(a) Composition. This Chapter shall be administered by a Board of Trustees, which also shall supervise and control the Fire and Police Disability and Retirement Fund and the Reserve Fund. The terms of the existing eleven-member Board shall terminate on December 31, 2006, but members shall remain in office until the new Board is sworn in. Beginning January 1, 2007, the Board of Trustees shall be composed of five members who shall be the following: The Mayor or the Mayor’s designee approved by the City Council (who shall act as Chairperson); one Active Member serving in the Bureau of Fire, to be elected to the Board by the Active Members in the Bureau of Fire; one Active Member serving in the Bureau of Police, to be elected to the Board by the Active Members in the Bureau of Police, and two citizens of the City of Portland who shall have relevant experience in pension or disability matters and shall be nominated by the Mayor and approved by the City Council. Neither the Mayor nor the Mayor’s designee nor either of the citizen members shall be an active or past Member or a beneficiary of the Fund or have been employed by the City of Portland Bureau of Fire or Bureau of Police. Notwithstanding the change in Board memberships, the Board of the Fund shall continue in existence without interruption. All members of the Board shall receive orientation to the Board and serve without compensation. References in this Chapter to the "Board" shall mean the Board of Trustees created by this Section. The Chairperson shall designate another member of the Board who shall act as Chairperson in the event of the Chairperson’s absence. At least three members of the Board must be present in order to constitute a quorum. An affirmative vote of at least three members of the board shall constitute an action of the Board. The Board shall keep a record of all of its proceedings and shall hold regular meetings at a time to be set by the Board.
(b) Election of Board Members. Elections of the Board members representing the Members of the Bureau of Fire and Bureau of Police shall be under the supervision of the City Auditor and shall be held in the month of December, at which election one Active Member from the Bureau of Fire and one Active Member from the Bureau of Police shall be elected to the Board for three‑year terms to succeed the members whose terms expire the month following the time of said election. Members so elected in December shall take office the following January. Similar elections for unexpired terms shall be held to fill other vacancies within thirty days after they occur. Elections shall be held in a manner prescribed by the rules and regulations adopted by the Board, which must be in writing and filed with the Administrator of the Fund. A Board member who ceases to be an Active Member may complete the remainder of the Board member's term.
(c) Appointment of Board Members. The appointments of the two citizen members shall be as follows: one for an initial one year term and every three years thereafter and the other for an initial two year term and every three years thereafter. The appointments shall be made in the month of January.
(d) New Board members shall be appointed or elected for terms to begin January 1, 2007 or as soon thereafter as they are elected or approved by the City Council. Appointments or elections for unexpired terms shall be made to fill vacancies within thirty days after they occur. The Board may set rules for attendance and any member may be removed by the Board for failure to abide by the attendance rules of the Board.
(e) Indemnity. The members of the Board and the Fund Administrator appointed under subsection 5‑202(f) shall be indemnified by the Fund from any claim or liability, including the cost of legal defense by counsel approved by the City Attorney, that arises from any action or inaction in connection with their functions under this Chapter subject to the following:
1. Coverage shall be limited to actions taken in good faith that the person reasonably believed were not opposed to the best interest of the Fund.
2. Coverage shall be reduced by the extent of any insurance coverage.