San Diego County Employees Retirement Board
Regular Administrative Meeting
Thursday, October 2, 2003 -- 8:30 A.M.
SDCERA Boardroom, 401 West A Street, Suite 1400

ACTIVE MEMBERS:

Regular 15,704
Safety 3,462
Total Active 19,166

RETIRED/DEFERRED MEMBERS:

Retired 10,180
Deferred 3,456
Total Retired/Deferred 13,636

TOTAL MEMBERS 32,802

There being a quorum present, Dan McAllister, Chairman, called to order the Regular Meeting of the Board of Retirement at 8:30 a.m., First National Bank Building, 401 West A Street, Suite 1400. Ms. Gonzalez led the Board in the Pledge of Allegiance to the flag.



SECTION A. OPEN SESSION

1. Public Communication

A. Opportunity for members of the public to speak to the Board on any subject within the Board's jurisdiction but not an item on today's agenda. If you wish to speak to the Board on a subject that is on today’s agenda, please fill out a Speakers Slip. These slips are located at the back of the Board Room. You will be called on as the Board takes up that agenda item.

Chairman McAllister read into the record a letter from Supervisor Ron Roberts, who will be appointed to the Board of Retirement October 7, 2003 to complete the term of Michael Branch, who vacated his seat June 30, 2003.

Mr. Roberts requested that any major policy decisions, staff changes, or controversial items be postponed until or after the meeting of November 6, 2003.


2. Approval of Minutes of the Regular Administrative Board Meeting held September 4, 2003 and amendment to Page 4 of Minutes of Regular Administrative Meeting held February 6, 2003.

ACTION: There was a motion by Mr. Russell and a second by Mr. Myers to approve the Minutes of the Regular Administrative Board Meeting held September 4, 2003 and an amendment to Page 4 of the Minutes of the Regular Administrative Meeting held February 6, 2003 as follows:

* Add James Cunningham, Attorney and Betty Trujillo, applicant to the attendance section of the minutes for the Closed Session portion.

The motion was carried by the following vote:

Ayes: Feeley, Gonzalez, Myers, Rose, Russell, Wiczynski
Noes: None
Abstain: Coomber, McAllister
Absent: None


3. Annual Member Benefit Statements

Mr. White reviewed the latest version of the Personalized Annual Member Statement, highlighting and explaining new features. Staff expects the statements to generate a lot of phone calls, so the mail out will take place over a three-week period during October. This will enable the Call Center to better respond to these calls. Mr. White and his staff were commended by the Board for their efforts to produce a well-done publication.

Discussion followed on ways to ensure that all members are informed about the mail out. Mr. White said that a countywide email announcement could be sent to the members. Ms. Gonzalez suggested an insert be included with the statements informing them that the mail out will take place over a three-week period.


4. Indemnity Policy

Mr. White reported that staff had been working with the Legal Affairs Committee and County Counsel to develop an indemnity policy for SDCERA. This policy would apply to Board Members and staff and sets forth conditions under which Board Members and SDCERA staff are entitled to defense and indemnification for their acts in the course and scope of their duties for SDCERA. The Legal Affairs Committee recommended approval of this policy.

In discussion that followed, questions arose regarding legislation passed and signed by the Governor recently, which gives the Retirement Association a choice regarding legal representation and would no longer require the Association to use the services of County Counsel.

Mr. Rose pointed out that the Board should reconsider adopting the policy as written, since there were areas in the policy that may not remain relevant and would be subject to change when the new legislation takes effect in January. Those changes could include the use of a new general counsel to replace County Counsel, who is currently named in the policy as counsel for the Retirement Association.

Mr. Rose also pointed out that there was a financial issue to consider as well. Right now, fees for County Counsel come from the administrative budget and fees for outside counsel come from excess earnings. Last year, there were no excess earnings and settlement and legal defense fees for several lawsuits affected the administrative budget. This could change if the Retirement Board adopts a new law that would allow legal fees to be paid from the system’s assets. Mr. Rose felt that until these issues were resolved, the Board should postpone adopting the indemnity policy.

