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Home My WebLink AboutAgenda Fire Pension 102008THE PENSION RESOURCE CENTER, LLC 4360 Northlake Boulevard Suite 206 ❖ Palm Beach Gardens, FL 33410 Phone (561) 624.3277 ❖ Fax (561) 624 -3278 ❖ WWW.RFSOURCECENTERS.COM PALM BEACH GARDENS FIREFIGHTERS' PENSION FUND Meeting of Monday, October 20, 2008 Location: Council Chambers, Palm Beach Gardens City Hall 10500 North Military Trail Palm Beach Gardens, FL 33410 Time: 9:00 A.M. AGENDA 1. Call Meeting to Order 2. Minutes of Meeting Held August 18, 2008 3. Disability Hearing for Toby Bivins 4. Investment Monitor Report: Bogdahn Consulting • TIPS /CIPS Manager Search • International Growth Manager Search 5. Attorney Report: Bob Sugarman 6. Administrative Report: Margie Adcock 7. Disbursements 8. Other Business 9. Schedule Next Meeting: Monday, November 17, 2008 at 9:00 A.M. 10. Adjourn PLEASE NOTE: Should any interested party seek to appeal any decision made by the Board with respect to any matter considered at such meeting or hearing, he will need a record of the proceedings, and for such purpose he may need to insure that a verbatim record of the proceedings is made, which record includes the testimony and evidence upon which the appeal is to be based. In accordance with the Americans With Disabilities Act of 1990, persons needing a special accommodation to participate in this meeting should contact The Pension Resource Center, Inc. no later than four days prior to the meeting. PALM BEACH GARDENS FIREFIGHTERS' PENSION FUND MINUTES OF MEETING HELD August 18, 2008 A meeting of the Board of Trustees was called to order at 10:00 A.M. at Council Chambers, Palm Beach Gardens, Florida. Those persons present were: TRUSTEES Ed Morejon Tom Murphy Richard Hitchins (10:55 A.M.) Steve Rogers Rick Rhodes MINUTES OTHERS Margie Adcock and Scott Baur (11:30 A.M), Administrator Bob Sugarman, Attorney Mike Welker, Investment Monitor The Board reviewed the minutes of the meeting held June 16, 2008. A motion was made, seconded and carried 4 -0 to accept the minutes of the meeting held June 16, 2008. ATTORNEY REPORT Mr. Sugarman noted that there was an issue raised about individuals hired at the same time but having different Share Account balances. Mr. Armstrong has indicated that the difference goes back to 2004. Mr. Armstrong needs copies of the prior State Annual Reports in order to figure out the discrepancy. A motion was made, seconded and carried 4 -0 to authorize the Actuary to review the discrepancy in Share Account balances and pinpoint the error with a cost not to exceed $3,000. Mr. Sugarman stated that he was contacted by one of the securities attorneys asking the Board to seek lead plaintiff status. He stated that the Board should decide if they wanted to approve seeking lead plaintiff status and how to do so in between meetings. He stated that it could be approved subject to ratification by the Board at a following meeting or the Board could have a special meeting. A motion was made, seconded and carried 4 -0 to delegate the Chairman the authority to approve lead plaintiff in a class action or derivative action between meetings with approval by the Board at the following meeting. It was noted that there was a balance in the Share Account for Shawn Thurman. It was confirmed that there was no distribution made during the fiscal year October 1, 2006 to September 30, 2007. Mr. Armstrong wanted to confirm that his decision to credit net investment earnings was consistent with the Ordinance and the Board's intent. Mr. Sugarman stated that the issue is not really answered in the Ordinance. The issue is whether the Share Account value includes accrued earnings. There was a lengthy discussion. The Board determined that the Share Account balance should include earnings. A motion was made, seconded and carried 4 -0 that when a death benefit is paid, all accrued earnings should be paid even if it requires a subsequent and separate 2 payment. The Board directed the Administrator to pay the balance in the Share Account for Shawn Thurman. Mr. Sugarman reported that the contract with Agincourt was completed. Mr. Sugarman stated that he had worked with the Chairman on a letter to the City Council on the possibility of going to FRS. A letter was received back from the City that there were just informal discussions and that the City would advise the Board if there were serious discussions. Mr. Morejon reported that he has heard nothing further with respect to this. Mr. Sugarman discussed filing for an IRS Determination Letter. He stated that he attended a roundtable discussion by the IRS. He stated that the IRS has an interest in public pension plans and concerns of underfunding and DROP plans costing tax dollars. He stated that the IRS would be sending out a questionnaire to all of the public pension plans. If a plan requests a Determination Letter, they might not receive the questionnaire. He stated that they are working on the IRS Determination Letter that the Board approved at a prior meeting. Mr. Sugarman discussed the proposed changes to the State Administrative Rules pertaining to funding and disclosure. He discussed the workshop the Department of Management Services held to discuss the proposed changes to Section 60T of the Florida Administrative Code. He noted that another workshop is scheduled for September 10 after the Division of Retirement Conference. Mr. Sugarman encouraged Trustees to attend and speak at the workshop. He stated that the Actuary prepared a memorandum dated July 17, 2008 on their comments to the proposed changes. Mr. Sugarman reviewed some of the proposed changes to the Rules. He stated that these proposed changes will make the Board's job harder and will be more cost for the City with no greater benefits. He suggested that someone present this to the City and have them speak up as well as this has a bigger financial impact on the City than the Board. It was noted that Voyageur was seeking the Board's consent to using the Fund as a client name. The Board stated that they had no objection in providing consent to using their client name. ADMINISTRATIVE REPORT It was noted that American Realty Advisors provided a consent and authorization to deliver certain documents to the Fund electronically. Mr. Sugarman stated that this would be fine as long as the Administrator has the ability to locate and retrieve that information. It was determined that the Board should make a blanket approval for such requests. A motion was made, seconded and carried 4 -0 to authorize electronic delivery by any of the investment mangers who want to, contingent upon the Administrator being able to store and back up the information. Ms. Adcock presented the list of disbursements to be made. A motion was made, seconded and carried 4 -0 to approve the disbursements listed . Ms. Adcock provided the Board with a copy of the Resolution on Social Security Numbers and the contracts with Davis Hamilton Jackson & Company and Agincourt for their Trustee Handbooks. Ms. Adcock stated that the online benefit calculator was working. INVESTMENT MONITOR REPORT Mike Welker appeared before the Board. He discussed the market environment and asset class performance. He stated that all asset classes were negative except for the mid cap. He noted that growth did better than value. He stated that energy, materials and industrials drove the quarter. Mr. Welker stated that he had prepared a letter for the Board to sign for the Custodian to open separate accounts for all of the managers. This will enable each account to be invoices separate and tack the cash flow. Richard Hitchins entered the meeting. Mr. Welker reviewed the investment performance for the quarter ending June 30, 2008. The total market value of the Fund as of June 30, 2008 was $22,775,912. The Fund was down 1.35% net of fees for the quarter while the benchmark was down 1.27 %. The equity portfolio managed by Dana was up .37% for the quarter while the benchmark was down 1.69 %. The portfolio managed by Galliard was down .76% for the quarter while the benchmark was down 1.02 %. Mr. Welker stated that because of the commingled issues, they would be moving the money out of Galliard and to Agincourt. He noted that Agincourt has better returns than Galliard. The international portfolio managed by Voyageur was down 10.94% for the quarter while the benchmark was down 1.93 %. Mr. Welker noted that up until this quarter, their numbers were good. Voyageur is a deep value manager. A couple of companies, like British Home Builders, did poorly. Additionally, their sock selection within materials did poorly. There has been no change in their process and the company is strong. He stated that the Fund is large enough now that it makes sense to fund an international growth manager to complement Voyageur and balance the volatility. They still like Voyageur and for the long term they look very strong. There was discussion on the actuarial assumption rate of 8.25 %. Mr. Welker stated that long term they still feel confident because of the way the portfolio is diversified. However, for the short term it will be tough to get 8.25 %. They are exploring additional asset classes to try to get the return to meet the 8.25% assumption in the short term. Scott Baur entered the meeting. 4 DISABILITY HEARING — TOBY BIVINS Mr. Sugarman provided an introduction. He noted that there are five questions the Board has to answer in the affirmative in order to grant a disability to Toby Bivins. Mr. Sugarman reviewed the five questions. He noted that this was an injury claim and not an illness claim. He reviewed the Disability Book his office prepared, the Code, Application, job description, personnel and risk management records, medical records and the IME of Dr. Sherman. Mr. Sugarman recommended that the Board permit Mr. Bivins or his attorney Richard Sicking or both to present their case and answer questions. He stated that at the end the Board could make a motion to grant, deny or table because more information or time is needed. Mr. Sicking provided an introduction. He stated that Mr. Bivins received a letter from the Chief dated March 27, 2008 recommending termination on April 4, 2008 due to the disability provision in Article 23 of the collective bargaining agreement, which gives one year to return to full duty. Mr. Sicking stated that on March 27, 2007 Mr. Bivins was unloading a truck and a tool weighing about 70 pounds feel on him and injured his back. He had a herniated disc and had surgery. He had an injury in 2003 where he injured his back in a brush fire in Colorado and had surgery and retuned to duty. In 2005, he injured his back puling hose. The workers' compensation carrier denied the claim due to a pre- existing condition. It was noted that on February 27, 2007 Mr. Bivins went to the ER and there were two different histories as to why he was there. Dr. McFarland stated that he was there because he had back pain on and off. The handwritten description on the notes from that ER visit state that Mr. Bivins fell from an 8 -foot ladder the day before. Mr. Bivins provided the time records from February 27 to March 27, 2007. He opined that Mr. Bivins could not have worked all of those shifts between that period with a herniated disc. Mr. Sicking stated that he has asked Dr. McFarland for an addendum to clarify the notes of the visit to the ER on March 27h. The Board had numerous questions for Mr. Sicking and Mr. Bivins. Mr. Sicking noted that aggravation of a pre- existing injury does not prevent a disability pension. Mr. Sugarman agreed. The Board has to take them as they are if they came back to work. Mr. Sugarman noted that the Board needs to determine if the injury was from the fall off the ladder which aw off duty or from the tool that fell on him which was on duty. Mr. Bivins stated that he did not fall off an 8 -foot ladder or into a fence. He went to the ER on February 27, 2007 because his back hurt. The Board stated that there appeared to be a number of inconsistencies. The Board thought seeing the call loads and talking to Mr. Bivins' partners from February 27 to March 27, 2007 might be helpful. There was discussion on providing misleading statements under Chapter 440 and how that could be a crime. Mr. Sugarman stated that Chapter 175 has an identical law. Mr. Sugarman stated that at the moment that is just an acquisition and a crime would need determined by a criminal court before the forfeiture requirements under Chapter 175 would come into play. Mr. Sugarman noted that the City has taken an interest in this case. He stated that right now there is no criminal finding in this case. He stated that the Board could wait on a ruling until that is resolved. Mr. Sicking stated that once 120 days have gone by the only way they can contest it is by a claim of fraud, which can be done either in a criminal case or a workers' compensation judge could find fraud. Mr. Sugarman stated that the workers' compensation determination is not binding on the Board like a criminal court conviction, although it could be persuasive and certainly is admissible. Mr. Sugarman stated that if the Board wanted to wait to see what happens with the workers' compensation case that is certainly reasonable. Mr. Sicking stated that there was a hearing on the motion in October. Mr. Sugarman stated that the City is asking the workers' compensation judge whether the March injury was the cause of the disability for which workers' compensation benefits were made or were they due to an injury that occurred earlier in February. This is exactly the same question that the Board has. If the workers' compensation judge grants the motion, there will be a hearing with sworn testimony on this issue. Mr. Sicking stated that he was not aware of any criminal proceedings. There was a lengthy discussion. Mr. Sugarman asked the Board if they wanted to wait for the fraud allegation to play out to which the Board responded in the affirmative. Mr. Sugarman stated that he would advise Mr. Sicking and the City Attorney to notify the Board of the October hearing. The Board determined that they needed to get any information available to help the Board made a decision. Mr. Sugarman stated that the workers' compensation hearing is in progress and he will ask to be kept updated; he would correspond with Dr. Sherman for a more definitive idea of whether Mr. Bivins is completely and totally permanently disabled, if appropriate, he would correspond with Dr. McFarland to have him clarify his notes and the nurses notes from the ER visit on February 27, 2007, and suggested that the Board obtain the call log reports and talk to Mr. Bivins' co- workers for the time period of February 27 to March 27, 2007. Steve Rogers departed the meeting. The Board directed Tom Murphy to obtain the call logs and set up in any way he deems possible and appropriate meetings with the co- workers. A motion was made, seconded and carried 4 -0 to table the disability hearing of Toby Bivins pending response from Dr. Sherman and Dr. Gomez on clarification of information; interviews with co- workers; information from Mr. Sicking on the workers' compensation hearing in October and whether Mr. Bivins has reached MMI; and clarification of the notes of Dr. McFarland and the nurses notes. Richard Sicking and Toby Bivins departed the meeting. INVESTMENT MONITOR REPORT CONTINUED Mr. Welker provided a revised draft Investment Policy Statement. He stated that it coordinates with the current Ordinance. It also includes addendums for Dana Growth, Dana Value and Voyageur. Mr. Sugarman stated that he would take one more look at the IPS to make sure there are no other issues. A motion was made, seconded and carried 4- 0 to accept the revised Investment Policy Statement subject to the Attorney's review and corrections. Mr. Welker presented the letters to terminate Galliard and instruct the Custodian to add manager accounts for signature. A motion was made, seconded and