30%) 3 (15%) 9 (45%) Earliest Date x Latest Date O Total Fund Policy 20 6 (30%) 5 (25%) 9 (45%) 0 (0%) Peer Group Scattergram -3 Years Peer Group Scattergram -5 Years 10.80 1120 10.50 O 12.87 0 10.20 ` 12.54 ' O «', 12.21 9.90 11 O .88 9.60 11.55 6.60 6.93 7.26 7.59 7.92 8.25 8.58 8.91 6.65 7.00 735 7.70 8.05 8.40 8.75 9.10 9.45 Risk(Standard Deviation%) Risk(Standard Deviation%) Return Standard Return Standard Deviation Deviation • Total Fund Portfolio(Gross) 10.56 8.41 O Total Fund Portfolio(Gross) 12.98 8.39 • Total Fund Policy 10.15 6.93 O Total Fund Policy 11.98 7.22 Median 9.94 8.64 Median 12.53 9.06 Historical Statistics-3 Years Tracking Up Down Information Sharpe Downside Error Market Market Alpha Ratio Ratio Beta Risk Capture Capture Total Fund Portfolio(Gross) 2.23 109.84 118.60 -1.35 0.22 1.23 1.18 4.99 Total Fund Policy 100.00 100.00 0. 1.43 1.00 3.94 Historical Statistics-5 Years Tracking Up Down Information Sharpe Downside Error Market Market Alpha Ratio Ratio Beta Risk Capture Capture Total Fund Portfolio(Gross) 1.87 110.23 113.96 -0.65 0.52 1.49 1.14 4.48 Total Fund Policy J 100.00 100.00 1.00 Tti k 23 0, B©GDAHN GROUP. Performance Review Ridgeworth LCV(STVTX) As of June 30,2014 Financial Reconciliation 1 Quarter Market Value Net Management Other Apprec./ Market Value 0410112014 Transfers Contributions Distributions Fees Expenses Income Deprec. 0613012014 Ridgeworth LCV(STVTX) 2,084 -59 112 2,138 Financial Reconciliation October 1,2013 To June 30,2014 Market Value Net Management Other Apprec./ Market Value 1010112013 Transfers Contributions Distributions Fees Expenses Income Deprec. 0613012014 Ridgeworth LCV(STVTX) 1,896 -84 247 79 2,138 Peer Group Analysis-IM U.S. Large Cap Value Equity(MF) Cumulative Performance 36.00 $132.00 $126.00 S 125.68 28.00 12181 O O O $120.00 20.00 O Q O � O $114.00 12.00 O O $108.00 4.00 S102.00 -4.00 QTR FYTD 1 YR 2 YR 3 YR 4 YR 5 YR • Ridgeworth LCV(STVTX) 5.41 (13) 17.31 (50) 25.68 (11) N/A N/A N/A N/A $96.00 • Russell 1000 Value Index 5.10 (26) 19.12 (12) 23.81 (29) 24.56 (33) 16.92 (13) 19.81 (17) 19.23 (11) 6/13 9/13 12/13 3/14 6/14 Median 4.39 17.30 22.38 23.40 15.29 18.10 17.08 Ridgeworth LCV(STVTX) Russell 1000 Value Index Comparative Performance 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr Ending Ending Ending Ending Ending Ending Mar-2014 Dec-2013 Sep-2013 Jun-2013 Mar-2013 Dec-2012 Ridgeworth LCV(STVTX) 1.61 (83) 9.52 (57) 7.14 (5) N/A N/A N/A Russell 1000 Value Index 3.02 (12) 10.01 (44) 3.94 (77) 3.20 (68) 12.31 (14) 1.52 (40) IM U.S.Large Cap Value Equity(MF)Median 2.28 9.75 4.52 3.69 11.29 1.27 THE 24 I(� BOGDAHN \ GROUP, Performance Review Vanguard Extended Mkt Index(VEMSX) As of June 30,2014 Financial Reconciliation 1 Quarter Market Value Net Management Other Apprec./ Market Value 0410112014 Transfers Contributions Distributions Fees Expenses Income Deprec. 0613012014 Vanguard Extended Mkt Index(VEMSX) 2,176 -59 71 2,188 Financial Reconciliation October 1,2013 To June 30,2014 Market Value Net Management Other Apprec./ Market Value 1010112013 Transfers Contributions Distributions Fees Expenses Income Deprec. 0613012014 Vanguard Extended Mkt Index(VEMSX) 1,974 -84 24 274 2,188 Peer Group Analysis-IM U.S.SMID Cap Core Equity(MF) Cumulative Performance 40.00 $136.00 $128.00 $12090 30.00 00 p S120.00 20.00 O O E v 00 O S112.00 K 10.00 S104.00 OO 0.00 S9&00 -10.00 $88.00 QTR FYTD 1 YR 2 YR 3 YR 4 YR 5 YR 6/13 9/13 12/13 3/14 6114 • Vanguard Extended Mkt Index(VEMSX) 3.32 (40) 15.22 (35) 26.98 (14) N/A N/A N/A N/A • S&P Completion Index 3.29 (42) 15.20 (36) 26.89 (14) 26.40 (16) 15.92 (17) 21.38 (14) 21.85 (15) Vanguard Extended Mkt Index(VEMSX) Median 2.92 14.19 24.07 23.83 13.72 18.93 19.61 S&P Completion Index Comparative Performance 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr Ending Ending Ending Ending Ending Ending Mar-2014 Dec-2013 Sep-2013 Jun-2013 Mar-2013 Dec-2012 Vanguard Extended Mkt Index(VEMSX) 2.73 (24) 8.55 (56) 10.20 (21) N/A N/A N/A S&P Completion Index 2.77 (23) 8.53 (57) 10.15 (22) 12.93 (38) 3.11 (48) IM U.S.SMID Cap Core Equity(MF)Median 1.71 8.68 8.66 12.51 3.04 Tti k 25 (� B©GDAHN GROUP. Performance Review Wells Adv LC R6 (EKJFX) As of June 30,2014 Financial Reconciliation 1 Quarter Market Value Net Management Other Apprec./ Market Value 0410112014 Transfers Contributions Distributions Fees Expenses Income Deprec. 0613012014 Wells Adv LC R6(EKJFX) 2,131 -59 70 2,143 Financial Reconciliation October 1,2013 To June 30,2014 Market Value Net Management Other Apprec./ Market Value 1010112013 Transfers Contributions Distributions Fees Expenses Income Deprec. 0613012014 Wells Adv LC R6(EKJFX) 1,988 -84 239 2,143 Peer Group Analysis-IM U.S. Large Cap Growth Equity(MF) Cumulative Performance 40.00 $136.00 $128.00 30.00 O O S120.00 20.00 C+ 0 E O ' S112.00 v p 10.00 O S104.00 O 0.00 S96.00 -10.00 588.00 -- QTR FYTD 1 YR 2 YR 3 YR 4 YR 5 YR 6/13 9/13 12/13 3/14 6/14 • Wells Adv LC R6(EKJFX) 3.32 (82) 12.07 (91) 25.95 (55) N/A N/A N/A N/A • Russell 1000 Growth Index 5.13 (24) 17.40 (20) 26.92 (41) 21.89 (35) 16.26 (17) 20.69 (15) 19.24 (15) - Wells Adv LC R6(EKJFX) Median 4.42 15.39 26.29 21.28 14.45 18.76 17.43 Russell 1000 Growth Index Comparative Performance 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr Ending Ending Ending Ending Ending Ending Mar-2014 Dec-2013 Sep-2013 Jun-2013 Mar-2013 Dec-2012 Wells Adv LC R6(EKJFX) -0.27 (59) 8.77 (95) 12.38 (10) N/A N/A N/A Russell 1000 Growth Index 1.12 (14) 10.44 (60) 8.11 (74) 2.06 (36) 9.54 (16) -1.32 (50) IM U.S.Large Cap Growth Equity(MF)Median -0.04 10.76 9.56 1.70 8.56 -1.32 THE 26 l(� BOGDAHN \ GROUP, TnE 27 BOGDAHN GROUP, Performance Review American Euro R6 (RERGX) As of June 30,2014 Financial Reconciliation 1 Quarter Market Value Net Management Other Apprec./ Market Value 0410112014 Transfers Contributions Distributions Fees Expenses Income Deprec. 