Mr. Coomber disagreed with postponing approval of this policy. He urged the Board to move forward in adopting the policy because of the Retirement Association’s recent lawsuits and litigation brought against another San Diego pension fund this year. He said changes could be made to the policy when and if needed.

In response to a question from Mr. Russell regarding whether or not he felt comfortable with the Board delaying a decision on the Indemnity Policy, Bill Smith, Senior Deputy County Counsel, said that postponing a decision in this matter would not pose any problems. He said the policy follows the Tortes Claim Act, which already exists but provides the Board with some specific guidelines.

ACTION: There was a motion by Mr. Russell and a second by Mr. Rose to postpone further discussion and decision in this matter and move it to the November Agenda for further review and decision.

The motion was carried by the following vote:

Ayes: Feeley, Gonzalez, McAllister, Myers, Rose, Russell, Wiczynski
Noes: Coomber
Abstain: None
Absent: None


5. Hearing Officers Contract and Application

Mr. White reported that staff had been working with the Legal Affairs Committee to amend the current Hearing Officer’s Contract. A Hearing Officer Application Packet had also been added to the contract. The application packets request information, such as the applicant’s California Bar #, California Bar Certified Specialties, pending, settled or litigated malpractice claims against the applicant and the applicant’s experience in the area of disabilities, etc.

Disability retirement applications that are supported by clear and convincing evidence of the disability claim are generally handled through an administrative recommendation, but in applications where the evidence is inconsistent, or there is a belief that the claim has not been proven, the matter is set for hearing before a Hearing Officer appointed by the Board of Retirement under Government Code Section 31533. Hearing Officers are members of the State Bar of California and according to the law, shall transmit, in writing, to the Retirement Board their proposed findings of fact and recommended decision.

In response to Board inquiry, Mr. White explained that staff had instituted a sliding scale for paying Hearing Officers. If a report is rendered within 60 days after a case has been submitted, the Hearing Officer is paid $100 per hour. If the report is received after more than 60 days, but less than 91 days, the Hearing Officer is paid $85 per hour and if received after 90 days, the Hearing Officer would receive $65 per hour. Mr. White said this procedure had been effective in getting final reports.

Mr. White said that there were approximately 160 disability applications in various phases currently. Mr. Rose asked about backlogs referenced in Mr. Sansone’s letter to the Board dated September 30, 2003. Ms. Boyd explained that County Counsel had been referring to a backlog in late 1999 and early 2001, where County Counsel found attorneys to handle some cases. She said that since then no cases had been assigned to other attorneys.

The Board also had questions and suggestions about what incentives could be utilized to compel Hearing Officers to submit their reports and decisions on a timely basis. These included hiring someone to audit timelines for processing cases, case reassignment, penalty payments or termination.

Mr. Wiczynski said that she had been responsible for instituting timelines, as she had become concerned about delays in processing disability cases.

Ms. Boyd said that staff monitors timelines and addresses those situations where Hearing Officers are delinquent in submitting reports as they occur. She said the policy would support what staff was trying to do in moving the process along. Ms. Boyd noted that there were many areas within the process that could create delays and that Hearing Officers were not always that reason.

MOTION There was a motion by Mr. Coomber and a second by Mr. Russell to adopt the Hearing Officer Agreement as modified and the application packet.

The motion was carried unanimously.

Mr. Rose asked how much money had been paid to Hearing Officers last year and Ms. Boyd replied that she would provide that information to him later. Mr. Rose also asked to be provided with a list of cases where the Hearing Officer had been more than 90 days delinquent in rendering a decision.


6. Interest Payments on Delayed Benefits

Mr. White reported that staff had recently been asked to develop a policy addressing the payment of interest in situations where a retired member’s benefit is required to be recalculated due to a change in the law or court interpretation of a current law. Staff proposed that in instances where a benefit is recalculated and additional amounts of money are owed to a retiree as a result of a change in the law or legal interpretation of the law, SDCERA would pay interest on the underpayment.

