miami beach employees’retirement plan of …...a motion was made by m. sinkes duly seconded by mr...

MIAMI BEACH EMPLOYEES’RETIREMENT PLAN OF THE CITY OF MIAMI BEACH PENSION BOARD MEETING Tuesday, April 9, 2019 10:00 a.m. CITY HALL Pension Office Conference Room BOARD OF TRUSTEES James Boyd Lynn Bernstein Jason Casanova Jose Del Risco Ray Horday Jonathan Sinkes Mark Taxis Manny Villar Jr. John Woodruff CONSENT AGENDA PAGE C-1 Minutes for approval – March 12, 2019 4 C-2 New Members of the System – 9 Carlos Naumann Ralph Martinez Aaron Casabone Allison Novack Rickie Bruton Jonathan Jones Darwin Chacon Yanko Ojeda Jhohan Gallo Ariel Guitian C-3 New Retirees – 10 Noel Socorro C-4 New Pensioners – (None) C-5 Request for Lump Sum Refunds – 11 Mercedes Moreno Alberto Ruiz Jr. Nashely Mendoza Claudia Rodriguez David Diaz Herbert Jimenez C-6 Request for Accumulated Contribution Refund For a Named Beneficiary – (None) C-7 Purchase of Creditable Service Time – (None) C-8 New DROP applicants – 17 Juan Bistolfi Manuel Lago Shawnnee Coney

CONSENT AGENDA April 9, 2019 C-9 Lump Sum Refunds Paid since last meeting – 20 Natalie Lopez Elias Galvan De Lima Darrell Finley Ian Fors Alejandro Cosano Sean Copeland C-10 Financial Reports

a. Pension Payroll for April 1, 2019 – $3,742,780 b. DROP Payroll for April 1, 2018 - $394,809.49 c. Bank reconciliation for January 2019 – 21

C-11 Requests for Payment – April 2019 Legal Amount Pg. # Legal Services - KKJ&L $ 5,000.00 22 for the month of April 2019 Bookkeeping Joan Wall- Bookkeeping For the month of April 2019 $ 350.00 24 Auditors Marcum LLP- External Audit Fees Progress bill for audit of Retirement Plan fiscal year ending Sept 30, 2018 Inv# 101276861 dated 3/31/2019 $ 8,600.00 25 Computer Consultant Pension Technology Group Pension Pro, Inv #1913 Dated: 4/1/2019 $ 6,000.00 27 Office etc Sharp Electronics Corporation For the month of April 2019 Invoice # 9001852138 dated 4/02/2019 $ 136.13 29 Quench USA Inc : Water System Acct # D303087 Inv# INV01690713 Month of March 2019 $ 34.99 31 Inv# INV01727201 Month of April 2019 $ 34.99 33 Central Services Inv#19642 Date 4/4/19 Month- March 2019 $ 601.38 34

CONSENT AGENDA April 9, 2019 C-11 Requests for Payment – April 2019 - Continued Money Managers Fees Rhumbline Advisers fee SP500P, SP400P, SP600P, CBOND-P Inv# gmbeach2019Q1 date 4/4/2019 $ 15,528.00 36 Wellington Trust Co Client ID# 4V55, Inv# 20190331-97388-A $ 87,514.26 38 C-12 Conv/Seminars/Dues/Etc American Express: $ 1,995.00 41 IN ACCORDANCE WITH THE AMERICANS WITH DISABILITY ACT OF 1990, PERSONS NEEDING A SPECIAL ACCOMMODATION TO PARTICIPATE IN THIS PROCEEDING SHOULD CONTACT THE PENSION OFFICE NO LATER THAN FOUR DAYS PRIOR TO THE PROCEEDING. TELEPHONE (305) 673-7437 FOR ASSISTANCE; IF HEARING IMPAIRED, TELEPHONE THE FLORIDA RELAY SERVICE NUMBERS (800) 955-8771 (TDD) OR (800) 955-8770 (VOICE), FOR ASSISTANCE. IF A PERSON DECIDES TO APPEAL ANY DECISION MADE BY THE BOARD WITH RESPECT TO ANY MATTER CONSIDERED A THIS MEETING, HE WILL NEED A RECORD OF THE PROCEEDINGS, AND FOR SUCH PURPOSE HE MAY NEED TO ENSURE THAT A VERBATIM RECORD OF THE PROCEEDING IS MADE WHICH RECORD INCLUDES THE TESTIMONY AND EVIDENCE UPON WHICH THE APPEAL IS TO BE BASED. FLORIDA STATUTES 286.0105 THIS MEETING MAY BE CONDUCTED BY MEANS OF OR IN CONJUNCTION WITH COMMUNICATIONS MEDIA TECHNOLOGY, SPECIFICALLY A TELEPHONE CONFERENCE CALL. THE ABOVE LOCATION, WHICH IS ORDINARILY OPEN TO THE PUBLIC, SHALL SERVE AS AN ACCESS POINT. PERSONS WISHING TO ATTEND SHOULD APPEAR AT THE ACCESS POINT, WHERE TELEPHONIC ACCESS TO THE MEETING WILL BE PROVIDED.

MINUTES OF THE MEETING OF THE BOARD OF TRUSTEES OF THE MIAMI BEACH EMPLOYEES’ RETIREMENT PLAN

OF THE CITY OF MIAMI BEACH March 12, 2019

Chairman Boyd called the meeting to order at 10:05 a.m. Board Members present were as follows: James Boyd Lynn Bernstein Jose Del Risco Ray Horday Jonathan Sinkes Mark Taxis Manny Villar Jr. John Woodruff Members absent – Jason Casanova Also present were:

Rick Rivera Pension Administrator Sandra Sicily Assistant Pension Administrator Robert Klausner Board Attorney, Klausner & Kaufman Amada Gonzalez City of Miami Beach employee Moises Ariza Senior Manager, Marcum LLP Michael Futterman Partner-in-charge, Miami Office, Marcum LLP Melissa Moskovitz Fund Actuary, Gabriel Roeder Smith Bill Cottle* Fund Consultant, Milliman Inc.

* Via conference call

CONSENT AGENDA The Administrator requested the addition of one (1) addendum to the Consent Agenda for item C-8, New DROP applicants, on behalf of Christopher Hipskind. A motion was made by Mr. Sinkes duly seconded by Ms. Bernstein and unanimously RESOLVED that one (1) addendum to the Consent Agenda for item C-8,

New DROP applicants, on behalf of Christopher Hipskind be added to the Consent Agenda as presented.

A motion was made by Ms. Bernstein duly seconded by Mr. Woodruff and unanimously RESOLVED that the Consent Agenda be approved as amended. C-1 Board Minutes approved – February 12, 2019 C-2 New Members of the System were approved as follows – Emp Id Last Name First Name Start

Date Job Title Hire Date

23107 RAHMINGS VIRGIL 2/4/2019 PUMPING MECHANIC 8/6/2018

23109 MORALES ARIEL 2/4/2019 PROP.& EVIDENCE TECH I 8/6/2018

23272 RATTIGAN RENNE 2/4/2019 OFFICE ASSOCIATE III 2/4/2019

PENSION BOARD MINUTES March 12, 2019 Page 2 C-3 New Retiree Allowances were approved as follows –

Name Date Retirement Type Monthly Amount

Michelot Pierre 4/1/2019 Joint Service Ret. (67%J&S) $513.89 C-4 New Pensioner Allowances were approved as follows –

Date of

Dependent

Name Retirement Ret._Type Upon Amount

Eunice Halfhill 02/01/2019 50% J&S Robert Halfhill $ 1,508.49 C-5 Requests for Lump Sum Refunds were approved as follows – Name Separation Date Gross Amount YCS Alejandro Cosano February 20, 2019 $ 2,642.46 .44 Ian Fors February 23, 2019 $ 6,565.76 1.08 Andrew Yanes February 27, 2019 $ 19,625.44 3.96 Sean Copeland March 2, 2019 $ 69,880.30 16.48 Ellias Galvan De Lima January 18, 2019 $ 16,457.22 2.30 Darrell Finley March 8, 2019 $ 13,724.90 3.17 C-6 Request for Accumulated Contribution Refund for a Named Beneficiary was approved as follows – (None) C-7 Purchases of Creditable Service Time were approved as follows – Name Contract Date Amount Hours used YCS Purch. Clarise Ferguson 02/22/2019 $4,623.88 85.48hrs .49 ycs C-8 DROP applicants were approved as follows –

Name Effective Estimated Benefit Last DROP Pmt.

Glassome Wint 03/01/2019 $4,274.01 2/01/2024 Christopher Hipskind 03/01/2019 $5,696.66 2/01/2024 C-9 Lump Sum Refunds paid since the last meeting were approved as follows – Check Date Name gross withholding check #

2/04/2019 Yenerys Orta $ 7,075.53 $1,415.11 117072 2/22/2019 Victor Sanchez $ 3,967.99 $ 793.60 117099 2/22/2019 Maggie Brown $16,669.52 $3,333.90 117101 2/22/2019 Jorge Regalado $11,921.15 $2,384.23 117102 2/22/2019 Noel Sutherland $ 9,398.75 $1,879.75 117103 C-10 The Financial Reports were approved as presented.

