March 22, 2005 – Board Agenda

Call to Order: Ms. Salas, Chair, called the Public Session of the Board of Retirement to order at 1:09 p.m. March 22, 2005, in SamCERA’s Board Room, Suite 125, 100 Marine Parkway, Redwood Shores.

0503.2

Roll Call: Ms. Salas, Mr. Bryan, Mr. Buffington, Ms. Colson (dep. 3:24 p.m.) & Ms. Tashman. Excused: Mr. Hooley, Mr. Lewis, Ms. Stuart. The second seat on the Board is currently vacant. Ms. Arnott was also in attendance. Staff: Mr. Bailey, Mr. Hood, Mr. Clifton, Ms. Lamica & Ms. Dames. Counsel: Ms. Carlson. Consultants: Dr. Fracchia & Mr. Thomas. Retirees: 1, County: 2.

0503.3

Approval of the Minutes: Ms. Arnott submitted the following correction to the February Minutes: 0502.6.6 ¶4: “Whereas, Michael E. McMahon, elected general member…”.

Motion by Buffington, second by Bryan, carried unanimously to approve the Board Meeting Minutes of February 22, 2005, as corrected.

Mr. Bailey submitted the following corrections to the January Minutes: 0501.5.4 ¶5 in the Employer Contribution Rates Table:

	Plan 1		Plan 2		Plan 3			Plan 4
effective July 3, 2005
General Member Rates:
Normal Cost	11.78%		10.04%		10.56%			~~9.76%~~ 9.08%
Contribution to Unfunded Accrued Actuarial Liability	18.54%		8.88%		6.83%			~~8.25%~~ 5.94%
Total General Member Rates	30.32%		18.92%		17.39%			~~18.01%~~ 15.02%

Safety Member Rates:
Normal Cost	15.56%		16.83%		None			13.24%
Contribution to Unfunded Accrued Actuarial Liability	52.49%		23.08%		None			18.17%
Total Safety Member Rates	68.05%		39.91%					31.41%

Probation Member Rates:
Normal Cost	19.58%	17.41%		None			14.77%
Contribution to Unfunded Accrued Actuarial Liability	22.78%	17.07%		None			12.86%
Total Probation Member Rates	~~47.36%~~ 42.36%	34.48%					27.63%

Mosquito Abatement
General Member Rates:
Total General Member Rates	24.42%	13.92%		17.39%		~~13.41%~~ 10.69%

Motion by Bryan, second by Tashman, carried unanimously to approve the Board Meeting Minutes of January 25, 2005, as corrected.

0503.4.1

Oral Communications From the Board: Mr. Bailey read ceremonial Resolution 04-05-26 in honor of Lt. Col. Scott Hood, as follows:

“RESOLVED, by the Board of Retirement of the San Mateo County Employees’ Retirement Association, that

“Whereas, Lt. Col. Scott Hood has served in the U.S. Army Reserve for 22 years; and

“Whereas, Lt. Col. Hood has served with honor both at home and abroad, including service in Bosnia; and

“Whereas, Lt. Col. Hood has the highest respect of the SamCERA Board of Retirement for both his service to his country and his service to the retirement association and its members; and

“Whereas, Lt. Col. Hood through his military service must make a personal sacrifice to place both his family and professional lives on hold; and

“Whereas, Lt. Col. Hood will deploy to the Middle East where he is expected to serve in Iraq; and

“WHEREAS, this Board desires to call special attention to Lt. Col. Hood’s service and patriotism:

“Now therefore, be it resolved that:

“Lt. Col. Scott Hood will deploy to the Middle East with the warmest wishes and highest respect of the SamCERA Board of Retirement. Scott is a fine example of the thousands of U.S. service men and women who serve our country through a high sense of duty and commitment. We hold him in high esteem, admire his commitment and personal sacrifice, and send with him and his fellow service men and women our cares and hopes for the most positive of futures, for themselves, the Iraqi people and for our nation.”