carried 4 -0 to 6 execute the letters to terminate Galliard and instruct the Custodian to add manager accounts. Mr. Welker provided information on alternative investments. He stated that he liked infrastructure but cannot do it right now based on the Ordinance. He stated that they really need to get in front of the Council to discuss with them the way to help the Fund get better returns in this rough market. Mr. Welker discussed TIPS (Treasury Inflation Protected Securities) and CIPS (Corporate Inflation Protected Securities). He stated that CIPS is a wonderful way to hedge against equity market volatility. He recommended a search for a complement manager who can do both TIPS and CIPS. He stated that S% in this portfolio makes sense. When markets rally, this asset class does not do well, but is up in environments when domestic and international stocks are down. It is good for diversification. Mr. Welker discussed real estate. He stated that he wants the Fund to be able to invest in all different areas. It is a great opportunity but not allowed in the current Ordinance because of quality and the 10% limitation. Mr. Welker stated that they would talk to Allan Owens. A motion was made, seconded and carried 4 -0 to authorize the Investment Monitor to bring in some managers for TIPS /CIPS and international growth and to set up something with the City. ADNIINISTRATIVE REPORT CONTINUED Mr. Baur appeared before the Board. He provided a summary of the Plan provisions. He stated that they are also the Administrator for the Police Pension Plan and had a long process of getting information from the City and historical data. He stated that he feels relatively comfortable that the information they are now receiving for this Plan is clean. He discussed the online calculator. Mr. Baur addressed communication issues and provided updates on his firm and what they are doing. It was suggested that perhaps a survey could be drafted to be sent out to the Participants in order to get more feedback. OTHER BUSINESS There being no further business, the meeting adjourned. Respectfully submitted, Tom Murphy, Secretary Page 1 of 2 Margie Adcock From: Brad .Armstrong@gabrielroeder.com Sent: Thursday, October 16, 2008 11:40 AM To: Margie Adcock; sugarman @sugarmansusskind.com Cc: reorchid @bellsouth.net Subject: PBG Fire Share Accounts Sender ALLOWED [ Remo_ve I [ Block I details Vanquish Anti Spam Control Panel The differences only affect hires before 2001, so that has been my focus. The text from the Ordinance below offers an explanation of how the Share Account allocations were done under Section 38 -78 of the PBG Code prior to the 2001 fiscal year (I bolded part of sub (3)a.1 below). The earliest share accounting I have right now is from 2000 to 2001. One example is Aiken and Haywood who were significantly different at the start of that year, yet showed the same date of entry: 10/07/87. Haywood appears to have had a higher salary and that is what likely made his share account allocations higher from 1998 to 2000. There does not appear to be any difference in their allocations after the new allocation method was adopted. Sec. 38 -78. Supplemental benefit; F.S. ch. 175 share accounts. There is hereby established an additional supplemental retirement, termination, death and disability benefit to be in addition to the benefits provided for in the previous sections of this division, such benefit to be funded solely and entirely by the premium tax monies received pursuant to F.S. Chapter 175. (1) Individual member share accounts. The board shall create individual member share accounts and maintain appropriate books and records showing the respective interest of each member hereunder. Each member shall have a member share account for his share of the Chapter 175 tax revenues, forfeitures and income and expense adjustments relating thereto. The board shall maintain a separate membership share account for each member, however, the maintenance of separate accounts is for accounting purposes only and a segregation of the assets of the trust fund to each account shall not be required. (2) Share account funding. a. Individual member share accounts shall be created with all of the monies received from Chapter 175, Florida Statutes, tax revenues in June 1999, plus any supplemental tax revenue amounts received in fiscal year 98 -99 and all similar tax revenues received in subsequent fiscal years. Commencing with the payment received in fiscal year 2004 and each year thereafter, two percent of the total salaries for all members during the prior plan year shall be deducted from the monies received from Chapter 175, Florida Statutes, tax revenues and credited as additional member contributions under section 38 -55(1) hereof for said prior plan year. b. In addition, any forfeitures as provided in subsection (4), shall be allocated to the individual Member share accounts in accordance with the formula set forth in subsection (4). (3) Allocation of monies to share accounts. a. Allocation of Chapter 175 contributions. 1. Upon receipt of the first premium tax monies attributable to the previous calendar year (beginning with calendar year 1998), an amount of money equal to the amount determined under F.S. § 175.122, Limitation of Disbursement, shall be allocated to individual member share accounts in an amount directly proportionate to the salary which the member was paid compared to the total fire department payroll (as determined under F.S. § 175.122) in the calendar year preceding the date for which F.S. Chapter 175, tax revenues were received. In addition, any amount of money described in subsection (2)a. above attributable to the previous calendar year and not otherwise distributed pursuant to the previous sentence, shall be allocated to each individual member account in an amount directly proportionate to the number of pay periods for which the member was paid compared to the total number of pay periods for which all members were paid, counting the pay periods in the calendar year preceding the date for which the F.S. Chapter 175, tax revenues were received. Page 2 of 2 2. Effective October 1, 2000 (only as to funds received on or after the effective date of the ordinance adopting this section), the allocation method in subsection 3.a.1. above shall be discontinued and premium tax monies received on or after that date after the deduction of the two percent total compensation which commences in FY 2004, shall be allocated as provided for in this paragraph 2. Circular 230 Notice: Pursuant to regulations issued by the IRS, to the extent this communication (or any attachment) concerns tax matters, it is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding tax - related penalties under the Internal Revenue Code or (ii) marketing or recommending to another party any tax - related matter addressed within. Each taxpayer should seek advice based on the individual's circumstances from an independent tax advisor. Brad Lee Armstrong A.S.A., E.A. Gabriel, Roeder, Smith & Company One Towne Square Suite 800 Southfield, Michigan 48076 -3723 brad. armstronu(leabrielroeder.com Telephone: 248-799-9000 Fax: 248-799-9020 Cellular: 248-921-6876 The above communication shall not be construed to provide tax advice or legal advice unless it contains one of the following phrases, or substantially equivalent language: "This communication is intended to provide tax advice" or "This communication is intended to provide legal advice." Notice of Confidentiality This transmission contains information that may be confidential and that may also be privileged. Unless you are the intended recipient of the message (or authorized to receive it for the intended recipient), you may not copy, forward, or otherwise use it, or disclose its contents to anyone else. If you have received this transmission in error, please notify the sender immediately and delete it from your system. 1 nil A /1)M)9 Certified Public Accountant American Institute of Certified Public Accountants Florida Institute of Certified Public Accountants September 5, 2008 Board of Trustees City of Palm Beach Gardens Firefighters' Pension Trust Fund Palm Beach Gardens, Florida I am pleased to confirm my understanding of the services I am to provide for City of Palm Beach Gardens Firefighters' Pension Trust Fund for the year ended September 30, 2008. I will audit the net assets available for benefits of Financial Statements of City of Palm Beach Gardens Firefighters' Pension Trust Fund as of September 30, 2008 and the related statements of changes in net assets for the year then ended. Also, the document I will submit to you will include the Schedule of Contributions from Employer and Other Contributors and the Schedule of Funding Progress. These financial statements and supplemental schedules are required by Generally Accepted Government Accounting Standards. Audit Objectives The objective of my 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 whether the supplemental schedules are fairly stated in all material respects in relation to the basic financial statements taken as a whole. My audit will be conducted in accordance with U.S. generally accepted auditing standards and will include tests of the accounting records of City of Palm Beach Gardens Firefighters' Pension Trust Fund and other procedures I consider necessary to enable me to express such an opinion. If my opinion is other than unqualified, I will discuss the reasons with you in advance. If, for any reason, I am unable to complete the audit or am unable to form or have not formed an opinion, I may decline to express an opinion or to issue a report as a result of this engagement. 4600 W. Commercial Blvd. Suite 5 Tamarac, FL 33319 Voice (954) 485 -5788 Fax (954) 485 -8988 Audit Procedures Our procedures will include tests of documentary evidence supporting the transactions recorded in the accounts and direct confirmation of investments, benefit obligations, and certain other assets and liabilities by correspondence with financial institutions, and other third parties. I will also request written representations from your attorneys as part of the engagement, and they may bill you for responding to this inquiry. At the conclusion of my audit, I will require certain written representations from you about the financial statements and related matters. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements; therefore, my audit will involve judgment about the number of transactions to be examined and the areas to be tested. Also, I will plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether from errors, fraudulent financial reporting, misappropriation of assets, or 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 an audit is designed to provide reasonable, but not absolute, assurance and because I will not perform a detailed examination of all transactions, there is a risk that material misstatements may exist and not be detected by me. 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, I will inform you of any material errors that come to my attention, and I will inform you of any fraudulent financial reporting or misappropriation of assets that comes to my attention. I will also inform you of any violations of laws or governmental regulations that come to my attention, unless clearly inconsequential. My responsibility as auditor is limited to the period covered by my audit and does not extend to any later periods for which I am not engaged as auditor. My audit will include obtaining an understanding of internal control sufficient to plan the audit and to determine the nature, timing, and extent of audit procedures to be performed. An audit is not designed to provide assurance on internal control or to identify reportable conditions, that is, significant deficiencies in the design or operation of internal control. However, during the audit, if I become aware of such reportable conditions, I will communicate them to the board of trustees in a separate letter. In addition, I will perform certain procedures directed at considering the Plan's compliance with applicable Internal Revenue Service (IRS) requirements for tax - exempt status. However, you should understand that my audit is not specifically designed for and should not be relied upon to disclose matters affecting plan qualifications or compliance with IRS requirements. If during the audit I become aware of any instances of any such matters or ways in which management practices can be improved, I will communicate them to you. Management Responsibilities You are responsible for making all financial records and related information available to me and for the accuracy and completeness of that information. I will advise you about appropriate accounting principles and their application and will assist in the preparation of your financial statements, but the responsibility for the financial statements remains with you. This responsibility includes the establishment and maintenance of adequate records and effective internal controls over financial reporting, the selection and application of accounting principles, and the safeguarding of assets. You are responsible for adjusting the financial statements to correct material misstatements and for confirming to me in the management representation letter that the effects of any uncorrected misstatements aggregated by me 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 also responsible for identifying and ensuring that the plan complies with applicable laws and regulations. Fees and Other My fees for these services will be $5,150. You will also be billed for travel and other out -of- pocket costs, if any. Should you request me to prepare the state annual report I would charge $1,000 for the service. The fee estimate is based on anticipated cooperation from your personnel and the assumption that unexpected circumstances will not be encountered during the audit. If significant additional time is necessary, I will discuss it with you and arrive at a new fee estimate before I incur the additional costs. My invoices for these fees will be rendered each month as work progresses and are payable on presentation. In accordance with my firm policies, work may be suspended if your account is overdue and will not be resumed until your account is paid in full. If I elect to terminate my services for nonpayment, my engagement will be deemed to have been completed upon written notification of termination, even if I have not completed my report. You will be obligated to compensate me for all time expended and to reimburse me for all out -of- pocket expenditures through the date of termination. I appreciate the opportunity to be of service to the City of Palm Beach Gardens Firefighters' Pension Trust Fund and believe this letter accurately summarizes the significant terms of my engagement. If you have any questions, please let me know. If you agree with the terms of my engagement as described in this letter, please sign the enclosed copy and return it to me. Very truly yours, Steven I. Gordon, CPA RESPONSE: This letter correctly sets forth the understanding of City of Palm Beach Gardens Firefighters' Pension Trust Fund. For the Plan: ' Title: Date: KOWWWOW OWOWNWANI j M&G MAGER & GOLDSTEIN LU I ..j .1 City of Palm Beach Gardens Firefighters' Pension Fund Monitoring Report September 2008 MAGER & GOLDSTEIN LLP Attorneys at Law I. UPDATE ON NEW SECURITIES CLASS ACTIONS!' We have not identified any purchases by your plan in newly filed securities cases during the putative class periods. II. UPDATE ON SETTLED CLASS ACTIONS!! We have not identified any purchases by your plan in recently settled class actions. Our records are limited to a more recent time period, so therefore we are enclosing a list of settled cases to forward to your custodial bank. Proof of Class Class Claim Period Period Total Stock Ticker Deadline Start End Settlement :American International Group, Inc. IG 9/12/2008 2/8/2001 3/31/2005 800,000,000 (SEC) (2006) American Italian PLB 9/5/2008 1/23/2002 8/17/2005 $3,500,000 Pasta Co. (settled partially 2nd part) American Tower AMT 9/9/2008 4/1/2002 5/22/2006 $14,000,000 Corp. -_ ;Arch Leasing 11/26/200 5/19/1995 1/1/2001 $2,100,000 3Corporation -Trust (Ser. 1 Coll. Tr. Bonds) ;Atlas Cold ZR-U 3/2/2009 3/l/2002 8/29/2003 $40,000,000 Storage Holdings Inc. (Canada) Bayer AG BAY 11/25/2008 8/4/2000 2/21/2003 $18,500,00 AYRY AYZF Piovail Corp. BVF 9/8/2008 2/7/2003 3/3/2004 $138,000,000 (Canada) $iovail Corp. BVF 9/8/2008 2/7/2003 3/2/2004 $138,000,000 (S.D.N.Y.) Brooks BRKS 9/16/2008 7/25/2001 8/1/2006 $7,750,000 `Automation, Inc. UCA, Inc. 13UCA 11/14/2008 2/6/2001 3/11/2005 $1,600,00 Career Education CECO 10/17/200 4/22/2002 2/15/2005 $4,900,000 Corp. Chiron Corp. CHIR 11/1/2008 7/23/2003 10/5/2004 $30,000,000 (2004) Coca -Cola KO 11/21/200810/21 /1999 3/6/2000$137,500,000 Company (2000) Converium HR #Holding AG 12/9/2008` 1/7/2002 9/2/2004 $84,600,000 (2004) HRN CP Ships TEU 11/13/2008 1/29/2003 8/9/2004 $1,300,000 Limited Exodus Communications XDSQ 11/51200 4/20/2000 9/25/2001 $5,000,000 Inc. (2001) FARO FARO 4/15/2004 3/15/2006 $6,875,000 Technologies, 110/30/2008 Ir►c. First Horizon FHRX 10/1012008 4/24/2002 4/29/2003 $4,650,000 Pharmaceutical Corp. UBE Harmonic Inc. 11/20/2008 3/23/2000 6/26/2000 $15,000,000 LIT Heritage 10/8/2008 2/1/1996 8/31/1999 $5,233,966 - Municipal Bonds (SEC) HIA, Inc. HIAI 9/10/200 8/29/2005 2/13/2006 $1,000,000 IIC Industries, IICR 8/30/2008 3/27/2002 3/27/2002 $2,542,756 Inc. =Iridium World LLC Communications, 11/17/2008 9/8/1998 5/13/1999 $14,850,00 Ltd. (Individual Defendants) ridium World RILLC communications, 11/17/2008 9/8/1998 5/13/1999 $20,000,000 Ltd. (Motorola, RUD Inc.) Iridium World Communications, H?JLLC Ltd. 11/17/2008 9/8/1998 5/13/1999 $8,250,000 ,(Underwriter EIRID Defendants) I{LA- Tencor AC 9/25/2008 6/30/2001 1/29/2007 $65,000,000 Corp. (2006) g(N.D. Cal.) LeapFrog LF 9/20/2008 7/24/200310/18/2004 $2,300,00 Enterprises, Inc. ;Levi Strauss & EVI 11/7/200 4/6/2001 6/16/2003 $5,000,000 Co. Lumems, Ltd. LUME 10/9/200 10/2/20 3/7/2006 $20,100,000 Magma Design LAVA 12/17/200810/23 /2002 4/12/2005 $13,500,00 ;Automation, Inc. MCSi, Inc. MCSI 12/11/2008 7/24/2001 2/26/2003 $2,250,00 Mercury MERQE 11/29/200 9/8/2001 7/3/2006 $117,500,000 Interactive Corp. Merge Technologies, RGE 11/12/2008 4/25/2002 7/3/2006 $16,000,00 Inc. (settled partially I st part) Nvidia NVDA 12/27/2008 5/16/2000 8/14/2000 $596,000 Corporation {SEC) OSl OSIP 9/9/2008 4/26/200411/22/2004 $9,000,000 Pharmaceuticals, Inc. PainCare PRZ 10/14/2008 3/24/2003 3/15/2006 $2,000,00 Holdings, Inc. Parmalat AF 1/12/2009 1/5/199912/18/2003 TBD finanziaria, FF S.p.A. (settled FMF par tially 2nd art) ., ....... .___ _.. .._. PETCO An PETC 11/14/200811/18 /2004 4/15/2005 $20,250,000 Supplies, Inc. (2005) ProNetLink NLKQ 9/2312008 8/26/1998 7/1 /2001 $1,225,000 Corp. R &G Financial RGFC 9/26/2008 1/21/2003 11/2/2007 $51,000,000 Corp. Restoration RSTO 10/14/2008 6/18/2008 6/18/2008 $3,700,000 Hardware, Inc. (2007) ..._.._�..: -- _ Royal Dutch various 11/18/2008 4/8/1999 3/18/2004 $89,508,000 Petroleum Company /The shell Transport =and Trading Company PLC RD.AS Royal Dutch Petroleum/Shell RD 11/18/2008' 4/8/1999 3/17/2004$120,000,000 'Transport (SEC) SHELL Tea Telecom 10/25/200 2/61 200211/14/2002 $4,300,000 ;International Ltd. elik, Inc. ELK 9/6/2008 2/19/200 6/4/2007 $5,000,000 Tenet Healthcare THC 10/30/2008 1/11/200 11/7/2002 $65,000,000 Corp. (settled partially 2nd part) Tommy Hilfiger !Corp. OM 10/29/2008 11/3/1999 9/24/2004 $16,000,00 Top Tankers,lnc. TOPT 9/12/2008 3/13/200611/29/2006 $1,200,000 _. Tube Media MCorp. TUBM 11/17/2008 8/19/200511/21/2006 $600,000 U.S. Auto Parts Network, Inc. RTS 10/29/2008 2/8/2007 2/8/2007 $10,000,000 1Viseon, Inc. VSNI 11/19/2008 11/3/2004 5/15/2006 $550,00 - Workstream, Inc. WSTM 9/22/2008' 1/14/2005 4/14/2005 $3,900,0 Xerox Corp. K2000) XRX 10/15/2008 2/17/1998 6/27/2002$750,000,000 ethanol Corp. XNL 9/26/2008 1/31/2006 8/8/2006 $2,800,00 Xybemaut Corp. XYBRE 2/19/2008 5/10/2002 4/8/2005 $6,300,00 PALM BEACH GARDENS FIREFIGHTERS' PENSION FUND DISBURSEMENTS October 20, 2008 • PENSION RESOURCE CENTER, LLC. $ 3,423.56 (Bill for services for September and October 2008 including overnight mailings) • REGIONS MORGAN KEEGAN TRUST $ 1,315.08 (Custodial Fees for July and August 2008) • SUGARMAN & SUSSKIND $ 2,455.19 (Fees for legal services for August and September 2008) • RODRIGUEZ -ECAY & COMPANY, P.A.. $ 100.00 (Bill for computer programming for on -line calculator) • DANA INVESTMENT ADVISORS INC. $ 17,226.06 (2 "(I Quarter 2008 Management Fee) • TOM MURPHY $ 14.75 (Reimbursement for expenses for public records request for Bivins Disability Application) • RICK RHODES $ 406.51 (Per diem expenses for FPPTA School in Orlando in October 2008) • LOCAL 2928 $ 500.00 (Reimbursement for registration for R. Rhodes for FPPTA School in October 2008) • STEVEN I. GORDON $ 75.00 (Progress bill for audit for year ended September 30, 2008) • TOBY BIVINS . $ 21,559.00 (Partial Distribution of Share Account) Total Disbursements for Approval $ 47,075.15 (Trustee) (Trustee) WWW.BOGDAHNGROUP.COM THE BOGDAHN GROUP .simplifying your investment and fiduciary decisions o� v v GROUP Volatility Hedge TIPS and Hedge Funds TIPS outperform hedge fund composite in bear market Bear NhrW erxing 031/MM 2C 1E 1C C i C G � -1C -15 -CL 0 2 4 6 8 10 12 14 16 18 20 Stada Dt iaticn • Citigroup Treasury Bill - 6 Month ■ HFN Multi- Strategy Average !7 Lehman US Treasury Inflation Notes -7 S &P 500 THE BOGDAHN 2 GROUP Why Inflation Protection? Hedges against inflation have always been attractive. Currently, surging commodities prices, a plummeting dollar, and an accommodative monetary policy provide the inflationary market conditions the Fed must consider. Investors have the fiduciary responsibility to maintain the purchasing power of their investments. AI When conducting asset/liability studies, plan sponsors market rate assumptions are challenged by: • Volatility • Real rates of return - inflation Typical pension fund demands greater protection in response to periods of inflation. BOGDAHN GROUP s Inflation is REAL! US CPI Urban Consumers Non - Seasonally Adjusted Index 1997- Present CPI Index mein Source: Bureau of Labor Statistics Ell M 0 01 0 M THF. BOGDAHN a GROUP TIPS & CIPS - A Comparison kjnvuil What are TIPS? Government guaranteed bonds designed to protect investors from inflation. Auctioned with 5 -, 10 -, 20 -, and 30 -year maturities. Initiated in 1997, the TIPS market has grown to nearly $400 billion outstanding, with average daily trading volume over $8 billion. �r-� I'm BOGDAHN s GROUP TIPS Annual Issuance and Outstanding Par $B 450 400 350 300 250 200 150 100 50 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Outstanding Treasury Inflation- Protected Securities (1997 - June, 2007) Source: U.S. Treasury — Office of Domestic Finance r7BOGDAHN 7 GROUP CIPS — A TIPS Alternative An extension of the TIPS concept but with some additional benefits. Issued by diverse financial entities such as federal agencies, commercial banks, investment banks, insurance companies, and corporate finance subsidiaries. Issued by companies with investment -grade credit ratings of single -A or better by Moody's and S &P. Some include: BARCLAYS f citior Up k rr r+r•rnrauns HSBC 4Z► D[aO HM" QJPMOlpanC hate * BARCLAYS � lliL BOGDAHN $ GROUP CIPS Annual Issuance and Outstanding Par $B 20 18 16 14 12 10 8 6 4 2 0 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Outstanding Corporate Inflation- Protected Securities (2003 - June, 2007) Sources: Bloomberg; mtn -i.com .%� THE: 7 ` BOGDAHN GROUP E Comparison of Issuance Growth Since 2003 600% 500% 400% 300% 200% 100% 0% CIPS outstanding issues grew 533% since 2003 CIPS TIPS------------------------------------------------------------------------------- - - - - -- ------------ - - - - -- 2003 2004 2005 2006 2007 Tin. BOGDAHN 10 GROUP CIPS vs. TIPS: An Example With a CIP, all of your earned income (coupon + inflation component) is received monthly. Morgan Stanley 7/1/14 TIPS 1/15/14 Coupon YoY CPI + 2.15% Coupon 2% Investment 1,000,000 1,000,000 Income Earned* Income Received Income Accrued CIPS TIPS CIPS TIPS CIPS TIPS Jan -05 24,840 23,595 24,840 10,345 0 13,250 Jul -05 27,168 29,924 27,168 10,634 0 19,290 Jan -06 28,890 32,525 28,890 11,055 0 21,470 Jul -06 31,455 30,364 31,455 11,564 0 18,800 Jan -07 32,476 10,434 32,476 11,984 0 -1,550 Jul -07 25,739 42,955 25,739 12,695 0 30,260 Total 170,568 169,797 170,568 68,277 0 101,520 Ann. Yield 5.39 5.2 Cash Yield 5.39 2.1 * Reinvestment of coupons is assumed at the 30 -Day A1/P1 commercial paper rate. 180,000 160, 000 140,000 y 120,000 100,000 80,000 60,000 40,000 20,000 0 CIPS TIPS ■ Income Earned ❑ Income Received ■ Income Accrued With a TIP, all of the inflation component is deferred until maturity. �0*4N y BOGDAHN GROUP 11 CIPS: A Strategic Addition to an Inflation Protection Strategy Inflation Hedge CIPS provide a predictable REAL return and an explicit hedge against inflation. Diversification — CIPS can add diversification benefits even to multi - sector portfolios. — When combined with TIPS, a powerful enhancement to an inflation protection investment strategy. Income /Additional Cash flow CIPS have a significant structural income producing advantage versus TIPS; important for investors that have a need for current income. TFIF: BOGDAHN 12 GROUP What are the Risks for CIPS? ➢ Credit • Default risk • Downgrade risk ➢ Volatility No defaults since 2003 • Price will fluctuate with inflation fluctuations. • Not a timing investment strategy > 1% since 2003 - Lends itself to long -term inflation protection, not a liquidity strategy. Tin 1 `BOGDAHN 13 GROUP ® - v GROUP 14 THE BOGDAHN GROUP simplifying your investment and fiduciary decisions 340 West Central Ave Suite 300 Winter Haven, Florida 33880 Phone: 863.293.8289 • Fax: 863.292.8717 WNW- City of Palm Beach Gardens Firefighters' Pension Trust Fund International Equity Manager Search Presented October 20, 2008 THE ]BOG-NDW-A-WHN nrx p jm"u W W W. B O G D A H N G R O U P. C O M simplifying your investment and fiduciary decisions Table of Contents International Equity — Candidate Evaluation International Equity — Strategy Narratives Manager Blends Statistics Definitions �J Pages: 1 -10 Pages: 11 -15 Pages: 16 -25 Page: 26 Palm Beach Gardens Firefighters' Pension Trust Fund aD of Zephyr StyleADVISOR: The Bogdahn Group Trailing Performance: Return through September 2008 Q3 -08 YTD 1 year 2 years 3 years 4 years 5 years 6 years 7 years 8 years ■ American Funds EuroPacific Gr R5 ❑ MFS International Growth I 0 Harding Loevner International Equity N MSCI EAFE GROWTH Trailing Performance: Return through September 2008 Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. Page 1 1 quarter YTD 1 year 2 years 3 years 4 years 5 years 6 years 7 years 8 years American Funds EuroPacific Gr R5 -17.99 -26.17 -25.17 -2.17 4.83 10.37 12.33 14.50% 10.23% 4.85% MFS International Growth 1 -18.98 -26.33 -26.24 -2.59 4.34 8.87 11.26 13.41% 9.95% 4.75% Harding Loevner International Equity -16.79 -21.98 -20.53 -1.29 4.08 10.21 10.58 12.00% 8.48% 2.53% MSCI EAFE GROWTH -21.88 -28.01 -28.19 -4.06 2.51 7.81 9.59 11.52% 7.66% 0.83% Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. Page 1 Palm Beach Gardens Firefighters' Pension Trust Fund 0% 25% Y C N C Median m 75% 100% Zephyr StyleADVISOR: The Bogdahn Group Trailing Rank vs Universe: For the Periods Ended September 2008 Mstar Foreign Large Growth Q3 -08 YTD 1 year 2 years 3 years 4 years 5 years 6 years 7 years 10 years • American Funds EuroPacific Gr R5 O MFS International Growth 1 • Harding Loevner International Equity 4 MSCI EAFE GROWTH ❑ 5th to 25th Percentile ❑ 25th Percentile to Median ❑ Median to 75th Percentile ❑ 75th to 95th Percentile Trailing Rank vs Universe: Return Rank through September 2008 Mstar Foreign Large Growth Created with Zephyr StyleADVISOR. Manager returns supplied by: eVeslment Alliance, Morningstar, Inc. =, Page 2 (V j Median Rank Volatility of Rank 1 quarter 251 rang YTD 240 rang 1 year 233 rang 2 years 220 rang 3 years 208 rang 4 years 192 rang 5 years 190 rang 6 years 187 rang 7 years 178 mng American Funds EuroPacific Gr R5 8 2 9 7 3 11 8 9 9 8 13 MFS International Growth 1 12 3 15 8 6 12 12 16 13 18 14 Harding Loevner International Equity 12 10 7 0 0 8 14 9 27 40 29 MSCI EAFE GROWTH 42 3 45 21 21 26 37 35 45 46 44 Mstar Foreign Large Growth Created with Zephyr StyleADVISOR. Manager returns supplied by: eVeslment Alliance, Morningstar, Inc. =, Page 2 (V j Palm Beach Gardens Firefighters' Pension Trust Fund E m 60% 50% 40% 30% 20% 10% 0% -10% -20% -30% Zephyr StyleADVISOR: The Bogdahn Group Calendar Year Performance: As of June 2008 YTD 2007 2006 2005 2004 2003 2002 2001 2000 1999 ■ American Funds EuroPacific Gr R5 ❑ MFS International Growth I ■ Harding Loevner International Equity ■ MSCI EAFE GROWTH Calendar Year Performance: As of September 2008 Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. Page 3 l�� YTD 2007 2006 2005 2004 2003 2002 2001 2000 1999 American Funds EuroPacific Gr R5 - 26.17% 19.22% 22.17% 21.38% 19.98% 33.24% - 13.45% - 12.17% - 17.84% 56.97% MFS International Growth 1 - 26.33% 16.31% 26.15% 14.35% 18.35% 37.82% - 10.83% - 16.07% - 10.18% 33.25% Harding Loevner International Equity - 21.98% 13.01% 23.01% 20.16% 11.64% 26.96% - 15.04% - 18.19% - 15.80% 49.80% MSCI EAFE GROWTH - 28.01% 16.84% 22.69% 13.64% 16.48% 32.49% - 15.77% - 24.41% - 24.39% 29.70% Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. Page 3 l�� Palm Beach Gardens Firefighters' Pension Trust Fund 0% 25% c c� c Median a� 75% 100% Zephyr StyleADVISOR: The Bogdahn Group Calendar -Year Rank vs. Universe Mstar Foreion Large Growth Q4 2007 Q4 2006 Q4 2005 Q4 2004 Q4 2003 Q4 2002 Q4 2001 Q4 2000 Q4 1999 • American Funds EuroPacific Gr R5 O MFS International Growth 1 • Harding Loevner International Equity ♦ MSCI EAFE GROWTH ❑ 5th to 25th Percentile ❑ 25th Percentile to Median [_]Median to 75th Percentile ❑ 75th to 95th Percentile Calendar -Year Rank vs Universe: Return Rank Median Rank Volatility of Rank Dec 2007 226 rang Dec 2006 215 rang Dec 2005 194 rang Dec 2004 190 mng Dec 2003 187 mng Dec 2002 183 rang Dec 2001 155 rang Dec 2000 136 rang Dec 1999 134 rang American Funds EuroPacific Gr R5 25 13 29 72 12 26 58 17 4 53 46 MFS International Growth 1 31 19 50 23 52 37 31 8 14 16 84 Harding Loevner International Equity 52 30 72 59 13 92 92 29 19 42 63 MSCI EAFE GROWTH 62 27 48 65 61 53 61 31 63 64 93 i Q4 2007 Q4 2006 Q4 2005 Q4 2004 Q4 2003 Q4 2002 Q4 2001 Q4 2000 Q4 1999 • American Funds EuroPacific Gr R5 O MFS International Growth 1 • Harding Loevner International Equity ♦ MSCI EAFE GROWTH ❑ 5th to 25th Percentile ❑ 25th Percentile to Median [_]Median to 75th Percentile ❑ 75th to 95th Percentile Calendar -Year Rank vs Universe: Return Rank Mstar Foreign Large Growth Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. /� ` Page 4 O Xj Median Rank Volatility of Rank Dec 2007 226 rang Dec 2006 215 rang Dec 2005 194 rang Dec 2004 190 mng Dec 2003 187 mng Dec 2002 183 rang Dec 2001 155 rang Dec 2000 136 rang Dec 1999 134 rang American Funds EuroPacific Gr R5 25 13 29 72 12 26 58 17 4 53 46 MFS International Growth 1 31 19 50 23 52 37 31 8 14 16 84 Harding Loevner International Equity 52 30 72 59 13 92 92 29 19 42 63 MSCI EAFE GROWTH 62 27 48 65 61 53 61 31 63 64 93 Mstar Foreign Large Growth Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. /� ` Page 4 O Xj Palm Beach Gardens Firefighters' Pension Trust Fund E 3 Zephyr StyleADVISOR: The Bogdahn Group Manager Risk/Return Longest Concurrent Timeframe: 10 Years Ended September 2008 14% 12%- to% 8% O s% 4% 2% 00% 5% 104. 