Closed Session – The Board will meet in Closed Session prior to Adjournment for a Conference with Counsel on Litigation – Teamsters Local 856 vs. Board of Retirement (Coordinated Proceedings JCCP4049) - None

Public Session – The Board will meet in Public Session at 1:00 p.m.

1.0

Call to Order

2.0

Roll Call

3.0

Approval of the Minutes

4.0

Oral Communications

4.1

Oral Communications From the Board

4.2

Oral Communications From the Public

5.0

Benefit Services

5.1

Adoption of Consent Calendar

5.2

Consideration of items removed from Consent Calendar

5.3

Further Consideration of the Application of Kimberly Sullivan for a Service Connected Disability

5.4

Adoption of Regulation authorizing Purchase of Upgrade of Plan 3 Service Credit

6.0

Investment Management Services & Investment Committee Report

6.1

Acceptance of Monthly Portfolio Performance Report

6.2

Acceptance of Strategic Investment Solutions’ Performance Analysis for periods ending 9/30/2001

6.3

Annual Investment Manager Review – Bank of Ireland Asset Management

6.4

Approval of Schedule for Asset / Liability Modeling Study

6.5

Approval of Asset/Liability Modeling Study Phase One :  Determination of Suitable Asset Classes, Constraints and Weighting Scheme for Integration of Sub-Classes

7.0

Board and Management Support Services & Audit Committee Report

7.1

Approval of William M. Mercer proposal for Special Study of Future Contribution Rates

7.2

Approval of William M. Mercer proposal for Special Study for the implementation of Plan 3 Upgrades program

7.3

Acceptance of SamCERA's Audited Financial Statements & Accompanying Notes

7.4

Acceptance of SamCERA’s Response to the 6/30/2001 Audits Management Letter

7.5

7.6

Acceptance of Report of the Ad Hoc January Retreat Planning Committee

7.7

Introduction of Regulation to add an Alternate Retiree Member to the Board per GC§31520.5

7.8

Authorization for Cost/Benefit Analysis of Proposed Migration to PensionGold Version 2

8.0

Approval or Acceptance of Reports

8.1

Report of Actions Taken in Closed Session – None

8.2

Chief Executive Officer's Report

8.3

County Counsel's Report – None

8.4

Investment & Finance Manager’s Report – None

8.5

Information Technology Manager’s Report

9.0

Adjournment

0111.1

Call to Order:  Mr. Cottle, Chair, called the Public Session of the Board of Retirement to order at 1:00 p.m., November 27, 2001 in SamCERA’s Board Room, Suite 280, 702 Marshall, Redwood City.

0111.2

Roll Call:  Mr. Bryan, Mr. Buffington, Ms. Colson, Mr. Cottle, Mr. Lewis, Mr. McMahon (1:06), Ms. Salas & Ms. Stuart.  Excused: Mr. Hoffman.  Staff:  Mr. McCausland, Mr. Clifton & Mr. Hood.  Counsel:  Ms. Carlson.  Consultants:  Ms. Chapman, Dr. Fracchia, Mr. Meier, Mr. Thomas, Ms. Ward & Mr. Yeung.  Retirees 3, Actives 2, County 2, Public 1.

0111.3

Approval of the Minutes:  Mr. Cottle & Ms. Arnott submitted the following corrections to the Minutes of October 23^rd:  0110.6.1 ¶3 “instructed to in investigate”; 0110.6.3 ¶6 “risk and characteristics”; 0110.6.4 ¶1 line 6 “markets in the light”; 0110.8.2 ¶2 “not take a position on the proposed legislation.”

Motion by Bryan, second by Salas, carried unanimously to approve the Minutes of the October 23^rd Meeting of the Board of Retirement as corrected.

0111.4.1

Oral Communications From the Board:  Ms. Stuart, Mr. Bryan and Ms. Salas reported on the SACRS conference.  They noted that some sessions were outstanding but that the Trustee Roundtable was very disappointing both in terms of acoustics and leadership. 