Mr. Smith said that this policy deals with a situation where the court has held, in a binding matter, that the Association’s previous decisions on payments of benefits were wrong and didn’t pay the member enough. In those cases, the member can go to court and sue to get the interest, so this policy is saying that if there is a court appeal decision that says SDCERA was wrong and owes the member money from two years ago, then SDCERA would pay them the interest rather than making them go to court to sue the Association.

County Counsel supported this recommendation.

ACTION: There was a motion by Mr. Russell and a second by Mr. Myers to accept the recommendation to adopt the policy for interest payment on amounts due retired members.

The motion was carried unanimously.


7. Request for Payroll Deductions from Retired Deputy Sheriff’s Association

Mr. White reported that staff had received a request from the Retired Deputy Sheriff’s Association to have certain payroll deductions, dues, DSA sponsored group insurance and miscellaneous benefits available to retirees who are members of the Retired Deputy Sheriff’s Association. These deductions would include dues, life insurance, dental insurance, vision care, chiropractic care, AFLAC coverage, special events and a periodic commemorative album.
Staff requested guidance from County Counsel regarding the types of deductions allowable under the law. County Counsel’s opinion was that all are allowable with the exception of special events and the periodic commemorative album.

Mr. White said that staff from the Deputy Sheriff’s Association had indicated that they would be able to assist in the administration of this request. There would be one deduction to cover all of the individual’s premiums. The funds would then be sent to the DSA each month for distribution and allocation to the various insurance premiums and benefits. Mr. White said the PARIS system would require programming changes to add a new deduction category and the estimate quoted by Watson Wyatt for this change was approximately $4,000. This amount does not include the cost of staff time for set up activities or ongoing support for the monthly process.

Staff recommended approval of the DSA request for the one deduction category for dues and group insurance where SDCERA has the legal authority. Implementation is expected to take place within the first quarter of next year.

Chairman McAllister asked what the fees would be for making these deductions and also if consideration had been given to charging a fee for this service. Mr. White replied that staff had not looked at considering the administrative costs for this service and charging the DSA or its members a fee. He added that this type of payroll deduction is currently utilized by the retired employees as members of RESDC (Retired Employees of San Diego County) and they are not charged for administrative costs.

Chuck Curtis, President of the Retired Deputy Sheriff’s Association addressed the Board. Mr. Curtis said this payroll deduction would eliminate some of the problems associated with members forgetting to mail in their dues or insurance premium payments, or those members who may be experiencing a financial hardship at the time a payment is due. He thanked staff for their prompt response to this request and gave special appreciation to Marsha Boyd, Director Member Services and Debbie Bill, Retirement Member Services Manager. Mr. Curtis encouraged the Board’s approval of this request.

ACTION: There was a motion by Mr. Myers and a second by Mr. Rose to approve the request from the Deputy Sheriff’s Association for a one-deduction category for dues and group insurance where SDCERA has legal authority. Implementation for this new deduction category is expected to take place within the first quarter of next year.

The motion was carried unanimously.


8. Additional Retirement Credit (AB 55) Legislation

Mr. White reported that the Governor had signed AB 55 into law on August 4, 2003. He said this law would allow members to purchase up to five years of additional retirement credit, and to be effective would have to be adopted by the Board of Supervisors. Staff has asked SDCERA’s tax counsel to address specific issues regarding the application of IRS Section 415 for the purchase of additional retirement service credit and how this will affect the contribution level and benefits payment level.

The Segal Company was asked to prepare a letter to discuss issues, considerations and possible next steps. Their letter was included in the Board Book material.

Mr. White will schedule a meeting with Bill Kelly, the County’s Chief Financial Officer, to discuss cost expectations and what the requirements would be for a cost neutral program. Walt Ekard, the County’s CAO, sent an email message to all employees September 24 regarding the complexities of implementing this program and asking that employees remain patient while issues are being worked out. This letter will be included on SDCERA’s website.