0503.4.2

Oral Communications From the Public: John Murphy noted that there was no retiree representative on the board at the meeting due to the lack of a retiree alternate. Mr. Murphy then noted the board’s Review & Revision of SamCERA’s Education Policy from the February board minutes. He opined that the trustees should provide the board an oral report on the content of educational activities rather than maintaining oral reports as optional.

Ms. Salas then took up agenda item 7.8.

0503.5

Benefit & Actuarial Services

0503.5.1

Adoption of Consent Calendar: Mr. Bailey informed the board that Arlene Silvera asked that the board remove her disability application from the day’s consent calendar. Motion by Bryan, second by Colson, carried unanimously to adopt the Consent Calendar, as amended, as follows:

Disability Retirements:

The Board finds that Delbert Lappin is disabled from performing his usual and customary duties as a Deputy Sheriff, and GRANTS his application for a service-connected disability retirement.

Routine Actions taken by staff pursuant to the Board's Delegation of Authority and the Regulations of the Board of Retirement:

Service Retirements:

Adona, Benjamin

03/13/05

Aging & Adult Services

Alvarado, Francisco

03/31/05

Human Services Agency

Anderson, David

03/15/05

Probation Department

Arrivee, Dale

03/31/05

Human Services Agency

Ball, Robert

03/13/05

Department of Public Works

Beardsley, Barbara

03/13/05

Superior Court

Behrmann, Emiliana

03/19/05

Superior Court

Bentley, Peter

03/27/05

Department of Public Works

Bevans, Janice

03/13/05 (from deferred)

San Mateo Medical Center

Bodden, Reginald

03/31/05

Probation Department

Botto, Nicki

03/13/05

Human Services Agency

Boucher, Teresa

03/13/05

County Library

Boyle, Gretchann

03/27/05

Human Services Agency

Brock, Charles

03/13/05

Parks & Recreation

Bruggemann, Joanne

03/19/05

Human Services Agency

Brusuelas, Edward

03/12/05

Sheriff’s Office

Burnes, Terry

03/13/05

Planning

Caravaca, Richard

03/13/05

Department of Public Works

Cardoza, Ronald

03/13/05

Parks & Recreation

Castro, Virgilio

03/31/05

Superior Court

Chetty, Sandra

03/13/05

Aging & Adult Services

Clark, Dana

03/31/05

Business Adm. & EMS

Codori, Sylvia

03/31/05

Human Services Agency

Connolly-Overbe, Marilyn

3/13/05 (from deferred)

Department of Public Health

Cowles, Judith

03/13/05 (from deferred)

Controller’s Office

Crist-Whitzel,Janet

03/31/05

Mental Health

Crowe-Urgo, Cynthia

03/31/05

Probation Department

Cushieri, Joseph

03/14/05

Department of Public Works

Da Cunha, Henrique

03/31/05

Probation Department

de Cesare, Joan

03/12/05

District Attorney’s Office

Dee, Josefina

2/26/05 (from deferred)

Department of Public Health

Dias, David

03/19/05

Information Services Division

Dick, Joan

03/13/05

Superior Court

Dirain, Maty

03/13/05

Department of Public Works

Dunn, Steven

03/12/05

Human Services Agency

Ejercito, Virginia

03/13/05

Information Services Division

Elumba, Bibiana

03/13/05

Hospital

Engel, Jannette

02/26/05

County Library

Frazier, Yvonne

03/31/05

Human Services Agency

Fucilla, Robert

03/15/05

San Mateo Medical Center

Gallegos, Cooper

03/13/05

Human Services Agency

Garrido, Roland

03/31/05

Probation Department

Giovannoni, Tony

03/15/05

Department of Public Works

Gonzalez, Rosa

03/13/05 (from deferred)

Department of Public Works

Grant, Vernon

03/31/05

Department of Public Works

Grimes, William

03/13/05 (from deferred)