15% 20% 25% 30% Standard Deviation • American Funds EuroPacific Gr R5 O MFS International Growth I * Harding Loevner International Equity ♦ MSCI EAFE GROWTH Risk - Return Table Longest Concurrent Timeframe: 10 Years Ended September 2008 Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. _ 1 Page 5 lZ� `� Return N Std Dev N Downside Risk ( %) Seta vs. Market Alpha vs. Market R- Sqared vs. Market Sharpe Ratio Tracking Error vs. Market American Funds EuroPacific Gr R5 9.20 19.69 13.97 0.9130 6.00 93.12 0.2954 5.4732 MFS International Growth 1 7.41 18.50 12.89 0.8647 4.30 94.63 0.2177 5.1292 Harding Loevner International Equity 6.67 19.00 13.50 0.8763 3.62 92.14 0.1726 5.9168 MSCI EAFE GROWTH 3.28 20.81 14.66 1.0000 0.00 100.00 - 0.0053 0.0000 Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. _ 1 Page 5 lZ� `� Palm Beach Gardens Firefighters' Pension Trust Fund E d Manager Risk /Return Late Mutually - Exclusive Timeframe: 5 Years Ended September 2008 14% 12% 10% Return Std Dev • Alpha R- Squared Sharpe 8% Return Std Dev Beta Alpha R- Squared Sharpe 6% N N vs. vs. Market vs. Market Ratio 4% (�) (oy°) vs. vs. Market vs. Market Ratio 2% Market N (%) 4/ 5% 10% 15% 20% 25% 30% c N 10% Zephyr StyleADVISOR: The Bogdahn Group Manager Risk/Return Early Mutually - Exclusive Timeframe: 5 Years Ended September 2003 0 0 • Standard Deviation Standard Deviation • American Funds EuroPacific Gr R5 O MFS International Growth I • Harding Loevner International Equity ♦ MSCI EAFE GROWTH Risk - Return Table Risk - Return Table Late Mutually - Exclusive Timeframe: 5 Years Ended September 2008 Early Mutually- Exclusive Timeframe: 5 Years Ended September 2003 30 Created with Zephyr Sty1eADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. �� Page 6 ,1 Return Std Dev Beta Alpha R- Squared Sharpe Return Std Dev Beta Alpha R- Squared Sharpe N N vs. vs. Market vs. Market Ratio (�) (oy°) vs. vs. Market vs. Market Ratio Market N (%) Market ( %) N American Funds EuroPacific Gr R5 12.33 15.19 0.8957 3.45 95.17 0.6082 American Funds EuroPacific Gr R5 6.16 23 .72 .933 0.9330 8.79 92.96 0.1046 MFS International Growth 1 11.26 16.02 0.9580 1.89 97.83 0.5094 MFS Intemational Growth 1 3.71 20.98 0.8285 5.71 93.64 0.0011 10.58 14.20 0.8335 2.32 94.24 0.5271 Harding Loevner International Equity 2.89 23.12 0.9037 5.40 91.75 -0.0341 Harding Loevner International Equity MSCI EAFE GROWTH 9.59 16.54 1.0000 0.00 100.00 0.3925 MSCI EAFE GROWTH -2.67 24.51 1.0000 0.00 100.00 -0.2591 Created with Zephyr Sty1eADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. �� Page 6 ,1 Palm Beach Gardens Firefighters' Pension Trust Fund 14 12 N 10 r CID C7 8l `o 6� E z 4 2� 0L- < -20 12 - 10 f cu C7 0 6 a� z 4'r 2 01 < -4 Zephyr StyleADVISOR: The Bogdahn Group Histogram of Returns 10 Years Ended September 2008 -20 to -15 -15 to -10 -10 to -5 -5 to 0 Returns Range ( %) Histogram of Excess Returns vs. MSCI EAFE GROWTH 10 Years Ended September 2008 -4 to -3 -3 to -2 -2 to -1 -1 to 0 Excess Returns vs. MSCI EAFE GROWTH Range ( %) 0to5 5to10 10 to 15 ■ American Funds EuroPacific Gr R5 ❑ MFS International Growth I ■ Harding Loevner International Equity 0 to 1 1 to 2 Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. _ Page 7 ■ /��\ Palm Beach Gardens Firefighters' Pension Trust Fund 1 1 (0 L _C. Q E d x w Zephyr StyleADVISOR: The Bogdahn Group Annualized Excess Return / Standard Deviation of Excess Return 10 Years Ended September 2008 IF 11 0 6% — Standard Deviation of Excess Return vs. MSCI EAFE GROWTH • American Funds EuroPacific Gr R5 O MFS International Growth I • Harding Loevner International Equity ♦ MSCI EAFE GROWTH Rolling Risk Statistics: Alpha Rolling Risk Statistic: Information Ratio 12- Quarter Moving Windows, Computed Quarterly relative to MSCI EAFE GROWTH 12- Quarter Moving Windows, Computed Quarterly relative to MSCI EAFE GROWTH 4% 2% 0% rn_ 8%- 6% 4% 2 %- 0% 2% 2 1 O Of C O .@ E 0 O C -0 .5 2 / \ 5 1- .5- 0 5- �1 Q3 2001 042002 Q4 2003 042004 Q4 2005 Q4 2006 Q4 2007 03 2008 Q3 2001 Q4 2002 042003 Q4 2004 Q4 2005 Q4 2006 Q4 2007 03 2008 Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. ^� Page 8 �; �, Palm Beach Gardens Firefighters' Pension Trust Fund Zephyr StyleADVISOR: The Bogdahn Group Upside vs. Downside Capture Upside vs. Downside Capture Late Mutually - Exclusive Timeframe: 5 Years Ended September 2008 Early Mutually - Exclusive Timeframe: 5 Years Ended September 2003 105 F-- _0 O 100 �— 0 d v Q D 85r • i 60 65 0 d CL e w 5 125 120 115 110 • 105 100 95 0 65 70 75 80 85 90 95 100 1 0 S Downside% Single Computation Upside vs. Downside Capture 10 Years Ended September 2008 Downside% Single Computation 114 112 110 108 106 104 102 100 IF 98 . 96 70 75 80 0 American Funds EuroPacific Gr R5 O MFS International Growth I • Harding Loevner International Equity ♦ MSCI EAFE GROWTH Created with Zephyr StyleADVISCR. Manager returns supplied by: eVestment Alliance. Morningstar, Inc. 85 90 Downside% Single Computation Page 9 95 100 lP Palm Beach Gardens Firefighters' Pension Trust Fund 7 Multi Statistic Graph Zephyr StyleADVISOR: The Bogdahn Group Multi Statistic Graph 4 3 - 2 - - -- 1 - -- - - - - - - - - - -- - -- 0 1 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - -2 - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - Batting Up Capture Down Capture Excess Return Average Ratio Ratio vs. Market American Funds EuroPacific Gr R5 ❑ MFS International Growth I Harding Loevner International Equity ■ MSCI EAFE GROWTH Multi- statistics Summary Table: 46 Quarters Ended September 2008 Information Ratio rreynor Ratio Created with Zephyr StyIeADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. Page 10 Batting Average # of Up Periods Up Capture Ratio # of Down Periods Down Capture Ratio Excess Return vs. Market Information Ratio Treynor Ratio American Funds EuroPacific Gr R5 65.22% 30 110.18% 16 78.84% 5.10% 0.97 5.14 MFS International Growth 1 63.04% 25 93.32% 21 79.99% 2.26% 0.40 2.15 Harding Loevner International Equity 45.65% 27 93.64% 19 83.31% 1.78% 0.30 1.58 MSCI EAFE GROWTH 0.00% 26 100.00% 20 100.00% 0.00% 0.00 -0.37 Created with Zephyr StyIeADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. Page 10 Palm Beach Gardens Firefighters' Pension Trust Fund Capital Research and Management Co.: EuroPacific Growth Fund Firm Ileadquartcrs 333 S. Ilope Street 50th Floor Los Angeles. California 90071 Main Phone Main Fax 213.486.9548 / 213.496.9979 Year Firm Founded 1931 Firm Website Address www.americanfunds.com Marketing Contact Kim Johnson. Asset Class Title Marketing Associate All Cap Phone ! Fax 213,4M6.9986 ' 213.486.9979 Preferred Benchmark ASSET & CLIENT Current Assets ($Ylil) •• • Current Total Clients Total Clients I Itstoncal Assets ($Mill Clients Gained Number Dollars ($Mill "/o Firm Assets Year 2007 Availability In 2007 Year 2006 1.081,496 In 2006 Assets By Tyne ($Mill In U.S. In Non -U.S. Clients Lost Number Dollars ($Mill % Firm Assets Equity - - In 2007 Fixed Income - - In 2006 Balanced - - Employee Owned 100(1"„ 1 irm AIMR Compliant No Publicly Ileld n.0" Parent Owned Minority Owned Portfolio M:magcr(.s Research Analyst(s) 3r)IINt The Capital Group Companies. Inc. (CG) is one of the country's oldest major financial services organizations, tracing its amts back to 1931. The Capital Group is the parent of an organization comprised of a family of companies whose only business is the management ofequity and fixed - mcome investment portfolios and necesssary supporting activities. Capital Research and Management Company (CRMC), one member of the family. has arranged investment company portfolios since 1933 and is one of the largest mutual fund investment advisers in the country. CRMC manages The American Funds Group of mutual funds whose combined assets exceed $924 billion. American Funds Distributors, Inc., (AFD), another member of the Capital family, is the principal undurwriter and distributor of the American funds. Capital Guardian Trust Company (CGTC). provides trust and management services for institutional clients in the United States. ■ Pe'rnmJnth /.yrlmr \.Snir. mll.V)R uvnx rknn ln.n 0',. mr. /11— Capital Research and Management Co.: EuroPacific Growth Fund PRODUCT Dollars fSMi❑ Asset Class International Equity Primary Capitalization All Cap Primary Style Emphasis Growth Preferred Benchmark MSCI ACWI ex -US -GD Total Assets ($Mil) 5113,374 Total Clients Not Used Minimum Size ($Mill YTD Availability Not Available Clients Gained Number Dollars fSMi❑ YTD In 2007 In 2006 PORTFOLIO CHARACTERISTICS Current Number of I luldings 300 Countries 39 Approach to Ilcdging Not Used %Allowed to Invest in Emg. Mitts. YTD Annual Turnover 39.0% Current P/E 02 -mo Trailing) 18.00 Current P/B (12 -m9 Trailing) 3.30 Weighted Avg. Mkt. Cap ($Mill S 33,400 Current Cash Position 9.0% Clients Lost Number Dollars (SMil) YTD In 2007 In 2006 Portfolio Managers Research Analysts Total Number Average Years of Experience Average Years with Firm MANAGEMENTTURNOVER 'ameJ Portfolio Managers Research Analysts Lost YTD YTD In 2007 In 2007 In 2006 0 0 In 2006 Portfolio Managers Research Analysts 0 0 In its rule as investment adviser. Capital Research and Management Company utilizes a value oriented, fundamental investment approach in providing a return consistent with the stated objectives of the hind. The fundamental investment approach has been followed for over 70 years and Is guided by thorough, detailed internal research and analysis based on extensive field work and direct company contact. Emphasis is placed on valuation and considerable effort is focused on identifying the difference between the underlying value of a security and its current price. This approach leads the portfolio counselors to invest as though they were buying entire . 1`rrlmrrvl,rnh /rlrinr'..rn %r.1 /ll %rnR rninx rbin hrun rl ismrrm Alliumv� Page 11 l ^' \ Palm Beach Gardens Firefighters' Pension Trust Fund Capital Research and Management Co.: EuroPacific Growth Fund companies rather than stock certificates. Research analysts and portfolio counselors look for companies that have characteristics such as a unique product or service, superior marketing, or unusually good research, or simply companies that happen to be a lot better than most of their competitors. When identifying value in a company. CRMCi :s investment professionals generally look at the following relationships: - Price relationship to camings. overall cash Flow and future income should be reasonable. They are normally not willing to discount earnings for too long a period into the future. Other things being equal• they prefer a good dividend retum, even where the investment objective does not stress yield. Companies selected are often asset -rich with strong balance sheets. They can afford to support substantial capital spending programs and /or dividend payments. - They review the relationship of price to book value as being meaningful. and therefore are more persuaded to invest in stocks whose prices am not excessive relative to book value• or in companies where asset values are understated. PORTFOLIO • • METHODOLOGY see above Harding, Loevner Management, L.P.: International Equity GENERAL FIRM INFORMATION Ilistorical Assets($Mill Firm Ileadquarters 50 Division Street Dollar,($Mill Suite 401 Year 2007 Somerville. New Jersey 09976 Main Phone / Main Fax 908.219.7900 / 908.219.1915 Year Firm Founded 1999 Firm Wehsite Address www.hardingloevner.com CONTACT O • Marketing Contact S Moody, CFA Title Director of Marketing Phone fax 909.947.0123 / 909.219.1915 Current Assets $6,069 Current Total Clients 72 Employee Owned 96.5% Firm AIMR Compliant Yes Publicly I leld Parent Owned Minority (honed 4.7% MANAGEMENTTEAM Portfolio Manager(s) Research Analyst(s) BACKGROUND FIRM David R. Locvncr, CFA and Daniel D. I larding, CFA, former global investment managers at Rockefeller & Co., founded I larding• Loevner Management. L.P. ( "I larding Loevner')in 1999. Their goal was to was to offer high - quality global and international (non -US) equity investment management services utilizing a research - intensive, bottom -up investment approach. The firm was registered with the SEC on July 3, 1999. Simon I fallen, CFA, who previously managed assets for Rockefeller on behalf off long Kong -based Jardine Fleming Investment Management, joined the firm in 1991. Loevner and I fallen continue to lead the firm in their respective roles as Chicf Executive Officer and Chief Investment Officer. Since 2(9)3. Ilarding has served as Senior Advisor to the inn. At inception. I larding Loevner introduced three global investment strategics, based upon a shared philosophy and research process: International Equity, Global Equity and Multi -Asset Global. The Firm first began managing intemational equity accounts for tax- exemot clients in 1991. 0 lam /xnxaI'In+i.in l�•. 1n)' I. SI) N�� ,inA,lnlafi- 1'r.,rmrni4ll . H.. lunrvl, ��, h.% a9ilnri .S)�!�•Anl' /.it)Rri,in.¢Mni� h,vnrl'r.,im,•"All —, Page 12^ Ilistorical Assets($Mill Clients Gained Number Dollar,($Mill %Firm Assets Year 2007 $ 6,359 In 2007 2 $ 47 0.7 11. Year 2006 $ 4.719 In 2006 15 $ 900 19.1% Assets By Tyne 1$Mih In U.S. In Non -U.S. Clients Lost Number Dollars ($Mil) %Finn Assets Equity $ 0 $ 6,035 In 2007 0 $ 0 0.01% Fixed Income $ 0 $ 0 In 2006 4 $ 54 1.1% Balanced 0 $ 34 Employee Owned 96.5% Firm AIMR Compliant Yes Publicly I leld Parent Owned Minority (honed 4.7% MANAGEMENTTEAM Portfolio Manager(s) Research Analyst(s) BACKGROUND FIRM David R. Locvncr, CFA and Daniel D. I larding, CFA, former global investment managers at Rockefeller & Co., founded I larding• Loevner Management. L.P. ( "I larding Loevner')in 1999. Their goal was to was to offer high - quality global and international (non -US) equity investment management services utilizing a research - intensive, bottom -up investment approach. The firm was registered with the SEC on July 3, 1999. Simon I fallen, CFA, who previously managed assets for Rockefeller on behalf off long Kong -based Jardine Fleming Investment Management, joined the firm in 1991. Loevner and I fallen continue to lead the firm in their respective roles as Chicf Executive Officer and Chief Investment Officer. Since 2(9)3. Ilarding has served as Senior Advisor to the inn. At inception. I larding Loevner introduced three global investment strategics, based upon a shared philosophy and research process: International Equity, Global Equity and Multi -Asset Global. The Firm first began managing intemational equity accounts for tax- exemot clients in 1991. 0 lam /xnxaI'In+i.in l�•. 1n)' I. SI) N�� ,inA,lnlafi- 1'r.,rmrni4ll . H.. lunrvl, ��, h.% a9ilnri .S)�!�•Anl' /.it)Rri,in.