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Agenda Item ______
FRESNO COUNTY BOARD OF RETIREMENT
February 2, 2005
A regular meeting of the Fresno County Board of Retirement was held in the FCERA Boardroom at 1111 H Street, Fresno, CA.
Trustees Present:
Michael Cardenas Phil Larson
Vicki Crow A. Papaleo
Vera Dominguez Stephanie Savrnoch
Steven Jolly John Souza
Others Present:
Harvey Leiderman, Steefel Levitt & Weiss (by conference call)
Merrill Wright, Retiree
Jeffrey MacLean, Wurts & Associates
Art Greenwood, Fidelity Management Trust Company
Mike Strong, Fidelity Management Trust Company
Robert Gilliam, McKinley Capital Management
Sheila Borer, McKinley Capital Management
Sean Roche, Oechsle International Advisors
Stephen P. Langer, Oechsle International Advisors
Jan Henderson, Walter Scott & Partners Ltd.
Andrew Miller, Mondrian Investment Partners Ltd.
Paul Ross, Mondrian Investment Partners Ltd.
Laurie Deaton, Wellington Management Company
Elizabeth O’Hara, Wellington Management Company
Vera Trojan, Wellington Management Company
Josephine Jimenez, Wells Capital Management
Frank Chiang, Wells Capital Management
Bill Norris, Wells Capital Management
Barbara Grunwald, Deputy County Counsel
Roberto L. Peña, Retirement Administrator
Becky Van Wyk, Chief Accountant
Autumn L. Henson, Administrative Secretary
Sign-up Sheet Attached
1. Call to Order
Chair Souza called the meeting to order at 9:02 AM.
2. Closed Session:
a. Conference with Legal Counsel – Actual Litigation - pursuant to G.C. §54956.9(a) - County of Fresno v. Board of Retirement
3. Report from Closed Session
a. The Board had nothing to report.
4. Public Presentations
Merrill Wright, FCERA retiree, addressed the Board regarding the reduction in retiree benefits. Mr. Wright stated that he attended a meeting last summer where the Board advised that in September they would start reducing retirement by the amount that had been overpaid. It is now February and this has not taken place and Mr. Wright asked when this is expected to be done and what can be expected as far as a repayment plan.
Mr. Peña advised that two repayment plans would be offered, one would be a lump sum payment and the second would allow repayment in the same amount of time that the excess was received, for example for Mr. Wright from September 1, 2004 on. No excess amount will be requested prior to September 1st.
Mr. Peña reviewed deadlines and what the expectations are to complete this process. FCERA Administration needed to get some experience with the process in order to determine how long it would take to complete the project. Mr. Peña advised that at the next Board meeting he will ask the Board for approval to hire ten extra help employees to help with the finalization of the process. Currently, approximately 50 recalculations are completed each month.
The calculation is split into three phases. There are 4268 retirees, the first phase will include members that retired between 1/1/01 through 10/31/04, the second phase includes members that retired from 10/7/97 (the date of the Ventura decision) through 12/31/00 and the third phase will include members that retired prior to 10/7/97. Based on estimates, the first phase should be completed by 9/30/05. Mr. Wright is included in this phase. The second phase is expected to be finished by 12/31/05 and phase three which includes 2500 retirees will hopefully be completed by 6/30/06.
Trustee Papaleo asked if the members have been notified of this timeline. Mr. Peña stated that he has discussed these expectations with retirees at their recent luncheon but did not want to send a letter out until the request to hire additional extra help has been approved by the Board. Once this is finalized a letter will be sent to all members letting them know what the timeline expectations are.
Chair Souza advised Mr. Wright that the Board is very concerned about this issue and that it has been brought up at virtually every meeting. The Board wants to see this process completed as soon as possible.
Mr. Peña advised that there are approximately 1200 members in the first phase, 500 members in the second phase and about 2500 in the third phase. A letter will be sent in the near future explaining to the members what the expectations are in terms of deadlines. In addition, each member will receive a letter explaining in detail how the new figure was arrived at, statements showing the member’s prior calculations and the new calculations and a spreadsheet showing how the difference in the prior and new amounts were calculated.
After hiring the extra help people and they have gained some experience, Mr. Peña stated that he hopes that 300 calculations will be completed per month.
Mr. Wright stated that his understanding was that the money that is owed since last September will have interest added. Mr. Peña advised that this is not correct and there will not be any interest charged.
Consent Agenda/Opportunity for Public Comment:
Roberto L. Peña, Retirement Administrator pulled Item #14.
A motion was made by Trustee Jolly, seconded by Vice Chair Dominguez to approve Consent Agenda Items 5 – 13 and 15. VOTE: Unanimous with Trustee Dominguez abstaining on Item #5 (Absent-Thobe)
*5. Approval of the January 19, 2005 Retirement Board Regular Meeting Minutes
RECEIVED AND FILED; APPROVED as recommended.