Mr. Bryan and Ms. Salas reported that the Fresno City conference had been outstanding and complimented Mr. Cottle on his contributions to the success of the conference.

0111.4.2

Oral Communications From the Public:  John Murphy, President of SCORPA, requested that the Board provide information regarding employer contribution rates since 1993.  Mr. McCausland agreed to assemble such a table from the Actuarial Valuations, as follows (in thousands):

Fiscal Year

“Covered Payroll”

Member Contributions

Average %

Employer Contributions

Nominal Aggregate %

1993

$176,432

$  9,534

5.4%

$28,514

16.2%

1994

174,992

9,621

5.5%

33,956

19.3%

1995

183,786

10,305

5.6%

38,502

20.8%

1996

188,822

10,561

5.6%

40,151

22.1%

1997

187,926

11,198

6.0%

42,877

22.1%

1998

196,391

12,033

6.1%

42,676

20.7%

1999

211,529

12,586

5.9%

41,289

18.9%

2000

238,864

14,383

6.0%

38,695

15.5%

2001

259,075

15,287

5.9%

39,482

15.2%

From the Actuarial Valuations:  “Covered Payroll” is prior year 6/30 annualized.  “Nominal Aggregate %” is “Total Employer Rate” estimated at start of year.  Estimated rate for Fiscal Year 2002 is ~11.9%.

0111.5

Benefit Services

0111.5.1

Adoption of Consent Calendar:  Without objection, Mr. Cottle removed the application of Maria Silva (Mr. McMahon) from the Consent Calendar. 

Motion by Bryan, second by McMahon, carried unanimously, to adopt the Consent Calendar, as amended

Disability Retirements: 

The Board finds that Corazon DePaul, is unable to perform her usual and customary duties as a Deputy Court Clerk, finds that her disability is Service-connected, and grants her application for Service-connected Disability Retirement.

The Board finds that Terry James, is unable to perform his usual and customary duties as a Painter, finds that his disability is Service-connected, and grants his application for Service-connected Disability Retirement.

The Board finds that Irene Ornano, is unable to perform her usual and customary duties as a Food Service Worker, finds that her disability is Service-connected, and grants her application for Service-connected Disability Retirement.

The Board finds that Carol Twomey, is unable to perform her usual and customary duties as an Office Assistant, finds that her disability is Non-service Connected, and grants her application for Non-service Connected Disability Retirement.

Service Retirements:

Martinson, Rosa

June 6, 2001

Quadro of Robert

Reed, David

October 30, 2001

District Attorney

Baltodano, Josefina

November 1, 2001

Juvenile Probation

Burgess, Mamie

November 3, 2001 (from deferred)

      Public Health Department

Hekker, Janice

November 26, 2001 (from deferred)

Chope Hospital

Andre, Edward  “Bud”

December 8, 2001

Probation Department

Diaz, Iris

December 2, 2001 (from deferred)

General Hospital

Deferred Retirements:

Arbizu, Imelda

G2

Reciprocity

Korpiel, Adina

G2

Reciprocity

Marundee, David

G2

Reciprocity

Moore, Roberta

G2

Reciprocity

Smyth-Mendoza, Shannon

Plan 3

Reciprocity

Shiner, Robert

G2

Reciprocity

Tippins, Rick

S2

Reciprocity

DeSmidt, Kristi

G2

Withdrawal Refunds:

Ferdinand Cayago

G4 non-vested

$4,721.85

Karen D’amato

G4 non-vested

$1,113.85

Marie Dominguez

G4 non-vested

$5,101.88

Aaron Dove

G4 non-vested

$1,082.57

David Lara

G4 non-vested

$2,700.84

Jacqueling Page

G4 non-vested

$1,547.17

Christopher Peters

G2 vested

$32,694.42

Jose Rabago

G2 vested

$30,213.73

Ronald Thomas

G4 non-vested

$3,362.71

Joseph Hinkston

G4 non-vested

  $7,720.12

TOTAL FOR NOVEMBER:

