Agenda Item ______
FRESNO COUNTY BOARD OF RETIREMENT July 6, 2005
A Regular meeting of the Fresno County Employees’ Retirement Association Board of Retirement was held at 1111 H Street, Fresno, CA.
Trustees Present: Michael Cardenas A. Papaleo Vicki Crow John P. Souza Phil Larson Michael Thobe
Trustees Absent: Vera Dominguez Steven Jolly Stephanie Savrnoch
Others Present: Ronald S. Frye, Alternate Board Trustee Roger Greening, Retired Les Jorgensen, FCREA Jeffrey MacLean, Wurts & Associates Kevin Briggs, Chief 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 9:09 AM.
2. Closed Session
a. Conference with Legal Counsel – Actual Litigation - pursuant to G.C. §54956.9(a)
1. County of Fresno v. Board of Retirement
3. Report from Closed Session
2a1. PULLED
4. Public Presentations
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Roberto L. Peña, Retirement Administrator introduced and welcomed the newly elected Retiree Alternate Trustee, Ronald S. Frye.
Roger Greening, Retired FCERA Member addressed the Board.
Consent Agenda/Opportunity for Public Comment:
Roberto L. Peña, Retirement Administrator, pulled consent agenda item 15.
Mr. Greening asked the subject of The Fresno Bee’s request listed on Consent Agenda item 12. Mr. Peña advised that the request was for a copy of a letter written to FCERA from Cliff Tutelian regarding terminating his services as property manager of the Fresno Train Depot.
A motion was made by Trustee Larson, seconded by Trustee Thobe to approve consent agenda items 5 – 14 and 16 – 22. VOTE: Unanimous (Absent-Dominguez, Jolly, Savrnoch).
*5. Approval of the June 15, 2005 Retirement Board Regular Meeting Minutes
RECEIVED AND FILED; APPROVED as recommended.
*6. Retirements
RECEIVED AND FILED; APPROVED as recommended.
Name Department Years Randy Albright General Services 8.78 Marie Arnest Valley Medical Center, Deferred 14.11 Paul R. DeSantiago Employment & Temporary Assist. 14.26 Michael J. Donahue Public Works and Planning, Deferred 17.44 Kausandra Edmond Employment & Temp. Assist., Deferred 15.43 Estela Flores Valley Medical Center, Deferred 14.27 Richard Granado General Services 19.97 Elvira N. Guerra Superior Court 20.19 Gerald A. Hockett Agriculture, Deferred 13.90 Nancy E. Kops Public Defender 28.40 Roy A. Kubley Public Works and Planning 32.04 Victor I. McKinney Fleet Services 10.02 Michael P. Moon Child Support Services 31.27 Leonor Pantoja Employment & Temporary Assist. 10.44
*7. Deferred Retirements
RECEIVED AND FILED; APPROVED as recommended.
Name Department Years Gerard Fernandez Children and Family Services 1.43
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*8. Request to Rescind Deferred Retirement
RECEIVED AND FILED; APPROVED as recommended.
Name Department Years Larra L. Robertson Public Works and Planning 3.01
*9. Disability Retirements
RECEIVED AND FILED; APPROVED as recommended.
Name Department Years Frances Grigsby Employment & Temporary, Assist. 8.71 Gary Henson North Central Fire Protection District 28.86
*10. Request to Purchase General Service as Safety Time
RECEIVED AND FILED; APPROVED as recommended.
1. John Byas 2. Edgar B. Mateo 3. Matthew Millson 4. Sergio Toscano
*11. Most recent investment returns, performance summaries and general investment information from investment managers
RECEIVED AND FILED
*12. Public Records Requests from Kerri Ginis, The Fresno Bee, John H. Swenning, Sr., Retired Member, Fresno Sheriff’s Department, Doug Hogel, Astec Consulting Group
RECEIVED AND FILED
*13. Correspondence from Todd W. Burns, Lynch, Jones & Ryan and Carey S. Pack, BNY Brokerage Inc., regarding an update on the anticipated acquisition of Lynch, Jones & Ryan, Inc. by BNY Brokerage Inc.
RECEIVED AND FILED
*14. Correspondence from Adam Spector, Brandywine and James Hirschmann, Western Asset Management regarding the acquisition of Citigroup’s worldwide asset management business by their parent firm, Legg Mason
RECEIVED AND FILED
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*15. Public Fund Universe Analysis Report for the period ending December 31, 2004 by R.V. Kuhns & Associates, a registered investment advisor with the Securities Exchange Commission, of 85 of the largest public funds nationwide
Mr. Peña advised the Board that Jeffrey MacLean of Wurts & Associates is available to answer any questions regarding this survey. Chair Souza stated he would like to hear from Mr. MacLean.
Jeffrey MacLean, Wurts & Associates, gave the Board a brief synopsis of the report from R.V. Kuhns & Associates.