0613012014 American Euro R6(RERGX) 1,898 -59 56 1,895 Financial Reconciliation October 1,2013 To June 30,2014 Market Value Net Management Other Apprec./ Market Value 1010112013 Transfers Contributions Distributions Fees Expenses Income Deprec. 0613012014 American Euro R6(RERGX) 1,749 -59 23 181 1,895 Peer Group Analysis-IM International Large Cap Growth Equity(MF) Cumulative Performance 36.00 $132.00 $126.00 28.00 $122.25 O O S120.00 20.00 E O ' S114.00 v K 12.00 p O p O S108.00 O � 4.00 O 5102.00 -4.00 596.00 QTR FYTD 1 YR 2 YR 3 YR 4 YR 5 YR 6/13 9/13 12/13 3/14 6/14 • American Euro R6(RERGX) 2.96 (72) 11.68 (24) 22.35 (27) N/A N/A N/A N/A • MSCI AC World ex USA 5.25 (15) 10.99 (37) 22.27 (28) 18.13 (38) 6.21 (59) 11.77 (60) 11.59 (55) American Euro R6(RERGX) Median 3.89 9.88 20.01 17.68 6.71 12.13 11.69 MSCI AC World ex USA Comparative Performance 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr Ending Ending Ending Ending Ending Ending Mar-2014 Dec-2013 Sep-2013 Jun-2013 Mar-2013 Dec-2012 American Euro R6(RERGX) 0.71 (27) 7.70 (4) 9.55 (50) N/A N/A N/A MSCI AC World ex USA 0.61 (33) 4.81 (73) 10.17 (31) -2.90 ( a) 3.27 (41) 5.89 (51) IM International Large Cap Growth Equity(MF)Median -0.10 5.90 9.55 -1.44 3.09 5.90 THE 28 ,� BOGDAHN �` GROUP, TnE 29 BOGDAHN GROUP, Performance Review Integrity Fixed Income As of June 30,2014 Financial Reconciliation 1 Quarter Market Value Net Management Other Apprec./ Market Value 0410112014 Transfers Contributions Distributions Fees Expenses Income Deprec. 0613012014 Integrity Fixed Income 4,261 -222 -3 -1 47 36 4,119 Financial Reconciliation October 1,2013 To June 30,2014 Market Value Net Management Other Apprec./ Market Value 1010112013 Transfers Contributions Distributions Fees Expenses Income Deprec. 0613012014 Integrity Fixed Income 4,219 -289 -5 -1 153 43 4,119 Peer Group Analysis-IM U.S.Broad Market Core Fixed Income(SA+CF) Cumulative Performance 10.00 $106.00 S105.03 8.00 610437 $104.00 6.00 E 0 O $102.00 4.00 O O O 2.00 O O $100.00 0.00 QTR FYTD 1 YR 2 YR 3 YR 4 YR 5 YR • Integrity Fixed Income 1.99 (78) 4.74 (27) 5.03 (45) N/A N/A N/A N/A $98.00 • Barclays Aggregate Index 2.04 (71) 3.78 (79) 4.37 (77) 1.81 (84) 3.66 (87) 3.72 (88) 4.85 (89) 6/13 9/13 12/13 3/14 6/14 Median 2.13 4.22 4.87 2.56 4.38 4.44 5.74 Integrity Fixed Income Barclays Aggregate Index Comparative Performance 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr 1 Qtr Ending Ending Ending Ending Ending Ending Mar-2014 Dec-2013 Sep-2013 Jun-2013 Mar-2013 Dec-2012 Integrity Fixed Income 2.36 (38) 0.33 (100) 0.28 (100) N/A N/A N/A Barclays Aggregate Index 1.84 (62) -0.14 (100) 0.57 (100) -2.32 (99) -0.12 (100) 0.21 (42) IM U.S.Large Cap Core Equity(SA+CF)Median 2.06 10.42 5.99 2.78 10.70 0.00 Tti k 30 0, B©GDAHN GROUP. TnE 31 BOGDAHN GROUP, Benchmark History Investment Policy Benchmarks As of June 30,2014 Total Fund Policy Total Equity Policy Allocation Mandate Weight(%) Allocation Mandate Weight(%) Russell 3000 Index 40.00 Russell 3000 Index 85.00 Barclays Aggregate Index 50.00 MSCI EAFE Index 15.00 MSCI EAFE Index 10.00 Apr-2012 Apr-2012 Russell 3000 Index 75.00 Russell 3000 Index 45.00 MSCI AC World ex USA 25.00 Barclays Aggregate Index 40.00 MSCI AC World ex USA 15.00 Total Fixed Income Policy Small Cap Policy Allocation Mandate Weight(%) Allocation Mandate Weight(%) Barclays Aggregate Index 100.00 Russell 2000 Value Index 50.00 Russell 2000 Growth Index 50.00 Total Real Estate Policy (%) Total International Policy Allocation Mandate Weight Allocation Mandate Weight(%) Oct-2000 NCREIF Property Index 100.00 MSCI EAFE Index 100.00 Apr-2012 Apr-2012 NCREIF Fund Index-ODCE(VW) 100.00 MSCI AC World ex USA 100.00 Div 32 BOGDAHN GROUP. Benchmark History Investment Policy Benchmarks As of June 30,2014 Vanguard Total Stock Market Index Hybrid Allocation Mandate Weight(%) MSCI US Broad Market Index 100.00 Feb-2013 CRSP U.S.Total Market TR Index 100.00 Tt 33 BOGDAHN GROUP. Comparative Performance Manager Composite Performance Comparison As of June 30,2014 Comparative Performance 1 YR 3 YR 5 YR 7 YR 10 YR 15 YR Vanguard TSM Idx;lnst(VITSX) 25.18 (41) 16.47 (26) 19.43 (25) 6.67 (22) 8.43 (29) 5.23 (56) Russell 3000 Index 25.22 (40) 16.46 (26) 19.33 (26) 6.47 (26) 8.23 (36) 5.03 (60) Difference -0.04 0.01 0.10 0.20 0.20 0.20 IM U.S. Multi-Cap Core Equity(MF)Median 24.47 14.75 17.75 5.30 7.58 5.67 Vanguard Tot I Stk;Sig(VTSGX) 22.44 (38) 5.88 (70) N/A N/A N/A N/A S&P EPAC BMI 24.79 (14) 8.58 (24) 12.91 (22) 1.80 (28) 7.97 (20) 5.82 (25) Difference -2.35 -2.70 N/A N/A N/A N/A IM International Multi-Cap Core Equity(MF)Median 21.36 6.89 11.53 0.39 6.43 4.39 Vanguard Tot Bd;Sig(VBTSX) 4.28 (69) 3.61 (65) 4.75 (80) 5.33 (44) N/A N/A Barclays Aggregate Index 4.37 (64) 3.66 (63) 4.85 (78) 5.35 (44) 4.93 (37) 5.60 (34) Difference -0.09 -0.05 -0.10 -0.02 N/A N/A IM U.S. Broad Market Core Fixed Income(MF)Median 4.85 3.91 5.83 5.24 4.70 5.35 American Funds EuPc;R-6(RERGX) 22.35 (27) 7.40 (38) 11.99 (44) N/A N/A N/A S&P EPAC LargeMidCap Growth Index 22.34 (27) 7.44 (37) 12.22 (38) 1.81 (61) 7.24 (65) 4.16 (76) Difference 0.01 -0.04 -0.23 N/A N/A N/A IM International Large Cap Growth Equity(MF) 20.01 6.71 11.69 2.22 7.94 5.32 Returns for periods greater than one year are annualized. Ttik Returns are expressed as percentages. 