PENSION BOARD MINUTES March 12, 2019 Page 3 C-11 Requests for Payment were approved as presented - Legal Amount

Legal Services - KKJ&L $5,000.00

for the month of March 2019 Bookkeeping Joan Wall- Bookkeeping For the month of March 2019 $350.00

Auditors Marcum LLP- External Audit Fees Progress bill for audit of Retirement

Plan fiscal year ending Sept 30, 2018 Inv# 101268516 dated 2/28/2019 $2,010.00

Computer Consultant Ellen Schaffer- for Munis Annual support fee for ODBC Driver to

Enable Excel & Access Queries Inv # 3178 Date: 2/11/2019 $91.00

Office etc Sharp Electronics Corporation For the month of March 2019 Invoice # 9001771059 dated 3/03/2019 $136.13

Quench USA Inc : Water System Acct # D303087 Inv# INV01628632 Month of February 2019 $34.99

American Express-office supplies $49.99

Central Services Date Range: 11/2017 - 02/2019 $18,186.14

Investment Custody Fees - Fiduciary Trust International Quarterly Custody Fee- For Miami Beach Gen -Fund Custody Fee for Acct# GP451022720, Inv#S14800673797 $838.62

C-12 Conv/Seminars/Dues/Etc American Express: $7,793.15

FPPTA Conference Reimbursement: J. Woodruff $789.28

PENSION BOARD MINUTES March 12, 2019 Page 4

REGULAR AGENDA R-1 Deferred Items –

A. Sugarman & Susskind demand letter Re: Amada Gonzalez – The Administrator said that Human Resources Director Michael Smith had updated him regarding Ms. Gonzalez’s case. He said that Mr. Smith had provided the City’s legal counsel a draft letter and is pending their review and response to the draft.

R-2 New Items –

A. Presentation of the 9/30/2018 Financial Statements by Marcum LLC. – Michael Futterman, Senior Partner, and Moises Ariza, Audit Manager, reviewed the draft copy of the fiscal year’s financial statements dated September 30, 2018. Mr. Ariza reviewed the financial statements including the Independent Auditor’s report, management’s discussion and analysis, required supplementary information and GASB 72 disclosures. Mr. Ariza stated that Marcum LLP had issued a clean opinion which meant that the financial statements present fairly, in all material aspects, the respective financial position of the Plan as of September 30, 2018. Mr. Ariza reminded the Board that this was the last year of a three (3) year engagement and distributed a new engagement letter for the Board to consider. The Administrator distributed a detail of Marcum’s historical fees charged to MBERP. Mr. Woodruff requested that this matter be deferred until next month since the Engagement Letter had not been placed on the Board Agenda as a new item. A motion was made by Mr. Taxis duly seconded by Mr. Del Risco, and with all in favor, it was unanimously

RESOLVED that the Plan’s financial statements dated September

30, 2018 be accepted as presented.

B. Presentation of Experience Study by GRS – Ms. Moskovitz reviewed the experience investigation report for the seven (7) years ended 9/30/2017. Ms. Moskovitz stated that the Board had set a Plan in place to lower the investment assumption to 7.40% by October 1, 2020. A discussion ensued A motion was made by Mr. Woodruff duly seconded by Mr. Del Risco, and with all in favor, it was unanimously

RESOLVED that the Plan’s previous resolution to lower the

actuarial assumption to 7.4% by the October 1, 2020 valuation be re-affirmed.

PENSION BOARD MINUTES March 12, 2019 Page 5

Ms. Moskovitz reviewed the summary of findings which included several recommendations including updating the future salary increase assumption to reflect lower than expected real salary increases, update assumed future retirement rates to reflect generally higher observed retirement experience than expected and update assumed rates of future separation from employment to reflect generally higher than expected separation experience. Ms. Moskovitz said that the combined effect of all the assumption changes not including changes to the investment rate of return assumption or changes to the amortization period was a savings of approximately $(1.1) million or -1.22% of covered payroll. A motion was made by Mr. Woodruff duly seconded by Mr. Del Risco, and with all in favor, it was unanimously

RESOLVED that the assumption changes recommended by the

actuary described above except the lowering of the Plan’s investment return assumption beyond its current schedule of 7.4% by October 1, 2020 be approved as presented.

Ms. Moskovitz went over the amortization period for payment of UAAL from the Experience Investigation report. She said she recommended lowering the amortization period used for new Unfunded Actuarial Accrued Liability (UAAL) bases by one or two years in each future year until the amortization period for new bases is 20 years. A discussion ensued. A motion was made by Mr. Del Risco duly seconded by Mr. Sinkes, and with all in favor, it was unanimously

RESOLVED that the UAAL amortization period be lowered to 29

years for future years as well as any existing bases that have more than 29 years remaining in their period.

R-3 Administrator’s Report

There was no new information at this time. R-4 For Your Information

Chairman Boyd and Mr. Klausner reviewed for your information.

There being no further business to discuss, a motion was made by Mr. Taxis duly seconded by Mr. Del Risco and unanimously

Resolved that the meeting be adjourned. The meeting was

adjourned at 11:30 a.m. ______________________ ___________________________ James W. Boyd, Chairman Jose Del Risco, Secretary

NEW MEMBERS FOR APRIL 9TH AGENDAEmp Id Last Name First Name Start Date Job Title Union Hire Date

20339 NAUMANN CARLOS 2/18/2019 CONTRACTS COMP ADMINISTRATOR CUNC 2/19/201923322 CASABONE AARON 3/12/2019 MEDIA ASSISTANT CUNC 3/12/201923174 BRUTON RICKIE 3/18/2019 MSW I CAFC 9/10/201821212 CHACON DARWIN 3/18/2019 RECREATION LEADER I CAFC 6/6/201622778 GALLO JHOJAN 3/18/2019 PARK RANGER COTH 10/30/201723334 GUITIAN ARIEL 3/18/2019 SR CAP PROJ COORD CUNC 3/18/201923270 MARTINEZ RALPH 3/18/2019 ECONOMIC DEVELOPMENT DIRECTOR CUNC 3/18/201923333 NOVACK ALLISON 3/18/2019 COMMUNITY INFO MANAGER CUNC 3/18/201923168 JONES JOHNATHON 3/4/2019 MSW I CAFC 9/4/201823320 OJEDA YANKO 3/4/2019 SR SYSTEMS ANALYST CUNC 3/4/2019

4/5/2019 8:08:31 AM

Ordinance No. 2015-3946 NEW RETIREE NAME: Noel Socorro DATE OF BIRTH: October 7, 1960 CLASSIFICATION: Heavy Equipment Operator I DEPARTMENT: Public Works - Streets TERMINATION DATE: November 2, 2018 BENEFITS TO COMMENCE: December 1, 2018 TYPE OF RETIREMENT: Joint Service Retirement (100% J&S) CREDITABLE SERVICE: 12.55 ycs EST. PENSION BENEFIT: $1,211.86 SECTION OF ORDINANCE: 5.07

ORDINANCE NO. 2015-3946

REQUEST FOR LUMP SUM REFUND

NAME: Mercedes Moreno CLASSIFICATION: Dispatcher DEPARTMENT: Public Safety Comm. Division DATE OF SEPARATION: September 9, 2017 CREDITABLE SERVICE: 2.53 ycs ESTIMATED LUMP SUM DUE: $12,626.12 Federal Tax Withholding: $2,525.22 SECTION OF ORDINANCE: 5.10



NAME: Alberto Ruiz, Jr. CLASSIFICATION: System Administrator DEPARTMENT: I.T. Support DATE OF SEPARATION: March 8, 2019 CREDITABLE SERVICE: 1.08 ycs ESTIMATED LUMP SUM DUE: $6,803.45 Federal Tax Withholding: $1,360.69 SECTION OF ORDINANCE: 5.10



NAME: Nashely Mendoza CLASSIFICATION: Case Worker DEPARTMENT: Housing Community Service DATE OF SEPARATION: March 11, 2019 CREDITABLE SERVICE: 2.45 ycs ESTIMATED LUMP SUM DUE: $9,661.40 Federal Tax Withholding: Rollover SECTION OF ORDINANCE: 5.10



NAME: Claudia Rodriguez CLASSIFICATION: Comm. Res. Coordinator DEPARTMENT: Communications DATE OF SEPARATION: March 8, 2019 CREDITABLE SERVICE: 2.91 ycs ESTIMATED LUMP SUM DUE: $16,163.53 Federal Tax Withholding: $3,232.71 SECTION OF ORDINANCE: 5.10



NAME: David Diaz CLASSIFICATION: Media Assistant DEPARTMENT: Communications DATE OF SEPARATION: March 7, 2019 CREDITABLE SERVICE: 2.60 ycs ESTIMATED LUMP SUM DUE: $13,901.08 Federal Tax Withholding: $2,780.22 SECTION OF ORDINANCE: 5.10



NAME: Herbert Jimenez CLASSIFICATION: Code Compliance Officer II DEPARTMENT: Code Compliance DATE OF SEPARATION: April 10, 2019 CREDITABLE SERVICE: 5.13 ycs ESTIMATED LUMP SUM DUE: $26,489.84 Federal Tax Withholding: Rollover SECTION OF ORDINANCE: 5.10

Ordinance No. 2015-3946 NEW DROP MEMBER NAME: Juan Bistolfi DATE OF BIRTH: January 6, 1956 CLASSIFICATION: Sr. Building Inspector DEPARTMENT: Building Services BEGINNING DROP DATE: April 1, 2019 TYPE OF RETIREMENT: Ordinary Service Retirement (50%) CREDITABLE SERVICE: 13.01 ycs EST. PENSION BENEFIT: $2,837.89 SECTION OF ORDINANCE: 5.13

Ordinance No. 2015-3946

NEW DROP MEMBER NAME: Manuel R. Lago DATE OF BIRTH: March 11, 1962 CLASSIFICATION: Parking Enforcement Specialist I DEPARTMENT: Parking on Street BEGINNING DROP DATE: April 1, 2019 TYPE OF RETIREMENT: Ordinary Service Retirement (LA) CREDITABLE SERVICE: 16.27 ycs EST. PENSION BENEFIT: $2,207.88 SECTION OF ORDINANCE: 5.13

Ordinance No. 2015-3946 NEW DROP MEMBER NAME: Shawnnee Coney DATE OF BIRTH: March 05, 1964 CLASSIFICATION: Parking Enforcement Specialist I DEPARTMENT: Parking - On Street BEGINNING DROP DATE: May 1, 2019 TYPE OF RETIREMENT: Ordinary Service Retirement (LA) CREDITABLE SERVICE: 26.18 ycs EST. PENSION BENEFIT: $3,867.03 SECTION OF ORDINANCE: 5.13

