M I NUT
E S
OF THE
BOARD OF PENSION COMMISSIONERS
MEETING OF AUGUST 25, 1988
The Board of Pension Commissioners of the City of Los Angeles met in
Room 700, 360 East Second Street, Brunswig Square Building, on Thursday, August
25, 1988.
COMMISSIONERS PRESENT:
Ken Staggs, President
Dellene Arthur
Kenyon Chan
Sam Diannitto
Dave Velasquez
COMMISSIONERS ABSENT:
Sherman L. Andelson
Bert Cohen
DEPARTMENT OF PENSIONS:
Gary Mattingly, General Manager
James J. McGuigan, Assistant General Manager
Allan Moore, Assistant General Manager
Dennis Sugino, Chief Investment Officer
CITY ATIORNEY'S OFFICE:
Siegfried O. Hillmer, Assistant City Attorney
Eudon Ferrell, Deputy City Attorney
President Staggs called
No. 1 on the Agenda.
o I S C U S S ION
the meeting to order at 9:50 a.m. and referred to Item
I T EMS
INVESTMENTS
The General Manager, Mr. Gary Mattingly, referred to the communications before
the Board, stating that two of them require motions.
Alliance Capital Management had no trades to report; Amerindo U.S. Advisors sent
a transmittal reporting a trade through August 19, 1988; BMI Capital sent a
letter reporting trades through August 19, 1988; The Boston Company had no trades
to report; Frontier Capital Management sent a transmittal reporting trades
through August 22, 1988 and a memo requesting Board approval to add National
Computer Systems to the Prudent Man stock list; Husic Capital Management sent a
transmittal reporting trades through August 22, 1988
and a letter requesting
Board approval to add Clorox Co., The Kroger Co., Sherwin-Williams, and Time
Inc., to the common stock list and Golden Valley Microwave Foods, inc., to the
Prudent Man stock list; Loomis, Sayles & Company sent a transmittal reporting
trades through August 19, 1988; Magten Asset Management had no trades to report;
Security Pacific Investment Management Managers, Inc., sent letters reporting
equity trades through August 19, 1988 and fixed-income trades through settlement
date September 8, 1988; Solomon Asset Management sent a transmittal reporting
trades as of August 22, 1988; Target Investors sent a transmittal reporting
PAGE 2
AUGUST 25, 1988
trades through August 19, 1988; and Wright
reporting trades through August 23, 1988.
Investors'
Services sent a letter
STOCK PURCHASE
Resolution No. 89026
2530 SAFETY MEMBERS SERVICE PENSION
After discussion by the Board it was moved by Commissioner Chan that the Board
amend Resolution No. 89004 by adding:
National Computer Systems
to the Prudent Man Universe, which motion was seconded by Commissioner Arthur and
adopted by the following vote: ayes, Commissioners Arthur, Diannitto, Chan and
President Staggs - 4; noes, none.
STOCK PURCHASE
Resolution No. 89027
2525 NEW SYSTEM GENERAL PENSION FUND
After discussion by the Board it was moved by Commissioner Chan that the Board
amend Resolution No. 89005 by adding:
Clorox Co.
Kroger Co. (The)
Sherwin-Williams
Time Inc.
to the Common Stock Universe; and
Golden Valley Microwave Foods, Inc.
to the Prudent Man Universe, which motion was seconded by Commissioner Arthur and
adopted by the following vote: ayes, Commissioners Arthur, Diannitto, Chan,
Velasquez and President Staggs - 5; noes, none.
The Board asked staff why they are not including descriptions of new stocks that
do not appear on any other advisor's lists. Since the hiring of so many small
cap managers the description lists have gotten so voluminous staff has not been
including them. The Board's concerns surround the matter that if too many money
managers have been hired that the Board does not have the time to read all the
information, this could be a potential problem.
Mr. Mattingly said he will
include the description lists in the future.
At this point in the proccedings, Commissioner Velasquez entered the boardroom
during the above discussion. The vote for the above motion was taken after this
discussion.
PAGE 3
AUGUST 25, 1988
COMMITTEE REPORTS
There were no Committee Reports today.