34 , (� B©GDAHN GROUP. The Bogdahn Group Your Service Team Contact Information Nick Rowlands Department: Performance Measurement Department: Consultant Team a Title: Performance Analyst Title: Consultant Direct Phone: 407-520-5374 Direct: 407-520-5351 Email: NickR @bogdahngroup.com Email: JackE @bogdahngroup.com John Thinnes Service Team Contact Information Department: Consultant Team Address: 4901 Vineland Road,Suite 600 Orlando,Florida 32811 Title: Consultant Phone: 866-240-7932 Direct Phone: 863-904-0846 Service Team Group Email: ServiceTeamO12 @bogdahngroup.com Email: JohnT @bogdahngroup.com Tin EOGDAHN GROUP, 35 City of Edgewater General Compliance Checklist as of 06/30/2014 Total Fund Compliance: Yes No NIA 1. The Total Plan return equaled or exceeded the 7.5% actuarial earnings assumption over the trailing three year period. (10.56%) 2. The Total Plan return equaled or exceeded the 7.5%% actuarial earnings assumption over the trailing five year period. (12.98%) 3. The Total Plan return equaled or exceeded the total plan benchmark over the trailing three year period. (10.56% vs 10.15%) 4. The Total Plan return equaled or exceeded the total plan benchmark over the trailing five year period.(12.98% vs. 11.98%) 5. The Total Plan return ranked within the top 40th percentile of its peer group over the trailing three year period. (Actual 27th) 6. The Total Plan return ranked within the top 40th percentile of its peer group over the trailing five year period. (Actual 30th) Equity Compliance: Yes No NIA 1. Total equity returns meet or exceed the benchmark over the trailing three year period. (13.76% vs. 14.44%) 2. Total equity returns meet or exceed the benchmark over the trailing five year period. (17.45% vs. 17.77%) 3. The total equity allocation was less than 70% of the total plan assets at market. (65.20%) * All managers report compliance with PFIA. Fixed Income Compliance: Yes No N/A 1. Total fixed income returns meet or exceed the benchmark over the trailing three year period. (4.77% vs. 3.66%) 2. Total fixed income returns meet or exceed the benchmark over the trailing five year period. (7.26% vs. 4.85%) Yes No N/A Yes No N/A Yes No N/A Yes No N/A Yes No NIA 1. Manager outperformed the index over the trailing three and five year periods. 2. Manager ranked within the top 40th percentile over trailing three and five year periods. 3. Less than four consecutive quarters of under performance relative to the benchmark. 4. Three-year down-market capture ratio less than the index. �� TflrL 36 BOGD►AHN GRoup Report Statistics Definitions and Descriptions Active Return Arithmetic difference between the manager's performance and the designated benchmark return over a specified time period. Alpha A measure of the difference between a portfolio's actual performance and its expected return based on its level of risk as determined by beta. It determines the portfolio's non-systemic return,or its historical performance not explained by movements of the market. Beta A measure of the sensitivity of a portfolio to the movements in the market. It is a measure of the portfolio's systematic risk. Consistency The percentage of quarters that a product achieved a rate of return higher than that of its benchmark. Higher consistency indicates the manager has contributed more to the product's performance. Down Market Capture The ratio of average portfolio performance over the designated benchmark during periods of negative returns.A lower value indicates better product performance Downside Risk A measure similar to standard deviation that utilizes only the negative movements of the return series. It is calculated by taking the standard deviation of the negative quarterly set of returns.A higher factor is indicative of a riskier product. Excess Return Arithmetic difference between the manager's performance and the risk-free return over a specified time period. Excess Risk A measure of the standard deviation of a portfolio's performance relative to the risk free return. Information Ratio This calculates the value-added contribution of the manager and is derived by dividing the active rate of return of the portfolio by the tracking error.The higher the Information Ratio,the more the manager has added value to the portfolio. R-Squared The percentage of a portfolio's performance that can be explained by the behavior of the appropriate benchmark.A high R-Squared means the portfolio's performance has historically moved in the same direction as the appropriate benchmark. Return Compounded rate of return for the period. Sharpe Ratio Represents the excess rate of return over the risk free return divided by the standard deviation of the excess return.The result is an absolute rate of return per unit of risk.A higher value demonstrates better historical risk-adjusted performance. Standard Deviation A statistical measure of the range of a portfolio's performance. It represents the variability of returns around the average return over a specified time period. Tracking Error This is a measure of the standard deviation of a portfolio's returns in relation to the performance of its designated market benchmark. Treynor Ratio Similar to Sharpe ratio but utilizes beta rather than excess risk as determined by standard deviation. It is calculated by taking the excess rate of return above the risk free rate divided by beta to