Lump Sums Paid March 2019Check Date Name gross withholding check #3/4/2019 Natalie Lopez 24,804.67$ 2,000.00$ 1171123/4/2019 Natalie Lopez 14,804.67$ R/O 1171133/22/2019 Elias Glavan De Lima 16,884.48$ R/O 1171303/22/2019 Darrell Finley 13,582.45$ 2,716.49$ 1171313/22/2019 Ian Fors 6,783.52$ 1,356.70$ 1171323/22/2019 Alejandro Cosano 2,767.83$ 553.57$ 1171333/22/2019 Sean Copeland 71,750.02$ 14,350.00$ 117134

Checking Account Beginning Balance 1/1/2019 $804,357.67

ReceiptsBank deposits $10,956.31

Wire from Trust $2,000,000.00

Wire from Money Managers $2,000,000.00

Void Benefits/Returned ACH $20,940.25

$4,031,896.56

DisbursementsAdvanced Payroll for January 2019 ($2,406,238.23)

Unclassified Payroll for January 2019 ($1,358,234.31)

Administrative Expenses for January 2019 ($68,690.55)

Lump Sum Payments ($163,340.39)

Additional Payroll Checks ($20,940.25)

($4,017,443.73)

Payroll Entry AdjustmentsPrepaid General Payroll Direct Deposit for January 2019 $1,966,635.52

Prepaid Unclassified Payroll Direct Deposit for January 2019 $1,111,715.93

Prepaid General 945 Payroll Taxes for January 2019 $233,626.75

Prepaid Unclassified 945 Payroll Taxes for January 2019 $155,667.05

$3,467,645.25

Checking Account Ending Balance 1/31/19 $4,286,455.75

Bank Statement Ending Balance 1/31/19 $4,289,958.06

Less Outstanding ChecksOutstanding Pension Payroll Checks ($1,528.20)

Outstanding Administrative Checks ($370.50)

Outstanding Lump Sum Payments ($1,603.61)

Deposit in Transit $0.00

($3,502.31)

$4,286,455.75

Completed by: Checked by:

MIAMI BEACH EMPLOYEES' RETIREMENT PLAN CHECKING ACCOUNT RECONCILIATION - ACCOUNT #0189001219860 (SUNTRUST)

1/31/19

Sandra Sicily Rick Rivera

F:\PENS\$ALL\XcelFiles\CHECKING & TRUST ACCOUNTS\CHECKACC\Checking Account Reconciliations\2019 Checking Account Reconciliation 2019

MIAMI BEACH EMPLOYEES’ RETIREMENT PLAN PENSION BOARD MEETING Tuesday, April 9, 2019

10:00 a.m. CITY HALL

Pension Office Conference Room

REGULAR AGENDA R-1 Deferred Items –

A. Sugarman & Susskind demand letter - Re: Amada Gonzalez R-2 New Items –

A. Presentation of Actuarial Valuation by GRS. -

(Separate attachment)

B. Request from CWA, AFSCME & GSA representatives to use Fund’s Actuary - 45

C. Request to change meeting date in June 2019 - 46

D. Marcum LLP. Engagement letter - 48

E. Salary range updates for Pension office staff and reclassification request for Alexander Gutierrez - 75

R-3 Administrator’s Report

R-4 For Your Information

A. Conference Calendar – 78

B. Klausner & Kaufman Memorandums – 81 C. Milliman Memo regarding currency hedging - 87

IN ACCORDANCE WITH THE AMERICANS WITH DISABILITY ACT OF 1990, PERSONS NEEDING A SPECIAL ACCOMMODATION TO PARTICIPATE IN THIS PROCEEDING SHOULD CONTACT THE PENSION OFFICE NO LATER THAN FOUR DAYS PRIOR TO THE PROCEEDING. TELEPHONE (305) 673-7437 FOR ASSISTANCE; IF HEARING IMPAIRED, TELEPHONE THE FLORIDA RELAY SERVICE NUMBERS (800) 955-8771 (TDD) OR (800) 955-8770 (VOICE), FOR ASSISTANCE. IF A PERSON DECIDES TO APPEAL ANY DECISION MADE BY THE BOARD WITH RESPECT TO ANY MATTER CONSIDERED A THIS MEETING, HE WILL NEED A RECORD OF THE PROCEEDINGS, AND FOR SUCH PURPOSE HE MAY NEED TO ENSURE THAT A VERBATIM RECORD OF THE PROCEEDING IS MADE WHICH RECORD INCLUDES THE TESTIMONY AND EVIDENCE UPON WHICH THE APPEAL IS TO BE BASED. FLORIDA STATUTES 286.0105 THIS MEETING MAY BE CONDUCTED BY MEANS OF OR IN CONJUNCTION WITH COMMUNICATIONS MEDIA TECHNOLOGY, SPECIFICALLY A TELEPHONE CONFERENCE CALL. THE ABOVE LOCATION, WHICH IS ORDINARILY OPEN TO THE PUBLIC, SHALL SERVE AS AN ACCESS POINT. PERSONS WISHING TO ATTEND SHOULD APPEAR AT THE ACCESS POINT, WHERE TELEPHONIC ACCESS TO THE MEETING WILL BE PROVIDED. (44)

‐‐‐‐‐Original Message‐‐‐‐‐ From: Osvaldo Garcia [mailto:[email protected]] Sent: Thursday, April 04, 2019 12:08 PM To: Rivera, Rick Subject: Request to use Fund’s actuary. >>> Good morning Rick, >>> >>> Can you please place myself, Carlos George and Gilberto Santiago on the April 9th Board Agenda. We will be in attendance in the capacity of Union representatives representing CWA, AFSCME & GSA respectively. We would like to request permission from the MBERP Board to use the Fund’s Actuary for a study. Rick, I have a copy of the Plan’s third (3rd) party use of the Fund’s Actuary Policy. The policy states that a request shall be ‘submitted in writing and shall delineate the full scope of the work to be produced’. In this case the study pertains to collective bargaining and the Board would receive a copy as soon as the study becomes public. >>> Thank you. >>> CWA local’s acting President, >>> Osvaldo Garcia jr >>> >>>

March 18, 2019

To the Board of Trustees and Administrator Miami Beach Employees’ Retirement Plan 1700 Convention Center Drive Miami Beach, FL 33139

Marcum LLP (Marcum) is pleased to have the opportunity to continue to provide auditing services to Miami Beach Employees’ Retirement Plan (the Plan).

For more than 65 years, Marcum has provided professional services to the public sector, including counties, local governments, government pension plans, charter schools, community redevelopment agencies, special districts and other government entities. In the past year alone, the Florida region of Marcum has performed more than 40 audits of government entities.

As outlined in our proposal, we will conduct an audit of the Plan’s financial statements for the fiscal years ending September 30, 2019, through 2021. We commit to perform the work within the time period defined in the request for proposal.

THE MARCUM DIFFERENCE

EXPERIENCE IN GOVERNMENT: Marcum’s public sector services is one of the Firm’s specialty industry sectors and focuses on local governments, public employee retirement plans and other government entities. We serve more than 100 of such organizations nationally. In Florida, the public sector practice represents our largest industry focus where we serve more than 40 clients. We are committed to the public sector.

LOCAL FIRM SERVICE PHILOSOPHY/NATIONAL FIRM RESOURCES: Being a National firm with 34 offices and more than 1,800 professionals, we serve as a strategic alternative to the much larger firms. The partners and managers with whom you will develop relationships, drive all major decisions; possessing both the appropriate resources and decision making authority. Our local firm approach provides hands-on service and timely communication, resulting in the Plan receiving the best of both worlds. Our Florida offices are located in Miami, Fort Lauderdale, and West Palm Beach. We currently have approximately 170 employees in our three Florida offices, however the resources of all of our offices are available to us.

ABILITIES AND EXPERIENCE OF PROFESSIONAL STAFF: For this proposed engagement Marcum has assembled an audit team whose skills and experience match the requirements of the Plan. The proposed client service and audit engagement partner, Michael D. Futterman has extensive experience in performing audits of government pension plans. Michael is also the partner-in-charge of Government Services for the Southeastern Region of Marcum. He will be supported by a senior audit manager, Moises D. Ariza, a quality control director, Beila Sherman, an audit supervisor, Rachel Johnson and a team of professionals.

All decisions that affect the planning, execution and completion of the proposed audit will be made by Michael D. Futterman. His experience in conducting audits for other government entities brings a wealth ofknowledge and gives us the opportunity to be more efficient and effective to the Plan. Tab 4 of the proposalfurther details the qualifications of the proposed engagement team.

The issues of audit quality and technical proficiency are important matters for consideration. Equally important is a firm’s commitment to continuing communications and providing a high caliber of professional service in a timely manner. Accounting firms, like people, have distinctive personalities. Perhaps the quality that best describes Marcum is our ability to go beyond the routine, to provide an extra dimension in quality, effort and service to our clients. The members of our firm are always accessible and are sensitive to your needs. We will be available to answer questions, discuss audit issues, and provide solutions to such issues throughout the year as they arise. We believe that this commitment and performance, as well as our commitment to ongoing communication with you, sets Marcum LLP apart from other firms. Although our fees may not be the lowest, our service, our technical competency, and our value to you will be unparalleled.

Our technical competencies will be essential over the next several years with the implementation, as applicable, of new Governmental Accounting Standards Board pronouncements. This assistance will be provided at no additional cost to the Plan.

We welcome the opportunity to answer any questions and to provide further information regarding our services and experience. Thank you for your consideration.

Sincerely,

Marcum LLP Michael D. Futterman, CPA Partner-in-Charge of Government Services for the Southeast Region Authorized to represent and contractually bind the Firm [email protected]

PUBLIC SECTOR EXPERIENCE

MIAMI BEACH EMPLOYEES’ RETIREMENT PLAN

Proposal for Auditing Services www.marcumllp.com

DEFINED BENEFIT PLANS AND OTHER POST‐EMPLOYMENT BENEFITS PLAN

Marcum LLP performs assurance services for a wide variety of benefit plans which financial statements

are prepared in conformity with generally accepted accounting principles as prescribed by the

Governmental Accounting Standards Board (GASB). Our experience with plans of all sizes and designs

has allowed us to develop a unique audit approach with tailored processes based on our strong

understanding of these plans and associated risks. We understand how plans operate, the risk

associated with fiduciary responsibilities, and the auditing challenges, particularly under the new GASB

pension and OPEB standards. To demonstrate our commitment to quality benefit plan audits, our firm is

part of the AICPA's Employee Benefit Plan Audit Quality Center (EBPAQC) and Governmental Audit

Quality Center (GAQC), holding our firm to a greater degree of scrutiny to ensure the highest level of

audit quality.