$90,259.14

Withdrawal Rollover:

Margaret Allen

G4 non-vested

$17,833.03

Eladio Amores

G4 non-vested

$8,779.83

Victoria Archila

G4 non-vested

$2,017.21

Richard Bullard

G4 non-vested

$8,330.66

Ida Cremers

G4 non-vested

$4,389.73

Peter Francisco

G4 non-vested

$3,268.56

Narda Garcia

G4 non-vested

$1,606.19

Elaine Laurel

G4 non-vested

$1,491.35

Marcela Magno

G2 vested

$31,908.17

Carolina Padron

G4 non-vested

$65.60

Katherine Schembri

G4 non-vested

$3,718.28

Lucia So

G4 non-vested

$9,132.55

Colleen Sullivan

S4 non-vested

  $10,416.44

TOTAL FOR NOVEMBER:

$102,957.60

0111.5.2

Consideration of items removed from Consent Calendar:  In response to questions from Mr. McMahon, Dr. Fracchia noted that there was some ambiguity in the medical history regarding the service connected nature of Ms. Silva’s disability.  Motion by Stuart, second by McMahon, carried unanimously, to find that Maria Silva is unable to perform her usual and customary duties as a Medical Services Assistant, to find that her disability is not service-connected, and to grant her a nonservice-connected disability retirement.

0111.5.3

Further Consideration of the Application of Kimberly Sullivan for a Service Connected Disability:  In response to questions from the Board, Ms. Sullivan described the nature of her work and her disability and Christopher Dehner, Ms. Sullivan’s attorney, reviewed the highlights of her medical condition.  Motion by Colson, second by Salas, carried unanimously to find that Kimberly Sullivan is unable to perform her usual and customary duties as a Court Services Supervisor, find that her disability is Service-connected, and grant her application for Service-connected Disability Retirement.

0111.5.4

Adoption of Regulation authorizing Purchase of Upgrade of Plan 3 Service Credit:  Mr. McCausland noted that, as a follow up to an item included in the last round of collective bargaining, the Board of Supervisors has authorized active SamCERA members who are currently in one of SamCERA’s contributory plans, but who also have Plan 3 service credit, to pay for the full cost of upgrading their Plan 3 service credit to their current plan.  The proposed regulation implements the Board of Supervisors’ new policy.  He noted that the proposed Regulation was Introduced on September 25^th and a Public Hearing was held on October 23^rd. 

Motion by Bryan, second by Salas, carried unanimously, to adopt the following new regulation:  Before Regulation 10.1.5 insert, the following:

10.1.5  An active member with Plan 3 Service Credit may upgrade such service credit to her or his current plan by paying (a) the difference between the County contributions paid for the Plan 3 service and the County contributions that would have been paid for the same service credit if earned in the current plan, plus (b) the member contributions and County pick-up of member contributions that would have been paid for the same service credit if earned in the current plan, plus (c) the accumulated interest that would have been credited on such contributions had they been on deposit at the time the service credit was earned.  10.1.6 5

0111.6

Investment Management Services & Investment Committee Report:  Ms. Colson presented the Investment Committee Report.

0111.6.1

Acceptance of Monthly Portfolio Performance Report:  Ms. Colson reported that SamCERA’s return for October was positive, but that for the 12-months ending October 31^st the return was –9.27% vs.
–11.71% for the policy benchmark.  Market value and performance for the month ending October 31^st were as follows:

Asset Class

Market Value

1-month

1-year TTWRR

5-year TTWRR

Domestic Equity

$  577,441,890

2.85%

-23.32%

7.84%

International Equity

    161,184,191

2.43%

-21.59%

4.94%

Total Equity

$  738,626,081

2.76%

-22.99%

5.89%

Fixed Income

401,437,691

1.98%

15.19%

7.56%

Real Estate

95,317,378

1.45%

13.17%

Cash Equivalents

       16,763,170

0.26%

    5.03%

Total Fund

$1,252,144,320

2.32%

-9.27%

7.10%

Benchmark

2.45%

-11.71%

6.47%

Ms. Colson noted that the variances between custodian and managers were negligible.  Without objection, Mr. Cottle accepted the report.