ATTENDANCE AT THE PUBLIC SAFETY EMPLOYEES PENSION & BENEFITS CONFERENCE
RESOLUTION NO. 881027
Commissioner Diannitto moved that two additional Board members be authorized to
attend the Public Safety Employees Pension and Benefits Conference which will be
held in Palm Springs, October 16-19, 1988, which motion was seconded by
Commissioner Chan and adopted by the following vote: ayes, Commissioners Arthur,
Chan, Diannitto, Velasquez and President Staggs - 5; noes, none.
ADDITIONAL CLAIMS FOR DAMAGES IN REFERENCE TO THE PROPOSITION H LAWSUIT
During this reporting period, the City Clerk has received three additional claims
for damages in connection with the Proposition H lawsuit. In accordance with the
City Council rules, claims from the below people wre referred to the City
Attorney for disposition or a report back to the City Council. The City
Attorney's Office has investigated these claims. The City of Los Angeles is in
the process of appealing a decision of the Superior court to the Appellate Court.
It is the advice of the City Attorney that these claims be denied.
1.
2.
3.
Charles C. Hudson
Wayne H. Jepson
Donald W. Weston
RECOMMENDATION
That the Board of Pension Commissioners deny these claims on the advice of the
City Attorney.
Commissioner Chan made a motion to adopt the recommendation,
which motion was seconded by Commissioner Arthur and adopted by the following
vote: ayes, Commissioners Arthur, Chan, Diannitto, Velasquez and President Staggs
- 5; noes, none.
AUDITING SERVICES
The contract for outside auditing services expired, and a new contract is
required for services beginning with the fiscal year ended June 30, 1988. The
proposed contract shall be for a period of three years and shall specify that an
examination of the department's books and records shall be performed in order to
prepare audited financial statements, and that a letter to management shall be
prepared noting any control deficiencies or opportunities for cost reduction. On
June 17,1988, the staff sent Requests for Proposal to twelve auditing firms
requesting proposals for auditiing services to begin July 1, 1988. From the
twelve proposals sent, two firms responded. The two firms are Simpson and
Simpson, CPA's, and Touche Ross & Company. Other firms did not respond due to
their current workload or the apparent financial loss for performance of this
type of audit. After a review of the written proposals, a meeting with the two
companies who submitted RFP's was held. Each company was asked the same series
AUGUST 25, 1988
PAGE 4
of questions by a panel consisting of Ken Staggs, Audit Committee Member; Allan
Moore, Assistant General Manager Fiscal; and John Morea, Chief Accounting
Employee. Following this meeting the interviewers agreed to recommend Touche
Ross, our current auditor. They have provided excellent services for the past
six years
and have helped our Department phase in a number of system
improvements. This recent experience will facilitate the department's transition
to the new investment accounting system acquired at the end of last year. Their
ability to support their opinion against legal actions and their broader base of
experience in all phases of accounting were important to the committee's higher
rating.
The committee thought this higher rating was warranted even though
Touche Ross & Company's bid is higher by $4,275 for the three-year period. Both
firms stated they would take a financial loss on the performance of the audit.
Simpson & Simpson wanted to gain the experience and prestige associated with the
audit; whereas, Touche Ross & Company stated that this was non-peak year business
and they wanted to perform a service for the community.
Staff recommends that the Board:
1.
Select Touche Ross & Company to be the department's independent auditor for
the three-year period beginning July 1, 1988;
2.
Direct the General Manager to prepare a contract for such services, and
3.
Authorize the President of the Board to execute it on behalf of the Board,
subject to the approval of the City Attorney.
Commissioner Chan made a motion to adopt the above recommendation, which motion
was seconded by Commissioner Diannitto. Commissioner Diannitto queried staff as
to why only two firms responded, out of twelve proposals that were sent. Mr.
John Morea, Chief Accounting Employee, explained to the Board why there was not a
higher percentage of returns to the RFP's that were sent to prospective auditors.
Motion was adopted by the following vote: ayes, Commissioners Arthur, Chan,
Oiannitto, Velasquez and President Staggs - 5; noes, none.