¢Mni� h,vnrl'r.,im,•"All —, Page 12^ Palm Beach Gardens Firefighters' Pension Trust Fund Harding, Loevner Management, L.P.: International Equity I larding Loevner established a dedicated Emerging Markets equity strategy in 1998 and International Small Companies Equity in 2(106. The predecessor to I larding, Loevner Funds, Inc. was launched in 1994, when the firm first offered the International equity strategy to institutions in mutual fund format. In 1998• [larding Loevner launched a dedicated Emerging Markets Strategy. The Firm's newest prducts include the International Small Companies Strategy (launched in 2006)and the Frontier Emerging Markets Strategy (launched in May 2008). The predecessor to I larding. Loevner Funds, Inc. was launched in 1994, when the Firm first offered the International (non -US) Equity Strategy in a mutual fund format. In May 2007, our mutual fund business expanded into Europe by establishing the I larding. Loevner Funds. plc ( Dublin UCITS) for our Global, International (non -US) and Emerging Markets Strategies. The Firm's clients are both tax - exempt and taxable. They include major foundations, endowments, pension plans, private family offices, sub-advisory relationships, and individuals. Today. the firm has 49 employees, including 22 experienced investment professionals, all located in Somerville. NJ. [larding Loevner is organized as a limited partnership with management responsibility residing in its corporate partner, IILM Iloldings. Inc. IILM I Ioldings, Inc owns 96.5 ".o of (larding Loevner. IILM Boldings. Inc. is owned 100" by the employees. This structure has been in place since the firm's establishment. There are no affiliated organizations. Harding, Loevner Management, L.P.: International Equity Asset Cla— International Equity Portfolio Managers Research Analysts Total Number Primary ( apitalizanon Large Cap 12 Average Years of Experience Primary Style Emphasis Growth Average Yeats with Firm 7 Preferred Benchmark MSCI ACW I ex -US -GD Total Assets($Mil) $932 Lost YTD 0 Total Clients 19 In 2007 0 (1 Minimum Size (Will $5 0 3 In 2006 Availability TURNOVER CLIENT open Clients Gained Number Dollars Mil) Clients Lost Number Dollars ($Mill YTD 0 $ (I YTD 2 $ 25 In 2007 0 $ 0 In 2007 0 $ 0 In 2006 2 $ 46 In 2006 2 $ 42 Current Number of I folding, 49 Countries 21 Approach to Iledging Not Used % Allowed to Invest in Emg. Mkts. 20.0% Annual Turnover 15.3% Current P/E 0 2 -mo Trailing) 16.80 Current P/B (12 -mo Trailing) 2.61 Wcighwd Avg. Mkt. Cap Mil) $ 46.640 ('i—nt Cash Position 3.9% Portfolio Manaeers Research Analysts 0 0 0 0 0 1 The firm operates on the conviction that insights gained through the careful study of individual companies art more valuable than market ('top down') forecasts. Accordingly, we manage equity portfolios following a company- analysis -based (i.e. bottom -up) approach, favoring stocks of companics that exhibit four characteristics: • Growth - prospective growth of revenue, earnings and cash flows • Management - track record of successful management with a clearly articulated business strategy and a suitable regard for shareholders • Financial Strength - financial resources, business - appropriate balance sheet and borrowing capacity, and free cash flow Pn• Iwrarl ,�irh /a•I.hrr:.rnlilnr "6ft)F vxin¢Mru hnm el'nrmenr.11liann• ■ /'�ereinv /nvrM1 /pFrri xn /.•:1(11rt!)N n.inx ./aa /.urn rii.im.•ni i /hanrr Page 13�� Portfolio Managers Research Analysts Total Number 4 12 Average Years of Experience 14 3 Average Yeats with Firm 7 0 MANAGEMENTTURNOVER Gained Portfolio Managers Research Analysts Lost YTD 0 2 YTD In 2007 0 (1 In 2007 In 2006 0 3 In 2006 Portfolio Manaeers Research Analysts 0 0 0 0 0 1 The firm operates on the conviction that insights gained through the careful study of individual companies art more valuable than market ('top down') forecasts. Accordingly, we manage equity portfolios following a company- analysis -based (i.e. bottom -up) approach, favoring stocks of companics that exhibit four characteristics: • Growth - prospective growth of revenue, earnings and cash flows • Management - track record of successful management with a clearly articulated business strategy and a suitable regard for shareholders • Financial Strength - financial resources, business - appropriate balance sheet and borrowing capacity, and free cash flow Pn• Iwrarl ,�irh /a•I.hrr:.rnlilnr "6ft)F vxin¢Mru hnm el'nrmenr.11liann• ■ /'�ereinv /nvrM1 /pFrri xn /.•:1(11rt!)N n.inx ./aa /.urn rii.im.•ni i /hanrr Page 13�� Palm Beach Gardens Firefighters' Pension Trust Fund Harding, Loevner Management, L.P.: International Equity generation • Competitive Advantage - high and growing margins, sustained by durable competitive advantages PORTFOLIO CONSTRUCTION METHODOLOGY Construction of a diversified portfolio of stocks selected from among the most promising candidates by portfolio management team. - Construction Process • three portfolio co- managers build unconstrained virtual portfolios from among stocks rated by analysts • lead portfolio manager has the final discretion on buy and sell decision and individual security weights in strategy model portfolio on which all client accounts are based • individual security weights are the result of PM conviction, within context of overall portfolio risk constraints • country and sector weights arc the result of bottom up stock selection not top down allocation; weights must be maintained within product guidelines o a stock is sold or reduced when a company's direction or business performance does not meet the mileposts set more attractive opportunities arc identified; or a holding exceeds 5% of the portfolio • PM must discuss company failure to meet mileposts with relevant analyst before sale • Portfolio risks and tracking error monitored by PM via risk factor model - Construction Results • holdings range hetween 35 -75 stocks. • typically 50 -60 holdings in 15 -25 markets • country risk factors may compel an underweight versus the benchmark • three -year average annual turnover of 30% • generally large cap profile • portfolio exhibits high fundamental quality (stocks of companies with high ROA, high ROE with low leverage, low variability of ROE, and high profit margins) o fundamental growth measures (sales, earnings, cash Bow) higher than benchmark MFS Investment Management: MFS International Growth Equity GENERAL FIRM INFORMATION Firm Iteadquarters 500 Boylston St. 21st floor Boston. Massachusetts 02116 Main Phonc ; Main Fax 617.954.50(X) / 617.954.6657 Year Firm Founded 1924 Firm Websile Address www.mfs.com Marketing Contact Topher Callahan, Title Director of North American Sales Phone ' Fax 617 954.5000 Current Assets ($Mil) $180,150 Current Total Clients 405 Portfolio Manager(s) Research Analyst(s) Massachusetts Financial Services Company ("MFS"). commonly known as MFS Investment Management, and its predecessor organizations have a history of money management dating from 1924, when it created the first U.S. mutual fund, Massachusetts Investors Trust. In 1932, MFS established one of the investment management business' first in -house research departments, introducing what we call MFS Original Rescarchla`. MFS and its predecessor organizations have been register d as an investment adviser under the Investment Advisers Act of 1940 (the "Advisers Act ") since 1969, and began managing its first tax - exempt account in 1970. MFS subsequently formed a separate subsidiary, MFS Institutional Advisors. Inc.. which registered as an investment adviser under the Advisers Act in 1994. MFS is a majority owned subsidiary of Sun Life of Canada (U.S.) Financial Services Holdings. Inc., which in turn is an indirect majority owned subsidiary of Sun Life Financial. Inc. (a diversified financial services organization). MFS has been a subsidiary of Sun Life since 1982. While MFS operates with considerable autonomy, this partnership offers us additional resources as we continue to expand our global research presence. Drawing on an investment heritage, which emphasizes integrity, teamwork and original research, MFS Investment Management (MFS) offers multi - product equity and fixed income capabilities to a broad client hale. This includes public pcmium plans, corporate pension plans, endowments and foundations, investment advisory firms, and individual investors, /' m) wrr�v)„ ii//. /,/ r�� ',tn/i•.Ilil /�flR...inA.lur,. ti.xn.)ivimrn..11hrm�r . ISr•)m.r)xirh / /.ln +i xnJr•.Inl/.G()ax.ine.kn.�/rrwn �•l i•.mr��n�.0ll�.x.�.• Page 14 listorical Assets ($Mil) Clients Gained Number Dollars ($Mill "'o Ftmr Assets Year 2007 $ )97,726 In 2007 0 $ 0 0.0 -1. Year 2006 $ 187,372 In 2006 29 $ 4,647 0.0% Assets By Tvoc ($Mill In U.S. In Non -U.S. Clients Lost Number Dollars ($Mil) % Fimr Assets Equity $ 61,572 $ 65,962 In 2007 0 $ 0 0.0% Fixed Income $ 30,972 $ 4,789 In 2006 33 $ 4.393 0.0% Balanced $ 14,621 $ 2,235 OWNERSHIP INFORMATION Employee Owned 210% •• Firm AIMR Compliant • Yes Publicly I Idd Parent Owned 78.0% Minority Owned 0.0% Portfolio Manager(s) Research Analyst(s) Massachusetts Financial Services Company ("MFS"). commonly known as MFS Investment Management, and its predecessor organizations have a history of money management dating from 1924, when it created the first U.S. mutual fund, Massachusetts Investors Trust. In 1932, MFS established one of the investment management business' first in -house research departments, introducing what we call MFS Original Rescarchla`. MFS and its predecessor organizations have been register d as an investment adviser under the Investment Advisers Act of 1940 (the "Advisers Act ") since 1969, and began managing its first tax - exempt account in 1970. MFS subsequently formed a separate subsidiary, MFS Institutional Advisors. Inc.. which registered as an investment adviser under the Advisers Act in 1994. MFS is a majority owned subsidiary of Sun Life of Canada (U.S.) Financial Services Holdings. Inc., which in turn is an indirect majority owned subsidiary of Sun Life Financial. Inc. (a diversified financial services organization). MFS has been a subsidiary of Sun Life since 1982. While MFS operates with considerable autonomy, this partnership offers us additional resources as we continue to expand our global research presence. Drawing on an investment heritage, which emphasizes integrity, teamwork and original research, MFS Investment Management (MFS) offers multi - product equity and fixed income capabilities to a broad client hale. This includes public pcmium plans, corporate pension plans, endowments and foundations, investment advisory firms, and individual investors, /' m) wrr�v)„ ii//. /,/ r�� ',tn/i•.Ilil /�flR...inA.lur,. ti.xn.)ivimrn..11hrm�r . ISr•)m.r)xirh / /.ln +i xnJr•.Inl/.G()ax.ine.kn.�/rrwn �•l i•.mr��n�.0ll�.x.�.• Page 14 Palm Beach Gardens Firefighters' Pension Trust Fund MFS Investment Management: MFS International Growth Equity PRODUCT Asset Class International Equity Primary Capitalization All Cap Primary Style Emphasis Growth Preferred Benchmark MSCI ACWI ex -US Growth -ND Total Asset., ($Mil) $2.588 Total Clients 9 Minimum Svc I$Mil) $50 .Availahiliry TURNOVER CLIENT Open Clients Gained Number Dollar., ($Mih Clients Lust Number Dollars($Mil) YTD 0 $ 0 YTD 0 $ 0 In 2007 _ % 259 In 2007 Il $ 0 In 2006 n s n In 2006 0 $ 0 PORTFOLIO Current Number of Iloldings Countries : I Approach to I lodging Defensive i Allowed to Invest in Emg. Mkts. 25.0 "n Annual Turnover S5.011. Current P/E (12 -mo Trailing) 14.60 Current P /B(12 -mo Trailing) 2.10 Wcightcd Avg. Mkt. Cap ($Mil) $ 67.600 Current Cash Position 0.8% MANAGEMENTTEAM Portfolio Managers Research Analysts Total Number 2 24 Average Years of I. �prnrnce 23 12 Average Years wnh Ilan 6 4 MANAGEMENTTURNOVER Gamed Portfolio Managers Research Analysts Last Portfolio Managers Research Analysts YTD 0 3 YTD 0 0 In 2007 0 1 In 2007 0 (1 In 2006 1 1 In 2006 0 0 We believe earnings growth drives share price performance over the long term. We conduct proprietary fundamental and quantitative research to identify companies with: - Iligher sustainable earnings growth rates and returns than their industry - Improving fundamentals leading to multiple expansion - Stock valuations not fully reflecting their long -term growth prospects ■ /' n• 1. mrrn/ nrrh /a• /rhr'ri.t'nli•11)1' /C!)N rrsrnA rMra h'r.m r•{'r•xrmrnr Allrnnrc MFS Investment Management: MFS International Growth Equity Internationally, there are approximately 275 -325 securities that MFS analysts have rated a buy. The portfolio will typically hold 100 names that meet the porfolio's bury criteria. The management team relics on their extensive experience and the input of analysts to select the best investment opportunities across regions and sectors. The following factors are considered when determining position sizes: liquidity in terms of the average days trading volume of a security and conviction relative to other investment opportunities. The portfolio is actively managed. While we are benchmark aware, we arc not benchmark driven. rvrrr .l"irh /a/rhrri511,tl)1'tT0Rr Rrlunrhr"nrr!•ermr•nr,flli- Page 15 ^�� Palm Beach Gardens Firefighters' Pension Trust Fund E a� Zephyr StyleADVISOR: The Bogdahn Group Trailing Performance: Return through September 2008 1 quarter YTD 1 year 2 years 3 years 4 years 5 years 6 years 7 years 10 years 50 %Voyageur Intl.,50 %Amer Funds EuroPacific 50% Voyageur Intl -50% Harding Loevner Intl. 50% Voyageur Intl.,50% MFS Intl. Growth MSCI EAFE Trailing Performance: Return through September 2008 Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. Page 16 1 ,I 1 quarter YTD 1 year 2 years 3 years 4 years 5 years 6 years 7 years 8 years 10 years 50 %Voyageur Inti.,50 %Amer Funds EuroPacific -20.93 -29.33 -31.03 -6.69 1.88 7.86 11.39 15.17% 13.19% 8.22% 10.79% 50% Voyageur Intl.,50% Harding Loevner Intl. -20.15 -27.21 -28.79 -6.16 1.58 7.86 10.67 14.07% 12.43% 7.18% 9.62% 50% Voyageur Inti.,50% MFS Intl. Growth -21.30 -29.41 -31.53 -6.86 1.66 7.17 10.90 14.65% 13.05% 8.21% 9.87% MSCI EAFE -20.50 -28.91 -30.12 -6.40 1.58 7.27 10.16 12.74% 8.23% 2.81% 5.42% Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. Page 16 1 ,I Palm Beach Gardens Firefighters' Pension Trust Fund 0% 25% Y C M cr C Median 75% 100% 03 -08 YTD 1 year 2 years 3 years 4 years 5 years 6 years 7 years 10 years • 50 %Voyageur Intl.,50 %Amer Funds EuroPacific • 50% Voyageur Intl.,50% Harding Loevner Intl. • 50% Voyageur Intl.,50% MFS Intl. Growth 4 MSCI EAFE ❑ 5th to 25th Percentile 25th Percentile to Median ❑Median to 75th Percentile i] 75th to 95th Percentile Zephyr StyleADVISOR: The Bogdahn Group Trailing Rank vs Universe: For the Periods Ended September 2008 Mstar Foreign Large Blend Universe Trailing Rank vs Universe: Return Rank through September 2008 Mstar Foreign Large Blend Universe A Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. Page 17 \V Median Rank Volatility of Rank 1 quarter 435 rang YTD 435 rang 1 year 435 mng 2 years 435 rang 3 years 435 rang 4 years 426 rang 5 years 402 rang 6 years 384 rang 7 years 373 rang 10 years 272 rang 50 %Voyageur Intl.,50 %Amer Funds EuroPacifi 10 10 54 49 62 62 42 33 15 6 0 3 50% Voyageur Intl.,50% Harding Loevner Intl. 18 15 41 21 34 51 49 33 24 11 1 3 50% Voyageur Intl.,50% MFS Intl. Growth 17 17 57 50 66 64 47 48 23 9 0 3 MSCIEAFE 39 9 46 45 51 55 49 44 33 25 30 39 Mstar Foreign Large Blend Universe A Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. Page 17 \V Palm Beach Gardens Firefighters' Pension Trust Fund Zephyr StyleADVISOR: The Bogdahn Group E 50% 40% 30% 20% 10% 0% -10% -20% Calendar Year Performance: As of June 2008 YTD 2007 2006 2005 2004 2003 2002 2001 2000 1999 ■ 50 %Voyageur Intl.,50 %Amer Funds EuroPacific ■ 50% Voyageur Intl.,50% Harding Loevner Intl. ■ 50% Voyageur Intl.,50% MFS Intl. Growth 0 MSCI EAFE Calendar Year Performance: As of September 2008 Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. Page 18 YTD 2007 2006 2005 2004 2003 2002 2001 2000 1999 50 %Voyageur Intl.,50 %Amer Funds EuroPacific - 29.33% 10.40% 28.23% 19.04% 24.91% 43.96% -3.66% -5.59% - 11.49% 39.48% 50% Voyageur Inti.,50% Harding Loevner Intl. - 27.21% 7.51% 28.66% 18.49% 20.86% 40.81% - 4.56% -8.52% - 10.12% 35.89% 50% Voyageur Inti.,50% MFS Intl. Growth - 29.41% 9.12% 30.31% 15.62% 24.14% 46.31% -2.33% -7.45% -7.05% 27.66% MSCI EAFE - 28.91% 11.63% 26.86% 14.02% 20.70% 39.17% - 15.66% - 21.21% - 13.96% 27.30% Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. Page 18 Palm Beach Gardens Firefighters' Pension Trust Fund 0% 25% Y C N C Median L N� LL 75% 100% Zephyr StyleADVISOR: The Bogdahn Group Calendar -Year Rank vs. Universe Mstar Foreign Large Blend Universe Q4 2007 Q4 2006 Q4 2005 Q4 2004 Q4 2003 Q4 2002 042001 Q4 2000 Q4 1999 • 50 %Voyageur Intl.,50 %Amer Funds EuroPacific • 50% Voyageur Intl.,50% Harding Loevner Intl. • 50% Voyageur Intl -50% MFS Intl. Growth ♦ MSCI EAFE ❑ 5th to 25th Percentile ❑ 25th Percentile to Median ❑ Median to 75th Percentile ❑ 75th to 95th Percentile Calendar -Year Rank vs Universe: Return Rank Mstar Foreign Large Blend Universe AA Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. — Page 19 Median Rank Volatility of Rank Dec 2007 435 rang Dec 2006 435 rang Dec 2005 429 mng Dec 2004 414 rang Dec 2003 389 rang Dec 2002 377 mng Dec 2001 343 mng Dec 2000 303 rang Dec 1999 283 rang 50 %Voyageur Intl.,50 %Amer Funds EuroPacifi 9 9 68 13 17 2 5 0 1 25 48 50% Voyageur Inti.,50% Harding Loevner Intl. 18 16 88 11 18 12 14 0 1 22 57 50% Voyageur Intl.,50% MFS Intl. Growth 11 11 78 6 40 3 1 0 1 7 81 MSCI EAFE 