0111.6.2

Acceptance of Strategic Investment Solutions’ Performance Analysis for periods ending 9/30/2001:  Mr. Thomas presented a summary of SamCERA’s investment performance for periods ending September 30^th.  Highlights in the Quarterly Report included the following:

Asset Class

1-month

1-year TTWRR

5-year TTWRR

Large Cap Equity

-28.37%

70

9.88%

59

Small Cap Equity

-20.68%

60

-21.05%

57

International Equity

-13.24%

22

-24.89%

34

4.71%

45

Total Equity

-15.82%

-26.45%

5.50%

Passive Fixed Income

4.65%

47

13.12%

52

8.12%

55

Active Fixed Income

5.39%

13

14.65%

11

Total Fixed Income

4.95%

23

13.77%

22

7.59%

Real Estate

1.49%

43

12.27%

19

Cash Equivalents

0.99%

35

5.33%

47

Total Fund

-7.88%

69

-12.16%

74

6.88%

78

Benchmark

-9.21%

86

-14.87%

88

6.18%

85

The Quarterly Report noted that SamCERA outperformed its benchmark primarily because the asset allocation was below target for both large cap equity and international equity during the period.

The Quarterly Report noted that passive portfolios had under performed actively managed portfolios all year, reversing a long period in which passive had outperformed active.  This recent under performance is now reflected across all historic periods (for instance the Russell 1000 annual return over the past five years now ranks at the 59^th percentile in the manager universe).

The Quarterly Report noted that SamCERA’s portfolio and asset allocation have higher risk profiles than are justified by the returns, which can be summarized as follows:

Three-Years

Five-Years

Return

Risk

Return

Risk

Median Fund

5.1%

10.9%

8.4%

10.8%

SamCERA’s Portfolio

4.1%

11.1%

6.9%

11.6%

SamCERA’s Benchmark

2.8%

11.9%

6.2%

11.4%

Ms. Colson noted that the Investment Committee had received a comprehensive presentation of the quarterly report from Mr. Thomas.  Ms. Colson thanked SIS for the timely and accurate report and noted that there will be a lot of work for SIS to help the Board with in the future. Without objection, Mr. Cottle accepted the report.

0111.6.3

Annual Investment Manager Review – Bank of Ireland Asset Management: 

Daniel E. Anderson, Vice President – Client Services, introduced Padraig Connolly, also a Vice President – Client Services, who is assuming responsibility for the SamCERA relationship.

Mr. Anderson noted that an additional support person has been added to the Santa Monica office to strengthen BIAM’s client services resources.  He noted that BIAM had added ~20 clients.  Funds under management declined as a result of market declines, even though ~$2.5 billion in new assets were added by new clients and increased allocations from existing clients.  Mr. Anderson reviewed BIAM’s investment style, reminding the Board that BIAM is a conservative, value-oriented, theme-driven, bottom-up active manager with a long-term perspective.  As in the past, he noted that BIAM selects individual securities and does not try to align itself with country or sector index weightings.

Mr. Connolly reviewed the investment guidelines, noting SamCERA’s BIAM assets are invested in the BIAM Group Trust International Equity Subtrust.  He reported that the MSCI benchmark index has been restructured to reflect only securities that are available for investment.  He noted that at September 30^th the portfolio had a market value of $157.4 million, with a return for the past year of –24.92% vs. the benchmark’s return of –29.39%.  Since the inception of the account in September 1996, the annualized return for the portfolio totaled 4.62% (gross of fees) vs. the benchmark’s annualized return of –0.12%.  Mr. Connolly reviewed the negative market returns experienced by nearly all developed countries over the past two years.   He reviewed the returns of the portfolio’s best and worst performing stocks and the characteristics of the ten largest holdings in the portfolio. 

