Fresno County Board of Retirement s3

BOARD OF RETIREMENT FRESNO COUNTY EMPLOYEES’ RETIREMENT ASSOCIATION

April 17, 2013

Trustees Present:

Marion Austin Laura P. Basua Alan Cade, Jr. Judith G. Case Dr. Rod Coburn, III Eulalio Gomez Steven Jolly Regina Wheeler for John Souza

Trustees Absent:

Vicki Crow John Souza

Others Present:

Attorney Jeffrey Rieger, Reed Smith ~ via teleconference Kevin Smith, SEIU Janelle Kelly, County Counsel Mike Linden, County Counsel Phillip Kapler, Retirement Administrator Becky Van Wyk, Assistant Retirement Administrator Pat Srisukwatana, SPA Elizabeth Avalos, Administrative Secretary

1. Call to Order

Chair Coburn called the meeting to order at 8:32 AM.

2. Pledge of Allegiance

Recited.

3. Public Presentations

Consent Agenda

On behalf of Trustee Case, Chair Coburn pulled Consent items 8, 9, 10, and 11 for discussion.

A motion was made by Trustee Austin, seconded by Trustee Gomez, to Approve Consent items 4-7, and 12. VOTE: Unanimous (Absent – Case, Crow, Jolly)

*4. Approve the April 3, 2013 Retirement Board Regular Meeting Minutes

RECEIVED AND FILED; APPROVED

*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 March 2013

04/17/13 Regular Meeting Minutes 2 RECEIVED AND FILED

*6. Educational Reading Material

RECEIVED AND FILED

 The New York Times – State-Wrecked: The Corruption of Capitalism in America  Barra – Introduction to risk modeling  Wellington Management – Is Parity Passe? A Better Way to Balance Risk  INVESCO – A Risk-Balanced Approach to Asset Allocation

*7. Report from Trustee Case on the CALAPRS Principals of Pension Management Course

RECEIVED AND FILED

*8. March 2013 Debit Card Account Statements

Please see discussion noted below.

*9. Update of Board of Retirement Project Tracking report

*10. Quarterly Trustee Travel and Anticipated Travel Report

*11. Correspondence from GMO regarding National Century Financial Enterprises

*12. SACRS Board of Directors Election Final Ballot

Trustee Jolly joined the Board at 8:36 AM.

Due to the absence of Trustee Case and Attorney Jeffrey Rieger, Item 14 was heard at this time.

14. Discussion and appropriate action on comparison of Debit Card vs. Credit Card purchases

Phillip Kapler, Retirement Administrator, gave a brief summary of a comparison between credit and debit card options through Bank of the West and the County program noting the key features of each. Mr. Kapler informed that Board that information on the County’s credit card processes policies were pending.

It was noted that FCERA Administration uses a debit card to secure travel arrangements for the Board and Staff and to purchase office supplies. 04/17/13 Regular Meeting Minutes 3

Trustee Case joined the Board at 8:38 AM.

The Board engaged in detailed discussions regarding the pros and cons of each card option as they relate to risk of potential misuse and fraud. In addition, the Board discussed the current processes for reviewing/approving purchases made with the FCERA debit card.

A motion was made by Trustee Case, seconded by Vice Chair Cade, to direct staff to bring back to the Board, within the next three meetings, a proposed change or amendment to policies and the intended procedures that were attached to them regarding the current debit card and to facilitate a movement from debit to a credit card arrangement for incidentals and travel expenditures that are going to be billed against the account and a comparison of the costs, controls and fraudulent corrections (and fees associated with it), and net cost against the credit card versus the debit card and bring that comparison back for the Boards consideration. VOTE: Yes – Austin, Cade, Case, Coburn, Jolly, Wheeler. No – Basua, Gomez. (Absent – Crow)

*8. March 2013 Debit Card Account Statements

A motion was made by Trustee Gomez, seconded by Trustee Basua, to Accept Consent Item 8 as presented. VOTE: Unanimous (Absent – Crow)

RECEIVED AND FILED

*9. Update of Board of Retirement Project Tracking report

Trustee Case opened discussions by suggesting that the Board prioritize the issues/items noted on the Tracking Report so as to not let issues go unresolved. Specifically, discussions of the rights and responsibilities of the Superior Courts as it relates to membership in the FCERA and IRS qualification for various policies.

Chair Coburn noted that it is his intention to schedule the Courts issue for discussion during a meeting in June. In addition, Chair Coburn welcomed the Trustees to inform him of issues that they would like to move forward for discussion.

A motion was made by Trustee Wheeler, seconded by Trustee Jolly, to Accept Consent Item 9 as presented. VOTE: Unanimous (Absent – Crow)

RECEIVED AND FILED

*10. Quarterly Trustee Travel and Anticipated Travel Report

A motion was made by Trustee Case, seconded by Vice Chair Cade, to Accept Consent Item 10 as presented. VOTE: Unanimous (Absent – Crow)

RECEIVED AND FILED 04/17/13 Regular Meeting Minutes 4

*11. Correspondence from GMO regarding National Century Financial Enterprises

Trustee Case requested that Administration provide more detail regarding the total investment losses and final expected settlement. Administration agreed.

A motion was made by Trustee Gomez, seconded by Trustee Jolly, to Accept Consent Item 11 as presented. VOTE: Unanimous (Abstain – Case) (Absent – Crow_

RECEIVED AND FILED

13. Discussion and appropriate action on FCERA Earn Code Resolutions

Attorney Jeffrey Rieger, Reed Smith, opened discussion by correcting a statement he had made at an earlier meeting regarding the County failing to include Stand-by and On-call as pensionable earn codes for Tiers II through IV. Attorney Rieger stated that a review of the language in the Settlement Agreement indicates that the County acted accordingly and no adjustments are necessary going forward and that the earlier statement does not affect the Board’s recent decisions as the statement is irrelevant based on the recent changes in the law.