A motion was made by Trustee Crow, seconded by Trustee Cardenas to accept consent agenda item 15.
RECEIVED AND FILED
*16. Press Release regarding SACRS vote to oppose proposed legislation to close California’s Public Defined Benefit Plans
RECEIVED AND FILED
*17. Fresno County Employees’ Retirement Association final Actuarial Valuation as of June 30, 2004
RECEIVED AND FILED
*18. Correspondence e-mailed to all active FCERA Members, Special Districts, and Employee Organizations regarding the 2005-06 retirement contribution rate increases
RECEIVED AND FILED
*19. FCERA Unaudited Financial Statements for the nine month period ended March 2005
RECEIVED AND FILED
*20. Financial Statements for the Fresno Station for the period January 31, 2005 through March 31, 2005
RECEIVED AND FILED
*21. Request to use the FCERA Boardroom for the Zoo Authority Meetings on the fourth Wednesday of each month beginning August 24, 2005 submitted by John W. Weiser, Fresno County Principal Administrative Analyst
RECEIVED AND FILED; APPROVED as recommended.
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*22. Wellington Management Company’s request to revise their guidelines to include investments in S&P 500 Exchange Traded Funds (ETFs) and Russell 1000 Value ETFs presented by Jeffrey MacLean, Wurts & Associates
RECEIVED AND FILED; APPROVED as recommended.
23. Discussion and appropriate action on due diligence visits and recommendation on the selection of International Equity Manager
Mr. MacLean reviewed the due diligence visits to McKinley Capital Management, Fidelity Management Trust and Oechsle International Advisors conducted by Mr. MacLean, Mr. Peña, Trustee Vera Dominguez, Trustee Michael Cardenas (McKinley only), and Trustee Stephen Jolly (excluding McKinley).
Mr. MacLean advised that Wurts & Associates recommends choosing Oechsle International Advisors as the International Growth Equity firm to replace Marvin & Palmer.
Mr. Peña concurred with Mr. MacLean and also recommends Oechsle International Advisors. Mr. Peña stated that Trustee Jolly has advised that he supports the recommendation to choose Oechsle.
A motion was made by Trustee Crow, seconded by Trustee Thobe to select Oechsle International Advisors as the International Growth Equity manager to replace Marvin & Palmer International as recommended. VOTE: Unanimous (Absent-Dominguez, Jolly, Savrnoch).
24. Discussion and appropriate action on due diligence visits and recommendation on the selection of Emerging Market Manager
Mr. MacLean reviewed the due diligence visits to Mondrian Investment Partners and Wellington Management Company conducted by Mr. MacLean, Mr. Peña, Trustee Dominguez and Trustee Jolly.
Mr. MacLean stated that Wurts & Associates recommends choosing Mondrian Investment Partners as the Emerging Market manager to replace Marvin & Palmer.
Mr. Peña concurred with Mr. MacLean and also recommends Mondrian Investment Partners. Mr. Peña stated that Trustee Jolly has advised that he supports the recommendation to choose Mondrian.
A motion was made by Trustee Crow, seconded by Trustee Thobe to select Mondrian Investment Partners as the Emerging Market manager to replace Marving & Palmer Emerging Market as recommended. VOTE: Unanimous (Absent-Dominguez, Jolly, Savrnoch).
25. Discussion and appropriate action on update of the Transition Management firm search
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Mr. MacLean stated that the Request For Proposal (RFP) for Transition Management was sent to ten firms and a notice was placed in the Pensions & Investments publication. Eighteen firms responded and after extensive review of the RFP’s by Wurts & Associates, the top five firms were determined. They are:
Barclays Global Russell Investment Group State Street Bank & Trust BNY Global Transition Management Mellon Transition Management
Conference calls will be conducted between Mr. Peña, Mr. MacLean and representatives of these five firms. Mr. Peña and Mr. MacLean will then make their recommendation to the Board on choosing three of the five firms. The three top firms will provide a pool of firms to choose from when transition management services are needed by FCERA.
26. Discussion and appropriate action on schedule of future Investment Manager presentations to the FCERA Board
Mr. MacLean briefly reviewed the schedule of Investment Manager presentations to the Board and recommended approval of the schedule and asked the Board to give Mr. Peña the authority to deviate from the written schedule if needed in the future.
A motion was made by Trustee Cardenas, seconded by Trustee Larson to approve the presented schedule and give Mr. Peña the authority to change the schedule if needed in the future. VOTE: Unanimous (Absent-Dominguez, Jolly, Savrnoch).
27. Presentation regarding on site visit with Aronson + Johnson + Ortiz (AJO)
Mr. MacLean and Mr. Peña gave a brief review of their visit to Aronson + Johnson + Ortiz (AJO) and stated that they were very impressed with the firm, their operation and staff.