Mr. Anderson noted that the portfolio’s value bias had helped the fund outperform the market.   BIAM holds positive views on the outlook for the companies in the portfolio, including the telecommunications stocks which were punished by the decline in technology stocks.  He reported that Marconi was sold because BIAM lost confidence in the company’s management.  Mr. Connolly reviewed individual security decisions.  In response to a question from Mr. Cottle, Mr. Anderson noted that BIAM’s value discipline does not mean that BIAM is a deep value manager.  The technology stocks in the portfolio are a good example of securities that reflected good value for the price at the time they were purchased.

Mr. Bryan noted that the consultant’s report indicated that BIAM’s country selection added value to the returns, while its stock selection detracted from the returns.  Mr. Anderson responded by noting that BIAM selects stocks that are typical global players that represent value.  The decision is made without reference to country.  It just so happens that the portfolio is underweight in countries that experienced higher than average negative returns, which is nothing but a byproduct of the selection of individual stocks.  Mr. Connolly noted that the volatile market of the last year did result in performance attribution analysis reports of negative return from stock selection.  He noted that Marconi was a good example of a stock that did not work for the portfolio.  Mr. Anderson noted that securities were sold that had reached prices BIAM did not believe could be sustained.  These sales added to the under weighting in Japan.  Mr. Anderson also noted that BIAM has not sold a number of stocks that have declined in value, because the investment management team believes that they will do well in the next phase of the market cycle.  

In response to a question from Mr. Cottle, Mr. Anderson noted that BIAM is adding on-line services for clients, but that nothing is changing with the way the investment management decisions are made.  Mr. Cottle noted that the Board will want to see any new analytical services which BIAM will have available for client’s use.

Ms. Colson asked why the price/earnings ratio is higher than the benchmark.  Mr. Connolly reported that the difference is the portfolio’s emphasis on developed markets and preference for mid-cap companies.  Ms. Colson asked BIAM to consider breaking out the sub-indices so that the Board could better understand the biases built into BIAM’s investment style.

Mr. Connolly noted that the future is very cloudy at the moment.  BIAM is of the opinion that the market has bottomed out and will recover more quickly than the underlying economies.  There is currently a race between falling earnings and declining interest rates.  Germany is on the brink of recession, which does not bode well for Europe, where growth is expected to be ~1.5%.  U.K. may grow at 1.9%.  There is hope that 2002 will set the stage for recovery.  BIAM is not expecting to see major moves in markets over the next six to twelve months. 

In response to a question from Ms. Colson, Mr. Connolly reported that BIAM is in the early stages of determining whether or not to commence securities lending.

0111.6.4

Approval of Schedule for Asset / Liability Modeling Study:  Ms. Colson noted that the Investment Committee forwarded the proposed schedule for the asset/liability modeling study to the Board without recommendation, with two members wanting to proceed now and two members wanting to defer action until the 2002 round of collective bargaining has concluded.  Mr. Thomas discussed the proposed work plan.  Mr. Cottle and Ms. Colson encouraged the Board to approve the work plan noting that the last full study by an independent consultant was initiated in 1998.  Motion by Colson, second by Lewis, failed four ayes (Colson, Cottle, Lewis & Stuart) to four noes (Bryan, Buffington, McMahon & Salas), to approve the schedule for an asset/liability modeling study.

0111.6.5

Approval of Asset/Liability Modeling Study Phase One:  Determination of Suitable Asset Classes, Constraints and Weighting Scheme for Integration of Sub-Classes:  Ms. Colson reported that John Meier, Director of SIS’ Quantitative Group, had provided the Investment Committee with a comprehensive overview of the asset allocation process and SIS’ assessment of the capital market expectations for each of the potential asset classes.  However, she noted that the study would not be proceeding at this time in light of the Board’s action on Agenda Item 0111.6.4.  Ms. Colson advised those in the audience that they could ask staff to provide them with copies of SIS’ white papers on the subject.

0111.7

Board and Management Support Services & Audit Committee Report:  Mr. Lewis presented the Audit Committee Report.