Information Services Division

Halpin, William

03/13/05

Coroner’s Office

Ham, James

03/31/05

Probation Department

Hamzelue, Denia

03/13/05 (from deferred)

Mental Health

Hardeman, Ramona

03/31/05

Sheriff’s Office

Hart, Travis

03/31/05

Department of Public Works

Hong, Arunee

03/31/05

Human Services Agency

Horace, Hurst

03/26/05

Sheriff’s Office

Hoss, Gary

03/27/05

Sheriff’s Office

House, Gregory

03/31/05

Library

Howard, Elizabeth

03/31/05

Information Services Division

Hurst, Horace

03/26/05

Sheriff’s Office

Jewell, John

03/28/05

Sheriff’s Office

Jimenez, Azucena

03/13/05

San Mateo Medical Center

Jones, Kirkland

03/31/05 (from deferred)

District Attorney’s Office

Jordan, Benjamin

03/13/05

Department of Public Works

Jordan, Charles

03/13/05

Food Services

Juel, Stephen

03/31/05

Aging and Adult Services

Jung, Merrill

03/31/05

Probation Department

Keegan, Virginia

03/26/05

Information Services Division

Kenney, John

03/27/05

Parks & Recreation

Kinney, Linda

03/31/05

Superior Court

Kirk, Bruce

03/31/05

Department of Public Works

Knighten, Susie

03/31/05

Hospital

Knox, Mavis

03/31/05

Human Services Agency

Kong, Carol

03/31/05

Superior Court

Larkin, Paul

03/27/05

Sheriff’s Office

Lee, Jane

03/31/05

Superior Court

Leonard, Harry

03/14/05

Mental Health

Lesui, Clark

03/26/05

Human Services Agency

Loschiavo, Joseph

03/28/05

Sheriff’s Office

Lowry, Pearl

03/13/05

Human Services Agency

Martinez, Lillian

03/13/05

Probation Department

Millin, Gerald

03/31/05

Department of Public Health

Mitchell, Rita

03/31/05

Employee & Public Services

Moran, Nancy

03/31/05

Human Services Agency

Morton, Marylin

03/13/05

Superior Court

Murphy, Richard

03/13/05

Parks Department

Nachtigall, Michael

03/13/05

Department of Public Health

Narayan, Navindra

03/31/05

San Mateo Medical Center

Nevin, Michael

03/15/05 (from deferred)

Board of Supervisor

Nicholson, Carolee

03/13/05

Public Health

O’Connor, Judy

03/31/05

Mental Health

Oppenheim, Stuart

03/13/05

Human Services Agency

Palacios, Miguel

03/31/05

Human Services Agency

Patel, Benista

03/31/05

San Mateo Medical Center

Patel, Kantilal

03/31/05

Department of Public Works

Phillips, Edward

03/26/05

Information Services Division

Pitlock, Gregory

03/31/05

Sheriff’s Office

Reyes, Felix

03/31/05

San Mateo Medical Center

Richardson, Judith

03/19/05

Human Services Agency

Rodewald, Donna

03/13/05

Aging & Adult Services

Salcines, Herminio

03/31/05

Human Services Agency

Sawyers, Claudette

03/31/05

San Mateo Medical Center

Schauer Sr., Donald

03/31/05

Human Services Agency

Schauer, Boyd

03/26/05

Department of Public Works

Schilling, Herbert

03/31/05

Probation Department

Scott, Lynn

03/31/05

Assessor’s Office

Sheridan, Ann

03/31/05

San Mateo Medical Center

Shiner, Cathy

03/31/05

San Mateo Medical Center

Shriver, Gordon

03/19/05

Information Services Division

Smith, Joyce

03/13/05

Human Services Agency

Sor, Elizabeth

03/31/05

Library

Speierer, Beatrix

03/15/05 (from deferred)

