BOARD OF RETIREMENT FRESNO COUNTY EMPLOYEES RETIREMENT ASSOCIATION. July 18, 2012

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1 BOARD OF RETIREMENT FRESNO COUNTY EMPLOYEES RETIREMENT ASSOCIATION July 18, 2012 Trustees Present: Marion Austin Laura Basua Dr. Rod Coburn Vicki Crow Phil Larson John Souza Trustees Absent: Franz Criego Eulalio Gomez Steven Jolly Others Present: Regina Wheeler, Alternate Trustee Sandra Hernandez, FCERA Member Michael Cunningham, FCERA Member Josie Ruiz, FCERA Member Anna Casey, FCERA Member John Navarrette, County Administrative Officer Kevin Briggs, County Counsel Harvey Leiderman, Reed Smith Jeffrey Rieger, Reed Smith Frankie Dorsey, Retirement Coordinator Susan Coberly, Senior Deputy County Counsel Phillip Kapler, Retirement Administrator Becky Van Wyk, Assistant Retirement Administrator Elizabeth Avalos, Administrative Secretary 1. Call to Order Vice Chair Souza called the meeting to order at 8:33 AM. 2. Pledge of Allegiance Recited. 3. Public Presentations Vice Chair Souza welcomed the new Retirement Administrator, Phillip Kapler. Mr. Kapler commented briefly on his first couple of weeks in the office noting that he is settling in well and that staff has been very accommodating. Consent Agenda/Opportunity for Public Comment A motion was made by Trustee Crow, seconded by Trustee Larson, to Approve Consent Items VOTE: Unanimous (Absent Criego, Gomez, Jolly)

2 *4. Approve the June 20, 2012 Retirement Board Regular Meeting Minutes *5. Summary of monthly statistics from the Retirement Association Office on service credit purchases, retirement benefit estimates, public service, age adjustments, final compensation calculations, and disability retirement applications for June 2012 *6. Retirement Sam D. Adams Dept of Social Svs, Deferred 5.51 Andy C. Anderson County Clerk/Registrar of Voters Johnie D. Belford Dept of Social Services Camille A. Boone Child Support Svs, Deferred Aurora M. Cabral Public Health, Deferred Michele Carter Public Works & Planning Enrique Chaparro-Nieto Behavioral Health Suzanne C. Clifford Community Health Irma Galvan Superior Court Arlan L. Harrell Superior Court Phyllis Hendrickson Assessor-Recorder Denise A. Lewis Public Works & Planning Susan L. Martyn Community Health, Deferred 9.98 Michele A. McGuire Probation, Deferred Richard Medina Community Health, Deferred 8.43 Deborah Nolan VMC, Deferred 7.68 Connie Peterson Dept of Social Services Jamie Powers Behavioral Health Henry W. Pratt VMC, Deferred Cheryl L. Reitz Community Health Alice H. Rocha Dept of Social Services Thomas S. Salinthone Dept of Social Services Chirld Ann Shagena-Phipps Sheriff Kenneth Spitzer Dept of Social Svs, Deferred 4.29 Janet E. Zelenak Assessor-Recorder *7. Request to Rescind Deferred Retirement Catherine Geston General Services *8. Public Records Requests and/or Retirement Related Correspondence from Agnes Macadangdang, ACERA; and Daren Perlstien, LA Fire & Police Pension System 2

3 3 *9. Educational Reading Material RECEVED AND FILED July 7, 2012 Fresno Bee article Reforming public pensions is still on legislative agenda July 7, 2012 Fresno Bee article Senate approves rail construction June 2012 Financial Analysts Journal editorial Investment Management Fees Are (Much) Higher Than You Think June 2012 The Public Retirement Journal Newsletter July 2012 Cortex Applied Research report Conferences and Seminars *10. Update of Board of Retirement directives to FCERA Administration *11. Most recent investment returns, performance summaries and general investment information from investment managers *12. FCERA Cash Flow position as of May 2012 *13. FCERA SAS 114 pre-audit communication to the Board *14. Budget Adjustment for Fiscal Year Discussion and appropriate action on request by Sandra M. Hernandez to change Benefit Payment Option elected at retirement Sandra Hernandez, FCERA Retiree, opened discussions with a brief explanation of her request to modify her benefit payment to include the Temporary Annuity Option (TAO). Ms. Hernandez noted that, because she was not adequately advised of her right to a TAO at the time of her retirement, she should be allowed to modify her retirement option. Attorney Jeffrey Rieger, Reed Smith, noted that it is his understanding from the Retirement Coordinator that Ms. Hernandez was advised of the TAO option at the time of her retirement, but expressed uncertainty at the time of the counseling session as to whether she wanted to elect the TAO. The applicable FCERA Checklist for Service Retirement Counseling Session, which is signed by Ms. Hernandez, indicates that the Retirement Coordinator discussed the TAO with Ms. Hernandez.