*6. Retirements
RECEIVED AND FILED; APPROVED as recommended.
Name
/Department
/Years
Andrea C. Burnett / Human Services System / 20.35Regina R. Carr / Human Services System / 14.25
John E. Cooley / Administrative Office / 14.18
Leida F. Crumb / Human Services System / 26.33
Linda C. DeWitt / Human Services System / 19.01
Larry D. Dixon / Human Services System, Deferred / 20.78
Lupe Fabela / Human Services System / 17.17
Mary Ann Gonzales / Human Services System, Deferred / 17.83
Pamela Hansen / Human Services System, Deferred / 16.97
David W. Henson / Administrative Office / 10.20
Emma Juhrend / Human Services System, Deferred / 5.75
Donna Logan / Assessor-Recorder, Deferred / 8.59
Gary L. Martin / Human Services System, Deferred / 23.48
Ernestine Massongill / Sheriff / 29.48
Enrique P. Mercado / Sheriff, Deferred / 12.52
Guadalupe Perez / Human Services System / 33.70
Esther Raymundo / Superior Court / 36.69
Barbara Silveira / Human Services System, Deferred / 2.89
Barbara Trimmer / Human Services System / 17.90
Sandra A. Venegas / Human Services System / 19.84
James W. Whitton / Sheriff / 20.39
*7. Deferred Retirements
RECEIVED AND FILED; APPROVED as recommended.
Name
/Department
/Years
Anna Carter / Human Services System / 5.25Kenneth Hahus / District Attorney / 23.66
Michael J. Reynolds / Human Services System / 8.21
Jonathan Skiles / District Attorney / 7.64
Linda Smith / Superior Court / 1.33
Martha B. Uribe / Human Services System / 5.29
William K. Volner / Superior Court / 5.10
La-Kebbia Wilson / Human Services System / 4.87
*8. Disability Retirements
RECEIVED AND FILED; APPROVED as recommended.
Name
/Department
/Years
Stacey Houston / Superior Court / 11.39Alisa J. Lee / North Central Fire Protection District / 10.52
*9. Most recent investment returns, performance summaries and general investment information from investment managers
RECEIVED AND FILED.
*10. Public Record Requests: January 10, 2005 request from Henry Lopez, January 14, 2005 request from Phillip Cronin, January 20, 2005 request from Pam Carozza, January 21, 2005 request from Kara Johnson, Lipper Inc., January 25, 2005 request from Paul Dictos
RECEIVED AND FILED.
*11. Letter to the Fresno Bee Editor to be submitted by Paul Dictos and response from FCERA Administration
RECEIVED AND FILED.
*12. Correspondence to Stuart Seiden, Public Works, thanking Mo Ansari and Claude DeChow for their work on the FCERA Administration building
RECEIVED AND FILED.
*13. SACRS System Survey on Defined Benefit Reform submitted results from FCERA Trustees
RECEIVED AND FILED.
*14. Response from J. Wesley Merritt, Chief Deputy County Counsel on behalf of the Fresno County Sheriff to Ashley Dunning, Steefel, Levitt & Weiss regarding Trustee Michael Thobe’s Board of Retirement duties
Mr. Peña noted that the Board had been provided a copy of the original letter from Ashley Dunning, Steefel Levitt & Weiss, that was directed to the Fresno County Sheriff. The response to this letter from County Counsel has also been provided.
A final draft of Ms. Dunning’s response to the County Counsel letter was presented to the Board this morning. The reason the item was pulled was so the Trustees could give Mr. Peña any comments or questions they want shared with Ms. Dunning. Mr. Peña stated that with the Board’s approval the response will be sent to County Counsel or, the Board could decide to drop the matter and not move forward. Mr. Peña asked for direction from the Board on this issue.
As the draft letter from Ms. Dunning was only received yesterday and presented to the Board at today’s meeting, Mr. Peña suggested that the Board set aside this item until later in today’s meeting after they have a chance to review the letter. Following brief discussion, the Board agreed to discuss this item further later in the meeting.
*15. Correspondence regarding CalPERS Long-Term Care Program that will be included with retirees’ February checks
RECEIVED AND FILED
16. Discussion and appropriate action on selection of investment management firms for the International and Emerging Markets Mandates
Jeffrey MacLean, Wurts & Associates, stated that today’s presentations are part of the manager search for an International Growth Manager to replace Marvin & Palmer and an Emerging Market Manager to also replace Marvin & Palmer. Four firms will be interviewed in the morning for the EAFE Large Cap assignment then, three firms will be interviewed in the afternoon for the Emerging Market manager. Each manager will be allowed 30 minutes to make their presentation, 20 minutes for formal remarks and 10 minutes for Q&A. Mr. MacLean will advise each of the firm representatives of the time allowance.
a. Fidelity Management Trust Company
Presentation was given by Art Greenwood, Senior Vice President and Relationship Manager and Mike Strong, Institutional Portfolio Manager of Fidelity Management Trust Company.
b. McKinley Capital Management, Inc.