Sheriff’s Office

Steiner, Douglas

03/31/05

Sheriff’s Office

Sylvester, Mary Jane

03/31/05

San Mateo Medical Center

Terron, Yvonne

03/26/05

Sheriff’s Office

Thompson, Margaret

03/31/05

Superior Court

Tzuang, Emmy

03/31/05

San Mateo Medical Center

VanPelt, James

03/26/05

Information Services Division

Velasquez, Richard

03/31/05

Probation Department

Walterscheid, William

03/13/05

Department of Planning

White, Morris

03/31/05

Department of Public Works

Wilkins, Luchers

03/31/05

Department of Public Works

Wood. Mary

03/31/05

Department of Public Health

Wysocki, Irene

03/13/05 (from deferred)

Department of Public Health

Yuen, Jim

03/31/05

Environmental Health

Continuance of Benefits:

Bates, Ethel

Beneficiary of Earl

Parker, Leslie

Beneficiary of Lillian

Czerkies, Peter

Beneficiary of Barbara

Allen, David

Beneficiary of Suzanne

Deferred Retirements:

Bischoff Ursula M.

G4 Vested

Johnstone Priscilla

G1 Vested

Leipzig Gregory X.

G2 Vested

Schultz Teresa R.

S2 vested

Weiss Shari L.

G4 vested

Burns Mary E.

G4 vested

Reciprocity

Swanson Andrew J.

G4 non vested

Reciprocity

Valdez Robert J.

G2 vested

Reciprocity

Refunds For March 2005:

Aguilar, Aida

G4 Vested

$19,695.85

Caruso, Joe

G2 Vested

$24,686.07

Dorham, Ruthell

G4 Non vested

$2,723.18

Villereal, Brando

G2 Vested

$15,245.92

Taylor, Lucas

S4 Non vested

$3,456.12

Sonntag, Armida

G4 Non vested

$6,552.25

Weese, Danell

G4 Non vested

$12,382.46

Total Refunds March 2005:

$84,741.85

Rollovers for March 2005:

Fan, Mary K.

G4 Non vested

$7,220.16

Kahn, Hannah

G4 Non vested

$5,976.46

Kristoferu, Shawn

G4 Non vested

$2,600.94

Moreno Vivian

G4 Non vested

$6,420.39

Markl, Joshua

G4 Non vested

$9,724.74

Pohlmann, Frederick

G4 Non vested

$8,153.52

Strojny, Mary

G4 Non vested

$15,929.68

Vaudell, Douglas

G4 Non vested

$5,435.59

Total Rollovers March 2005:

$61,461.48

0503.5.2

Consideration of items removed from Consent Calendar: None.

0503.6

Investment Services

0503.6.1

Acceptance of Monthly Portfolio Performance Report: Mr. Clifton presented the monthly performance report for the period ending February 28, 2005. He indicated that the Association’s Total Fund Return of 1.9% out-performed the Total Plan Policy Benchmark return of 1.64%. He then reported that there were suggested changes to the monthly report that will be implemented at the following board meeting.

Asset Class

Market Value

1-Month

1-year TTWRR

5-year TTWRR

Domestic Equity

$825804688

2.17%

9.12%

-0.46%

International Equity

265,439,103

4.91%

15.73%

0.08%

Total Equity

1,091,243,791

2.83%

10.64%

-0.17%

Fixed Income

459,156,067

-0.37%

3.24%

7.92%

Real Estate Aggregate

54,967,034

0.00%

16.94%

11.30%

Cash Equivalents

-3,939,623

0.66%

2.82%

3.41%

Total Fund

$1,601,427,269

1.79%

8.71%

3.70%

Benchmark

1.64%

8.57%

3.12%

Motion by Bryan, second by Colson, carried unanimously to accept the report.