4 4 Mr. Rieger stated that if the Board determines that staff did not adequately inform Ms. Hernandez of her right to elect the TAO prior to her retirement the Board could grant her request to elect a TAO. On the other hand, if the Board finds that staff did adequately inform Ms. Hernandez of her right to elect the TAO prior to her retirement and/or Ms. Hernandez unreasonably delayed in seeking the TAO, then there is no basis to deviate from the Board s ordinary policy of allowing such an election only prior to retirement. The Board heard from Frankie Dorsey, Retirement Coordinator, who confirmed that Ms. Hernandez had been adequately advised of the TAO prior to her retirement. A motion was made by Trustee Coburn, seconded by Trustee Crow, to Deny the request based on the information submitted. VOTE: Unanimous (Absent Criego, Gomez, Jolly) 16. Discussion and appropriate action on California High-Speed Train Project Notice of Decision to Appraise Assessor s Parcel No ST Property Address: 1111 H St, Fresno, CA Phillip Kapler, Retirement Administrator, opened discussions by stating that Administration had received a Notice of Decision to Appraise the FCERA property for the California High-Speed Train Project (CHSTP). Mr. Kapler noted that, although the final route for the high speed train system has not been selected, the FCERA property has been identified as being within the designated preferred alternative route and all or a portion of it may be sought for acquisition of the CHSTP. Mr. Kapler stated that a representative from the firm Bender Rosenthal, Inc. performed an appraisal of the property on July 16, 2012 and noted that the results of the appraisal are not expected for sometime. The Board directed Administration to obtain an independent appraisal of the property and to recover the appraisal costs through the CHSTP. A motion was made by Trustee Crow, seconded by Trustee Larson to authorize a full appraisal of the FCERA Property. VOTE: Unanimous (Absent Criego, Gomez, Jolly) 17. Discussion and appropriate action on the designation of Agent to execute contracts and administrative documents on behalf of the Board A motion was made by Trustee Crow, seconded by Trustee Coburn, to Approve Item 17 as presented. VOTE: Unanimous (Absent Criego, Gomez, Jolly)

5 18. Discussion and appropriate action on person(s) authorized to direct and approve cash movement at State Street Bank 5 A motion was made by Trustee Coburn, seconded by Trustee Crow, to Approve Item 18 as presented. VOTE: Unanimous (Absent Criego, Gomez, Jolly) 19. Discussion and appropriate action FCERA Facility Use Policy Attorney Jeffrey Rieger, Reed Smith, opened discussions by reminding the Board of its desire to implement a formal policy on the use of FCERA s Board Chambers by other groups that are some way associated with Fresno County. Attorney Rieger noted that there are no legal requirements that the Board make its Boardroom available to other groups to hold their meetings. FCERA is, however, a public agency and therefore, it is reasonable for the Board to make the Boardroom available for use by other groups, subject to conditions the Board wishes to impose on their usage. Detailed discussions ensued regarding the policy guidelines, conditions, and terms of use. The Board directed Administration to work with Attorney Rieger to draft a formal policy for the Board s consideration based on the guidelines and conditions recommended by Staff, Attorney Rieger and FCERA Members, Jose Ruiz and Anna Casey. Administration agreed. NO ACTION TAKEN 20. Discussion and appropriate action on FCERA Board s authority to appoint and promote FCERA staff Attorney Harvey Leiderman, Reed Smith, opened discussion by briefly commenting on the FCERA Board s authority to appoint and promote FCERA staff and advising that the Board of Retirement, not the County, has the sole legal authority to appoint and promote staff members of FCERA who are required to accomplish the necessary work of the Board. Attorney Leiderman noted that the administration of FCERA is governed by the County Employees Retirement Law of 1937, Government Code sections et seq. ( CERL ). The FCERA Board is the independent public entity entrusted with plenary authority and fiduciary responsibility to administer FCERA. California Constitution, Article XVI 17 provides, in pertinent part: Notwithstanding any other provisions of law or this Constitution to the contrary, the retirement board of a public pension or retirement system shall have plenary authority and fiduciary responsibility for investment of moneys and administration of the system. Becky Van Wyk, Assistant Retirement Administrator, advised the Board that the County Administrative Office has recently denied the promotion of a FCERA staff member and rejected a request to fill a vacant Retirement Coordinator position.