In response to a question from Trustee Case regarding whether Stand-by and On-call pay would be included as pensionable for current employees, Attorney Rieger noted that they will not and have not been included as pensionable for current employees based on the Settlement Agreement and new PEPRA laws.

The Board engaged in detailed discussions regarding the proposed earn codes resolutions (Pensionable Compensation = new members & Compensation Earnable = current members) noting that each of the resolutions and respective exhibits are working documents and will be refined and re-worked as applicable. In addition, the Board directed Administration to provide a full list of the County Earn Codes (includable and excludable) at a future meeting.

A motion was made by Trustee Wheeler, seconded by Trustee Basua, to Approve the FCERA Earn Codes Resolutions as presented.

Trustee Case expressed concern regarding the accuracy of the includable earn codes. Specifically, On-call EN and EW as it is her understanding that On-call pay was not included in compensation earnable. Attorney Rieger concurred. In addition, Trustee Case requested that separate votes be taken for each Resolution.

Kevin Smith, SEIU Local 521, also expressed concern regarding the exclusion of certain Holiday Pay codes and requested that the Board consider this issue further.

Phillip Kapler, Retirement Administrator, reminded the Board that Administration had worked with County Personnel Staff in develop the earn codes lists noting that the lists under consideration are consistent with the Board’s approval at the March 20, 2013 Regular meeting.

The motion was amended as follows:

04/17/13 Regular Meeting Minutes 5 Motion by Trustee Wheeler, second by Trustee Basua, to Approve the Resolution defining Compensation Earnable. ROLL CALL VOTE: Yes – Austin, Basua, Cade, Jolly, Wheeler, Coburn. No – Case, Gomez. (Absent – Crow) MOTION PASSED.

A motion was made by Trustee Austin, seconded by Trustee Basua, to Approve the Resolution defining Pensionable Compensation. ROLL CALL VOTE: Yes – Austin, Basua, Cade, Jolly, Wheeler, Coburn. No – Case, Gomez. (Absent – Crow) MOTION PASSED.

14. Discussion and appropriate action on comparison of Debit Card vs. Credit Card purchases

Please see discussion following Consent Item 12.

15. Discussion and appropriate action on Retirement Coordinator minimum qualifications

Phillip Kapler, Retirement Administrator, opened discussions with brief overview of the proposed Retirement Coordinator I/II/III class specification revisions (minimum qualifications or MQ’s) noting that all were reviewed by the incumbent staff, management and the Labor Relations staff. In addition, the MQ’s were forwarded to the employee union with a meet & confer invitation.

Mr. Kapler stated that he believes that the documents are a considerable improvement over the previous MQ’s and provide both staff and management with a clearer, more objective outline of the knowledge, skills, and contributions that will better map the path toward a professional development and advancement within the series.

FCERA is working with the County to extend this series into a “professional” class range within the County personnel and the overall compensation structure.

Mr. Kapler requested that the Board approve the revised MQ’s and refer them to the County Board of Supervisors for inclusion in their classification and compensation program.

A motion was made by Trustee Wheeler, seconded by Trustee Gomez, to Approve the revised MQ’s and refer them to the County Board of Supervisors for inclusion in their classification and compensation program as requested.

Discussions followed.

As a result of questions raised by Trustee Case regarding the educational credit requirements, the Board directed Administration to invite representatives of the County Personnel Department to the May 1, 2013 Regular meeting to clarify and discuss further the class specification revisions as they relate to the educational requirements. Administration agreed.

Trustee Wheeler withdrew the motion.

04/17/13 Regular Meeting Minutes 6 NO ACTION TAKEN

Item was Tabled until the May 1, 2013 Regular Board of Retirement meeting.

16. Discussion and appropriate action on forming an Ad Hoc Committee to review Board policies

Chair Coburn opened discussions with a recommendation to form an ad hoc committee to evaluate, review, refine and update the existing organizational bylaws, mission statement, charters, procedures, and policies.

In addition, Chair Coburn recommended that the committee be comprised of Trustees Austin, Basua, Cade, and himself.

A motion was made by Trustee Case, seconded by Trustee Basua, to Accept the recommendations as presented. VOTE: Unanimous (Absent – Crow)

RECEIVE AND FILE; APPROPRIATE ACTION

17. Demonstration on data transfer speeds and video conference support capabilities at the FCERA Boardroom

Phillip Kapler, Retirement Administrator, opened the discussions by informing the Board that the scheduled video conference demonstration was canceled because the current system can not support this option at this time.

Pat Srisukwatana, Systems & Procedures Analyst, explained the details of the equipment needed to fully support a consistent and reliable video conferencing system.

The Board directed Administration to research the costs of enhancing the current system bandwidth capacities to allow for video conferencing and to return to the Board with findings for further discussion. Administration agreed.

NO ACTION TAKEN

18. Closed Session:

A. Disability Retirement Applications – Personnel Exception (G.C. §54957):

1. Ronald Munarolo 2. Susan Valenzuela

19. Report from Closed Session

18.A.1. Munarolo – Decision – Grant service connected disability benefits with an effective date of May 5, 2011, the day following the day compensated. M – Gomez. S – Basua. VOTE: Unanimous (Absent – Crow) 18.A.2. Valenzuela – Nothing to report.

20. Report from FCERA Administration

Phillip Kapler, Retirement Administrator, reported on the following:

04/17/13 Regular Meeting Minutes 7 1. The SACRS Symposium on April 23, 2013 in Burlingame, CA. Mr. Kapler noted that he is scheduled and invited any Trustees likewise interested. Trustee Jolly expressed interest and requested additional information. 2. An update on the High Speed Rail Project.