Members will be kept up-to-date on ARC activities through SDCERA’s website. Staff is also working to develop a section with answers to frequently asked member questions. After a formula has been established, a calculator will developed so that members will be able to access and get an estimate of what the costs will be.

Ms. Wiczynski urged the Board and staff to make sure that all possible ramifications are looked at and all members affected by the decision to implement AB 55 are notified. Mr. Rose reminded Ms. Wiczynski that the Board of Supervisors would make the decision to adopt this benefit and the Retirement Association’s job would be to implement it.

Mr. Rose reported that the Budget & Finance Committee had discussed AB 55 extensively and the cost to the system for communications, actuary and legal counsel, independent of software changes is about $200,000. The cost of the software is about $140,000.

Mr. Rose also reported that the Governor would probably sign the DROP program and this could cost about $340,000 and the actuary and legal fees about $200,000. He said the Budget & Finance Committee discussed SDCERA’s need to clarify costs associated with implementing the DROP program with the Board of Supervisors, as there are three different possible programs. Who is responsible for paying, SDCERA or the County?
Ms. Wiczynski said the Board needs a legal opinion about contracting with Watson Wyatt about the program’s software because of past issues.

In reply to Ms. Wiczynski’s remarks, Mr. Rose said that the Budget & Finance Committee had asked staff to accelerate hiring someone to fill the position that will be in charge of the computer system for this project and this individual will have knowledge of contract requirements.

Mr. Smith said that there were several disclosure issues that would need to be looked at regarding the AB 55 program. He informed the Board that County Counsel had in-house expertise, as 90% of one County Counsel member’s work is computer contracts.


9. Future Board of Retirement Special Meetings

Mr. White reviewed and asked for Board input on potential dates for future Special Retirement Board Meetings.

* Date for Cortex Governance Workshops
* Date for Actuary Workshop
* Date and Proposed Administrative Retreat Agenda

Board Members will provide staff with feedback on these proposed dates.


10. Excess Earnings

Mr. White reviewed his report along with guiding the Board through a PowerPoint presentation to show where excess earnings are derived and how they are used.


As of June 30, 2003, the excess earnings reserve was $347.7 million. Mr. White reported that County Counsel had reviewed various issues regarding the interest crediting policy and SDCERA’s new actuary had also reviewed the policy and their comments were included in the meeting material.

The investment income is first applied to employee reserves and employer reserves, and anything remaining is considered excess earnings, which are used to maintain:

* 1% Contingency Reserve
* Retiree Medical Reserve
* STAR COLA Reserve
* Employer Reserve, and if needed
* Employee Reserve

In discussion that followed Mr. White’s report, questions were raised regarding the Retirement Board’s duty under Proposition 162, formal agreements between the Retirement Association and the County regarding transfers to various reserves and the use of excess earnings to pay off the unfunded liability and the flow of information between the two organizations.

The consensus of the Board was that there was a definite need for a formalized written policy regarding the exchange of information between the Retirement Association and the County to ensure the accuracy of information that each is receiving regarding issues of mutual concern.

Mr. Rose requested that the County provide the Retirement Board with their position and expectations in relation to the Retirement Association’s obligations under Proposition 162. Mr. Kelly said he thought that the request was appropriate and might help promote potential legislative remedies to provide clarity to the unsettled application of Proposition 162. He also felt there should discussion between the Retirement Association and the County prior to the Board taking action on the policy of distribution of assets.

Mr. Russell also suggested that the new actuary should be involved to provide input regarding any policy changes and updates.

Mr. Myers said that in light of all the questioning and unresolved issues, this item should be moved to the November Agenda for further review and decision. He also suggested that perhaps the Benefits Committee could include discussion of these issues at a meeting prior to the Board meeting and find out if some of the employee groups would like provide their input.