derive the absolute rate of return per unit of risk.A higher value indicates a product has achieved better historical risk-adjusted performance. Up Market Capture The ratio of average portfolio performance over the designated benchmark during periods of positive returns.A higher value indicates better product performance. THIS 37 B©GDAHN GROUP. Disclosures The Bogdahn Group compiled this report for the sole use of the client for which it was prepared. The Bogdahn Group is responsible for evaluating the performance results of the Total Fund along with the investment advisors by comparing their performance with indices and other related peer universe data that is deemed appropriate. The Bogdahn group uses the results from this evaluation to make observations and recommendations to the client. The Bogdahn Group uses time-weighted calculations which are founded on standards recommended by the CFA Institute. The calculations and values shown are based on information that is received from custodians. The Bogdahn Group analyzes transactions as indicated on the custodian statements and reviews the custodial market values of the portfolio. As a result,this provides The Bogdahn Group with a reasonable basis that the investment information presented is free from material misstatement. This methodology of evaluating and measuring performance provides The Bogdahn Group with a practical foundation for our observations and recommendations. Nothing came to our attention that would cause The Bogdahn Group to believe that the information presented is significantly misstated. The strategies listed may not be suitable for all investors. We believe the information provided here is reliable,but do not warrant its accuracy or completeness. Past performance is not an indication of future performance. Any information contained in this report is for informational purposes only and should not be construed to be an offer to buy or sell any securities, investment consulting,or investment management services. Additional information included in this document may contain data provided by from index databases, public economic sources and the managers themselves. This document may contain data provided by Barclays. Barclays Index data provided by way of Barclays Live. This document may contain data provided by Standard and Poor's. Nothing contained within any document,advertisement or presentation from S&P Indices constitutes an offer of services in jurisdictions where S&P Indices does not have the necessary licenses.All information provided by S&P Indices is impersonal and is not tailored to the needs of any person,entity or group of persons.Any returns or performance provided within any document is provided for illustrative purposes only and does not demonstrate actual performance. 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Div 38 B©GDAHN GROUP. r7THE � BOGDAHN GRoup si1►lpfifpif►q pollr if)vesinte►►l and fiduciary decisions Orlando 4901 Vineland Road, Suite 600 Orlando, Florida 32811 866.240.7932 Chicago I Milwaukee I Cleveland I Dallas City of Edgewater General Employees' Retirement Plan Investment Performance Review June 30 , 2014 THE BOGDAHN GRoup W W W.B O G D A H N G R O U P.C O M simplifying your in veshnent and fiduciarp decisions Asset Allocation Summary Total Fund As of June 30,2014 Asset Allocation By Segment as of Asset Allocation By Segment as of March 31,2014:$12,689,470 June 30,2014:$12,911,051 i Allocation Allocation Segments Market Value Allocation Segments Market Value Allocation Domestic Equity 6,391,535 50.4 Domestic Equity 6,468,895 50.1 International Equity 1,897,656 15.0 International Equity 1,894,508 14.7 M Domestic Fixed Income 4,136,029 32.6 M Domestic Fixed Income 3,995,302 30.9 Cash Equivalent 264,251 2.1 Cash Equivalent 552,346 4.3 Tt BOGDAHN GROUP. Asset Allocation Summary Total Fund As of June 30,2014 Asset Allocation By Manager as of Asset Allocation By Manager as of March 31,2014:$12,689,470 June 30,2014:$12,911,051 4 41 a+ Allocation Allocation Market Value Allocation Market Value Allocation • Integrity Fixed Income 4,260,997 33.6 ■ Integrity Fixed Income 4,119,488 31.9 Vanguard Extended Mkt Index(VEMSX) 2,175,858 17.1 Vanguard Extended Mkt Index(VEMSX) 2,188,372 16.9 • Wells Fargo Advantage Large Cap R6(EKJFX) 2,131,390 16.8 E Wells Fargo Advantage Large Cap R6(EKJFX) 2,142,732 16.6 Ridgeworth Large Cap Value(STVTX) 2,084,287 16.4 Ridgeworth Large Cap Value(STVTX) 2,137,791 16.6 • American Funds EuroPacific Gr R6(RERGX) 1,897,656 15.0 ■ American Funds EuroPacific Gr R6(RERGX) 1,894,508 14.7 • R&D 139,283 1.1 ■ R&D 428,160 3.3 THE BOGDAHN GROUP. Financial Reconciliation Total Fund As of June 30,2014 Financial Reconciliation Quarter to Date Market Value Net Management Other Apprec./ Market Value 0410112014 Transfers Contributions Distributions Fees Expenses Income Deprec. 0613012014 Total Domestic Equity 6,391,535 -176,921 254,280 6,468,895 Ridgeworth Large Cap Value(STVTX) 2,084,287 -58,974 112,477 2,137,791 Vanguard Extended Mkt Index(VEMSX) 2,175,858 -58,974 71,487 2,188,372 Wells Fargo Advantage Large Cap R6(EKJFX) 2,131,390 -58,974 70,316 2,142,732 Total International Equity 1,897,656 -58,974 55,826 1,894,508 American Funds EuroPacific Gr R6(RERGX) 1,897,656 -58,974 - - - 55,826 1,894,508 Total Fixed Income 4,260,997 -221,550 -2,649 -633 47,385 35,938 4,119,488 Integrity Fixed Income 4,260,997 -221,550 -2,649 -633 47,385 35,938 4,119,488 Vanguard Total Bond Mkt Idx Signal(VBTSX) - - - - - - - - - R&D 139,283 457,444 182,350 -338,779 - -12,140 2 - 428,160 Total Fund 12,689,470 - 182,350 -338,779 -2,649 -12,773 47,387 346,044 12,911,051 Financial Reconciliation Fiscal Year to Date Market Value Net Management Other Apprec./ Market Value 1010112013 Transfers Contributions Distributions Fees Expenses Income Deprec. 