Marcum has more than 60 years of experience in performing audits of government entities, including

preparing government financial statements and performing Federal and Florida Single Audits.

Annually, we perform more than 100 Single Audit engagements.

Marcum specializes in audits of all types of Employee Benefit Plans including:

Defined Benefit Plans

o Government Single‐Employer Planso Cash Balance Planso Money Purchase Plans

Defined Contribution Plans

o 401 (K) Planso Profit‐Sharing Plans

Employee Stock Option Plans (ESOP)

403 (b) and 401 (a) Plans

Plans requiring 11K SEC filings

Health and Welfare Benefit Plans

QUALITY CONTROL SYSTEM

The quality of Marcum’s professional practice is of utmost importance to the Firm, to clients and to the

users of our reports. We provide services that conform to professional standards and consider the

integrity of individuals in determining our professional relationships.

The Firm participates in an external quality review program requiring an on‐site independent

examination of our Accounting and Auditing practice. The Firm has consistently received a “clean”

opinion on the quality of the Firm’s audit practice. This is the highest level of achievement and

recognition in the peer review program. The latest external peer review report for Marcum LLP is

provided in Appendix A. The Firm’s government engagements were included in its latest review.



Page 14

TAB 3 – PUBLIC SECTOR EXPERIENCE

GOVERNMENT PENSION PLAN EXPERIENCE

The following are South Florida government single‐employer defined benefit pension plan

engagements for which the Firm has provided auditing services.

GOVERNMENT PENSION PLAN EXPERIENCE OF KEY MEMBERS YEARS SERVED Investment Portfolio (Approx.)

Includes Alternative Investments

Bal Harbor Village Police Pension Trust 14 ** ** *City of Boca Raton Executive Employees Retirement Plan 9 $45 M Yes *City of Boca Raton General Employees’ Pension Plan 9 $212 M Yes *City of Boca Raton Police and Firefighters’ Retirement System 9 $ 388 M Yes *City of Florida City Police Pension Plan 22 $ 5 M No City of Fort Lauderdale General Employees’ Retirement System 7 ** **

*City of Fort Lauderdale Police and Firefighters’ Retirement System 10 $ 950 M Yes City of Hallandale Beach General Employees Retirement System 6 ** ** City of Hialeah General Employees Retirement System 5 ** **

*City of Hollywood Florida Employees’ Retirement Fund 3 $ 332 M Yes City of Miami Springs General Employees’ Retirement System 8 ** ** City of Miami Springs Police and Firefighters’ Retirement System 8 ** **

*Clair T. Singerman Retirement Plan (City of North Miami) 16 $ 130 M No *Miami Beach Employees’ Retirement Plan 3 $652 M Yes *North Miami Police Pension 16 $ 80 M No *Pompano Beach Police and Firefighters’ Retirement System 8 $245 M Yes *Town of Bay Harbor Islands Employees’ Retirement System 14 $ 23 M Yes Town of Lauderdale‐By‐The‐Sea Volunteer Firefighters’ Retirement System 6 ** **

*Town of Southwest Ranches Volunteer Firefighters Pension Plan 5 $ 1M No *Town of Surfside Employees Retirement Systems 4 $ 25 M No *Town of Palm Beach Retirement System 6 $ 220 M Yes *Village of Key Biscayne Employee Retirement System 24 $ 40 M Yes *Village of Tequesta Employees Retirement System 10 $ 20 M Yes

*Investment portfolio data provided for current audit clients



Page 15

CURRENT AND FORMER LOCAL GOVERNMENT CLIENTS

LOCAL MUNICIPALITIES AND COUNTY’S YEARS

SERVED

INCLUDES

PENSION AUDITS

SINGLE

AUDIT

Bal Harbour Village 8 ✓ ✓ Broward County 5 ✓City of Aventura 3

*City of Boca Raton 8 ✓ ✓ *City of Coconut Creek 3 ✓*City of Deerfield Beach 4 ✓ ✓ *City of Florida City 22 ✓ ✓ City of Hallandale Beach 6 ✓ ✓ City of Hialeah 6 ✓ ✓ *City of Hollywood 3 ✓ ✓ *City of Homestead 15 ✓City of Marathon 5 ✓City of Miami Springs 7 ✓City of Miramar 8 ✓ ✓ City of North Miami 15 ✓ ✓ City of North Miami Beach 20 ✓ ✓ City of Oakland Park 4

*City of Palm Beach Gardens 4 ✓City of Pembroke Pines 10 ✓ ✓ *City of Pompano Beach 3 ✓ ✓ *City of Sunrise 10 ✓City of Sunny Isles Beach 5

City of West Palm Beach 5 ✓*Florida Keys Aqueduct Authority 6 ✓*Miami‐Dade Water & Sewer Department 12 ✓Miami Shores Village 8 ✓*Northern Palm Beach County Improvement District 15

*The Children’s Trust 6 ✓*Town of Bay Harbor Islands 14 ✓ ✓ Town of South Palm Beach 4

*Town of Surfside 8 ✓ ✓ *Village of Key Biscayne 25 ✓ ✓ *Village of Tequesta 5 ✓

*Current audit clients

ENGAGEMENT TEAM MEMBERS



Michael D. Futterman, CPA* Partner, Assurance Services 305.995.9610 [email protected]

AREAS OF EXPERTISE Financial Audits

Federal Single Audits Florida Single Audits

Employee Benefit Plans Operations or Performance

Reviews Agreed‐Upon Procedures

Internal Control Assessments Consulting Services

Peer Reviews

KEY CLIENTS Governments Special Districts

Government Pension Plans ERISA Pension Plans

Not‐for‐Profit Organizations

EDUCATION

Bachelor of Business Administration,

Florida Atlantic University

*Licensed by the State of Florida

Michael Futterman is the partner‐in‐charge of the Government Services Practice for the Southeast Region. He focuses much of his work in the local government, not‐for‐profit and employee benefit plan sectors. With more than 28 years of professional experience, primarily in the government services sector, Mr. Futterman provides consulting on accounting, financial reporting and operational matters. In addition, he conducts peer reviews for large and mid‐size accounting firms.

Within the Firm, Mr. Futterman performs quality control reviews of the employee benefit plan audit engagements, for government entities, government pension plans, and not‐for‐ profit organizations.

Mr. Futterman is actively involved in training for the professional staff and is responsible for developing internal training programs for the government, not‐for‐profit, and employee benefit plan sectors as well as external training for the accounting profession.

Professional & Civic Affiliations American Institute of Certified Public Accountants (AICPA) Florida Institute of Certified Public Accountants (FICPA) Florida Government Finance Officers Association (FGFOA) Government Finance Officers Association (GFOA) South Florida Government Finance Officers Association (SFGFOA) GFOA Certificate of Achievement Program Special Review Committee, Member Miami‐Dade, Broward and Palm Beach Counties Leagues of Cities Florida Public Pension Trustees Association Florida Association of Special Districts AICPA Employee Benefit Plan Audit Quality Center AICPA Governmental Audit Quality Center, Designated Audit Partner Dade Schools Athletic Foundation, Treasurer

Articles, Seminars & Presentations “GASB Statement No. 72, Fair Value Measurement and Application”, 2016 SFGFOA Training “Nuts and Bolts of an Audit”, 2015 FGFOA Annual Conference “GASB Hot Topics”, FGFOA Webinar Series, 2015 “GASB Statements No. 67 and 68” Marcum 2015 Governmental Symposium “Risk‐Based Approach to Governmental Audits,” Internal Training Annual Governmental Accounting (GASB) and Government Auditing Standards, Internal Training “Federal and Florida Single Audit Acts,” Internal Training “Employee Benefit Plans,” Internal Training (multiple years) “The New Risk Assessment Standards,” Annual Internal Training “GASB Statement No. 34,” Presentation to University of Miami Students “Preparing a Comprehensive Annual Financial Report,” FICPA Training “Common Reporting Deficiencies in Governmental Financial Statements,” Palm Beach Chapter FGFOA, 2012

CPE (past three years)

Government 102 Other (Accounting, Auditing,

Technical and Behavioral) 45

Total 147



Moises D. Ariza, CPA*, CGMA Senior Manager, Assurance Services 305.995.9612 [email protected]

AREAS OF EXPERTISE Financial Audits

Federal & Florida Single Audits Financial Reporting

Program‐Specific Compliance Audits

KEY CLIENTS Local Governments

Government Pension Plans ERISA Pension Plans Special Districts Not‐For‐Profits

Wholesale & Retail Distributors Manufacturers

EDUCATION Bachelors of Accounting –

Florida International University

Masters of Accounting – St. Thomas University

*Licensed by the State of Florida

Moises D. Ariza is a senior manager in the Firm’s Assurance Division. He has over a decade of experience in the accounting profession providing accounting, assurance and advisory services to a wide range of clients. Much of his client base includes not‐ for‐profit organizations, local governments, employee benefit plans, manufacturing companies and retail entities.

In addition, Mr. Ariza has significant expertise in performing Federal and Florida Single Audits in accordance with OMB Uniform Guidance and the Florida Single Audit Act, as well as program‐specific compliance audits.

Mr. Ariza is involved in all phases of the audit process, from planning and initial risk assessment to ensuring compliance with all State and Federal laws, and the preparation and review of financial statements. He is a qualified peer reviewer and regularly performs peer reviews under the AICPA Peer Review Program.

Within the firm, Mr. Ariza develops in‐house training seminars for professional staff as well as continuing education programs for various outside organizations.