0111.7.1

Approval of William M. Mercer proposal for Special Study of Future Contribution Rates:  Mr. McCausland reported that the Audit Committee had reviewed staff’s recommendation for a special study of several items which would be discussed during the 2002 collective bargaining season.  He reported that it was the consensus of the Committee that the employer or the unions should fund plan design studies and that SamCERA should fund plan implementation studies.  Consequently, Mr. McCausland reported that he had withdrawn the staff recommendation for the special studies.

0111.7.2

Approval of William M. Mercer proposal for Special Study for the implementation of Plan 3 Upgrades program:  Mr. McCausland noted that the Board had approved the Plan 3 Upgrade Regulation [see Agenda Item 0111.5.4]. 

In response to questions from Mr. Lewis, Mr. McCausland reported that the calculation of the individual member’s cost for the upgrade will be complex, since it will involve calculating the amount due for each biweekly pay period using the appropriate entry-age member contribution rates, Plan 3 and Plan 2 or 4 employer contribution rates and the interest crediting rates appropriate for the ensuing interest crediting periods.  He noted that each of these rates have been revised many times over the years so that there will be a multitude of “look-up” tables.  He requested the Board authorize William M. Mercer to program an Excel macro for staff to use in the calculation of the cost for each member that wants to upgrade Plan 3 service.  Mr. Yeung and Ms. Chapman were available to discuss the scope of work with the Board and Mr. Yeung responded to questions from Mr. Cottle regarding the cost and the effort required.

Motion by Bryan, second by Lewis, carried unanimously, to authorize William M. Mercer to proceed with the development of the procedures and the macro-enhanced worksheet for staff to use in calculating individual member Plan 3 Upgrade estimates, for a fee not to exceed $10,000, per Mr. Yeung’s letter of October 31, 2001, subject to approval of the licensing agreement by Mr. McCausland and Ms. Carlson.

0111.7.3

Acceptance of SamCERA's Audited Financial Statements & Accompanying Notes:  Mr. Lewis reported that Mr. Huening, the County Auditor/Controller and his audit staff had met with the Committee to review the Auditor’s draft unqualified opinion on SamCERA’s financial statements.  Mr. Lewis reported that the Audit Committee had amended the Management Discussion and Analysis section and the note explaining the Market Stabilization Reserve for clarity of presentation.  Ms. Colson requested that the Security Lending note be revised for clarity of presentation as well.  Mr. Cottle requested changes to the description of the investment program.  Motion by Lewis, second by Stuart, carried unanimously, to accept SamCERA’s Audited Financial Statements & Accompanying Notes as amended for clarity, subject to approval of the wording of the amendments by the Chair of the Audit Committee.

0111.7.4

Acceptance of SamCERA’s Response to the 6/30/2001 Audit Management Letter:  Mr. Lewis reported that the Audit Committee had reviewed the Auditor’s Management Letter and Staff’s Response with the County Auditor.  He reported that the Audit Committee had instructed staff to provide the Committee with a progress report at the end of six months in an effort to expedite completion of the open items. Ms. Colson noted that the trustees should have copies of SamCERA’s emergency procedures when the manual is completed.  In response to a request from Mr. Buffington, a sentence stating that the custodian serves as SamCERA’s book of record was deleted from the Response to a recommendation regarding reconciliation of custodian and investment manager records. 

Mr. Clifton noted that staff believes that the internal controls referred to in the Management Letter were in place, but that the auditor had identified lapses in the execution of those internal controls, which staff will be addressing in the months ahead.  Motion by Colson, second by Bryan, carried unanimously, to accept SamCERA’s Response to the 6/30/2001 Audit’s Management Letter as amended for clarity.

0111.7.5

Acceptance of SamCERA's Comprehensive Annual Financial Report:  Mr. Lewis reported that the Audit Committee had reviewed SamCERA’s Comprehensive Annual Financial Report and recommended that the Board accept the report as amended to reflect the changes made to the financial report by the Committee and the Board.  Motion by Bryan, second by Lewis, carried unanimously to accept SamCERA’s Comprehensive Annual Financial Report as amended to conform to the Audited Financial Statements and Accompanying Notes as amended.