LEGISLATIVE ADVOCATE REGISTRATION
The City Clerk's Office furnished each department in the City with a list of city
legislative advocates. Mr. Mattingly told the Board that he is submitting this
list to them for information only.
DISABILITY PENSION APPLICATION OF CARL E. ALGEE
Mr. Mattingly made reference to the report received from the City Attorney's
Office notifying the Board that the City Attorney's Office has lost the Algee
disability case in the Courts. Mr. Don Ferrell, Deputy City Attorney, reported
on this matter to the Board.
After his report, Mr. Mattingly said he will
reschedule this matter on a future agenda.
AUGUST 25, 1988
PAGE 5
ARTICLE XXXV MEMBERS - PURCHASE OF SERVICE CREDIT
Police Officers Belinda Richie, Wayne C. Blandin and Kellie Matson; Paramedics
Art Morin and Timothy Wilson, members of the Safety Members Pension Plan, have
requested that the Board of Pension Commissioners allow them an extension on the
length of time allowed to elect to purchase service credit for time spent in
basic training. It is recommended that the Board grant all five members time
extension to elect the purchase of service credit, whereby Commissioner Chan made
a motion to approve the recommendation, which motion was seconded by Commissioner
Arthur and adopted by the following vote: ayes, Commissioners Arthur, Chan,
Diannitto, Velasquez and President Staggs - 5; noes, none.
PUBLIC COMMENTS
Ken Buzzell, Representative from UFLAC, stated that Mr. Conrad Melton, who will
be appearing before the Board today on the Berringer disability case, will not be
appearing on behalf of UFLAC, but on behalf of Berringer.
Mr. Mattingly introduced the Board to Nona Tobin, the Assistant Director of
Personnel
for the City of San Jose, who is here to study the Department's
processing of disability cases.
Ms. Tobin stated that the City of San Jose
experiences a ninety percent disability rate for the fire and police.
President Staggs suggested that a reception be held sometime in the near future
so that the Fire and Police Chiefs and their respective Commissions be introduced
to our Commission.
The Board asked Mr. Siegfried O. Hillmer, Assistant City
Attorney, if the Board has authority to arrange such a reception. Mr. Hillmer
responded that if there is no expense to the pension fund, then it is perfectly
okay to hold such a reception.
Mr. Mattingly
next week.
reminded the Board that there is no Board meeting
scheduled
for
Mr. Mattingly reported that the Personnel & Labor Relations Committee met
yesterday and voted to receive and file the communication from the Chief of
Police regarding an amendment be made to the City Charter excluding surviving
spouses and dependent children from the Workers' Compensation reimbursement
requirement. Mr. Mattingly stated that the communication had been received in
error, as the City Charter does not require surviving spouses and dependent
children to pay back Workers' Compensation.
CONSENT ITEMS
DISCONTINUE PENSIONS - ARTICLE XVII - 1
Hazel B. Steckel
Po 1 ice Widow
DISCONTINUE PENSIONS - ARTICLE XVIII Raymond R. Cooper
James P. Wampler
Retired 11-01-50
Died 07-05-88
Retired 09-01-68
Retired 06-01-78
Died 07-25-88
Died 07-25-88
2
Police Service
Police Service
AUGUST 25, 1988
PAGE 6
SERVICE PENSIONS - ARTICLE XVIII
- 1
FIRE
Engineer
Christopher C. Cook
Appt'd
Eff:
02-20-60
07-31-88
28 Years, 161 Days
NPB:
$3,979.47
65.3233
$2,599.52
ELIGIBLE SURVIVING SPOUSE'S PENSION - ARTICLE XVIII - 2
Member's
Class
Normal
Pen. Base
Rate
Name
Patricia A. Cooper
(Raymond R. Cooper)
Police
Service
$ 914.50
42%
07-26-88
t~ember's ClL
Total
$ 384.09
779.69
$1,163.78
lee R. Wampler
(James P. Wampler)
Police
Service
$2,622.18
55%
07-26-88
Member's C/l
Total
$1,442.20
1,442.10
$2,884.30
%
Effect ive
Date
Monthly
Amount
The above consent items were
approved. Motion made by Commissioner Chan,
seconded by Commissioner Diannitto and adopted by the following vote: ayes,
Commissioners Andelson, Arthur, Diannitto, Velasquez and President Staggs - 5;
noes, none.