38 16 56 25 55 12 20 43 54 31 82 Mstar Foreign Large Blend Universe AA Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. — Page 19 Palm Beach Gardens Firefighters' Pension Trust Fund E m Zephyr StyleADVISOR: The Bogdahn Group Manager Risk/Return Longest Concurrent Timeframe: 10 Years Ended September 2008 a% Return (°/,) Std Dev ( %) Downside Risk ( %) Beta vs. Market Alpha vs. Market R- Sqared vs. Market 2% Tracking Error vs. Market 50 %Voyageur Int1.,50 %Amer Funds EuroPacific 10.79 19.25 14.01 0.9510 0% 88.86 0.3842 6.4935 50% Voyageur Intl.,50% Harding Loevner Intl. 9.62 19.13 8% 0.9310 4.56 86.25 0.3258 7.2146 50% Voyageur Intl.,50% MFS Intl. Growth 6% 18.75 13.58 0.9220 4.78 88.09 0.3457 4% MSCI EAFE 5.42 19.08 13.67 1.0000 0.00 2% 0.1063 0.0000 08% 5% 10% 15% 20% 25% 30% Standard Deviation • 50 %Voyageur Intl.,50 %Amer Funds EuroPacific • 50% Voyageur Intl.,50% Harding Loevner Intl. • 50% Voyageur Int1.,50% MFS Intl. Growth ♦ MSCI EAFE Risk - Return Table Longest Concurrent Timeframe: 10 Years Ended September 2008 Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance. Morningstar, Inc. Page 20 t . A Return (°/,) Std Dev ( %) Downside Risk ( %) Beta vs. Market Alpha vs. Market R- Sqared vs. Market Sharpe Ratio Tracking Error vs. Market 50 %Voyageur Int1.,50 %Amer Funds EuroPacific 10.79 19.25 14.01 0.9510 5.55 88.86 0.3842 6.4935 50% Voyageur Intl.,50% Harding Loevner Intl. 9.62 19.13 13.90 0.9310 4.56 86.25 0.3258 7.2146 50% Voyageur Intl.,50% MFS Intl. Growth 9.87 18.75 13.58 0.9220 4.78 88.09 0.3457 6.6391 MSCI EAFE 5.42 19.08 13.67 1.0000 0.00 100.00 0.1063 0.0000 Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance. Morningstar, Inc. Page 20 t . A Palm Beach Gardens Firefighters' Pension Trust Fund C 7 N tY Manager Risk/Return Late Mutually - Exclusive Timeframe: 5 Years Ended September 2008 14% 12% Return Std Dev Beta Alpha R- Squared Sharpe 10% 8% Return Std Dev Beta Alpha p R -S uared q Sharpe 6% N N vs. Market vs. Market Ratio 4% N (°A) vs. vs. Market vs. Market Ratio 2% Market (°A) (°A) 0 5/6 10 °/ 15 % 20% 25 % An Standard Deviation C 7 N d' 1 1 1 Zephyr StyleADVISOR: The Bogdahn Group Manager Risk/Return Early Mutually - Exclusive Timeframe: 5 Years Ended September 2003 4% 2% 0% 8% 6% 4% 2% 0% 0% 5% 10% 15% 20% 25% 30% Standard Deviation • 50 %Voyageur Inti.,50 %Amer Funds EuroPacific • 50% Voyageur Intl.,50% Harding Loevner Intl. 0 50% Voyageur Int1.,50% MFS Intl. Growth ♦ MSCI EAFE Risk- Return Table Risk - Return Table Late Mutually - Exclusive Timeframe: 5 Years Ended September 2008 Early Mutually- Exclusive Timeframe: 5 Years Ended September 2003 Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. ^� Page 21 l� Return Std Dev Beta Alpha R- Squared Sharpe Return Std Dev Beta Alpha p R -S uared q Sharpe N N vs. Market vs. Market Ratio N (°A) vs. vs. Market vs. Market Ratio Market (°A) (°A) Market (96) ('%) 50 %Voyageur Intl .,,%Amer Funds EuroPacific 11.39 16.61 0.9692 1.51 93.55 0.4996 50 %voyageur Intl -50 %Amer Funds EuroPacific 10.18 22.02 0.9573 9.47 87.73 0.2951 50% Voyageur Intl-50% Harding Loevner Intl. 10.67 16.21 0.9352 1.13 91.53 0.4672 50% Voyageur Intl.,50% Harding Loevner Intl. 8.59 22.10 0.9436 7.97 84.60 0.2219 50% Voyageur InV.,50 % MFS Intl. Growth 10.90 17.11 1.0010 0.77 94.07 0.4561 50% Voyageur Infl.,50% MFS Intl, Growth 8.85 20.70 0.8891 8.09 85.66 0.2496 MSCI EAFE 10.16 16.58 1.0000 0.00 100.00 0.4263 MSCI EAFE 0.87 21.54 1.0000 0.00 100.00 -0.1303 Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. ^� Page 21 l� Palm Beach Gardens Firefighters' Pension Trust Fund iv r 0 0 a� .o E 0 z iu r m C� 0 iu a E z III 1 Zephyr StyleADVISOR: The Bogdahn Group Histogram of Returns 10 Years Ended September 2008 < -20 -20 to -15 -15 to -10 -10 to -5 -5 to 0 0 to 5 Returns Range ( %) Histogram of Excess Returns vs. MSCI EAFE 10 Years Ended September 2008 5to10 10to15 4 2 0' - -�- < -6 -6 to -4 -4 to -2 -2 to 0 0 to 2 2 to 4 Excess Returns vs. MSCI EAFE Range ( %) ■ 50 %Voyageur Inti.,50 %Amer Funds EuroPacific ■ 50% Voyageur Intl -50% Harding Loevner Intl. ■ 50% Voyageur Intl.,50% MFS Intl. Growth Created with Zephyr StyleADVISOR. Manager returns supplied by: eVeslment Alliance, Momingstar, Inc. Page 22 -A- 4to6 0 rj Palm Beach Gardens Firefighters' Pension Trust Fund CO L _d Q E d o! v W Annualized Excess Return I Standard Deviation of Excess Return 10 Years Ended September 2008 Zephyr StyleADVISOR: The Bogdahn Group 0 2% 3% 4% 5% 69% 7% 8% Standard Deviation of Excess Return vs. MSCI EAFE • 50 %Voyageur Intl.,50 %Amer Funds EuroPacific • 50% Voyageur Intl.,50% Harding Loevner Intl. • 50% Voyageur Intl.,50% MFS Intl. Growth ♦ MSCI EAFE Rolling Risk Statistics: Alpha Rolling Risk Statistic: Information Ratio 12- Quarter Moving Windows, Computed Quarterly relative to MSCI EAFE 12- Quarter Moving Windows, Computed Quarterly relative to MSCI EAFE a F N C O CIO E O C 0. 032001 042002 042003 042004 042005 Q4 2006 04 2007 03 2008 Q3 2001 Q4 2002 042003 042004 Q4 2005 Q4 2006 Q4 2007 Q3 2008 A Created with Zephyr StyleADVISOR Manager returns supplied by: eVestment Alliance, Morningstar, Inc. Page 23 Palm Beach Gardens Firefighters' Pension Trust Fund Zephyr StyleADVISOR: The Bogdahn Group Upside vs. Downside Capture Upside vs. Downside Capture Late Mutually - Exclusive Timeframe: 5 Years Ended September 2008 Early Mutually - Exclusive Timeframe: 5 Years Ended September 2003 0 d v CL 1 1 v o. 1 1 1 a m v CL M 1bu 20 15 0 • 10 140 00 130 120 • 110 100 70 75 80 85 90 95 100 Downside% Single Computation Upside vs. Downside Capture 10 Years Ended September 2008 Downside% Single Computation 25 20 15 0 • 10 05 00 80 85 90 95 100 Downside% Single Computation • 50 %Voyageur Inti.,50 %Amer Funds EuroPacific • 50% Voyageur Intl.,50% Harding Loevner Intl. • 50% Voyageur Intl.,50% MFS Intl. Growth Market Benchmark: MSCI EAFE Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. Page 24 Palm Beach Gardens Firefighters' Pension Trust Fund 120 100 80 60 40 20 Multi Statistic Graph Batting Up Capture Down Capture Average Ratio Ratio Zephyr StyleADVISOR: The Bogdahn Group Multi Statistic Graph Excess Return Information Treynor vs. Market Ratio Ratio E 50 %Voyageur Intl.,50 %Amer Funds EuroPacific ■ 50% Voyageur Intl.,50% Harding Loevner Intl. ■ 50% Voyageur Intl.,50% MFS Intl. Growth ■ MSCI EAFE Multi- statistics Summary Table: 41 Quarters Ended September 2008 Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. Page 25 Batting Average # of Up Periods Up Capture Ratio # of Down Periods Down Capture Ratio Excess Return vs. Market Information Ratio Treynor Ratio 50 %Voyageur Intl.,50 %Amer Funds Euro 60.98% 25 121.23% 16 89.88% 4.66% 0.71 5.08 50% Voyageur Intl -50% Harding Loevner 56.10% 24 113.24% 17 90.74% 3.36% 0.45 3.80 50% Voyageur Intl.,50% MFS Intl. Growtt• 58.54% 24 111.87% 17 88.29% 3.53% 0.51 4.00 MSCI EAFE 0.00% 23 100.00% 18 100.00% 0.00% 0.00 0.29 Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. Page 25 Palm Beach Gardens Firefighters' Pension Trust Fund Zephyr StyleADVISOR: The Bogdahn Group Return Compounded rate of return for the period. Standard Deviation A statistical measure of the range of a portfolio's performance, the variability of a return around its average return over a specified time 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 the absolute rate of return per unit of risk. The higher the value, the better the product's historical risk-adjusted performance. Alpha A measure of the difference between a portfolio's actual returns and its expected performance, given its level of risk as measured by beta. It is a measure of the portfolio's historical performance not explained by movements of the market, or a portfolio's non-systematic return. Beta A measure of the sensitivity of a portfolio to the movements in the market. It is a measure of a portfolio's non- diversifiable or systematic risk. Treynor Ratio Similar to Sharpe ratio, but focuses on beta rather than excess risk (standard deviation). Represents the excess rate of return over the risk free rate divided by the beta. The result is the absolute rate of return per unit of risk. The higher the value, the better the product's historical risk - adjusted performance. Information Ratio Measured by dividing the excess return by the tracking error. The higher the Information Ratio, the more value -added contribution by the manager. Tracking Error A measure of the standard deviation of a portfolio's performance relative to the performance of the benchmark index. Excess Return Arithmetic difference between the managers return and the index return over a specified time period. Up Market Capture The ratio of average portfolio return over the benchmark during periods of positive benchmark return. Higher values indicate better product performance. Down Market Capture The ratio of average portfolio return over the benchmark during periods of negative benchmark return. Lower values indicate better product performance. Batting Average The batting average of the manager vs. a benchmark is the ratio between the number of periods where the manager outperforms the benchmark and the total number of periods. Downside Risk A measure similar to standard deviation, but focuses only on the negative movements of the return series. It is calculated by taking the standard deviation of the negative quarterly set of returns. The higher the factor, the riskier the product. R- Squared The percentage of a portfolio's performance explained by the behavior of the appropriate benchmark. High R- Square means a higher correlation of the portfolio's performance to the appropriate benchmark. Created with Zephyr StyleADVISOR. Manager returns supplied by: eVestment Alliance, Morningstar, Inc. �r,N Page 26 a, th j `J THE BOGDAHN GROUP simplifying your investment and fiduciary decisions 340 West Central Ave Suite 300 Winter Haven, Florida 33880 Phone: 863.293.8289 • Fax: 863.292.8717 City of Palm Beach Gardens Firefighters' Pension Trust Fund Quarterly Review 3rd Quarter 2008 THE BOCJA- HN GROUP W W W. B O G D A H N G R O U P. C O M simplifying your investment and fiduciary decisions Investment Market Summary 311 Quarter 2008 Crisis of Confidence The events that are unfolding in the financial sector continue to generate a high level of uncertainty in the global marketplace. Despite the headline focus on financial companies and their underlying securities (Lehman, AIG, etc.), portfolio losses are widespread across most economic sectors and asset classes. Regardless of the ultimate outcome, September 2008 will certainly take its place in history with other periods of severe market dislocation where fear and volatility trump any consideration of the underlying current or future intrinsic value of a company or asset. The events of the Third Quarter resulted in the failure and /or restructuring of several iconic names in the investment industry. The volatility and uncertainty created by these headline events has caused governments and monetary authorities around the world to step in with a variety of programs and funding solutions to address what can only be categorized as a complete shutdown of the credit markets as banks are increasingly uneasy about lending to one another. These collective efforts have resulted in the largest global policy response on record. While it is too early to evaluate the details of many of these programs and what the ultimate long -term effects on the global marketplace will be, there appears to be a clear commitment to do whatever is necessary to return the world's financial markets to "normal." U.S. equities experienced a dramatic and sharp reversal of sector performance leadership from the June quarter. The S &P 500 posted double digit losses in five of the ten economic sectors of the index, and was particularly hurt by previous market leadership groups as the Energy (- 24.7 %), Materials (- 22.5 %) and Utilities (- 18.0 %) sectors suffered enormously. Despite grabbing much of the headline focus during the quarter, the Financials sector actually posted a positive result of +0.8 %. The only other sectors that managed positive performance during the quarter were Health Care ( +0.5 %), and Consumer Staples ( +4.8 %). These two sectors are traditionally viewed as "defensive" equity plays and received favorable attention in the quarter's market disruption. Not surprisingly, results were negative across the capitalization spectrum for domestic equity. In the board market area the Russell 3000 returned -8.7 %, while the S & P 500, a proxy for large cap issues, posted a return of -8.4 %. Value stocks posted stronger results at all capitalization levels relative to growth with an average performance spread between the styles of more than 8 %. At the composite level, the broad market Russell 3000 Value Index fell by -5.3% and the Russell 3000 Growth Index posted a loss of - 11.9 %. ♦ Performance in the international equity markets was dominated by prospects for declining global economic growth in the third quarter, as well as, the impact of a worldwide credit crisis. As a result, the MSCI -EAFE index declined sharply in both U.S. dollars (- 20.5 %) and local currency (- 13.0 %). After years of positive contribution to diversified portfolio returns, the index now stands at a disappointing -28.9% for the year in U.S. dollars. The "decoupling" of the world's markets from the U.S. slowdown and the "containment" of the sub -prime crisis are now merely distant memories in investor's minds. As the global markets came to grips with the developing crisis, lack of investor trust has become prominent across borders. Much like the U.S. market bailout headlines, overburdened financial institutions in many European countries have resulted in the rescues of banks Dexia and Fortis as well as the German lender Hypo Real Estate. In addition to the effects of the global credit crisis, the significant decline and negative sentiment for commodities exacerbated losses in emerging markets. The MSCI Emerging Market Index returned -26.9% in US dollars and - 20.8% in local currency. For the year, the Emerging Market Index has posted a return of -35.4% in U.S. dollars. As is evidenced by the differences in U.S. dollar versus local currency returns, the dollar managed to strengthen during the quarter. This U.S. currency strength dilutes the performance of un- hedged international investments resulting in additional portfolio losses. Prospects for changes in the relationship between interest rates in the U.S. and Europe led to further speculation that the U.S. currency may have bottomed following a six year decline. Domestic Fixed Income markets, which are clearly at the epicenter of the current crisis, continue to bear the brunt of the massive de- leveraging that is occurring in the global markets. Despite the mild -0.5% return posted by the Lehman Aggregate Index, high quality domestic bond investments, other than investment in U.S. Treasuries, provided little opportunity to add value. The quarter's massive flight to quality was notable in the dramatic underperformance of corporate bonds for the quarter with the Lehman Credit Index posting a decline of 6.5% vs. a gain of 1.9% for the Lehman Treasury Index. U.S. Agencies, having recently received a full faith and credit government guarantee, underperformed Treasuries by a much smaller 0.8% for the quarter as the Lehman Agency index returned +1.1 %. Although inflation - protected bonds are directly linked U.S. Treasury issues, sharply reduced inflation expectations and forecasts for slower economic growth hurt the performance of inflation linked bonds (- 3.5 %). Structured products such as asset - back - securities (ABS: -3.7 %) and commercial - mortgage- backed - securities (CMBS: -5.8 %) also underperformed Treasuries on a duration - equivalent basis. During the quarter, concerns over .'counterparty risk" became elevated. As a result, risk aversion remains high, global in scope and carries major liquidity implications. The lack of confidence