0111.7.6

Acceptance of Report of the Ad Hoc January Retreat Planning Committee:  Mr. Lewis reviewed the proposed program with the Board.  Ms. Colson noted that the program will need to be revised given the fact that the Board would not be proceeding with the asset/liability modeling study or the actuarial study of prospective benefit changes.  Following extensive discussion, Mr. Lewis outlined the revised proposed schedule.  Without objection, Mr. Cottle approved the schedule, as follows: 9-10:15 California’s Economic Forecast, 10:30-11 SamCERA’s Plan Design, 11-12 Public Session, 1-2:30 (a) The Roles of Investment Managers & (b) Rebalancing, 2:30-3:45 Review of Post-Retirement Benefits, 4-4:30 SamCERA’s Business Plan Update.

0111.7.7

Introduction of Regulation to add an Alternate Retiree Member to the Board per GC§31520.5:  Mr. Lewis reported that the Audit Committee had concluded that the proposed regulation should be discussed with the full Board.  Ms. Stuart noted that CRCEA had sponsored legislation that extends to all ’37 Act Boards of Retirement authority to appoint an alternate retiree trustee.  Ms. Stuart noted that the trustee would be empowered to participate in Board meetings when Ms. Stuart is absent.  In response to a question from Mr. Buffington, Ms. Carlson noted that the Board must appoint the first alternate in order to implement the law.  Mr. Bryan noted that the law might work well for counties in which the retired member missed many meetings, but that has not been the case with Ms. Stuart.  He expressed reservations about having to provide trustee education for the alternate member.  Mr. Bryan noted that the Board has a history of deferring action on a matter of strong interest to an absent trustee.  Steve Perry, AFSCME, noted that he supported the regulation, but felt that SCORPA should not be specifically named as the retiree organization recognized to nominate candidates for the Board’s consideration.  Ms. Carlson noted that she and Mr. McCausland had agreed to draft language that would authorize other organizations to nominate candidates.  The Board discussed the possibility of there eventually being alternate trustees for each position on the Board.  Motion by Stuart, second by Buffington, failed two ayes (Buffington & Stuart) to six noes (Bryan, Colson, Cottle, Lewis, McMahon & Salas) to introduce a Regulation to add an alternate retiree member to the Board per GC§31520.5.

0111.7.8

Authorization for Cost/Benefit Analysis of Proposed Migration to PensionGold Version 2:   Mr. Cottle noted that all trustees that are present were present at the Audit Committee meeting.  Mr. McCausland noted that the Audit Committee prefers to have staff approach Levi, Ray & Shoupe and request that they extend their no-license-fee offer for another year.   Mr. Hood reminded the Board that long lead times will be required for the migration to any new system.

0111.8

Approval or Acceptance of Reports

0111.8.1

Report of Actions Taken in Closed Session:  None.

0111.8.2

Chief Executive Officer's Report:  Mr. McCausland reminded trustees that they could forward a check to him for the personal premium for the non-recourse endorsement to SamCERA’s fiduciary liability policy. Without objection, Mr. Cottle accepted the report.

0111.8.3

County Counsel's Report:  None.

0111.8.4

Investment & Finance Manager’s Report:  None.

0111.8.5

Information Technology Manager’s Report:  Mr. Hood reported on the PensionGold Users’ Conference and LRS’ new clients.  He reported that SamCERA’s communications link with the County will be upgraded.  Without objection, Mr. Cottle accepted the report.

0111.9

Adjournment in Memory of the following Deceased Members:  There being no further business, Mr. Cottle adjourned the meeting at 3:30 p.m. in memory of the following recently deceased members:

Delano, Gladys

September 19, 2001

General Hospital

Derrickson, Jack

October 17, 2001

Beneficiary of Pearl

Lucero, Leo

October 31, 2001

Assessor’s Office