Moises is an active team leader in the Firm's Employee Benefit Plan Group, Nonprofit Sector and Government Services Group.

Professional & Civic Affiliations Chartered Global Management Accountant (CGMA) American Institute of Certified Public Accountants (AICPA) Florida Institute of Certified Public Accountants (FICPA) Government Finance Officers Association (GFOA) GFOA Special Review Committee, Active Member Association of Latin Professionals in Finance and Accounting, Member (ALPFA) Miami‐Dade, Broward and Palm Beach County League of Cities, Associate Member South Florida Government Finance Officers Association, Associate Member Florida Government Finance Officer Association, Member (FGFOA) YMCA of South Florida, Finance Committee Member

Articles, Seminars & Presentations

Navigating through GASB No. 68, Published Article The Importance of Governmental Financials, FGFOA Conference GASB Statement No. 68, 2015 Marcum Governmental Symposium Government Auditing Standards and OMB Uniform Guidelines, Internal Training Risk Assessment and Audit Approach, Internal Training Related Party Transactions, Internal Training Employee Benefit Plans, Internal Training

CPE (past three years)

Government 97 Other (Accounting, Auditing,

Technical and Behavioral) 100

Total 197

REFERENCES

REFERENCES

The following represents engagements performed by Marcum LLP within the last five (5) years by our

government team that are similar to the engagement described in the RFP. Additional references can

be provided upon request.

Agency Name Address City/State/Zip Phone Contact Name/Title

Pompano Beach Police and Firefighters Retirement System 2335 East Atlantic Boulevard, Suite 400 Pompano Beach, Florida 33062 (954) 782‐4161Debra Tocarchick, Executive Director


City of Hollywood Employees’ Retirement Fund 2600 Hollywood Boulevard, City Hall Hollywood, Florida 33020 (954) 921‐3230Cintya Ramos, Finance Director


City of Fort Lauderdale Police and Firefighters Retirement System 888 South Andrews Avenue Fort Lauderdale, Florida 33316 (954) 828‐5595Lynn Wengeur, Plan Administrator


City of Boca Raton (General and Police/Fire) 201 W. Palmetto Park Rd. Boca Raton, Florida 33432 (561) 393‐7857Leslie Harmon, Pension Manager


Town of Palm Beach Retirement System 360 South County Road Palm Beach, Florida 33480 (561) 838‐5444Jane Le Clainche, Finance Director



ENGAGEMENT LETTER

Marcum LLP n One Southeast Third Avenue n Suite 1100 n Miami, Florida 33131 n Phone 305.995.9600 n Fax 305.995.9601 n www.marcumllp.com

March 12, 2019

Board of Trustees and Plan Administrator Miami Beach Employees’ Retirement System 1700 Convention Center Drive Miami Beach, FL 33139

Re: Engagement of Marcum LLP

We are pleased to confirm our understanding of the services Marcum LLP (“Marcum,” the “Firm,” “we,” “us” or “our”) are to provide to the Miami Beach Employees’ Retirement System (the Plan) for the fiscal year ending September 30, 2019 with the option of two (2) annual renewals for fiscal years 2020 and 2021. We will audit the financial statements of the Plan as of and for the fiscal years ending September 30, 2019 through 2021. Accounting standards generally accepted in the United States of America provide for certain required supplementary information (RSI), such as management’s discussion and analysis (MD&A), to supplement the Plan’s financial statements. Such information, although not part of the financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the financial statements in an appropriate operational, economic, or historical context. As part of our engagement, we will apply certain limited procedures to the Plan’s RSI. These limited procedures will consist of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the financial statements, and other knowledge we obtained during our audit of the financial statements. We will not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. The following RSI is required by generally accepted accounting principles and will be subjected to certain limited procedures, but will not be audited:

1) Management’s Discussion and Analysis2) Schedule of City Contributions3) Schedule of Changes in the City’s Net Pension Liability and related Ratios4) Schedule of Investment Returns

We have also been engaged to report on supplementary information other than RSI that accompanies Plan’s financial statements. We will subject the following supplementary information to the auditing procedures applied in our audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America and will provide an opinion on it in relation to the basic financial statements as a whole:

1) Schedule of Investment Expenses2) Schedule of Administrative Expenses

Miami Beach Employees’ Retirement System March 12, 2019 Page 2 Audit Objectives The objective of our audit is the expression of an opinion as to whether your financial statements are fairly presented, in all material respects, in conformity with U.S. generally accepted accounting principles and to report on the fairness of the supplementary information referred to in the second paragraph when considered in relation to the financial statements as a whole. Our audit will be conducted in accordance with auditing standards generally accepted in the United States of America and the standards for financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and will include tests of the accounting records of the Plan and other procedures we consider necessary to enable us to express such an opinion. We cannot provide assurance that an unmodified opinion will be expressed. Circumstances may arise in which it is necessary for us to modify our opinion or add emphasis-of-matter or other-matter paragraphs. If our opinion on the financial statements are other than unmodified, we will discuss the reasons with you in advance. If, for any reason, we are unable to complete the audit or are unable to form or have not formed an opinion, we may decline to express an opinion or issue reports, or may withdraw from this engagement. We will also provide a report (that does not include an opinion) on internal control related to the financial statements and compliance with laws, regulations, and the provisions of contracts or grant agreements, noncompliance with which could have a material effect on the financial statements as required by Government Auditing Standards. The report on internal control and compliance will include a statement that the report is intended solely for the information and use of management, the body or individuals charged with governance, others within the entity, and specific legislative or regulatory bodies and is not intended to be and should not be used by anyone other than these specified parties. If during our audit we become aware that the Plan is subject to an audit requirement that is not encompassed in the terms of this engagement, we will communicate to management and those charged with governance that an audit in accordance with U.S. generally accepted auditing standards and the standards for financial audits contained in Government Auditing Standards may not satisfy the relevant legal, regulatory, or contractual requirements. Audit Procedures - General An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, our audit will involve judgment about the number of transactions to be examined and the areas to be tested. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We will plan and perform the audit to obtain reasonable rather than absolute assurance about whether the financial statements are free of material misstatement, whether from (1) errors, (2) fraudulent financial reporting, (3) misappropriation of assets, or (4) violations of laws or governmental regulations that are attributable to the Plan or to acts by management or employees acting on behalf of the Plan. Because the determination of abuse is subjective, Government Auditing Standards do not expect auditors to provide reasonable assurance of detecting abuse.

Miami Beach Employees’ Retirement System March 12, 2019 Page 3 Because of the inherent limitations of an audit, combined with the inherent limitations of internal controls, and because we will not perform a detailed examination of all transactions, there is a risk that material misstatements may exist and not be detected by us even though the audit is properly planned and performed in accordance with U. S. generally accepted auditing standards.. In addition, an audit is not designed to detect immaterial misstatements or violations of laws or governmental regulations that do not have a direct and material effect on the financial statements. However, we will inform the appropriate level of management of any material errors and any fraudulent financial reporting or misappropriation of assets that come to our attention. We will also inform the appropriate level of management of any violations of laws or governmental regulations that come to our attention, unless clearly inconsequential. Our responsibility as auditors is limited to the period covered by our audit and does not extend to any later periods for which we are not engaged as auditors. Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts, and may include direct confirmation of receivables and certain other assets and liabilities by correspondence with selected individuals, funding sources, creditors, and financial institutions. We will request written representations from the Plan’s attorney as part of the engagement, and they may bill you for responding to this inquiry. At the conclusion of our audit, we will require certain written representations from you about the financial statements and related matters. Audit Procedures - Internal Controls Our audit will include obtaining an understanding of the entity and its environment, including internal control, sufficient to assess the risks of material misstatement of the financial statements and to design the nature, timing, and extent of further audit procedures. Tests of controls may be performed to test the effectiveness of certain controls that we consider relevant to preventing and detecting errors and fraud that are material to the financial statements and to preventing and detecting misstatements resulting from illegal acts and other noncompliance matters that have a direct and material effect on the financial statements. Our tests, if performed, will be less in scope than would be necessary to render an opinion on internal control and, accordingly, no opinion will be expressed in our report on internal control issued pursuant to Government Auditing Standards. An audit is not designed to provide assurance on internal control or to identify significant deficiencies or material weaknesses. However, during the audit, we will communicate to management and those charged with governance internal control related matters that are required to be communicated under AICPA professional standards and Government Auditing Standards. Audit Procedures - Compliance As part of obtaining reasonable assurance about whether the financial statements are free of material misstatement, we will perform tests of the Plan’s compliance with the provisions of applicable laws, regulations, contracts, and agreements. However, the objective of our audit will not be to provide an opinion on overall compliance and we will not express such an opinion in our report on compliance issued pursuant to Government Auditing Standards.

Miami Beach Employees’ Retirement System March 12, 2019 Page 4 Management Responsibilities Management is responsible for establishing and maintaining effective internal controls, including evaluating and monitoring ongoing activities, to help ensure that appropriate goals and objectives are met; following laws and regulations; and ensuring that management and financial information is reliable and properly reported. Management is also responsible for implementing systems designed to achieve compliance with applicable laws, regulations, contracts, and grant agreements. You are also responsible for the selection and application of accounting principles, for the preparation and fair presentation of the financial statements and all accompanying information in conformity with U.S. generally accepted accounting principles, and for compliance with applicable laws and regulations and the provisions of contracts and grant agreements. Management is also responsible for making all financial records and related information available to us and for the accuracy and completeness of that information. You are also responsible for providing us with (1) access to all information of which you are aware that is relevant to the preparation and fair presentation of the financial statements, (2) additional information that we may request for the purpose of the audit, and (3) unrestricted access to persons within the government from whom we determine it necessary to obtain audit evidence. Your responsibilities include adjusting the financial statements to correct material misstatements and for confirming to us in the written representation letter that the effects of any uncorrected misstatements aggregated by us during the current engagement and pertaining to the latest period presented are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. You are responsible for the design and implementation of programs and controls to prevent and detect fraud, and for informing us about all known or suspected fraud or illegal acts affecting the government involving (1) management, (2) employees who have significant roles in internal control, and (3) others where the fraud or illegal acts could have a material effect on the financial statements. Your responsibilities include informing us of your knowledge of any allegations of fraud or suspected fraud affecting the Plan received in communications from employees, former employees, regulators, or others. In addition, you are responsible for identifying and ensuring that the Plan complies with applicable laws and regulations. You are responsible for the preparation of the supplementary information in conformity with U.S. generally accepted accounting principles. You agree to include our report on the supplementary information in any document that contains and indicates that we have reported on the supplementary information. You also agree to include the audited financial statements with any presentation of the supplementary information that includes our report thereon or make the audited financial statements readily available to users of the supplementary information no later than the date the supplementary information is issued with our report thereon. Your responsibilities include acknowledging to us in the management representation letter that (1) you are responsible for presentation of the supplementary information in accordance with GAAP; (2) that you believe the supplementary information, including its form and content, is fairly presented in accordance with GAAP; (3) the methods of measurement or presentation have not changed from those used in the prior period (or, if they have changed, the reasons for such changes); and (4) you have disclosed to us any significant assumptions or interpretations underlying the measurement or presentation of the supplementary information.