0503.6.2

Acceptance of Strategic Investment Solutions’ Report on the Russell Investment Group Transaction: Mr. Clifton reported that Ms. Jadallah of Strategic Investment Solutions provided a brief overview of the Russell Investment Group Transaction at the Investment Committee meeting. Patrick Thomas then presented a brief report regarding this transaction before the entire board. He indicated that both SIS and Russell had jointly agreed to have SIS repurchase the 19.9% of SIS shares previously purchased by Russell in July of 2003. He indicated that SIS continues to have a great working relationship with Russell and cannot foresee any negatives due to the event. SIS will continue to have access to Russell’s research resources in the fields of manager research and other areas of interest to their respective clients while Russell will continue to utilize SIS as consultants in their business practices. With regards to the current status of Michael Beasley, Mr. Thomas indicated that Mr. Beasley will incrementally step back from his current position. Mr. Thomas stated that SIS is still undergoing some minor planning issues. He then reported that Russell requests that all of SIS’ clients sign confidentiality agreements prior to accessing Russell’s manager search resources. Ms. Colson expressed concern that, as a public entity, she did not find it feasible for the board to sign any form of confidentiality agreements. Ms. Carlson concurred with Ms. Colson’s statement and would find it hard pressed for SIS’s other public entity clients to sign such agreements.

Motion by Buffington, second by Colson, carried unanimously to accept Strategic Investment Solutions’ report.

0503.6.3

Acceptance of Quarterly Investment Performance Analysis for periods ending December 31, 2004: Mr. Thomas reported that equity performed extremely well for the quarter. He highlighted the presidential election, the uncertainty of the Iraq engagement, oil prices and the Fed’s tightening regime. He noted that SamCERA’s composite fund performed well with a return of 8.5% in the fourth quarter, 40 basis points above policy index and ranking in the 26^th percentile amongst large pension plans. He stated that the Association’s performance was excellent especially given the fact that multiple manager transitions took place in the quarter.

Without objection, Ms. Salas accepted the report.

0503.6.4

Annual Investment Manager Review – Barclays Global Investors: Mr. Clifton presented Trey Heiskell, Craig Tann and Jan Bratteberg of Barclays Global Investors. BGI presented a 30 minute presentation providing a general overview of their organization, an index fund account review, a Russell 1000 Alpha Tilts account review and a discussion regarding the multiple new insights in growth investing within their firm.

0503.6.5

Approval of Real Estate Funding – INVESCO Core Real Estate – U.S.A., LLC: Mr. Clifton reported that the Investment Committee recommends that the board approve the capital contribution of $40 million to INVESCO’s Core Real Estate fund to bring SamCERA to full real estate allocation. Ms. Colson inquired on SamCERA’s status in the queue. Mr. Clifton indicated that there is currently $45 million ahead in the queue while INVESCO is also currently working with two other potential investors.

Motion by Bryan, second by Tashman, carried unanimously to approve the capital contribution of $40 million to INVESCO’s Core Real Estate fund.

The Board went into recess in order to fax the necessary documents to INVESCO to be included in the queue.

Following the short recess, Mr. Clifton reported that the Investment Committee had discussed the Association’s future plans regarding its real estate structure and the development of an ad hoc committee to achieve its goals. Ms. Salas indicated that she was not prepared to create an ad hoc real estate committee. At the present time, she opined that the Investment Committee is well equipped to conduct any necessary research that the matter required.

Ms. Colson noted her background as a licensed real estate agent and as a real estate consultant for several large pension funds across the country. Given her background and training, Ms. Colson offered her level of expertise to the Investment Committee. Ms. Tashman stated that more research in the real estate sector regarding management diversification and various types of funds is needed and vastly prudent. Mr. Bryan opined that the Investment Committee can discuss and explore the issue.

Ms. Colson departed at 3:24 p.m. Ms. Salas adjourned the meeting due to lack of a quorum.