6 6 John Navarrette, County Administrative Officer, and Kevin Briggs, County Counsel, explained that the County views the FCERA staff as County employees and because they are governed under the County labor agreements, the Administrative Office has the authority to approve or deny FCERA s requests based on those labor agreements and supporting documentation submitted by the requesting department. More specifically, requests to promote or fill a vacancy must be accompanied by a Request to Waive Hiring Freeze form. Mr. Navarrette noted that the form is necessary for payroll processing. Attorney Leiderman recommended that, in order to move forward with the promotion and filling the Retirement Coordinator vacancy, Administration submit the appropriate documents to ensure that the County Personnel and Payroll Departments have what is necessary to process the requests according to the needs established by the Board of Retirement. In response to a question from Trustee Coburn as to whether there is currently a Countywide hiring freeze, Mr. Navarrette stated that there is no hiring freeze at this time. However, departments are required to submit a Request to Waive Hiring Freeze form along with promotion requests for tracking purposes. Trustee Crow acknowledged that several personnel issues remain unresolved between the BOR and County and recommended that the two entities continue to work together on the outstanding personnel related issues. In addition, Trustee Crow suggested that, in the interest of filling the vacant Retirement Coordinator position and promoting staff, Administration submit the appropriate documents as requested by the County. A motion was made by Trustee Crow, seconded by Trustee Austin, to submit the appropriate documents necessary to complete the promotion and fill the vacant position and to work with the County to resolve issues related to the Administrators salary and other personnel issues. VOTE: Yes Austin, Basua, Coburn, Crow, Larson. No Souza. (Absent Criego, Crow, Gomez, Jolly) Trustee Crow departed at 11:00 AM. 21. Discussion and appropriate action on the delineation of authority between the County of Fresno and Board of Retirement regarding the terms and conditions of employment for the FCERA Administrator At the request of Trustee Coburn, John Navarrette, County Administrative Officer, and Kevin Briggs, County Counsel, clarified that a letter submitted to the Board of Retirement by Chairman Deborah Poochigian on June 5, 2012 outlines inconsistencies (mileage reimbursement and severance pay) within the Retirement Administrator employment contract and between the Retirement Administrator employment contract and the County s salary resolution. Detailed discussions ensued regarding the need to establish an ad hoc committee comprised of FCERA representatives and County representatives to discuss the roles of each Board as they relate to personnel issues.

7 7 A motion was made by Trustee Coburn, seconded by Vice Chair Souza to create an ad hoc committee comprised of FCERA representatives and County representatives to create and define a policy and working with relationship as it relates to employment of FCERA staff. VOTE: Unanimous (Absent Criego, Crow, Gomez, Jolly) 22. Closed Session: A. Conference with Legal Counsel Actual Litigation - pursuant to G.C (a) 1. Fresno County Employees Retirement Association v. Countrywide Financial Corporation, et al., United States District Court for the Central District of California Case No. CV MRP (MANx) B. Conference with Legal Counsel Potential initiation of litigation pursuant to subdivision (c) of G.C : (two cases) C. Disability Retirement Applications Personnel Exception (G.C ): 1. Andrea Carrisosa 2. Virginia Landeros 3. Pamela Ford 4. Tami Cullen 5. Dennis Cooper 23. Report from Closed Session 22.A B. 22.C C.2. Nothing to report. Nothing to report on either case. Andrea Carrisosa - Decision - Grant Andrea Carrisosa service connected disability benefits based on the Findings of Fact and Decision with an effective date of July 1, 2010, the date the application was filed. M - Souza. S - Basua. VOTE: Unanimous. Absent Criego, Crow, Gomez, Jolly. Virginia Landeros - Decision - Grant Virginia Landeros service connected disability benefits based on the Findings of Fact and Decision. M - Souza. S - Basua. VOTE: Unanimous. Absent Criego, Crow, Gomez, Jolly. 22.C.3. Pamela Ford - Decision Grant Pamela Ford service connected disability benefits based on the Findings of Fact and Decision with the disability benefits commencing September 24, 2009, the date the application was filed. M - Crow. S - Basua. ROLL CALL VOTE: Yes Austin, Basua, Larson, Souza. No Coburn. Absent Criego, Crow, Gomez, Jolly. MOTION PASSED.

8 8 22.C C.5. Tami Cullen - Decision - Grant Tami Cullen service connected disability benefits based on the Findings of Fact and Decision with the disability benefits commencing April 21, 2008, the day the application was filed. M Austin. S Souza. ROLL CALL VOTE: Yes Austin, Basua, Larson, Souza. No Coburn. Absent Criego, Crow, Gomez, Jolly. MOTION PASSED. A motion was made by Trustee Coburn, seconded by Vice Chair Souza to rescind Trustee Coburn s June 6, 2012 motion to conditionally deny Dennis Cooper s disability application pending an additional Independent Medical Examiner evaluation and to open the issue for further discussion. VOTE: Unanimous. Absent Criego, Crow, Gomez, Jolly. Dennis Cooper Decision Grant Dennis Cooper service connected disability benefits based on the Findings of Fact and Decision. M Souza. S Austin. ROLL CALL VOTE: Yes Austin, Basua, Larson, Souza. No Coburn. Absent Criego, Crow, Gomez, Jolly. MOTION PASSED. 24. Report from FCERA Administration Elizabeth Avalos, Administrative Secretary, reported on the following: 1. The Special Meeting scheduled for Friday, July 27, 2012 at 8:30 AM. 2. The upcoming SACRS Fall Conference. Kelly Prinz, Retirement Benefits Manager, reported on the following: 1. The Pre-Retirement Seminar scheduled for Thursday, July 19, 2012 in the FCERA Board Chambers. 25. Report from County Counsel Susan Coberly, Senior Deputy County Counsel, had nothing to report. 26. Board Member Announcements or Reports The Board Members had nothing to report. There being no further business the meeting adjourned at 12:26 AM. Phillip Kapler Secretary to the Board