Miami Beach Employees’ Retirement System March 12, 2019 Page 5 We will provide copies of our reports to management of the Miami Beach Employees’ Retirement System; however, management is responsible for distribution of the reports and the financial statements. Unless restricted by law or regulation, or containing privileged and confidential information, copies of our reports are to be made available for public inspection. With regard to the electronic dissemination of audited financial statements, including financial statements published electronically on your website, you understand that electronic sites are a means to distribute information and, therefore, we are not required to read the information contained in these sites or to consider the consistency of other information in the electronic site with the original document. Management is responsible for the financial statements and all accompanying information as well as all representations contained therein. As part of the audit, we will assist with preparation of your financial statements and related notes. These nonaudit/nonattest services do not constitute an audit under Government Auditing Standards and such services will not be conducted in accordance with Government Auditing Standards. You agree to assume all management responsibilities relating to the financial statements and related notes and any other nonaudit/nonattest services we provide. You will be required to acknowledge in the management representation letter our assistance with preparation of the financial statements and related notes and that you have reviewed and approved the financial statements and related notes prior to their issuance and have accepted responsibility for them. Further, you agree to oversee the nonaudit/nonattest services by designating an individual, preferably from senior management, who possesses suitable skill, knowledge, or experience; evaluate the adequacy and results of those services; and accept responsibility for them. Communication with Those Charged with Governance As part of our engagement, we are responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process as well as other matters we believe should be communicated to those charged with governance. Generally accepted auditing standards do not require the auditor to design procedures for the purpose of identifying other matters to communicate with those charged with governance. Such matters include, but are not limited to, (1) the initial selection of and changes in significant accounting policies and their application; (2) the process used by management in formulating particularly sensitive accounting estimates and the basis for our conclusions regarding the reasonableness of those estimates; (3) all passed audit adjustments (an audit adjustment not recorded by the Plan); (4) any disagreements with management, whether or not satisfactorily resolved, about matters that individually or in the aggregate could be significant to the financial statements or our report; (5) our views about matters that were the subject of management’s consultation with other accountants about auditing and accounting matters; (6) major issues that were discussed with management in connection with the retention of our services, including, among other matters, any discussions regarding the application of accounting principles and auditing standards; (7) serious difficulties that we encountered in dealing with management related to the performance of the audit; and (8) matters relating to our independence as your auditors.

Miami Beach Employees’ Retirement System March 12, 2019 Page 6 Reproduction of Auditors’ Report

If you intend to publish or otherwise reproduce the financial statements and make reference to our Firm, you agree to provide us with printers' proofs or masters for our review and approval before printing. You also agree to provide us with a copy of the final reproduced material for our approval before it is distributed. In addition, to avoid unnecessary delay or misunderstanding, it is important that you give us timely notice of your intention to issue any such document. Assistance By Your Personnel We will ask that your personnel, to the extent possible, prepare required schedules and analyses, and make selected invoices and other required documents available to our staff. This assistance by your personnel will serve to facilitate the progress of our work and minimize our time requirements. Background Checks As a matter of Firm policy, we perform background checks on potential clients and/or on existing clients, on an as-determined basis. The terms and conditions of this engagement are expressly contingent upon the satisfactory completion of our investigatory procedures and we reserve the right to withdraw from any relationship should information which we deem to be adverse come to our attention. The results of all background checks and other investigatory procedures are submitted to, and reviewed by, our Firm’s Client Acceptance Committee. Independence Professional standards require that a firm and its members maintain independence throughout the duration of the professional relationship with a client. In order to preserve the integrity of our relationship, no offer of employment shall be discussed with any Marcum professionals assigned to the audit, including within the one year period prior to the commencement of the year-end audit. Should such an offer of employment be made, or employment commences during the indicated time period, we will consider this an indication that our independence has been compromised. As such, we may be required to recall our auditors’ report due to our lack of independence. In the event additional work is required to satisfy independence requirements, such work will be billed at our standard hourly rates. Furthermore, we strive to staff your engagement with quality, superbly trained professionals. In recognition of the extensive investment we have made to recruit and develop our personnel, we ask that you agree to the following. In the event that any of our employees accepts a position of employment with your Organization, or any of its related parties at any time while we are performing services for you or within one year thereafter, you agree to pay us a placement fee equal to the employee’s annual compensation in effect on the date such employment was contracted. Such fee is payable when the employee accepts such a position. If you need a permanent employee and would like assistance in locating this type of individual, we can provide personnel search assistance to help you locate and hire a qualified individual.

Miami Beach Employees’ Retirement System March 12, 2019 Page 7 Access to Working Papers The working papers prepared in conjunction with our engagement are the property of Marcum LLP and constitute confidential information, subject to Florida’s Public Records Law, to the extent applicable. These working papers will be retained by us in accordance with applicable laws and our Firm's policies and procedures. However, we may be required, by law or regulation, to make certain working papers available to regulatory authorities for their review, and upon request, we may be required to provide such authorities with photocopies of selected working papers. The Firm is required to undergo a “Peer Review” every three years. During the course of a Peer Review engagement, selected working papers and financial reports, on a sample basis, will be inspected by an outside party on a confidential basis. Consequently, the accounting and/or auditing work we performed for you may be selected. Your signing this letter represents your acknowledgement and permission to allow such access should your engagement be selected for review. As a result of our prior or future services to you, we may be required or requested to provide information or documents to you or a third-party in connection with a legal or administrative proceeding (including a grand jury investigation) in which we are not a party. Third-Party Service Providers The Firm may, from time to time, and depending on the circumstances, use third-party service providers to assist us with the audit of your financial statements. We may share confidential information about you with the third-party service providers, but remain committed to maintaining the confidentiality of your information. Accordingly, we maintain internal policies, procedures and safeguards to protect the confidentiality of your information. Furthermore, the Firm will remain responsible for the work performed by such third-party service providers. Dispute Resolution Procedure, Waiver of Jury Trial and Jurisdiction and Venue for Any and All Disputes Under This Engagement Letter and Governing Law AS A MATERIAL INDUCEMENT FOR US TO ACCEPT THIS ENGAGEMENT AND/OR RENDER THE SERVICES TO THE GOVERNMENT UNIT IN ACCORDANCE WITH THE PROVISIONS OF THIS ENGAGEMENT LETTER: This Firm and the Plan each hereby knowingly, voluntarily and intentionally waive any right either may have to a trial by jury with respect to any litigation based hereon, or arising out of, under or in connection with this engagement letter and/or the services provided hereunder, or any course of conduct, course of dealing, statements (whether verbal or written) or actions of either party. This Firm and the Plan each expressly agree and acknowledge that the Circuit Court of the 11th Judicial Circuit, in and for Miami- Dade County, Florida and the United States District Court for the Southern District of Florida, shall each have exclusive and sole jurisdiction and venue for any respective state or federal actions arising from, relating to or in connection with this engagement letter, or any course of conduct, course of dealing, statement or actions of either party arising after the date of this engagement letter.

Miami Beach Employees’ Retirement System March 12, 2019 Page 8 The terms and provisions of this engagement letter, any course of conduct, course of dealing and, or action of this Firm and/or the Plan and our relationship with you shall be governed by the laws of the State of Florida to the extent said laws are not inconsistent with the Federal Securities Laws and Rules, Regulations and Standards there under. In any litigation brought by either this Firm or the Plan, the prevailing party shall be entitled to an award of its reasonable attorneys’ fees and costs incurred, including through all appeals. We acknowledge your right to terminate our services at any time, and you acknowledge our right to resign at any time (including instances where in our judgment, our independence has been impaired or we can no longer rely on the integrity of management), subject in either case to our right to payment for all direct and indirect charges including out-of-pocket expenses incurred through the date of termination or resignation. You agree that our liability arising out of our services provided shall not exceed the total amount paid for the services described herein. This shall be your exclusive remedy. Subject to and without waiver of the provisions of Section 768.28, Florida Statutes, the Plan hereby indemnifies Marcum LLP and its partners, principals, and employees, and holds them harmless from all claims, liabilities, losses, and costs arising as a direct result of a known and intentional misrepresentation of fact that is provided by an employee or officer of the Plan to the Firm for a matter applicable to the services which are the subject of and being provided by the Firm under this engagement letter, regardless of whether such person was acting in the Plan’s interest. This indemnification will survive termination of this letter of engagement. Other Services We are always available to meet with you and/or other management personnel at various times throughout the year to discuss current business, operational, accounting and auditing matters affecting the Plan. Whenever you feel such meetings are desirable please let us know; we are prepared to provide services to assist you in any of these areas. Timeline Our engagement ends on delivery of our audit report. Any follow-up services that might be required will be a separate, new engagement. The terms and conditions of that new engagement will be governed by a new, specific engagement letter for that service. See Appendix B for a detailed timeline of our procedures. Fees As delineated in our proposal, the above described professional services will be completed for a maximum fee of $24,200 (same fee as the fiscal 2018 audit) for fiscal year 2019, $25,050 for fiscal year 2020 and $25,925 fiscal year 2021. To the extent that certain circumstances including, but not limited to those listed in Appendix A, arise during the engagement, our fee may be significantly affected and additional fees may be necessary. Additional services provided beyond the described scope of services will be billed

Miami Beach Employees’ Retirement System March 12, 2019 Page 9

separately. Any fees above the agreed-upon maximum amount must have prior Board of Trustees approval.