Commissioner Chan mentioned
that there
Investing Committee meeting next Thursday.
will
be an
International
At this point in the proceedings, President Staggs recessed the meeting
short while.
for a
DISABILITY CASE - REQUEST FOR REHEARING - ARTICLE XVIII - 1
Edward
l. Cook
Continued.
President Staggs directed that the request for rehearing will be
taken under submission and will be rescheduled for Board resolution. Doctor M.
Ray Rogers, treating physician, testified regarding Mr. Cook. Mr. Cook was
present and was represented by his attorney, Thomas J. Wicke.
DISABILITY CASES - REVIEW - ARTICLE XVIII - 3
Robert l. Noel
Continued. President Staggs directed that this case be continued in order for
the applicant to obtain additional documentation concerning the disability
retirement granted by the U.S. Postal Service.
Mr. Noel was present and
represented himself.
AUGUST 25, 1988
PAGE 7
Ronald E. Richmond
No change. Remain at 65%. Motion made by Commissioner Diannitto, seconded by
Commissioner Arthur and adopted by the following vote: ayes, Commissioners
Arthur, Chan, Oiannitto, Velasquez and President staggs - 5; noes, none. Mr.
Richmond was present and was represented by Ken Buzzell, Director, United
Firefighters of L. A. City.
Ray A. Noetze 1
Adjusted to 65% or $2,591.12, plus $216.60 cost of living for a total of
$2,807.72.
Motion made by Commissioner
Arthur, seconded by Commissioner
Velasquez and adopted by the following vote: ayes, Commissioners Arthur, Chan,
Velasquez and President Staggs - 4; noes, Commissioner Diannitto - 1. Lt. Edmund
Gagnon, Medical Liaison, Police Department, testified regarding Mr. Noetzel. Mr.
Noetzel was present and was represented by his attorney, Michael T. Roberts.
DISABILITY CASES - NEW - ARTICLE XVIII - 3
Gary J. Petrilla
Continued.
President Staggs directed that this case be rescheduled when more
Commissioners are present. (Original motion to deny was made by Commissioner
Velasquez, seconded by Commissioner Arthur and failed by the following vote:
ayes, Commissioners Arthur, Chan and Velasquez - 3; noes, Commissioner Diannitto
and President Staggs
2.) Lt. Edmund Gagnon, Medical Liaison, Lt. Eugene
LaBriola, Sgt. H. G. Dublin, Officer Michael Pytel, Police Department and Doctor
Gail Taucher, treating psychologist, testified regarding Mr. Petrilla.
Mr.
Petrilla was present and was represented by his attorney, Michael T. Roberts.
Leslie F. Pellicano
Withdrawn.
The application was withdrawn at the hearing at the request of the
applicant's attorney. Mr. Pellicano was not present but was represented by his
attorney, Michael T. Roberts.
Brian B. Berenger
Prior Board action of March 3, 1988 granting Mr. Berenger a service pension is
rescinded and a service-connected disability pension granted, effective February
14, 1988, in the monthly amount of $2,380.17 or 57.2849% of $4,154.97. Motion
made by Commissioner Chan, seconded by Commissioner Arthur and adopted by the
following vote: ayes, Commissioners Arthur, Chan, Diannitto and President Staggs
- 4; noes, Commissioner Velasquez - 1. Captain John P. Miller, Medical Liaison,
Mr. Aldred D. Brekke, Retired Fire Captain and Captain Gilbert Ramelli, Fire
Department, testified regarding Mr. Berenger. Mr. Berenger was present and was
represented by Conrad Melton, United Firefighters of L. A. City.
AUGUST 25,
PAGE 8
1988
At this point in the proceedings,
meeting adjourned at 2:20 p.m.
President
Staggs called for adjournment.
Manag.
The