0503.6.6

Approval of Amendment to Julius Baer’s Investment Management Agreement: n/a

0503.6.7

Approval of Investment Committee Plan for Fiscal year 2005/2006: n/a

0503.6.8

Acceptance of Amendments to Part One & Part Two of SamCERA's Investment Plan: n/a

0503.6.9

Introduction of Amendments to Part Three & Four of SamCERA's Investment Plan: n/a

0503.6.10

Approval of Annual Shareholder Written Consent Form: n/a

0503.7

Board & Management Support Services

0503.7.1

Acceptance of Monthly Financial Reports: n/a

0503.7.2

Acceptance of KPMG's Audited Financial Statements for SamCERA's Real Estate Portfolio: n/a

0503.7.3

Acceptance of Report on the Ventura Project: n/a

0503.7.4

Approval of SamCERA’s Strategic Services Resolution: n/a

0503.7.5

Introduction of SamCERA’s Sources, Uses & Budget for Fiscal Year 2005/2006: n/a

0503.7.6

Nomination of State Association of County Retirement Systems Officers: n/a

0503.7.7

Approval of Amendment to Chief Executive Officer Agreement: n/a

0503.7.8

Approval of Staff Compensation Recommendation (Time Certain 1:15 PM): Mary Welch, from Employee and Public Services, was present to discuss the recommended salary rates for three positions on SamCERA’s staff. She reported the salary survey conducted by her department for the Benefits Manager, Assistant Executive Officer and Investment & Finance Manager positions encompassed the review of San Mateo County’s comparator agencies which consists of four counties (Alameda, Contra Costa, Santa Clara and San Francisco) and two cities (Oakland and San Jose). Ms. Welch noted that her department took the external data collected and examined the entire organizational structure, including staff size and other factors, prior to generating the recommended salary ranges presented to the board. Because of the relative smaller staff size, Ms. Welch indicated that the salary recommendations presented are under the mean of salary ranges in the county’s comparative agencies but opined that the recommendations are fair and equitable salary ranges.

In response to Ms. Tashman, Ms. Welch indicated that the recommended salary ranges for the Assistant Executive Officer and Investment Finance Manager positions reflect a 15% increase from the current range.

Motion by Bryan, second by Salas, failed with two ayes (Bryan and Salas) to three nays (Tashman, Buffington and Colson) to approve all three recommended salary ranges for the Benefits Manager, Assistant Executive Officer and Investment and Finance Manager positions.

Motion by Colson, second by Buffington, failed with three ayes (Colson, Buffington and Tashman) to two nays (Bryan and Salas) to approve the recommended salary range for the Assistant Executive Officer position.

Motion by Bryan, second by Salas, failed with two ayes (Bryan and Salas) to three nays (Tashman, Buffington and Colson) to approve the recommended salary range for the Investment and Finance Manager position.

Ms. Colson inquired about the relative complexity of investment structures in the comparator agencies versus that of SamCERA’s. She also noted the 5% gap between the AEO and IFM salary ranges. In response to a question from Ms. Colson, Ms. Welch stated that it is industry standard for the Investment and Finance Manager to be the second highest paid position in a public pension organization as supported by information collected in the salary survey.

Ms. Colson opined that more time was required to review and analyze the Investment and Finance Manager’s position prior to making a decision.

Ms. Salas then took up agenda item 5.1.

0503.8

Approval or Acceptance of Reports

0503.8.1

Chief Executive Officer's Report: n/a

0503.8.2

Assistant Executive Officers’ Report: n/a

0503.8.3

Investment & Finance Manager’s Report: n/a

0503.8.4

County Counsel's Report: n/a

0503.9

Adjournment in Memory of the following Deceased Members: Ms. Salas adjourned the meeting at 3:24 p.m. in memory of the following deceased members:

Christensen, Constance

January 15, 2005

Probation Department

Mcclory, Colette

January 21, 2005

Health Administration

Brenneman, Madeline

January 30, 2005

Beneficiary Of Garland

Hamel, Damon

February 13, 2005

Probation Department

Czerkies, Barbara

February 17, 2005

Library Department

Wolfe, Dora

February 17, 2005

Beneficiary Of Lowell