Our invoices for these fees will be rendered as the work progresses, and are due and payable once approved by the Board of Trustees. In accordance with our firm policies, should any invoice remain unpaid, we reserve the right to defer providing any additional services until all outstanding invoices are paid in full. You agree that we are not responsible for the impact on the Plan of any delay that results from such non-payment by you.

Agreement

This letter comprises the complete and exclusive statement of the agreement between the parties, superseding all proposals oral or written and all other communications between the parties. If any provision of this letter is determined to be unenforceable, all other provisions shall remain in force.

It is hereby understood and agreed that this engagement is being undertaken solely for the benefit of the Plan and that no other person or entity shall be authorized to enforce the terms of this engagement.

If you agree with the terms of our engagement, as described in this letter, please sign the enclosed letter and return to us.

Michael D. Futterman is the Engagement Partner and is responsible for supervising the engagement and signing the report or authorizing another individual to sign it.

This agreement is renewable at the option of the Plan. We appreciate the opportunity to be of continued service to the Miami Beach Employees’ Retirement System and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know.

Very truly yours,

Marcum LLP

Michael D. Futterman, CPA Partner

MDF/cmk

Miami Beach Employees’ Retirement System March 12, 2019 Page 10

ACCEPTED

This letter correctly sets forth the agreement of the Miami Beach Employees’ Retirement System.

Authorized Signature:

Title:

Date Signed:

APPENDIX A

Miami Beach Employees’ Retirement System Circumstances Affecting Timing and Fees

The fee is based on certain assumptions. Circumstances may arise during the engagement that may significantly affect the targeted completion dates and our fee. As a result, additional fees may be necessary. Such circumstances include but are not limited to the following:

1. Changes to the timing of the engagement at your request. Changes to the timing of the engagement usually require reassignment of personnel used by Marcum LLP Marcum in the performance of services hereunder. However, because it is often difficult to reassign individuals to other engagements, Marcum may incur significant unanticipated costs.

2. All requested schedules that are not (a) provided by the accounting personnel on the date requested, (b) completed in a format acceptable to Marcum (c) mathematically correct, or (d) in agreement with the appropriate underlying records (e.g., general ledger accounts). Marcum will provide the accounting personnel with a separate listing of required schedules and deadlines.

3. Weaknesses in the internal control structure.

4. Significant new issues or unforeseen circumstances as follows:

a. New accounting issues that require an unusual amount of time to resolve. b. Changes in the Plan’s accounting personnel, their responsibilities, or their availability. c. Changes in auditing requirements set by regulators that were unknown at the time of

this letter.

5. Significant delays in the accounting personnel’s assistance in the engagement or delays by them in reconciling variances as requested by Marcum. All invoices, contracts and other documents which we will identify for the Plan, are not located by the accounting personnel or made ready for our easy access.

6. A significant level of proposed audit adjustments are identified during our audit.

7. Changes in audit scope caused by events that are beyond our control.

8. Untimely payment of our invoices as they are rendered.

APPENDIX B

Miami Beach Employees’ Retirement System Timeline

Strategic Planning (Including detailed audit plan) September - October Execution of the Audit Plan December - January Completion of Fieldwork December - February Auditor’s Reports and Management Letter February - March

The timeline above is contingent upon timely receipt of the requested items included in our planning want list, our fieldwork want list, as well as additional requests that may occur during the audit.

PEER REVIEW REPORT

1

Rivera, Rick

From: Ariza, Moises <[email protected]>Sent: Tuesday, March 12, 2019 8:43 AMTo: Rivera, RickCc: Futterman, MichaelSubject: RE: history of audit fees

Good morning Rick, Please see below:

2014 ‐ $21,900

2015 ‐ $22,600

2016 ‐ $23,200

2017 ‐ $23,200 (same as 2016)

2018 ‐ $24,200 The proposed fees in the new letter are:

2019 ‐ $24,200 (same as 2018)

2020 ‐ $25,050

2021 ‐ $25,925 See you soon, Moe

Moises D. Ariza, CPA, CGMA Profile Senior Manager Marcum LLP One SE Third Avenue, Suite 1100 Miami, FL 33131 P: (305) 995-9612 F: (305) 995-9601 [email protected]

From: Rivera, Rick <[email protected]> Sent: Tuesday, March 12, 2019 8:17 AM To: Ariza, Moises <[email protected]> Cc: Futterman, Michael <[email protected]> Subject: history of audit fees Importance: High Good morning Moises, Can you provide me a history of the Marcum Audit fees since 9/30/2014.

Pension Assistant Salary Range

DATE Cola/adj Beg Mid Top

5/1/2006 MEMO 37,058.75$ 43,921.25$ 50,783.75$

5/1/2007 0.06 39,282.28$ 46,556.53$ 53,830.78$

5/1/2007 0.0225 40,166.13$ 47,604.05$ 55,041.97$

5/1/2008 0.05 42,174.43$ 49,984.25$ 57,794.07$

5/1/2009 0.04 43,861.41$ 51,983.62$ 60,105.83$

5/1/2012 0.03 43,861.41$ 51,983.62$ 60,105.83$

10/1/2014 0.03 43,861.41$ 51,983.62$ 60,105.83$

4/1/2016 0.01 44,300.02$ 52,503.46$ 60,706.89$

7/1/2017 0.03 46,072.02$ 54,078.56$ 62,528.09$

7/1/2018 0.03 47,914.91$ 55,700.92$ 64,403.94$

Name Position Salary Tenure ‐ Yrs

Beatriz Creagh Pension Assistant 50,667.50$ 3.64

Alexander Gutierrez Pension Assistant 57,411.64$ 12.23

The Pension Aide position serves as the assistant to Pension Administrator and Assistant Pension Administrator as needed. Is the first contact person for visitors and callers

Responsible for the preparation of various active employee and retiree applications, pick-up and distribution of correspondence

Receives and screens telephone calls; takes messages; greets visitors; provides information and assistance; schedules IFEBP and FPPTA Conferences for Board Members and staff

Maintains the calendar by making appointments as needed, for staff and conference room bookings for various City and Union functions

Assists in the preparation of Requests for Payment, Informational Page for new retirees, pensioners, lump sum applicants

Assists in preparation of the expense journal Enters retiree changes to address, direct deposits, withholding Maintains active employee, retiree and terminated files, stores and retrieves files

from storage as needed Prepares and generates bi-weekly MBERP staff payroll Prepares monthly accounts payable checks for review, distributes A/C checks Manages positive pay, ACH reversal and stop payments Responsible for the annual affidavit process Assists in the annual preparation of the 1099Rs for lump sum applicants Manages office supply inventory

Pension Secretary Unclassified Grade: 16 Salary range: $52,918 through $85,560

Betty is currently at $50,668

Financial analytical work, assigned with specific responsibility multiple departmental functions.

Work involves financial analysis, reporting and problem solving. General supervision is received from an administrative superior who reviews work for conformity with established financial, administrative, and departmental policies and attainment of desired objectives, through review of reports.

Is the secondary or back-up contact person for visitors and callers.

Reviewing computer generated and manually prepared reports Preparing reports and statistical information Troubleshooting between HR and Payroll departments regarding multiple issues

dealing with service time, merit increases, COLAs, pension contributions Reviewing reports and deposits of pension contributions Meets with active employees to discuss buy backs, DROPs, retirement or return of

pension contributions Gathers necessary payroll history to calculate probationary buy backs, final

calculations, lump sums Distributes and assists employees with Annual Pension Statements Meets with active employees to transition into retiree Collects necessary documents, obtains signatures on applications, affidavits and

supporting documentation Entering new retirees/pensioners into Munis for monthly payroll Assists retirees with access to the Self-Service Prepares quarterly newsletter As needed assists in maintaining financial software package/reports Maintains effective working relationships with other employees, supervisors, City

employees, other agencies and the general public Deals with Central Services for large mailings, copying and printing Assists with maintenance of retiree files Manages the MBERP website

Pension Analyst Unclassified Grade: 19 Salary range: $61,369 through $100,384 Alex is currently at $57,408

National Conference on Public Employee Retirement Systems The Voice for Public Pensions 2019 Legislative Conference January 27 – 29, 2019 Capital Hilton Washington, DC Trustee Educational Seminar (TEDS) May 18 – 19, 2019 Hilton Austin Austin, TX NCPERS Accredited Fiduciary Program (Modules 1&2 and 3&4) May 18 – 19, 2019 Hilton Austin Austin, TX Annual Conference & Exhibition May 19 – 22, 2019 Hilton Austin Austin, TX

Chief Officers Summit June 13 – 14, 2019 Chicago, IL Public Safety Conference October 27 – 30, 2019 New Orleans, LA Public Pension Funding Forum September 11 – 13, 2019 New York, NY

https://www.ncpers.org/

M E M O R A N D U M

TO: ALL FLORIDA PENSION CLIENTS FROM: KLAUSNER, KAUFMAN, JENSEN & LEVINSON RE: DATA IN THE DIVISION OF RETIREMENT’S ANNUAL REPORT DATE: FEBRUARY 6, 2019 ______________________________________________________________________________ The purpose of this memo is to alert clients that the Division of Retirement recently released its Annual Report to the Florida Legislature. The Division’s Report, formerly known as the 2018 Florida Government Retirement Systems Annual Report (hereinafter the “Annual Report”), contains useful information that is reviewed by policy makers in Tallahassee. The Annual Report is prepared by the Division of Retirement’s Local Retirement Section, which is overseen by Keith Brinkman. Our office is available to answer any questions about the Report, which can provide useful background as trustees review their plan with their professionals. The Report can be downloaded from the Division’s website using the following link: https://www.dms.myflorida.com/workforce_operations/retirement In addition to preparing the Annual Report, the Local Retirement Section also prepares the “Actuarial Summary Fact Sheets” for each plan. By way of reminder, the “Fact Sheets” are required to be posted on the plan sponsor’s website (and the plan’s website - if it has one), along with other specified records under Chapter 112, Part VII, Fla.Stat. Copied below is a skeletal outline of the Annual Report:

• This year the Division of Retirement does not have any recommendations for the Florida Legislature.