ACTION: There was a motion by Mr. Myers and a second by Mr. Feeley to postpone taking any action in this matter and continue discussion at the November meeting. The Benefits Committee will also include a discussion of this item in a meeting prior to the November meeting.

The motion was carried unanimously.


11. Letter from County CAO

Chairman McAllister reported that he had received a letter from Walt Ekard, the County’s Chief Administrative Officer, dated September 18, 2003. Mr. McAllister said that he had brought the letter to Mr. White’s attention, and had asked him to prepare a draft response for the Board’s review.

Mr. White distributed and reviewed a copy of his letter to Mr. McAllister dated September 27, which addressed the issues raised by Mr. Ekard in his letter. Mr. White said that he believed there had been some miscommunication or misunderstanding between the County and the Retirement Association. Mr. White said that he agreed with Mr. Ekard’s statement about the importance of both agencies working together cooperatively to share accurate and consistent information on relevant issues, and that this was something that SDCERA and the County had both been striving for.

Mr. White said that he had been working closely with Bill, Kelly, the County’s Chief Financial Officer, meeting and speaking with him regularly on relevant issues, but feels there is something that is making that communication ineffective. Mr. White recommended that the Retirement Board work on formalizing a communication structure regarding communication to the County from the Retirement Office through the Chief Executive Officer’s position to either the County’s Chief Financial Officer or the Chief Administrative Officer.

In response to Ms. Wiczynski’s suggestion that perhaps Mr. White and Mr. Ekard could meet regularly on a quarterly basis, Mr. Russell reported that, as Chair of the Executive Committee, he had tried to meet with Mr. Ekard and was told that he preferred that communication go through Mr. Kelly.

Mr. Kelly reported that before Chairman Murphy had retired, there had been a process in place where communication from the County was through Mr. White. He said there had been a change since the chairmanship had changed. Mr. Kelley said that speaking for himself and also on behalf of Mr.
Ekard; they would communicate with the Retirement Association through whatever format the Board preferred.

Mr. Russell said, with no disagreement from other Board Members, that Mr. White should remain the contact person for the Retirement Association regarding communication with the County, until Cortex completes their governance review and recommendations.

The Board next discussed issues raised in Mr. Ekard’s letter regarding excess earnings. Mr. Ekard stated in his letter that, “County staff has repeatedly asked SDCERA for information related to the excess earnings issue and how those funds are defined, calculated and used, to no avail.” Mr. Ekard’s letter also stated that, “we received word, indirectly, that additional medical benefits have been granted to retirees in the form of an increase to the medical allowance of $50.00.”

Mr. Rose said that this decision had taken place in an open session of a Retirement Board Meeting at which County representatives were present and after discussion at a committee meeting which was also open to the public. He asked what the County would have wanted the Retirement Board to do differently.

Mr. Rose asked if the County wanted the Retirement Board to notify them when the Board takes any action that may impact excess earnings, giving the County an opportunity to speak and present their position regarding the use of those earnings. Mr. Kelly said the answer to that question was absolutely yes.

Mr. Kelly said that, except for the Retirement Board’s decisions regarding the asset allocation and the Board’s selection of managers to manage the assets of the Fund, the County would like to know well in advance anything that has a financial consequence on the County’s contribution to the Retirement Association, so that it can incorporate that information into its five-year financial forecast, two-year operating plan or quarterly budget adjustments.

Mr. Kelly said that he had requested and Mr. White had been responsive to providing him with the agendas and backup materials for all Retirement Board meetings. This will ensure that he is aware of any decisions the Board may be contemplating that would impact the County. Mr. Kelly said they would comply with any time requirements to provide their input on any issues relevant to the County.

Mr. Rose asked if the County would be interested in sending a representative to the Retirement Board’s committee meetings, so the Board could get input from the representative. Mr. Kelly said he thought the County would be receptive to sending a representative to committee meetings.

Staff will provide Mr. Kelly with copies of all committee agendas as well as Board Book material.