in the global banking system's willingness to lend is best depicted by Libor spreads, which have expanded to historically wide levels. THE BOGDAHN %1il /lT 7T Investment Market Summary 3" Quarter 2008 Anatomy of a Market Crisis It may appear at first glance that this cycle is identical to those of the past; however, a brief review of the composition of the market over the last decade tells us that although the game may be the same, the rules and the players have most definitely changed this time around. The massive use of leverage by hedge funds and financial institutions during the last several years has been unprecedented in both size and scope, and will clearly define this cycle as markedly different than anything ever before witnessed in the global markets. Over the course of the last seven years, domestic debt levels in the U.S. have risen by a staggering $21 trillion due to a powerful combination of an abnormally long period of low interest rates, a breakdown of regulatory oversight, overly complacent lenders and borrowers, and the mass creation of loosely regulated derivative instruments by financial institutions. As the markets for these exotic derivative contracts have ballooned to the hundreds of trillions of dollars in recent years, institutional investors along with large financial institutions have engaged in the practice of using massive leverage to concentrate their investment bets in select segments of the global markets. This activity has caused investors and institutions to become entangled in a complex web of leverage, debt and counterparty risk without the underlying assets to support the hazardous structures that have been created. These events have combined to create the classic signs of mania and speculation which has led to the largest credit overshoot on record in the U.S. and developed countries worldwide. We are currently witnessing the violent unwinding of this speculative credit cycle as financial markets around the globe are swept into a massive attempt among market participants to deleverage their investment portfolios by selling assets in order reduce outstanding debt. This has impacted all markets and asset classes as leveraged investment strategies that relied heavily on concentrated bets are now being liquidated swiftly and chaotically. Over the recent past, we have observed markets and structures, which took many years to create, essentially collapse upon themselves in a matter of days or weeks. Despite the "hour -by -hour' and "blow -by- blow" coverage of current market events, the structural unwinding of credit bubbles has historically been a gradual, multi -year workout, with governments and regulatory agencies using the many tools at their disposal to ensure an orderly deleveraging process. It is important to remember that the unfortunate consequence of any deleveraging process, regardless of policy initiatives utilized to cushion the blow, is that asset prices must deflate across the board. Unfortunately, this corrective process is agnostic to asset class, market sector or individual security. As a result, assets across all markets will be exposed to Page 3 of 24 this unwinding process, and investors of all sizes and risk tolerances will be touched to some extent. Although it is difficult at such an early stage in the cycle to understand how this extraordinary financial crisis will ultimately be resolved, history tells us that the markets will stabilize in time. The history of speculation and excess in the financial markets dates back centuries, providing countless examples of bubbles that ultimately burst, booms which end in bust, and investor manias that collapse upon themselves. Following more than a decade of credit excesses both in the U.S. and abroad, the global financial system has now fallen victim to the classic unwinding of a speculative debt bubble, and only in hindsight will we know the ultimate damage that will be sustained throughout this process. However, the most important lesson to be learned from this period, as well as from the many others scattered throughout time, is that history rarely repeats itself and predicting the outcome of any financial crisis is a futile exercise. The unfortunate reality of extremes such as those we are currently witnessing is that every market cycle is different in its nature and characteristics, and attempting to forecast when or how the cycle will reverse has always been an unproductive and unfulfilling endeavor for investors. While it is fortunate that our institutional client base has managed to avoid a majority of the troubled areas of the market that have experienced the greatest magnitude of declines, no portfolio can be truly isolated from current events. However, wise investment policy decisions, proper risk controls, and diversification continue to be the best way to mitigate portfolio impact. Therefore, as the pundits and strategists engage in heated debates over the timing of market bottoms while trying to predict the madness of crowds, we will simply maintain our focus on guiding our clients through this extraordinary time with sound investment policy controls, heightened diligence over investment managers, a disciplined approach to asset allocation decisions, and the maintenance of a long term perspective of the capital markets. Our primary goal as fiduciaries is to ensure that our clients maintain a disciplined, long term approach to investing, and avoid the perils inherent in short-term decision making which almost always yields a negative outcome. TtIE BOGDAHN l GROUP MSCI EAFE MSCI Emerg. Mkts. S &P 500 Russell 3000 Russell 1000 Russell 2000 Lehman US Agg. Lehman US Gov. Lehman MBS Fixed Lehman US Credit The Market Environment Asset Class Performance Period Ended: September 30, 2008 Quarter Performance Year -to -Date Market Performance 3mos. T -Bill I 0.7% -35.0% -30.0% -25.0% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% Five Year Annualized Performance MSCI EAFE MSCI Emerg. Mkts. S &P 500 Russell 3000 Russell 1000 Russell 2000 Lehman US Agg. Lehman US Gov. Lehman MBS Fixed Lehman US Credit 3mos. T -Bill 1o.z� 19.1% 5.2°i S. % s.s °o 8.2% 3.8 % 4.3 4.9 1s °i 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% Source: MSCI Capital Markets, Russell Co., HFR. Lehman, & Bogdahn Consulting, LLC. MSCI EAFE MSCI Emerg. Mkts. S &P 500 Russell 3000 Russell 1000 Russell 2000 Lehman US Agg. Lehman US Gov. Lehman MBS Fixed Lehman US Credit 3mos. T -Bill -40.0% MSCI EAFE MSCI Emerg. Mkts. S &P 500 Russell 3000 Russell 1000 Russell 2000 Lehman US Agg. Lehman US Gov. Lehman MBS Fixed Lehman US Credit 3mos. T -Bill -30.0% -200% -10.0 % 0.0% 10.0% Ten Year Annualized Performance 0.0°% 3 0 "L: 6.0°% 9.0% 12.0% 15.0% THE BOGDAHN (_Dnr TD ENERGY MATERIALS INDUSTRIALS CONSUMER DISCR CONSUMER STAPLES HEALTH CARE FINANCIALS INFORMATION TECH TELECOM SVC UTILITIES Source: Thompson Financial Page 5 of 24 The Market Environment Asset Class Performance Period Ended: September 30, 2008 S&P 500 Sector Performance as of 9/30/2008 - 24.7% - 14.4% .. - 22.5% -21.4% ._. -8.6% - 24.7% -0.7% - 22.4% 4.8% 0.7% 0.5% - 12.2% 0.8% - 39.3% - 11.9% - 23.4% - 14.8% -33.1% ■QTR -18.0% ■ 1YR - 14.3% THE BOGDAHN GROUP 10 5 0 -5 -10 -15 -20 -25 -30 15 10 5 0 -5 -10 -15 -20 The Market Environment Asset Class Performance Period Ended: September 30, 2008 Russell All Cap Style Performance 7.3 5.7 5.9 3.8 4.0_ _ 0.2 0.3 0.2 0.9 I -5.3 -8.7 -11.9 -19.9 - 21.5 22 : — - -- -_ 7— -- 03000 Growth 11113000Index ■3000 Value Qtr YTD 1yr 3yr Syr 10yr ,Small Cap Style Performance 8.2 9.5 10.1 7.8 6.6 5.0 4.7 1.5 1.8 2.0 5.4 -7.0 110.4 -12.3 ■2000 Growth ■ 2000 Index 02000 Value -15.3 -14.5 Qtr YTD 1 yr 3yr Syr 10yr Source: Frank Russell Co. BOGDAHN T" 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% 300% The Market Environment Asset Class Performance Period Ended: September 30, 2008 Growth vs. Value Russell 1000 Excess Return Rolling 12 Month Periods Style is In -Favor Style is Out -of -Favor —Value — Growth v�o o° o�` ti ums 'j, my u�6 m� u0, 41 aO ug11 ao� n� � 10 a`� uo� 0 0 cF� v °, a°ti p° u °y �r°6 Uo� Uo� 00 Oe O� O O° O� O6 O� O°u 00 O� Oe Oe Om O°U O� O� O° Om O� O� O" e e e O� 00 Om 0. Oe Treasury Yield Curve 7 6 5 4 3 2 1 0 -M-12/ 31/2007 -41--6/30/2008 -$- 9/30/2008 1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 yr 30 yr Source: Frank Russell Co. & US Department of Treasury Page 7 of 24 THE BOGDAHN GROUP The Market Environment Historical Bear Markets Period Ended: September 30, 2008 Comparison of Strategies Through Historical Bear Markets as Defined by the S &P 500 Historical Market Duration Sell Hold Hold and Buy Recovery From More* Market Bottom Crisis (Peak to Trough) (Sold at :. -. (Recovered In) (One Year Later) The Great Depression (1928 -1935) 34 months Lost 76% 150 months 42 months Gained 74% World War II (1939 -1946) 31 months Lost 30% 9 months 6 months Gained 61 % Oil Crisis (1972 -1976) 21 months Lost 44% 21 months 7 months Gained 38% Crash of 1987 3 months Lost 30% 18 months 7 months Gained 23% (1987) Gulf War Crisis (1990 -1991) 4 months Lost 15% 5 months 2 months Gained 33% Technology Bubble (2000 -2002) 25 months Lost 45% 49 months 16 months Gained 24% Added Investment of Equal Amount Source. Ibboston Associates Yearbook & Zephyr Assoiciates �� -I,IIF BOGDAHN �` C R (li m Total Fund Portfolio September 30, 2008 Asset Allocation By Stvle as of Jun - 2008 Asset Allocation By Style - Current Quarter June 30, 2008 : $22,777,155 September 30, 2008 : $22,595,024 Segments Market Value Allocation Segments Market Value Allocation • Domestic Equity 11,623,067 51.0 ■ Domestic Equity 10,466,256 46.3 • International Equity 1,458,006 6.4 ■ International Equity 1,103,970 4.9 • Domestic Fixed Income 6,749,247 29.6 ■ Domestic Fixed Income 6,756,171 29.9 • Real Estate 1,138,272 5.0 ■ Real Estate 1,131,896 5.0 • Cash Equivalent 1,808,563 7.9 ■ Cash Equivalent 3,136,731 13.9 BOGDAHN Page 9 of 24 GROUP Total Fund Portfolio September 30, 2008 Asset Allocation By llanager - Current Quarter ,tune 30, 2008 : $22,777,155 September 30, 2008 : $22,595,024 T !iF l BOGDAHN (-Dnr m Manager Market Value Allocation Manager Market Value Allocation ($ ) ( %) ($ ) ( %) ■ Dana Equity Portfolio 12,846,980 56.9 ■ Dana Equity Portfolio 12,494,694 54.9 ■ Davis,Hamiltonjackson & Assoc. Fixed 3,671,436 16.2 ■ Davis,Hamiltonjackson & Assoc. Fixed 3,780,194 16.6 ■ Agincourt Capital Management 3,166,758 14.0 ■ Galliard Fixed Income Portfolio 3,234,747 14.2 ■ Voyageur International Portfolio 1,777,953 7.9 ■ Voyageur International Portfolio 2,129,248 9.3 ■ American Real Estate Fund 1,131,896 5.0 ■ American Real Estate Fund 1,138,272 5.0 ❑ Galliard Fixed Income Portfolio - - T !iF l BOGDAHN (-Dnr m Asset Allocation History by Portfolio Dana Equity Portfolio 16,517,835 73.59 Voyageur International Portfolio 1,752,040 7.81 American Real Estate Fund 1,086,355 4.84 Agincourt Capital Management Fixed - - Davis,Hamilton,Jackson & Assoc. Fixed - - Galliard Fixed Income Portfolio 3,088,095 13.76 Total Fund Portfolio 22,444,325 100.00 Historical Asset Allocation By Se¢ment Palm Beach Gardens Firefighters' Asset Allocation As of September 30, 2008 16,618,446 73.46 1,640,641 7.25 1,113,701 4.92 3,251,148 14.37 22,623,936 100.00 16,564,740 73.34 1,637,111 7.25 1,124,052 4.98 3,259,631 14.43 22,585,534 100.00 12,494,694 54.86 2,129,248 9.35 1,138,272 5.00 3,780,194 16.60 3,234,747 14.20 22,777,155 100.00 12,846,980 56.86 1,777,953 7.87 1,131,896 5.01 3,166,758 14.02 3,671,436 16.25 22,595,024 100.00 100.0 80.0 e 60.0 0 40.0 20.0 0.0 9/07 10/07 11/07 12/07 1/08 2/08 3/08 4/08 5/08 6/08 7/08 8/08 9/08 Domestic Equity International Equity Domestic Fixed Income Real Estate N Cash Equivalent Page 11 of 24 l% THE BOGDAHN GROUP Financial Reconciliation Ouarter Dana Equity Portfolio 12.494,694 Voyageur International Portfolio 2,129,248 American Real Estate Fund 1338,272 Agincourt Capital Management - Davis,Hamilton,Jackson & Assoc. Fixed 3,780,194 halliard Fixed Income Portfolio 3,234.747 Total Fund Portfolio 22,777,155 Financial Reconciliation FYTD Dana Equity Portfolio 16.517.835 Voyageur International Portfolio 1,752,040 American Real Estate Fund 1,086.355 Agincourt Capital Management - Davis,Hamilton,Jackson & Assoc. Fixed - Galliatd Fixed Income Portfolio 3,088,095 Total Fund Portfolio 22,444,325 Palm Beach Gardens Firefighters' Financial Reconciliation As of September 30, 2008 - 12,190 1,482,708 - 88,650 - 25,614 - 14,449 59,101 - 1.048,620 12.846.980 7,008 - - -7,008 - 2.740 - 354,036 1,777,953 - - - -6.375 1,131,896 3,234,577 - 4.789 - 72,608 3.166.758 311 -311 46.088 - 154,846 3,671,436 - 3,229,707 - - -4.871 - - -169 - - 1,482,708 - 88,650 - 37,804 - 14,449 112,718 - 1,636,654 22,595,024 - 4,470271 3,819,094 - 687,981 - 67,752 - 51,393 378,884 - 2.591.437 of 12,840,990 677.008 - - -7,008 - 3.983 - 648,070 1.777.953 - -8,509 48,372 5,678 1.131.896 3,234,577 - 4,789 - 72,608 3,166.758 3,788,392 - -311 115,423 - 232,068 3.671,436 - 3,229,707 84,956 - 4,871 - - 61.526 - - 3,904,050 - 687,981 - 88,451 - 51,393 551,452 - 3,476,978 22,595,024 70411 BOGDAHN %' 7'1 11 T T" Fund Portfolio (Net) Fund Policy ence I -Asset Target Alloc Moderate Funds (MF) Median Fund Portfolio (Gross) Fund Policy Dana Equity Portfolio Dana Equity Policy Difference US Core /Large Cap Equity (SA +CF) Median Voyageur International Portfolio MSCI EAFE Difference International Active Value Equity (SA +CF) Median American Real Estate Fund NCREIF Property Index Difference US Private Real Estate -Open End (SA +CF) Median Agincourt Capital Management LB Aggregate Index Difference US Intermediate Duration Fixed Income Accounts (SA) Median Davis, Ham iItonjackson & Assoc. Fixed LB Intermediate Aggregate Difference US Broad Market Core Fixed Income (SA +CF) Median Palm Beach Gardens Firefighters' Comparative Performance As of September 30, 2008 -6.48 (24) -12.30 (24) -12.30 (24) 1.65 (26) -6.94 (28) -14.06 (45) -14.06 (45) 2.08 (19) 0.46 1.76 1.76 2.66 -0.43 3.91 -8.04 N/A -14.55 -14.55 0.62 -6.32 -11.96 3.82 -11.% 5.00 2.22 1.64 -6.94 -14.06 -14.06 2.08 0.62 5.32 2.10 7.37 2.10 3.80 0.14 06/01/2002 -8.75 (44) -19.54 (31) -19.54 (31) 0.42 (55) -8.73 (43) -21.52 (55) -21.52 (55) 0.26 (62) -0.02 1.98 1.98 N/A 0.16 N/A -9.03 0.86 -21.15 01/01/2006 -21.15 (73) 0.69 (78) -16.50 (35) -29.87 (70) -29.87 (70) N/A 0.62 -20.50 (76) -30.13 (74) -30.13 (74) 1.58 (71) 4.00 N/A 0.26 N/A 0.26 10.48 N/A 08/01/2006 -17.66 N/A -27.74 N/A -27.74 3.10 N/A -0.56 N/A 4.98 N/A 4.98 N/A N/A -0.52 N/A 4.90 N/A 4.90 N/A 13.12 N/A -0.04 -3.00 0.08 09/01/2008 0.08 (38) N/A (23) N/A N/A N/A N/A N/A N/A N/A -1.66 N/A N/A N/A N/A -0.49 (36) 3.65 (40) 3.65 (40) 4.15 (51) N/A (42) N/A (49) N/A N/A N/A N/A -1.18 N/A 3.27 -2.74 3.27 4.16 -2.88 (83) N/A N/A N/A -0.13 (20) 4.16 (27) 4.16 (27) 4.44 (25) -2.75 N/A N/A N/A -1.06 3.08 3.08 4.02 4.56 (11) 5.73 (13) 3.51 N/A 05/01/1998 3.82 (22) 5.00 (22) 3.64 N/A 0.74 0.73 -0.13 2.66 3.91 N/A 5.13 6.31 4.11 05/01/1998 3.82 5.00 1.64 1.31 1.31 0.47 5.32 (25) 7.37 (22) 3.80 N/A 06/01/2002 3.23 (79) 5.28 (79) 3.41 N/A 2.09 2.09 0.39 4.13 6.14 N/A N/A N/A 0.86 N/A 01/01/2006 7.27 (73) 10.16 (78) 0.24 N/A N/A N/A 0.62 8.04 11.32 N/A N/A N/A 10.48 N/A 08/01/2006 14.61 N/A 14.16 N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A -3.00 N/A 09/01/2008 3.81 (38) 3.79 (23) -1.34 N/A N/A N/A -1.66 3.66 3.47 N/A N/A N/A -3.01 N/A 06/01/2008 3.89 (42) 3.79 (49) -0.27 N/A N/A N/A -2.74 3.75 3.74 N/A Returns for periods greater than one year are annualized. TI IF. Returns are expressed as percentages. Total Fund Policy =55% Russell 3000, 30% LB Intermediate Aggregate, 10% MSCI EAFE, & 5% Citigroup Treasury Bill- 3Mo BOGDAHN Fixed assets transferred from Dana to DHJ 5 -31 -2008, fixed performance in total plan. GROUP Page 13 of 24 Palm Beach Gardens Firefighters' Comparative Performance As of September 30, 2008 Total Fund Portfolio (Net) 10.96 (59) 7.92 (39) 13.82 (3) 10.51 (30) 11.42 (89) -8.56 (55) -14.24 (65) Total Fund Policy 13.40 (27) 9.16 (21) 9.23 (55) 9.84 (44) 17.82 (26) -10.92 (84) -13.91 (6; Difference -2.44 -1.24 4.59 0.67 -6.40 2.36 -0.33 Mixed -Asset Target Alloc Moderate Funds (MF) Median 11.55 7.25 9.54 9.40 15.67 -8.18 -11.90 Total Fund Portfolio (Gross) 11.67 8.65 14.35 11.19 12.28 -8.13 -13.48 Total Fund Policy 13.40 9.16 9.23 9.84 17.82 -10.92 -13.91 Difference -1.73 -0.51 5.12 1.35 -5.54 2.79 0.43 Dana Equity Portfolio 14.18 (85) 10.21 (62) 21.50 (9) 15.99 (26) 20.02 (84) N/A N/A Dana Equity Policy 16.52 (53) 10.22 (62) 12.69 (74) 13.87 (60) 24.40 (44) -20.47 (75) -26.62 (68) Difference -2.34 -0.01 8.81 2.12 -4.38 N/A N/A US Core /Large Cap Equity (SA +CF) Median 16.59 10.78 14.45 14.28 23.99 -19.14 -25.79 Voyageur International Portfolio 24.22 (51) N/A N/A N/A N/A N/A N/A MSCI EAFE 25.38 (41) 19.65 (69) 26.32 (58) 22.52 (79) 26.54 (76) -15.26 (90) -28.27 (86) Difference -1.16 N/A N/A N/A N/A N/A N/A International Active Value Equity (SA +CF) Median 24.33 20.76 26.81 25.40 29.77 -7.04 -17.84 American Real Estate Fund 16.31 (81) N/A N/A N/A N/A N/A N/A NCREIF Property Index 17.31 (67) 17.62 (53) 19.19 (68) 12.41 (52) 7.83 (82) 5.70 (54) 10.10 (32) Difference -1.00 N/A N/A N/A N/A N/A N/A US Private Real Estate -Open End (SA +CF) Median 18.34 17.92 19.86 12.50 9.60 6.02 9.82 Agincourt Capital Management N/A N/A N/A N/A N/A N/A N/A LB Aggregate Index 5.14 (82) 3.67 (79) 2.80 (13) 3.68 (17) 5.40 (53) 8.61 (28) 12.95 (48) Difference N/A N/A N/A N/A N/A N/A N/A US Intermediate Duration Fixed Income Accounts (SA) Median 5.46 3.91 2.09 2.88 5.52 8.10 12.92 Davis,Hamilton,Jackson & Assoc. Fixed N/A N/A N/A N/A N/A N/A N/A LB Intermediate Aggregate 5.33 (34) 3.84 (51) 2.23 (94) 3.39 (79) 4.94 (79) 7.92 (67) 12.75 (79) Difference N/A N/A N/A N/A N/A N/A N/A US Broad Market Core Fixed Income (SA +CF) Median 5.16 3.85 3.10 3.78 5.79 8.56 13.32 Returns for periods greater than one year are annualized. 