• The average local retirement pension was $27,354 per year. • The average employer contribution was 34.33% of payroll. • The number of active employees increased by .89%, while the number of retirees

increased by 3.16%

https://www.dms.myflorida.com/workforce_operations/retirement

Perhaps the most useful information in the Annual Report is the comparative data of investment allocations and investment return assumptions:

• Investments were allocated as follows across the state: equities (59.61%), fixed income (23.28%), real estate (8.66%), and other/alternatives/cash (8.45%).

• The most common investment assumption is currently 7.5% (used by 92 plans). • The second most common investment assumption is 7.0%. • The clear trend over the past decade, in Florida and across the country, is for

governmental plans and other institutional investors to lower their investment return assumption.

• An overwhelming majority of plans (approximately 70%) use an investment return assumption between 7.75% to 7%. By contrast, only 30% of plans used an assumption between 7.75 to 7% in 2011.

• Approximately 50% of plans are using an investment return assumption between 7% to 7.5%. Only 23% of plans used an assumption in this range in 2011.

Copied below is the breakdown of investment return assumptions used by Florida municipal plans. It is important to note, however, that this chart does not distinguish between open and closed plans. Nor does the chart reflect the fact that investment portfolios differ across the state.

INVESTMENT ASSUMPTION # OF PLANS IN ‘18 % OF PLANS IN ‘18 Above 8 2 0% Exactly 8% 42 9% Between 8% and 7.75% non-inclusive 32 7% Exactly 7.75% 59 12% Between 7.75% and 7.5% non-inclusive 41 8% Exactly 7.5% 92 19% Between 7.5% and 7% non-inclusive 66 14% Exactly 7% 85 18% Between 7% and 6% non-inclusive 47 10% 6% and under 19 4%

While this memorandum is not entitled as a recommendation of any kind, plans are encouraged to periodically review their investment policy statement and assumptions with their investment consultant and actuary. Our office is happy to answer any questions.

M E M O R A N D U M

TO: ALL FLORIDA PENSION CLIENTS FROM: KLAUSNER, KAUFMAN, JENSEN & LEVINSON RE: DATA IN THE DIVISION OF RETIREMENT’S ANNUAL REPORT DATE: FEBRUARY 6, 2019 ______________________________________________________________________________ The purpose of this memo is to alert clients that the Division of Retirement recently released its Annual Report to the Florida Legislature. The Division’s Report, formerly known as the 2018 Florida Government Retirement Systems Annual Report (hereinafter the “Annual Report”), contains useful information that is reviewed by policy makers in Tallahassee. The Annual Report is prepared by the Division of Retirement’s Local Retirement Section, which is overseen by Keith Brinkman. Our office is available to answer any questions about the Report, which can provide useful background as trustees review their plan with their professionals. The Report can be downloaded from the Division’s website using the following link: https://www.dms.myflorida.com/workforce_operations/retirement In addition to preparing the Annual Report, the Local Retirement Section also prepares the “Actuarial Summary Fact Sheets” for each plan. By way of reminder, the “Fact Sheets” are required to be posted on the plan sponsor’s website (and the plan’s website - if it has one), along with other specified records under Chapter 112, Part VII, Fla.Stat. Copied below is a skeletal outline of the Annual Report:

• This year the Division of Retirement does not have any recommendations for the Florida Legislature.

• The average local retirement pension was $27,354 per year. • The average employer contribution was 34.33% of payroll. • The number of active employees increased by .89%, while the number of retirees

increased by 3.16%

https://www.dms.myflorida.com/workforce_operations/retirement

Perhaps the most useful information in the Annual Report is the comparative data of investment allocations and investment return assumptions:

• Investments were allocated as follows across the state: equities (59.61%), fixed income (23.28%), real estate (8.66%), and other/alternatives/cash (8.45%).

• The most common investment assumption is currently 7.5% (used by 92 plans). • The second most common investment assumption is 7.0%. • The clear trend over the past decade, in Florida and across the country, is for

governmental plans and other institutional investors to lower their investment return assumption.

• An overwhelming majority of plans (approximately 70%) use an investment return assumption between 7.75% to 7%. By contrast, only 30% of plans used an assumption between 7.75 to 7% in 2011.

• Approximately 50% of plans are using an investment return assumption between 7% to 7.5%. Only 23% of plans used an assumption in this range in 2011.

Copied below is the breakdown of investment return assumptions used by Florida municipal plans. It is important to note, however, that this chart does not distinguish between open and closed plans. Nor does the chart reflect the fact that investment portfolios differ across the state.

INVESTMENT ASSUMPTION # OF PLANS IN ‘18 % OF PLANS IN ‘18 Above 8 2 0% Exactly 8% 42 9% Between 8% and 7.75% non-inclusive 32 7% Exactly 7.75% 59 12% Between 7.75% and 7.5% non-inclusive 41 8% Exactly 7.5% 92 19% Between 7.5% and 7% non-inclusive 66 14% Exactly 7% 85 18% Between 7% and 6% non-inclusive 47 10% 6% and under 19 4%

While this memorandum is not entitled as a recommendation of any kind, plans are encouraged to periodically review their investment policy statement and assumptions with their investment consultant and actuary. Our office is happy to answer any questions.

M E M O R A N D U M

TO: All Pension Clients

FROM: Klausner, Kaufman, Jensen & Levinson

Re: Changes in Tax Rules for Alimony

Date: April 2, 2019

In response to tax law changes/reform, commonly referred to as the Tax Cuts and

Jobs Act (TCJA), the Internal Revenue Service has issued the following:

IRS Publication 5307 (Rev. 10-2018)

Tax Reform, Basics for Individuals and Families

“Repeal of deduction for alimony payments

Alimony and separate maintenance payments are no longer deductible for any

divorce or separation agreement executed after December 31, 2018, or for any

divorce or separation agreement executed on or before December 31, 2018, and

modified after that date. Further, alimony and separate maintenance payments are

no longer included in income based on these dates, so you won’t need to report

these payments on your tax return if the payments are based on a divorce or

separation agreement executed or modified after December 31, 2018.

WHAT’S NEXT FOR TAX YEAR 2019? … divorce or separation agreements executed

or modified after Dec 31, 2018 providing alimony will have different tax

consequences. The alimony payments will not be deductible for the spouse who

makes alimony payments and they will not be included in the income of the

receiving spouse.”

Due to the tax law change, effective January 2019, we strongly recommend adding

the following language to Plan Summary Plan Descriptions (SPD’s) and posting on

the website for members’ information:

Tax Cuts and Jobs Act Alters Tax Rules for Alimony

Effective January 1, 2019, changes in the federal income tax

laws have eliminated tax deductions for alimony if the

marriage was dissolved or a property settlement was made

on or after January 1, 2019. This also includes any

modification to an existing order or agreement if the

modification is made on or after January 1, 2019. This

means that income deduction orders which require alimony

payments to a former spouse will be income to the

member. Dissolutions of marriage orders or separation

agreements entered on or before December 31, 2018 will

remain under the prior rule. Members who are involved in a

dissolution of marriage proceeding are strongly encouraged

to consult a qualified tax advisor concerning the impact of

both alimony and equitable division of marital property on

the member’s federal income tax obligations. The Pension

Fund Board of Trustees and staff CANNOT provide individual

tax advice.

Note that it is not the duty of plans to give individual tax advice and this memo is

not intended to provide individualized tax advice to any members. As always, our

office is available to answer any questions.

Memorandum

1

650 California Street, 21st Floor San Francisco, CA 94108 USA

Tel +1 415 403 1333 Fax +1 415 403 1334

milliman.com

April 5, 2019

To: Rick Rivera, Retirement Administrator Miami Beach Employees Retirement Plan

From: Bill Cottle, Steven Cottle, Jeff Nipp Subject: Infrastructure Foreign Currency Hedging Program

Background The JP Morgan Infrastructure Fund offers an annual election regarding foreign currency hedging. We have researched information on the existing currency hedging program and spoken with Nick Moller, Executive Director the JP Morgan Infrastructure Group. Foreign Currency Hedging Program The JP Morgan foreign currency hedging program began in July, 2018. Performance of the program is available only for the fourth quarter. Due to the strengthening of the US dollar relative to most other currencies, there was a benefit for US infrastructure investors who hedged their infrastructure investment back into US dollars. At the present time, the JP Morgan Infrastructure Fund is approximately $10 billion and is expected to grow to $12 billion over the next few quarters. The current number of clients invested in the Fund is about 400, 80 of which are US based. Of the total number of clients invested in the Infrastructure Fund, 30% have decided to go into the foreign currency hedging program. It was Mr. Moller’s expectation that once the firm tabulates current interest in the foreign currency hedging program, between 35 to 40% of all investors will enter into the program. Recommendation From a strategic investment standpoint, the Retirement Plan made an investment in the JP Morgan infrastructure fund based upon long-term expected return and risk characteristics. Over the long term, it is expected that short-term currency fluctuations would tend to balance out any benefit associated with currency movements. At the same time, if it can be demonstrated that, from a shorter investment time period context, there is a benefit to hedging foreign currency movement, this potential benefit should be further evaluated. It is our recommendation to evaluate the foreign currency hedging program over the next year and determine a year from now if entering into the program would be appropriate.

miami beach employees’retirement plan of …...a motion was made by m. sinkes duly seconded by mr...

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