Mr. Rose said that it would also be helpful to have some County representatives attend the upcoming actuary workshop to gain a better understanding of the Retirement System. Mr. Russell said that it might also be helpful if representatives attended the administrative retreat next year.

After thanking Mr. Kelly for his input, Mr. McAllister said that Mr. Kelly had been with the County for 34 years and that he had been an incredible public servant, who had done a lot of work above and beyond the call of normal duty. Mr. McAllister announced that he had received word that Mr. Kelly planned to retire from the County in the near future and wished him well in any endeavor that he would undertake in the future, and that the Retirement Board looked forward to working with him in the interim and transition.


12. CIO Recruitment

Mr. White reported that staff had been actively recruiting for the Chief Investment Officer position. An advertisement had run in Pensions & Investments and announcements had also been posted with various web services, including CALAPRS. Mr. White said that the announcement had also been distributed to other 1937 Act counties.

Mr. McAllister announced that he had made a decision, which had been based on input from the Board as well as discussions with Mr. White, to form a special ad hoc committee. He said that this was in concert with the law and the Board’s duty to hire the new Chief Investment Officer. This committee will consist of Ms. Gonzalez, Mr. Russell, Ms. Wiczynski as well as the Chairman.

Mr. Coomber said that according to the Board Operations Policy, the Board shall set up ad hoc committees, so he thought a formal action would be appropriate to establish this committee.

ACTION: There was a motion by Mr. Russell and a second by Mr. Myers to establish an ad hoc committee to search for candidates for the Chief Investment Officer position. The committee will consist of Ms. Gonzalez, Mr. McAllister, Mr. Russell and Ms. Wiczynski.

The motion was carried unanimously.

Chairman McAllister said the committee would work with Mr. White to develop an outline of the process to be used for the search and report back to the Board at the next meeting about their progress.

Mr. Coomber asked the Chairman to consider appointing him to this committee.

Mr. Smith said the Board could not have five members on a committee that is an ad hoc committee that would be meeting outside the terms of the Brown Act.

Mr. Coomber then raised the issue of the number of Board Members on standing committees. He said that according to the Operations Policy (page 5, item 5); it specifically says that each committee shall be made up of three members and one alternate. He said the Board needed to evaluate whether or not that was controlling language.

Mr. Smith said that he thought there had been some consensus among Board Members that there could be four members on a committee. Mr. McAllister said discussion on this issue had taken place earlier in the year.

Seeking clarification of the Board’s authority, Mr. McAllister asked if the Board had the right to appoint four members to committees, since the subject had been discussed previously and would this constitute a legal act.

Mr. Smith said that if the Board consciously visited the issue of having four members on a committee instead of three plus an alternate and took formal action then it would be considered a legal act.

Mr. Coomber said this issue would require some interpretation. Mr. McAllister asked if he wanted to suspend the process of looking for a CIO until then and Mr. Coomber replied that he did not.

Mr. White then asked for clarification from the Board regarding the section in the 1937 Act regarding the Chief Investment Officer, as it also incorporated a number of other positions that are within the Retirement Association. Mr. White said this section referred to Board appointment for all those positions, which was basically all of his executive staff. He said if the Board was taking responsibility to appoint the CIO, would that also be the Board’s position on the rest of his staff.

Mr. Russell responded, with concurrence from the Chairman, that the Board’s only interest right now was the CIO position.


13. Committee Reports

* Legal Affairs Committee (Coomber)

Committee discussed the following:

* Hearing Officer Contracts

* Indemnity Policy

* Update on 1937 Act litigation that may impact SDCERA.

* Quarterly Review of legal providers (committee evaluated and reviewed billing).

Mr. Rose asked if there had been a committee recommendation to withhold payment of certain legal expenses.

Mr. Russell said that it had been his recommendation that the Board not pay any bills from County Counsel where the committee had questions regarding specific line items. The committee instructed staff and the legal consultant to work with County Counsel for answers.

Mr. Myers said there had also been questions about legal providers, including the investment counsel provider regarding the types of information provided by the providers and the backlog. He said that he hoped the committee would have a full accounting of these unanswered questions at the next committee meeting.