06/3012014 Total Domestic Equity 5,858,510 -252,449 271,001 591,832 6,468,895 Vanguard Total Stock Mkt Index Inst(VITSX) - - - - - Ridgeworth Large Cap Value(STVTX) 1,895,880 -84,150 247,333 78,727 2,137,791 Vanguard Extended Mkt Index(VEMSX) 1,974,417 -84,150 23,667 274,437 2,188,372 Wells Fargo Advantage Large Cap R6(EKJFX) 1,988,213 -84,150 - 238,669 2,142,732 Total International Equity 1,749,085 -58,974 23,319 181,078 1,894,508 American Funds EuroPacific Gr R6(RERGX) 1,749,085 -58,974 - - 23,319 181,078 1,894,508 Total Fixed Income 4,219,126 -288,704 -5,323 -1,262 152,504 43,148 4,119,488 Integrity Fixed Income 4,219,109 -288,687 -5,323 -1,262 152,504 43,148 4,119,488 Vanguard Total Bond Mkt Idx Signal(VBTSX) 17 -17 - - - - - - - R&D 300,001 600,126 514,221 -954,051 - -32,144 6 - 428,160 Total Fund 12,126,722 - 514,221 -954,051 -5,323 -33,406 446,830 816,058 12,911,051 Tt BOGDAHN GROUP. Edgewater General Employees' Retirement Plan Flash Report As of June 30,2014 Asset Allocation&Performance Allocation Performance(%) Market Value % MTH FYTD 1 YR 3 YR Total Fund 12,911,050.85 100.00 1.82 10.65 17.39 10.56 Total Equity 8,363,402.75 64.78 2.76 14.11 25.35 13.76 Total Equity Policy 2.31 16.03 24.51 14.44 Total Domestic Equity 6,468,894.69 50.10 3.30 14.83 26.24 15.62 Russell 3000 Index 2.51 17.75 25.22 16.46 IM U.S.All Cap Core Equity(SA+CF)Median N/A N/A N/A N/A Vanguard Extended Mkt Index(VEMSX) 2,188,372.03 16.95 4.45 15.22 26.98 N/A S&P Completion Index 4.45 15.20 26.89 15.92 IM U.S. SMID Cap Core Equity(MF)Median 4.30 14.03 23.95 13.68 Ridgeworth Large Cap Value(STVTX) 2,137,790.71 16.56 2.11 17.31 25.68 N/A Russell 1000 Value Index 2.61 19.12 23.81 16.92 IM U.S. Large Cap Value Equity(MF)Median 2.25 17.32 22.38 15.29 Wells Fargo Advantage Large Cap R6(EKJFX) 2,142,731.95 16.60 3.32 12.07 25.95 N/A Russell 1000 Growth Index 1.95 17.40 26.92 16.26 IM U.S. Large Cap Growth Equity(MF)Median 2.30 15.37 26.28 14.44 Total International Equity 1,894,508.06 14.67 0.95 11.67 22.34 6.88 Total International Policy 1.72 10.99 22.27 6.32 IM International Core Equity(SA+CF)Median N/A N/A N/A N/A American Funds EuroPacific Gr R6(RERGX) 1,894,508.06 14.67 0.95 11.68 22.35 N/A MSCI AC World ex USA 1.72 10.99 22.27 6.21 IM International Large Cap Growth Equity(MF)Median 1.30 9.63 19.72 6.33 Total Fixed Income 4,119,488.41 31.91 0.04 4.74 4.98 4.77 Total Fixed Income Policy 15 3.78 4.37 3.66 IM U.S. Broad Market Core Fixed Income(SA+CF)Median N/A N/A N/A N/A Integrity Fixed Income 4,119,488.41 31.91 0.04 4.74 5.03 N/A Barclays Aggregate Index 0.05 3.78 4.37 3.66 IM U.S. Broad Market Core Fixed Income(SA+CF)Median N/A N/A N/A N/A Tiie BOGDAHN GROUP. City of Edgewater General Employees' Retirement Plan Investment Performance Review July 31 , 2014 THE BOGDAHN GRoup W W W.B O G D A H N G R O U P.C O M simplifying your in veshnent and fiduciarp decisions Asset Allocation Summary Total Fund As of July 31,2014 Asset Allocation By Segment as of Asset Allocation By Segment as of April 30,2014:$12,564,723 July 31,2014:$12,610,899 1 1 tt Allocation Allocation Segments Market Value Allocation Segments Market Value Allocation Domestic Equity 6,296,563 50.1 Domestic Equity 6,300,487 50.0 International Equity 1,894,197 15.1 International Equity 1,855,753 14.7 M Domestic Fixed Income 4,160,669 33.1 M Domestic Fixed Income 3,888,537 30.8 Cash Equivalent 213,293 1.7 Cash Equivalent 566,122 4.5 Tt BOGDAHN GROUP. Asset Allocation Summary Total Fund As of July 31,2014 Asset Allocation By Manager as of Asset Allocation By Manager as of April 30,2014:$12,564,723 July 31,2014:$12,610,899 4 Allocation Allocation Market Value Allocation Market Value Allocation Integrity Fixed Income 4,225,959 33.6 Integrity Fixed Income 4,113,804 32.6 Vanguard Extended Mkt Index(VEMSX) 2,120,460 16.9 Wells Fargo Advantage Large Cap R6(EKJFX) 2,118,366 16.8 * Ridgeworth Large Cap Value(STVTX) 2,105,105 16.8 Vanguard Extended Mkt Index(VEMSX) 2,091,995 16.6 Wells Fargo Advantage Large Cap R6(EKJFX) 2,070,998 16.5 M Ridgeworth Large Cap Value(STVTX) 2,090,125 16.6 ■ American Funds EuroPacific Gr R6(RERGX) 1,894,197 15.1 ■ American Funds EuroPacific Gr R6(RERGX) 1,855,753 14.7 ■ R&D 148,004 1.2 ■ R&D 340,855 2.7 THE BOGDAHN GROUP. Financial Reconciliation Total Fund As of July 31,2014 Financial Reconciliation Quarter to Date Market Value Net Management Other Apprec./ Market Value 05/01/2014 Transfers Contributions Distributions Fees Expenses Income Deprec. 07/31/2014 Total Domestic Equity 6,296,563 -176,921 180,844 6,300,487 Ridgeworth Large Cap Value(STVTX) 2,105,105 -58,974 43,994 2,090,125 Vanguard Extended Mkt Index(VEMSX) 2,120,460 -58,974 30,508 2,091,995 Wells Fargo Advantage Large Cap R6(EKJFX) 2,070,998 -58,974 106,342 2,118,366 Total International Equity 1,894,197 -58,974 20,530 1,855,753 American Funds EuroPacific Gr R6(RERGX) 1,894,197 -58,974 - - - 20,530 1,855,753 Total Fixed Income 4,225,959 -157,263 -2,487 -643 47,637 602 4,113,804 Integrity Fixed Income 4,225,959 -157,263 -2,487 -643 47,637 602 4,113,804 Vanguard Total Bond Mkt Idx Signal(VBTSX) - - - - - - - - - R&D 148,004 393,157 169,303 -357,632 - -11,979 3 - 340,855 Total Fund 12,564,723 - 169,303 -357,632 -2,487 -12,623 47,639 201,976 12,610,899 Financial Reconciliation Fiscal Year to Date Market Value Net Management Other Apprec./ Market Value 1010112013 Transfers Contributions Distributions Fees Expenses Income Deprec. 