7%s� 1,11F: Returns are expressed as percentages. BQCDAHN Total Fund Policy =55% Russell 3000, 30% LB Intermediate Aggregate, 10% MSCI EAFE, & 5% Citigroup Treasury Bill- 3Mo Fi-A Accetc trancferrerl from Dana to DH I i -31 -MM fixed nerfonnance in total nlan. !' n z-Nr Try Palm Beach Gardens Firefighters' Total Fund Portfolio (Net) September 30, 2008 Finmicial Reconciliation I Quarter Market Value Capital Market Value As of Transfers Contributions Distributions Fees Expenses Income App ecJDeprec. As of 6/3012008 9/30/2008 Total Fund Portfolio (Net) 22,777 1,483 -89 -38 -14 113 -1,637 22.595 Financial Reconciliation Market N aluc Market Value Net Capital As of Transfers Contributions Distributions Fees Expenses Income App ecJJ Deprec. As of 9/30/20117 9/30/2008 Total Fund Portfolio (Net) 22.444 3.904 -688 -88 -51 551 -3.477 22.595 10.0 $ 190.0 $175.0 0.0- $160.0 -10.0 $145.0 -20.0 $130.0 $115.0 -30.0 I Oct -2007 1 2 3 4 5 Quarter To Year Years Years Years Years $100.0 1 1 Sep -2008 Quarter Quarter ■Total Fund Portfolio (Net) -6.5 (24) -12.3 (24) -12.3 (24) -1.4 (30) 1.6 (26) 4.6 (11) 5.7 (I3) Total Fund Policy -6.9 (28) -14.1 (45) -14.1 (45) -1.3 (30) 2.1 (19) 3.8 (22) 5.0 (22) $85.0 6/98 9/00 12/02 3/05 6/07 9/08 Median -8.0 -14.6 Comparative Performance -14.6 -2.5 0.6 2.7 3.9 -Total Fund Portfolio (Net) -Total Fund Policy 1 1 1 1 1 1 Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Jun -2008 Mar -2008 Dec -2007 Sep-2007 Jun -2007 Mar -2007 Total Fund Portfolio (Net) -1-34 (60) 3.85 (24) -1.15 (62) 0.43 (86) 2.80 (63) 2.63 (6) Total Fund Policy -1.27 (58) -5.44 (52) -1.08 (60) 2.30 (37) 4.13 (16) 1.32 (74) Mixed -Asset Target Alloc Moderate Funds (MF) Median -1.03 -5.40 -0.85 1.93 3.07 1.71 Page 15 of 24 Tiff 7**�, BOGDAHN l GROUP Palm Beach Gardens Firefighters' Total Fund Portfolio (Net) September 30, 2008 20.0 0.0 Over Perbrmance _ j� 8.0 G e 2.0 e 0. -4.0 e e t` -10.0 L::�-- t r o -10.0 40 2 0 8.0 14.0 F Total Fund Policy (%) M- OverPerfornance - -I;nderPerfolTnaoce -,-Dec -2003 ♦Sep-2009 7.5 5.0 2.5 0.0 C -2.5 -5.0 -7.s 2.0 L Under Performance 20.0 T 4.0 6.0 8.0 10.0 12.0 14.0 Risk (Stands rd Deviation %) Return Standard Deviation ■ Total Fund Portfolio (Net) 1.6 6.4 • Total Fund Policy 2.1 7.3 - Median 0.6 7.5 25.0 Y C 50.0 Y [L v 75.0 a d a 100.0 12/03 12/04 Total Period ■ Total Fund Portfolio (Net) 20 * Total Fund Policy 20 100 7.5 5.0 2.5 0.0 0 a -2.s -5.0 2.0 12/05 12/06 12/07 9/08 5-25 25- Median Median -75 75-95 Count Count Count Count 10 (50 %) 4 (20 %) 3 (15%) 3 (15 %) 3 (15 %) 11 (55 %) 6 (30 %) 0 (0 %) 0 I -V r 4.0 6.0 x.0 too Risk (Standard Deviation ' %,) Return Standard Deviation ■ Total Fund Portfolio (Net) 0 ,, 0 Total Fund Policy n 7() - Median 3.'t 7 ? 12.0 BOGDAHN GROI TP Tracking Up Down Sharpe Do. nside Error Market Market Alpha IR Ratio Beta Risk Capture Capture Total Fund Portfolio (Net) 2.27 82.97 84.89 -0.10 -0.22 - 0.37 0.83 4 4' Total Fund Police 0.00 100.00 100.00 0.00 N/A -0.25 1.00 S I', ,Historical Tracking Up Down Sharpe Do" nside Error Market Market Alpha IR Ratio Beta Risk Capture Capture Total Fund Portfolio (Net) 2.29 96.31 71.55 1.27 0.29 0.41 0.88 3.49 Total Fund Policy 0.00 100.00 100.00 0.00 N/A 0.29 1.00 4.09 BOGDAHN GROI TP Palm Beach Gardens Firefighters' Dana Equity Portfolio September 30, 2008 Market Value Net Capital Market Value As of Transfers Contributions Distributions Fees Expenses Income App Ca tal As of 6/30/2008 9/30/2008 Dana Fquity Podfolio 12,495 -12 1,483 -89 -26 -14 59 -1,049 12,847 Financial Reconciliation t Date r t Market Value Net Capital Market Value As of Contributions Distributions Fees Transfers Expenses Income Apprec./ Deprec. As of 9/30/2007 Year Years 9/30/2008 Dana Equity Portfolio 16.518 4,470 1 ct -688 -68 -51 379 -2,591 12,847 20.0 10.0 0.0 -10.0 `e x a -20.0 -30.0 =�i 40.0 1 t r t -Dana Equity PortSlio -Dana Equity Policy 1 Oct -2007 1 2 1 Quarter To Year Years Quarter Quarter Sep -2008 Quarter Quarter ■ Dana Equity Portfolio -8.8 (44) -125 (31) -19.5 (31) -4.2 (54) 0 Dana Equity Policy -8.7 (43) -21.5 (55) -21.5 (55) -4.4 (57) Years 4 5 Years Years 0.4 (55) 5.3 (25) 7.4 (22) 0.3 (62) 3.2 (79) 5.3 (79) $180.0 $160.0 $140.0 $120.0 $100.0 $80.0 143.5 in 6/02 9/03 12/04 3/06 6/07 9/08 Median -9,0 Comparative Performance -21.2 -21.2 -3.9 0.7 4.1 6.1 -Dana Equity PortSlio -Dana Equity Policy I I 1 I 1 I Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Jun -2008 Mar -2008 Dec -2007 Sep -2007 Jun -2007 Mar -2007 Dana Equity Portfolio 037 (24) -934 (41) -3.11 (55) -0.81 (92) 5.11 (84) 3.16 (11) Dana Equity Policy -1.69 (57) -9.52 (53) -3.34 (67) 1.55 (58) 5.77 (70) 1.27 (46) US Core/Large Cap Equity (SA +CF) Median -1.28 -9.48 -2.87 1.96 6.27 1.18 Page 17 of 24 �^ Ti II'. BOGDAHN GROUP Palm Beach Gardens Firefighters' Dana Equity Portfolio September I 2008 l r Rollin l'nder /Over Performance - 5 Years 3 Yr Rolling; 1'erct 4T 22.0 E. 14.0 0 6.0 ar -2.0 a -10.0 c -10.0 10.0 5.0 -2.0 6.0 14.0 22.0 30.0 Dana Equity Policy(%) .W UnderPerbrmance -0- Over Perfoniance } Jun-2005 ♦ Sep -2008 A 0.0 e -s.o Y a 10.0 0.0 5.0 10.0 15.0 Risk (Stands rd Deviation % ) Return Standard Deviation III Dana Equity Portfolio 0.4 9.9 0 Dana Equity Policy 0.3 10.4 - Median 0.7 10.5 1 e 25.0 z c Soo a e 75.0 ce 100.0 12/03 12/04 Total Period ■ Dana Equity Portfolio 20 0 Dana Equity Policy 20 15.0 12.0 9.0 e � G.0 3.0 �i 12/05 12/06 12,07 9/08 5-25 2-1-Median Median -75 75-95 Count Count Count Count 9 (45 %) 4 (20 %) 1 (5 %) 0 (0 %) 0 0116) 0 (0 %) 16 (80%) 4 (20 %) 0,0 20.0 25.0 0.0 5.0 10.0 15.0 20.0 Risk (Standard Deviation %) Return Standard Deviation ■ Dana Equity Portfolio 7.4 10.3 • Dana Equity Policy 5.3 10.5 - Median 6.1 10.6 25.0 THE BOGDAHN f' T11 1-%T TT) Tracking Up Down Sharpe Downside Error Market Market Alpha IR Ratio Beta Risk Capture Capture Dana Equity Portfolio 2.70 100.88 99.74 0.19 0.07 -0.25 0.99 9.44 Dana Equity Policy 0.00 100.00 100.00 0.00 N/A -0.27 1.00 9.24 Historical Tracking Up Down Sharpe Downside Error Market Market Alpha IR Ratio Beta Risk Capture Capture Dana Equity Portfolio 3.06 109.64 97.07 2.00 0.66 0.42 1.01 7.76 Dana Equity Policy 0.00 100.00 100.00 0.00 N/A 0.25 1.00 7.55 THE BOGDAHN f' T11 1-%T TT) Palm Beach Gardens Firefighters' Voyageur International Portfolio September 30, 2008 Market Value Net Capital Market Value As of Transfers Contributions Distributions Fees Expenses Income ApprecJ Deprec. As of 6130/2008 9/30/2008 Voyageurintemational Portfolio 2.129 7 -7 3 -354 1.778 Financial Reconciliation t Date Market V aloe Net Capital Market Value As of Transfers Contributions Distributions Fees Expenses Income Apprecd Deprec. As of 9/30/2007 9/30/2008 Voyageur International Portfolio 1,752 677 -7 4 -648 1,778 Peer Group Anahsis - International ActiNe Value Equity (SA +CF) scurnil 30.O 15.0 $140.0 0.0 S130.0 e -15.0 m $120.0 -30.0 MEN .45.0 1 1 1 f I 1 $110.0 1 Oct -2007 1 2 3 4 5 Quarter To Year Years Years Years Years Sep-2008 ■ Voyageur International Portfolio -16.5 (35) -29.9 (70) -29.9 (70) -6.7 (72) N/A N/A N/A $100.0 * MSCIEAFE -20.5 (76) -30.1 (74) -30.1 (74) -6.4 (67) 1.6 (71) 7.3 (73) 10.2 (78) Median -17.7 -27.7 -27.7 -5.3 3.1 8.0 11.3 12/05 9/06 6/07 3/08 9/08 - Voyageur International Portblio - MSCIEAFE 12.4 10.7 1 I 1 1 1 1 Quarter Quarter Quarter Quarter Quarter Quarter Ending Finding Ending Ending Ending Ending Jun -2008 Mar -2008 Dec -2007 Sep -2007 Jun -2007 Mar -2007 Voyageur International Portfolio -10.12 (100) -0.22 (2) -6.36 (94) -1.13 (88) 3.80 (96) 5.78 (6) MSCIEAFE -1.93 (41) -8.82 (65) -1.71 (51) 2.23 (29) 6.67 (56) 4.15 (41) International Active Value Equity (SA +CF) Median -2.39 -8.14 -1.60 1.23 6.91 3.87 Page 19 of 24 BOGDAHN l GROUP Peer Group Analysis - US Private Real Estate -Open End (SA +CI) I ('till] 20.0 15.0 10.0 e a r 7 5.0 z 0.0 -5.0 Oct -2007 Palm Beach Gardens Firefighters' To - American Real Estate Fund - NCREIF Property Index Sep -2008 ■ American Real Estate Fund -0.6 (N /A) American Real Estate Fund • NCREIF Property Index -0.5 (N /A) 4.9 (N /A) t I September 30, 2008 Quarter Quarter Financial Reconciliation Quarter Quarter Ending Ending V Market Value Ending Ending Ending Market Value A Transfers Contributions Distributions Fees Expenses Income ApprecPiDeprec. As of 6/30/2008 1.18 (61) ■ 4.69 (33) 9/30/2008 American Real Estate Fund 1.138 0.56 (57) 1.60 (33) -6 1.132 Fiscal Year To Date 0.74 1.28 1.92 Financial Reconciliation Net Capital Market Value Market Value As of Transfers Contributions Distributions Fees Expenses Income ;%pprec./ Deprec. As of 9/30/2007 9/3012008 American Real Estate Fund 1.086 > 49 6 1.132 Peer Group Analysis - US Private Real Estate -Open End (SA +CI) I ('till] 20.0 15.0 10.0 e a r 7 5.0 z 0.0 -5.0 1 Oct -2007 Quarter To - American Real Estate Fund - NCREIF Property Index Sep -2008 ■ American Real Estate Fund -0.6 (N /A) 5.0 (N /A) • NCREIF Property Index -0.5 (N /A) 4.9 (N /A) t I Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending w Mar -2008 Dec -2007 Sep -2007 Jun -2007 Mar -2007 American Real Estate Fund 1.52 (13) 1.18 (61) ■ 4.69 (33) 4.10 (59) 4.72 (27) NCREIF Property Index 0.56 (57) 1.60 (33) ■ 4` ■ US Private Real Estate -Open End (SA+CF) Median 0.74 1.28 1.92 3.67 4.60 4.09 t 1 Oct -2007 Quarter To - American Real Estate Fund - NCREIF Property Index Sep -2008 ■ American Real Estate Fund -0.6 (N /A) 5.0 (N /A) • NCREIF Property Index -0.5 (N /A) 4.9 (N /A) 1 2 3 4 5 Year Years Years Years Years $120.0 $115.0 $110.0 $105.0 5.0 (N /A) 10.5 (N /A) N/A N/A N/A 4.9 (N /A) 109 (N /A) 13.1 (N /A) 14.6 (N /A) 14.2 (N /A) $100.0 9/06 3/07 9/07 3/08 9/08 I Median NIA N/A N/A N/A N/A N/A N/A - American Real Estate Fund - NCREIF Property Index Comparative 1 1 1 t t I Quarter Quarter Quarter Quarter Quarter Quarter Ending Ending Ending Ending Ending Ending Jun -2008 Mar -2008 Dec -2007 Sep -2007 Jun -2007 Mar -2007 American Real Estate Fund 1.52 (13) 1.18 (61) 2.78 (17) 4.69 (33) 4.10 (59) 4.72 (27) NCREIF Property Index 0.56 (57) 1.60 (33) 3.21 (11) 3.56 (52) 4.59 (51) 3.62 (74) US Private Real Estate -Open End (SA+CF) Median 0.74 1.28 1.92 3.67 4.60 4.09 \ THF. BOGDAHN %'13 ]]11 TD Historical Effective Date: May -1998 S &P 500 Index LBGC Bond Index Citigroup 3 Month T -Bill Effective Date: Jan -2001 S &P 500 Index LBGC Bond Index Citigroup 3 Month T -Bill Effective Date: Apr -2003 S &P 500 Index LBGC Intermediate Bond Index Citigroup 3 Month T -Bill Effective Date: Jul -2005 S &P 500 Index LBGC Intermediate Bond Index MSCI EAFE Citigroup 3 Month T -Bill Effective Date: Oct -2007 Russell 3000 Index LB Intermediate Aggregate MSCI EAFE Citigroup 3 Month T -Bill Total Fund 60.00 35.00 5.00 65.00 30.00 5.00 65.00 30.00 5.00 55.00 30.00 10.00 5.00 55.00 30.00 10.00 5.00 Palm Beach Gardens Firefighters' Benchmark History As of September 30, 2008 Historical Hybrid Composition Dana Fixed Policy Effective Date: May -1998 LBGC Bond Index Effective Date: Apr -2003 LBGC Intermediate Bond Index Effective Date: Oct -2007 LB Intermediate Aggregate 100.00 100.00 100.00 BOGDAHN GROI TP Statistics Definitions Statistics Description Return — Compounded rate of return for the period. Standard Deviation -- A statistical measure of the range of a portfolio's performance, the variability of a return around its average return over a specified time 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 the absolute rate of return per unit of risk. The higher the value, the better the product's historical risk - adjusted performance. Alpha -- A measure of the difference between a portfolio's actual returns and its expected performance, given its level of risk as measured by beta. It is a measure of the portfolio's historical performance not explained by movements of the market, or a portfolio's non - systematic return. Beta — A measure of the sensitivity of a portfolio to the movements in the market. It is a measure of a portfolio's non- diversifiable or systematic risk. R- Squared -- The percentage of a portfolio's performance explained by the behavior of the appropriate benchmark. High R- Square means a higher correlation of the portfolio's performance to the appropriate benchmark. Treynor Ratio — Similar to Sharpe ratio, but focuses on beta rather than excess risk (standard deviation). Represents the excess rate of return over the risk free rate divided by the beta. The result is the absolute rate of return per unit of risk. The higher the value, the better the product's historical risk - adjusted performance. Downside Risk — A measure similar to standard deviation, but focuses only on the negative movements of the return series. It is calculated by taking the standard deviation of the negative quarterly set of returns. The higher the factor, the riskier the product. Tracking Error — A measure of the standard deviation of a portfolio's performance relative to the performance of an appropriate market benchmark. Information Ratio -- Measured by dividing the active rate of return by the tracking error. The higher the Information Ratio, the more value -added contribution by the manager. Consistency -- The percentage of quarters that a product achieved a rate of return higher than that of its benchmark. The higher the consistency figure, the more value a manager has contributed to the product's performance. Excess Return — Arithmetic difference between the managers return and the risk -free return over a specified time period. Active Return -- Arithmetic difference between the managers return and the benchmark 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. Up Market Capture -- The ratio of average portfolio return over the benchmark during periods of positive benchmark return. Higher values indicate better product performance. Down Market Capture -- The ratio of average portfolio return over the benchmark during periods of negative benchmark return. Lower values indicate better product performance. Calculation based on monthly periodicity. Page 23 of 24 ^THE lJ BOGDAHN GROUP `J BOGDAHN GROUP simplifying your• investment and fiduciary decisions 340 West Central Ave Suite 300 Winter Haven, Florida 33880 Phone: 863.293.8289 • Fax: 863.292.8717