Mr. Russell said that the committee would bring recommendations to the Board regarding those issues.

Mr. Coomber said that because of past conflicts with providers, he had requested a meeting with John Sansone to discuss these issues and how to work together moving forward.
Mr. Rose had questions about Mr. Sansone’s letter dated September 30, 2003 in which he expressed concern about a discussion that had taken place at the September 17 Legal Affairs Committee Meeting regarding issues about services and billings provided by the Office of County Counsel to SDCERA.

Mr. Coomber reminded Mr. Rose that this letter had been written under the attorney-client privilege and could not be discussed openly.

Mr. Smith said that although the letter had been written to the Board under the attorney-client privilege, the Board could waive that privilege and discuss the letter.

Mr. Coomber said that he didn’t think one Board Member could waive that privilege on behalf of the Board and Mr. Smith concurred.

Mr. Smith said the Board would have to vote to waive the attorney-client privilege before discussing the letter in public.

Mr. Rose asked what steps the Board could take so that discussion of the letter could take place without violating the attorney-client privilege so that the Board could formulate a response.

Mr. Smith will research this matter and provide information to the Legal Affairs Committee regarding discussion of this issue without the Board having to waive their attorney-client privilege.

* Budget & Finance Committee (Rose)

* Discussed the legal budget, where $560,000 was allocated for legal advice and county counsel costs for disability issues, without including litigation costs. Hearing Officer costs are approximately $63,000 in addition to the $560,000.

* Discussed new legislation signed by the Governor in September and the committee’s recommendation that Mr. White, in conjunction with the Legal Affairs Committee, research alternatives provided under that new law which could reduce the $560,000 budget costs, which was about 8% of the administrative budget. The Legal Affairs Committee will evaluate the legal quality of services the Association would receive under the options. The committee will have recommendations for the Board by January.

* The committee included the new in-house counsel position in the budget.

* Discussed ARC costs.


14. Chairman’s Report

The Chairman’s report included the following information:

* Progress Report on Goals for 2003-04 and Report Card

* Draft Agenda for Investment Symposium. Mr. Feeley, Mr. Myers and Ms. Wiczynski will assist as moderators.

* Established the Executive Compensation and Performance Review Committee, which will be made up of:

* Mr. McAllister, Chairman
* Mr. Coomber, Vice Chairman
* Ms. Wiczynski, Secretary


15. Chief Executive Officer’s Report

* An updated Board Calendar had been included for review.

* Legislative update regarding:

* AB 374 – Administrative Budget – Chaptered

* AB 55 – Additional Retirement Credit – Chaptered

* AB 1585 – Legal Representation – Enrolled and Chaptered

* AB 274 – Safety DROP – Enrolled
Staff met with representatives from DSA, Probation and DAI to discuss DROP, implementation and issues regarding implementation. Staff will continue communication efforts to educate members and employee representatives.

* Financial Reports for the period ended August 31, 2003 were included for review.

* Report on conferences attended.


16. Seminars and Conferences

ACTION: There was a motion by Mr. Russell and a second by Mr. Feeley to approve the attendance of the following individuals at various seminars and conferences:

Nicholas Applegate’s Investment Conference
November 2-4, 2003
Carlsbad, CA

Coomber
Feeley

Opal’s Public Funds Summit
January 14-16, 2004
Scottsdale, Arizona

Coomber
Myers
Russell

Hearthstone’s Investor Meeting
January 19-21, 2004
Las Vegas, Nevada

Colafrancesco
Coomber
Wiczynski

NCPERS’s Trustee Educational Seminar
April 30-May 1, 2004
Anaheim, CA

Myers

The motion was carried unanimously.