0713112014 Total Domestic Equity 5,858,510 -252,449 - 271,001 423,424 6,300,487 Vanguard Total Stock Mkt Index Inst(VITSX) - - - - - Ridgeworth Large Cap Value(STVTX) 1,895,880 -84,150 247,333 31,061 2,090,125 Vanguard Extended Mkt Index(VEMSX) 1,974,417 -84,150 23,667 178,060 2,091,995 Wells Fargo Advantage Large Cap R6(EKJFX) 1,988,213 -84,150 - 214,303 2,118,366 Total International Equity 1,749,085 -58,974 23,319 142,324 1,855,753 American Funds EuroPacific Gr R6(RERGX) 1,749,085 -58,974 - - 23,319 142,324 1,855,753 Total Fixed Income 4,219,126 -288,704 -7,810 -1,905 168,063 25,034 4,113,804 Integrity Fixed Income 4,219,109 -288,687 -7,810 -1,905 168,063 25,034 4,113,804 Vanguard Total Bond Mkt Idx Signal(VBTSX) 17 -17 - - - - - - R&D 300,001 600,126 559,880 -1,075,037 - -44,123 8 - 340,855 Total Fund 12,126,722 - 559,880 -1,075,037 -7,810 -46,029 462,391 590,782 12,610,899 THE BOGDAHN GROUP. Edgewater General Employees' Retirement Plan Flash Report As of July 31,2014 Asset Allocation&Performance Allocation Performance(%) Market Value % MTH FYTD 1 YR 3 YR Total Fund 12,610,899.45 100.00 -1.64 8.84 11.43 10.20 -1.13 Total Equity 8,156,240.13 64.68 -2.48 11.28 15.27 13.92 Total Equity Policy -1.72 14.04 16.30 14.62 Total Domestic Equity 6,300,486.75 49.96 -2.60 11.84 15.34 15.84 Russell 3000 Index -1.97 15.42 16.37 16.58 IM U.S.All Cap Core Equity(SA+CF)Median N/A N/A N/A N/A Vanguard Extended Mkt Index(VEMSX) 2,091,994.94 16.59 -4.40 10.15 13.47 N/A S&P Completion Index -4.43 10.10 13.39 15.41 IM U.S. SMID Cap Core Equity(MF)Median -5.13 8.46 10.66 13.14 Ridgeworth Large Cap Value(STVTX) 2,090,125.37 16.57 -2.23 14.69 16.23 N/A Russell 1000 Value Index -1.70 17.09 15.47 17.56 IM U.S. Large Cap Value Equity(MF)Median -1.66 15.45 14.56 16.05 Wells Fargo Advantage Large Cap R6(EKJFX) 2,118,366.44 16.80 -1.14 10.79 16.28 N/A Russell 1000 Growth Index -1.53 15.60 18.69 16.05 IM U.S. Large Cap Growth Equity(MF)Median -1.29 13.79 18.15 14.37 Total International Equity 1,855,753.38 14.72 -2.05 9.40 14.98 6.76 Total International Policy -0.97 9.91 15.98 6.54 IM International Core Equity(SA+CF)Median N/A N/A N/A N/A American Funds EuroPacific Gr R6(RERGX) 1,855,753.38 14.72 -2.05 9.40 14.98 N/A MSCI AC World ex USA -0.97 9.91 15.98 6.34 IM International Large Cap Growth Equity(MF)Median -2.07 7.79 11.70 6.62 Total Fixed Income 4,113,803.99 32.62 -0.06 4.68 5.11 4.18 Total Fixed Income Policy -0.25 3.52 3.97 3.04 IM U.S. Broad Market Core Fixed Income(SA+CF)Median N/A N/A N/A N/A Integrity Fixed Income 4,113,803.99 32.62 -0.06 4.68 5.17 N/A Barclays Aggregate Index -0.25 3.52 3.97 3.04 IM U.S. Broad Market Core Fixed Income(SA+CF)Median N/A N/A N/A N/A Tiie BOGDAHN GROUP. 104 N. Riverside Drive City of Edgewater Edgewater, FL 32132 EDGEWATER Legislation Text File M AR-2014-302, Version: 1 AGENDA ITEM SUBJECT: Christiansen& Dehner, H. Lee Dehner, Plan Attorney Board transition from seven Trustees to fire Trustees. DEPARTMENT: SUMMARY: BUDGETED ITEM: ❑ Yes ❑ No ❑ Not Applicable BUDGET AMENDMENT REQUIRED: ❑ Yes ❑ No ❑ Not Applicable RECOMMENDED ACTION: None. City of Edgewater Page 1 of 1 Printed on 9/9/2014 powered by LegistarT" 104 N. Riverside Drive City of Edgewater Edgewater, FL 32132 EDGEWATER Legislation Text File M AR-2014-304, Version: 1 AGENDA ITEM SUBJECT: Salem Trust, custodian fees for April 1, 2014 through June 30, 2014, - $1,286.96 Fee will automatically be charged to the account. DEPARTMENT: SUMMARY: BUDGETED ITEM: ❑ Yes ❑ No ❑ Not Applicable BUDGET AMENDMENT REQUIRED: ❑ Yes ❑ No ❑ Not Applicable RECOMMENDED ACTION: Approval of invoice as presented. City of Edgewater Page 1 of 1 Printed on 9/9/2014 powered by LegistarT" SALEM TRUST C 0 M P A N Y July 15, 2014 Foster& Foster Edgewater General 13420 Parker Commons Blvd., Suite 104 Fort Myers, FL 33912 Fee Advice for Period April 1, 2014 to June 30, 2014 Total Market Value for Fund: $ 12,869,586.41 Detail of Calculation: Pro-Rated Market Value Basis Point Rate Annual Fee Quarterly Fee 12,869,586.41 0.0004 $ 5,147.83 $1,286.96 Total Amount Due $1,286.96 These fees will automatically be charged to your account. If you have any questions, please contact Brian Bizzell at 877-382-5268. DEERFIELD BEACH TAMPA 1715 N.WESTSHORE BLVD.,SUITE 750 TAMPA,PL 33607 TEL(877)382-5268 FAX(813)301-1295 www.salem trus t.com 104 N. Riverside Drive City of Edgewater Edgewater, FL 32132 EDGEWATER Legislation Text File M AR-2014-306, Version: 1 AGENDA ITEM SUBJECT: Integrity Fixed Income Management, LLC, management fees for quarter ending June 30, 2014, invoice 1820 - $2,657.57 DEPARTMENT: SUMMARY: BUDGETED ITEM: ❑ Yes ❑ No ❑ Not Applicable BUDGET AMENDMENT REQUIRED: ❑ Yes ❑ No ❑ Not Applicable RECOMMENDED ACTION: Approval of invoice as presented. City of Edgewater Page 1 of 1 Printed on 9/9/2014 powered by LegistarT" Integrity Fixed Income Management, LLC Invoice 651 Bryn Mawr Street Orlando, FL 32804 (407)481-2403 The City of Edgewater General Employees Pension Plan Attn: Julie Christine P.O. Box 100 Edgewater, Fl 32132 Invoice#1820 7/11/2014 Core Bond Portfolio Statement of Management Fees For Quarter Ended June 30,2014 #of Days % of Prorated Date Portfolio Value Annual Fee Quarterly Fee Prorated Quarter Fee 4/8/2014 $4,205,227 $10,513.07 $2,628.27 7 7.8% 204.42 6/1/2014 $4,274,496 $10,686.24 $2,671.56 54 60.0% 