28. Update on the progress of liquidation of DT Capital Partners, L.P.
Mr. MacLean gave an update on the progress of the liquidation of DT Capital Partners.
Mr. MacLean noted that one of the interests in DT Capital was Encore Clean Energy, Inc. – formerly Cryotherm. As part of DT Capital’s liquidation, shares of Encore Clean Energy Inc. were distributed to FCERA. DT Capital’s original investment was in Cryotherm, then Cryotherm was acquired by Forge, Inc. who later changed its name to Encore Clean Energy, Inc. These shares are valued at significantly less than FCERA’s original investment in Cryotherm.
The Encore shares are under a two year restriction from trading. The Board’s decision at this time, is to either liquidate the shares of Encore before the end of the two year
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period, which can be costly and timely, or liquidate after the two year holding period when the legal fees and administrative costs associated with lifting the restrictions will be significantly less. Mr. MacLean stated that Wurts & Associates recommends holding the shares until the end of the two year holding period (February 25, 2006).
A motion was made by Trustee Crow, seconded by Trustee Thobe to proceed as recommended and hold the Encore shares until the end of the two year holding period. VOTE: Unanimous (Absent-Dominguez, Jolly, Savrnoch).
29. Discussion and appropriate action regarding correspondence from James R. Dodd, Sr. Vice President of Fifth Third Bank
Mr. Peña gave a brief history of the services provided by Fifth Third Bank, as FCERA’s disbursement agent including a review of their most recent error involving a tax related issue with the retiree payroll.
Mr. Peña stated his desire to move ahead with an RFP for Global Custodian services and had originally decided and reported to the Board that Fifth Third would be invited to participate in the RFP. However, after the most recent tax related mistake by Fifth Third and the loss of Darrin Smith, Sr. Vice President, Mr. Peña decided and reported to the Board that it would be best if Fifth Third was not invited to participate in the RFP.
Mr. Peña noted a letter received from James Dodd, Sr. Vice President apologizing for the recent mistake and requesting that Fifth Third be invited to submit an RFP for disbursement services only.
Mr. Peña explained to Fifth Third his preference to conduct the RFP and hire a bank to perform both the custody and disbursement services as it provides for better administrative efficiencies and less overall costs.
Mr. Peña recommended approval of a search for Global Custodian Services, both the custody and disbursement functions, and to not extend an invitation to the current FCERA provider, Fifth Third, to participate in the process.
A motion was made by Trustee Larson, seconded by Trustee Crow to accept Administration’s recommendations regarding the search for Global Custodian Services. VOTE: Unanimous (Absent-Dominguez, Jolly, Savrnoch).
Trustee Crow suggested that a review of this service be conducted every three to five years. Mr. Peña stated that this could be made part of the contract.
30. Discussion and appropriate action on bids for signs on the FCERA Administration Building
Becky Van Wyk, Chief Accountant, reviewed the bid process and the bids received to install signs at the FCERA Administration Building. Ms. Van Wyk advised that Fresno County Purchasing has also reviewed the bids.
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Ms. Van Wyk and Fresno County Purchasing recommend choosing Fluoresco Lighting & Signs to install the FCERA signs at a cost of $6,221.17.
A motion was made by Trustee Crow, seconded by Trustee Thobe to approve the recommendation of sign installation by Fluoresco Lighting & Signs. VOTE: Unanimous (Absent-Dominguez, Jolly, Savrnoch).
31. Report from FCERA Administration
Mr. Peña gave a brief report on the following items:
1. Tax implications in regard to the final compensation issue. A letter will be posted to the FCERA web site explaining the adjustment to the gross earnings which will be made to the 2005 1099’s to address this issue. Gross earnings will be adjusted by subtracting repayments made under the final compensation recalculation from a retiree’s gross benefit amount.
2. Mr. Peña has been appointed a member of the Deferred Compensation Management Council with Ms. Van Wyk serving as his backup.
32. Report from County Counsel
None.
33. Board Member Announcements or Reports
None.
NEXT MEETINGS:
July 20, 2005 – 9:00 AM (Wednesday) Regular Meeting FCERA Boardroom 1111 H Street, Fresno, CA 93721
July 22, 2005 – 9:00 AM (Friday) Special Meeting FCERA Boardroom 1111 H Street, Fresno, CA 93721
August 3, 2005 – 9:00 AM (Wednesday) Regular Meeting FCERA Boardroom 1111 H Street, Fresno, CA 93721
August 17, 2005 – 9:00 AM (Wednesday) Regular Meeting FCERA Boardroom
07/06/05 Regular Meeting 9
1111 H Street, Fresno, CA 93721
There being no further business, the meeting was adjourned at 11:12 AM.
Roberto L. Peña Retirement Administrator
07/06/05 Regular Meeting