17. Information Items

Various items of information were included for the Board’s information.
18. Closed Session

A. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
Subdivision (a) of Government Code Section 54956.9
Mark A. Lane and Kenneth E. Martone v. San Diego County Employees Retirement Association et al., GIC 812943

B. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
Subdivision (a) of the Government Code Section 54956.9
Gary Bonner et al vs. Board or Retirement et al, SDSC Court No. GIC 806790

C. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
Subdivision (a) of Government Code Section 54956.9
William M. Bandt and Byron E. Ellsworth v. Board of Retirement, et al., SDSC No. GIC 810546

D. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
Subdivision (a) of Government Code 54956.9
San Diego County Public Defenders Association, et al. v. Board of Retirement, et al., SDSC Court No. GIC 782445

E. PUBLIC EMPLOYEE PEFORMANCE EVALUATION
Title: Chief Executive Officer

19. Report out, if required, decisions made on Closed Session Items.

No actions were taken.


20. Last Item of Business

A. Future Agenda Items/Matters to be referred to staff.

There was none.


SECTION B. CONSENT CALENDAR

NOTE: WHEN CONSIDERING ADMINISTRATIVE RECOMMENDATIONS ON DISABILITY RETIREMENT APPLICATIONS, THE BOARD MAY FIND IT NECESSARY TO PULL AN ITEM FOR LATER DISCUSSION DURING THE DISABILITY CLOSED SESSION UNLESS THE MEMBER REQUESTS THAT THE DISCUSSION BE IN PUBLIC.

1. Application on member for a Service Connected Disability Retirement. Adopt Administrative Recommendation that the application is granted. (Pulled for further review.)

2. Application on member for a Safety Service Connected Disability Retirement. Adopt Administrative Recommendation that the application is granted.

3. Application on member for a Safety Member Service Connected Disability Retirement. Adopt Administrative Recommendation that the application is granted.

4. Application on member for a Safety Member Service Connected Disability Retirement. Adopt Administrative Recommendation that the application is granted.

5. Member - Original retirement date March 31, 2000, re-employment date September 5, 2003, re-entry date October 1, 2003, reinstated request submitted, medical screening passed.

6. Request To Withdraw/Amend Application:

Member to withdraw application for a Service Connected Disability Retirement without prejudice, filed April 15, 2003.

7. INFORMATIONAL ITEMS REGARDING MEMBERS TO BE FILED WITH MINUTES OF BOARD (attached)

A. DEATH BENEFITS, ACTIVE MEMBERS

B. DEATH BENEFITS, RETIRED MEMBERS & BENEFICIARIES

C. SERVICE RETIREMENT

********************End of Consent Calendar***********************

ACTION: There was a motion by Mr. Coomber and a second by Mr. Myers to approve the Consent Calendar, Items 1-7 (A-C), with the exception of Item #1, which was pulled for further review.

The motion was carried unanimously.

The application on member for a Service Connected Disability Retirement (Agenda Item #1, Section B) was pulled for further review and the applicant had waived his right to be heard in closed session. Mr. Coomber had questions regarding the validity of applications where applicants refuse medical treatment. After a brief discussion, the Board took action to accept the recommendation.

ACTION: There was a motion by Mr. Coomber and a second by Mr. Myers to adopt administrative recommendation that the application on member for a Service Connected Disability Retirement is granted.

The motion was carried unanimously.


SECTION C. CLOSED SESSION - DISABILITY RETIREMENT APPLICATIONS

NOTE: WHEN CONSIDERING DISABILITY RETIREMENT APPLICATIONS, THE BOARD WILL ADJOURN TO CLOSED SESSION TO DISCUSS AND VOTE ON--DISABILITY RETIREMENT MATTERS PURSUANT TO GOVERNMENT CODE SECTION 54957, UNLESS THE MEMBER REQUESTS THAT THE DISCUSSION BE IN PUBLIC.

1. Hearing on the application of member for a Service Connected Disability Retirement.

ACTION: There was a motion by Mr. Myers and a second by Mr. Russell to grant the applicant’s request for a 60-day continuance to find legal counsel.

The motion was carried unanimously.


Meeting adjourned at 2:40 p.m.