1,602.94 6/29/2014 $4,225,462 $10,563.65 $2,640.91 28 31.1% 821.62 6/30/2014 $4,118,110 $10,295.27 $2,573.82 1 1.1% 28.60 90 100.0% $2,657.57 Annual Fee Schedule 0.25%on balance Quarterly Management Fee Due 2,657.57 104 N. Riverside Drive City of Edgewater Edgewater, FL 32132 EDGEWATER Legislation Text File M AR-2014-307, Version: 1 AGENDA ITEM SUBJECT: Christiansen& Dehner,professional legal fees as of June 30, 2014,invoice 24963 - $1,499.65 DEPARTMENT: SUMMARY: BUDGETED ITEM: ❑ Yes ❑ No ❑ Not Applicable BUDGET AMENDMENT REQUIRED: ❑ Yes ❑ No ❑ Not Applicable RECOMMENDED ACTION: Approval of invoice as presented. City of Edgewater Page 1 of 1 Printed on 9/9/2014 powered by LegistarT" Christiansen & Dehner, P. A. 63 Sarasota Center Boulevard Suite 107 Sarasota, FL 34240- 941-377-2200 941-377-4848 Phone Fax June 30, 2014 City of Edgewater General Employees' Pension Plan C/O Foster & Foster, Plan Administrator 13420 Parker Commons Blvd, #104 Fort Myers, FL 33912 Attn: Ferrell Jenne Invoice Number In Reference To: Edgewater General Employee's 0615 24963 Pension Plan Professional Services Hours Amount 6/11/2014 Preparation of Records Management Liaison Officer (RMLO) Resolution and 0.60 219.00 transmittal to Board; final revisions to Operating Rules and transmittal to F. Jenne. 6/16/2014 Preparation and attendance at Board Meeting. 1.20 438.00 Travel Time 2.50 456.25 6/17/2014 Final change to Operating Rules and transmittal to F. Jenne. 0.10 36.50 6/23/2014 Preparation and attendance at Board Meeting by phone. 0.60 219.00 For professional services rendered 5.00 $1,368.75 Additional Charges Qty 6/11/2014 Copies 30 7.50 Postage 1 2.45 6/16/2014 Car Expense 1 78.96 Food Expense 1 13.25 Hotel Charge 1 28.74 Total additional charges $130.90 Total amount of this bill $1,499.65 Previous balance $2,866.06 City of Edgewater General Employees' Pension Plan June 30, 2014 Amount Accounts receivable transactions 7/9/2014 Payment-thank you. Check No. 10026 ($1,090.28) Total payments and adjustments ($1,090.28) Balance due $3,275.43 ** Please note that the "Balance Due" figure at the end of this bill reflects both "Total New Charges -Current Period" and any previous balances due. In most cases, if the previous balance(s) have already been approved for payment but not yet received in our office, you should be paying only the "Total New Charges -for services and/or expenses" . Thank you. Please indicate account number(s) with payment. (Please Deduct any payments not reflected in Balance due) 104 N. Riverside Drive City of Edgewater Edgewater, FL 32132 EDGEWATER Legislation Text File M AR-2014-308, Version: 1 AGENDA ITEM SUBJECT: Christiansen& Dehner,professional legal fees as of July 31, 2014,invoice 25106 - $151.60 DEPARTMENT: SUMMARY: BUDGETED ITEM: ❑ Yes ❑ No ❑ Not Applicable BUDGET AMENDMENT REQUIRED: ❑ Yes ❑ No ❑ Not Applicable RECOMMENDED ACTION: Approval of invoice as presented. City of Edgewater Page 1 of 1 Printed on 9/9/2014 powered by LegistarT" Christiansen & Dehner, P. A. 63 Sarasota Center Boulevard Suite 107 Sarasota, FL 34240- 941-377-2200 941-377-4848 Phone Fax July 31, 2014 City of Edgewater General Employees' Pension Plan C/O Foster & Foster, Plan Administrator 13420 Parker Commons Blvd, #104 Fort Myers, FL 33912 Attn: Ferrell Jenne Invoice Number In Reference To: Edgewater General Employee's 0615 25106 Pension Plan Professional Services Hours Amount 7/21/2014 Review document and telephone conference with F. Jenne. 0.20 75.80 7/22/2014 Review e-mail and telephone conference with Ferrell. 0.20 75.80 For professional services rendered 0.40 $151.60 Previous balance $3,275.43 Balance due $3,427.03 ** Please note that the "Balance Due" figure at the end of this bill reflects both "Total New Charges -Current Period" and any previous balances due. In most cases, if the previous balance(s) have already been approved for payment but not yet received in our office, you should be paying only the "Total New Charges -for services and/or expenses" . Thank you. Current 30 Days 60 Days 90 Days 120+ Days $1,651.25 $1,775.78 $0.00 $0.00 $0.00 Please indicate account number(s) with payment. (Please Deduct any payments not reflected in Balance due) 104 N. Riverside Drive City of Edgewater Edgewater, FL 32132 EDGE4VATER Legislation Text File M AR-2014-309, Version: 1 AGENDA ITEM SUBJECT: The Bogdahn Group, performance evaluation and consulting services from July 1, 2014 through September 30, 2014 - $3,625.00 DEPARTMENT: SUMMARY: BUDGETED ITEM: ❑ Yes ❑ No ❑ Not Applicable BUDGET AMENDMENT REQUIRED: ❑ Yes ❑ No ❑ Not Applicable RECOMMENDED ACTION: Approval of invoice as presented. City of Edgewater Page 1 of 1 Printed on 9/9/2014 powered by LegistarTM THE Invoice BOGDAHN GRoup Date Invoice # 9/8/2014 10778 4901 Vineland Rd Suite 600 Orlando, FL 32811 Bill To Edgewater General Employee Pension Plan email - Att: Ferrell Jenne Description Amount Performance Evaluation for 6/30/14 Reports and Consulting 3,625.00 Services through 9/30/14 7/1/14 - 9/30/14 Balance Due $31625.00 104 N. Riverside Drive City of Edgewater Edgewater, FL 32132 EDGEWATER Legislation Text File #: AR-2014-310, Version: 1 AGENDA ITEM SUBJECT: Foster and Foster, plan administration services,invoice 6394 - $4,923.59 DEPARTMENT: SUMMARY: BUDGETED ITEM: ❑ Yes ❑ No ❑ Not Applicable BUDGET AMENDMENT REQUIRED: ❑ Yes ❑ No ❑ Not Applicable RECOMMENDED ACTION: Approve invoice as presented. City of Edgewater Page 1 of 1 Printed on 9/9/2014 powered by LegistarT" FOSTER & FOSTER Invoice ACTUARIES AND CONSULTANTS Date • 9/9/2014 6394 Phone: (239) 433-5500 Fax: (239) 481-0634 data @foster-foster.com www.foster-foster.com City of Edgewater General Employee's Pension Fund c/o Foster&Foster, Inc. 13420 Parker Commons Blvd., Ste.104 Terms Due Date Fort Myers, FL 33912 Net 30 10/9/2014 Descriiption Amount Plan Administration services for the month of July 2014. 