Presentation was given by Robert Gilliam, Director of Global Equities and Sheila Borer, Director of Institutional Marketing – Western North America of McKinley Capital Management.
c. Oechsle International Advisors
Presentation was given by Sean Roche, Managing Principal, CIO, COO and Stephen P. Langer, Director of Marketing of Oechsle International Advisors.
d. Walter Scott & Partners Ltd.
Presentation was given by Jane Henderson, Portfolio Manager of Walter Scott & Partners, LTD.
The meeting was adjourned at 12:05 PM for lunch. The meeting was called to order at
12:40 PM.
A motion was made by Vice Chair Dominguez, seconded by Trustee Crow to choose McKinley Capital Management, Fidelity Management Trust Company and Oschle International Advisors as the finalists in the International Growth search and direct Administration to proceed with due diligence of these firms. VOTE: YES-Cardenas, Crow, Dominguez, Jolly, Larson, Papaleo, Souza. NO-Savrnoch. ABSENT-Thobe.
e. Mondrian Investment Partners Ltd.
Presentation was given by Andrew Miller, Portfolio Manager and Paul Ross, President of Mondrian Investment Partners LTD.
f. Wellington Management Company
Presentation was given by Laurie Deaton, Vice President, Business Development, Elizabeth O’Hara, Vice President, Relationship Management and Vera Trojan, Vice President, Emerging Markets Equity Portfolio Manager of Wellington Management Company.
g. Wells Capital Management
Presentation was given by Josephine Jimenez, Senior Portfolio Manager, Frank Chiang, Portfolio Manager and Bill Norris, Managing Director Public Funds of Wells Capital Management.
Trustee Larson departed the meeting at 3:10 PM. Trustee Papaleo departed the meeting at 3:20 PM.
A motion was made by Vice Chair Dominguez, seconded by Trustee Crow to choose Mondrian Investment Partners Ltd. And Wellington Management Company as finalists in the Emerging Market search and direct Administration to proceed with due diligence on these firms. VOTE: Unanimous (Absent-Larson, Papaleo, Thobe).
*14. (continued)
A motion was made by Trustee Crow, seconded by Trustee Savrnoch to send the letter after review and acceptance of the letter by Trustee Thobe. VOTE: Unanimous (Absent-Larson, Papaleo, Thobe).
17. Report from FCERA Administration
Roberto L. Peña, Retirement Administrator gave a brief report on the following items:
1. The Retirees’ Association (FCREA) has requested, in a letter to Mr. Peña, a copy of the biweekly Board packet. Mr. Peña stated he is not opposed to this but has advised the FCREA that they would be charged for the copies as the request would fall under the Public Records Act. FCREA disagreed and Mr. Peña has sent this issue to the FCERA attorney and the attorney verbally stated that he doesn’t see any reason not to charge for the copies. This issue may be brought back to the Board on the 16th for direction.
Chair Souza asked how many copies would need to be made. Mr. Peña stated that if a copy of the Board packet is given to the FCREA it would be unreasonable not to then send a copy of the Board packet to any one of the Employee Organizations in the County.
Chair Souza stated his understanding was that the FCREA only want information on items affecting benefits. Mr. Peña advised that he spoke with the FCREA President, George Bleth, and was told specifically that except for closed session items, the FCREA wants the entire packet. Mr. Peña did suggest to Mr. Bleth that when he received the agenda he could send an e-mail to Mr. Peña asking for copies of the particular items they want. Mr. Bleth stated they wanted everything.
Chair Souza stated the FCREA should have access to this information. Mr. Peña advised that the entire packet is available at the front desk of the FCERA Administration offices.
Mr. Peña will bring more information to the Board on this issue after discussing with counsel.
2. The Board agreed to a Special meeting for an educational presentation on the actuarial process. The Actuary is available on February 17th or February 25th. An e-mail will be sent to the Trustees asking for their date preference.
3. A meeting was held last week with North Central Fire Protection District. NCFPD are looking to consolidate these particular firefighters with the City of Fresno so there may be a possibility that the members will become City employees. NCFPD sent a letter to FCERA which has been forwarded to the FCERA Actuary. NCFPD is looking for information and a general study from the Actuary as there would be a cost related to this change. Mr. Peña will keep the Board updated. The letter from NCFPD and any information from the Actuary will be given to the Board at the next meeting.