1,563.42 Plan Administration services for the month of August 2014. 1,563.42 Plan Administration services for the month of September 2014. 1,641.59 Attendance at June 23, 2014 special Board meeting (via conference call). 37.50 Attendance at June 16, 2014 Board meeting (out-of-pocket expenses only). 117.66 Balance Due 549923.59 Thank you for your business! Please make all checks payable to: Foster & Foster, Inc. 13420 Parker Commons Blvd, Suite 104 Fort Myers, FL 33912 104 N. Riverside Drive City of Edgewater Edgewater, FL 32132 EDGEWATER Legislation Text File M AR-2014-316, Version: 1 AGENDA ITEM SUBJECT: Foster and Foster, actuarial consulting services,invoice 6367 - $800.00 DEPARTMENT: SUMMARY: BUDGETED ITEM: ❑ Yes ❑ No ❑ Not Applicable BUDGET AMENDMENT REQUIRED: ❑ Yes ❑ No ❑ Not Applicable RECOMMENDED ACTION: Accept invoice as presented. City of Edgewater Page 1 of 1 Printed on 9/9/2014 powered by LegistarT" FOSTER & FOSTER Invoice ACTUARIES AND CONSULTANTS Date • 9/3/2014 6367 Phone: (239) 433-5500 Fax: (239) 481-0634 data @foster-foster.com www.foster-foster.com City of Edgewater General Employee's Pension Fund c/o Foster&Foster, Inc. 13420 Parker Commons Blvd., Ste.104 Terms Due Date Fort Myers, FL 33912 Net 30 10/3/2014 Descniption Amount Benefit Calculations: POLIZZI, MCGRATH(2), REED 800.00 Balance Due 5800.00 Thank you for your business! Please make all checks payable to: Foster & Foster, Inc. 13420 Parker Commons Blvd, Suite 104 Fort Myers, FL 33912 104 N. Riverside Drive City of Edgewater Edgewater, FL 32132 EDGEWATER Legislation Text File M AR-2014-311 , Version: 1 AGENDA ITEM SUBJECT: R. Reed-Modified cash refund of $11,128.14 with a monthIv benefit of $1,541.65 effective May 1, 2014, for Retiree's lifetime onhr. DEPARTMENT: SUMMARY: Lump sum distribution was paid out July 16, 2014 and benefit payments started on July 1, 2014. BUDGETED ITEM: ❑ Yes ❑ No ❑ Not Applicable BUDGET AMENDMENT REQUIRED: ❑ Yes ❑ No ❑ Not Applicable RECOMMENDED ACTION: No action needed. City of Edgewater Page 1 of 1 Printed on 9/9/2014 powered by LegistarT" 104 N. Riverside Drive City of Edgewater Edgewater, FL 32132 EDGEWATER Legislation Text File M AR-2014-312, Version: 1 AGENDA ITEM SUBJECT: W. Martin- monthly benefit of$1,233.54, effectiN e July 1, 2014. DEPARTMENT: SUMMARY: Joint Annuitant of James Martin who chose 100% continued to Joint Annuitant. BUDGETED ITEM: ❑ Yes ❑ No ❑ Not Applicable BUDGET AMENDMENT REQUIRED: ❑ Yes ❑ No ❑ Not Applicable RECOMMENDED ACTION: No action required. City of Edgewater Page 1 of 1 Printed on 9/9/2014 powered by LegistarT" 104 N. Riverside Drive City of Edgewater Edgewater, FL 32132 EDGEWATER Legislation Text File M AR-2014-313, Version: 1 AGENDA ITEM SUBJECT: Ferrell Jenne, Plan Administrator Update on Fiduciary-Liability-Insurance Update on first reading of proposed Ordinance 2014-0-21 DEPARTMENT: SUMMARY: BUDGETED ITEM: ❑ Yes ❑ No ❑ Not Applicable BUDGET AMENDMENT REQUIRED: ❑ Yes ❑ No ❑ Not Applicable RECOMMENDED ACTION: No action required. City of Edgewater Page 1 of 1 Printed on 9/9/2014 powered by LegistarT" FOSTER & FOSTER '09d September 8, 2014 VIA E-MAIL CONFIDENTIAL Ms. Ferrell Jenne Lead Plan Administrator Foster& Foster, Inc. 13420 Parker Commons Blvd. Fort Myers, FL 33912 Re: City of Edgewater General Employees' Retirement Plan Dear Ferrell: We have reviewed Ordinance 2014-0-21 amending Plan provisions regarding Board composition, and have determined that adoption of these changes will have no impact on the assumptions used in determining the funding requirements of the program. Because the changes do not result in a change in the valuation results, it is our opinion that a formal Actuarial Impact Statement is not required in support of its adoption. However, since the Division of Retirement must be aware of the current provisions of all public pension programs, it is recommended that you send a copy of this letter and a copy of the fully executed Ordinance to each of the following offices: Mr. Keith Brinkman Bureau of Local Retirement Systems Division of Retirement P. O. Box 9000 Tallahassee, FL 32315-9000 If you have any questions, please let me know. Sincerely, Douglas . Lozen, EA, MAAA cc: H. Lee Delmer, Board Attorney 13420 Parker Commons Blvd.,Suite 104 Fort Myers, FL 33912 • (239)433-5500 • Fax(239)481-0634 www.foster-foster.com Law Offices Christiansen & Dehner9 P.A. 63 Sarasota Center Blvd. Suite 107 Sarasota,Florida 34240 • 941-377-2200•Fax 941-377-4848 MEMORANDUM TO: City of FAgewater General Employees' Pension Plan ]FROM: Kristin Kill RE: Proposed 2015 Meeting Dates DATE: September 1, 2014 Listed below are the proposed 2015 meeting dates based on the previous year's schedules. Should they meet with the Board's approval, please let us know and we will put them on our calendar. Should there be any discrepancies with any of the dates and/or thins, please do not hesitate to contact Kristin at the office, via phone at 941-377-2200 or E-Mail at kristin@a)cdpension_co1A and we will do the best we can to comply with your requests. ALL MEETINGS WILL BE NF:i 17 AT 11,0OAM: March 16, 2015 June 15, 2015 September 14,2015 December 14,2015 Thank you.