·CJTYOF �
SANJOSE
CAPI
T
AL OF SILICON VALLEY
TO: HONORABLE MAYOR
AND CITY COUNCIL
SUBJECT: PUBLIC MEMBER APPLICANT
FOR FEDE RA TED CITY
EMPLOYEES' RETIREMENT
PLAN BOARD
BACKGROUND
COUNCIL AGENDA: 11/29/22
ITEM:
Memorandum
FROM: Nora Frimann
City Attorney
DATE: November 8, 2022
This Office routinely reviews applications for appointment to City boards and commissions for conflicts of interest, appearance of bias and incompatible office.
The applications generally do not provide complete information; however, they do occasionally disclose potential conflicts of interest or incompatible offices.
The purpose of this memorandum is to summarize our review of the application submitted by an individual who will be considered by the City Council for a public member trustee position on the Federated City Employees' Retirement Plan's Board.
BOARD DUTIES
In order to analyze potential conflicts, it is necessary to consider the duties of the particular board or commission for which the applicant is seeking appointment.
The Board of Trustees of the Federated City Employees' Retirement Plan is established under the Municipal Code to manage, administer and control the plan. The .Board's scope of authority and duties include determining employee eligibility for benefits, establishing contribution rates for employees and the City based on actuarial valuations, commenting on ordinances that propose modifications to the retirement plan and investing retirement funds. The Board is expressly authorized to secure the following types of contractual services:
1 . Actuarial service
2. Auditing services
3. Investment management services
4. Investment performance evaluation services
5. Proxy voting services
6. Legal services
7. Other consulting services as the Board deems necessary to carry out its duties and responsibilities under the retirement plan.
1973557
3.3 Honorable Mayor and City Council
Subject: Federated Retirement Board Conflicts Review
November 8, 2022
SUBSTANCE OF CONFLICTS REVIEW
Incompatible Office
The doctrine of incompatible offices is contained in Government Code section 1099. To fall within the Doctrine of Incompatible Offices, two elements must be present.
e Hold two public offices simultaneously, and
e A potential conflict or overlap in the functions or responsibilities of the two offices must exist.
Appearance of Bias
There may be facts which would not amount to a legal conflict of interest, but which could require a Board trustee to recuse him or herself from a Board vote or discussion, because of an appearance of bias on the part of the Board. City Council policy requires Board members to be free from bias in their decision making, and may require a Board member to recuse him or herself if the facts could reasonably lead one to conclude that the Board member would be biased for or against a person or entity.
Legal Conflicts That May Preclude Board Contracts
Because the Board has independent contracting authority, Board member conflicts of interest preclude the Board from contracting with entities in which a trustee has a financial interest. (Government Code Section 1090) For the Federated City Employees’ Retirement Plan Board, it is not adequate for a trustee to recuse him or herself from participating in a Board discussion or from voting on matters coming before the Board. The trustee with the conflict must either resign, or the Board must forgo the contractual opportunity.
While this list is not complete, conflicts generally arise in one or more of the following situations:
e A trustee has “sources of income’ within the 12 months preceding the start of the trustee’s term or during the trustee’s term, as defined under the Political Reform Act.
e A trustee’s spouse or domestic partner has “sources of income” within the 12 months preceding the start of the trustee’s term or during the trustee’s term, as defined under the Political Reform Act. 1973557
Honorable Mayor and City Council
Subject: Federated Retirement Board Conflicts Review
November 8, 2022
e A trustee or trustee’s spouse or domestic partner is an Officer or Board Member of an entity other than the Retirement Board and the entity is involved in a matter coming before the Board.
APPLICANT
Anurag Chandra
Employer
Gresham Partners, LLC Finance
Spouse’s Employer
Foundation for College Education Director of Development Conflict of Interest
Mr. Chandra is a current member of the Federated City Employees’ Retirement Plan Board. He did not identify any organization, association, or entity in which he is active or which he is involved or associated that might be affected by decisions of the Board. He further indicated that he would have no financial interest to disclose other than his interest in his employment and his spouse’s interest in employment.
LEGAL REVIEW OF RETIREMENT BOARD APPLICANTS
Our office reviewed the application submitted by the applicant to be considered for the public member position on the Federated Employees’ Retirement Plan Board by the City Council. Our review was limited to the information provided by the applicant and was not intended to be a comprehensive investigation of potential conflicts involving the applicant. The results of our review are as follows:
e The applicant did not disclose any incompatible offices. e The applicant did not disclose an appearance of bias. e The applicant did not disclose an existing conflict of interest, e.g. no disclosure of an existing financial interest in any organization, association, or entity that has an existing contractual relationship with the Federated Retirement Board.
e The applicant indicated that he would not have any financial interests other than his own employment and his spouse’s employment. 1973557
Honorable Mayor and City Council
Subject: Federated Retirement Board Conflicts Review
November 8, 2022
Attachment A is a list of the entities with which the Federated City Employees’ Retirement Board has a contractual relationship as of November 8, 2022. We note that some of these are forms of entities (partnerships or private companies) in which it is unlikely that an applicant would have a financial interest if they are not employed by the firm. However, even if an applicant does not currently have a contractual relationship with any firm in which the Board currently has a financial interest, the list of entities with which the Board contracts with changes from time to time and we would expect a Board member's financial interests to change over time as well. Thus, both staff and any individual appointed to this Board will need to exercise vigilance to avoid conflicts from arising in the future.
NORA FRIMANN
City Attorney
By Mee be
Suzanhe Hutchins
Sr. Deputy City Attorney
cc: Jennifer Maguire, City Manager
Toni Taber, City Clerk
Roberto Pena, Director Retirement Services
1973557
ATTACHMENT A
Retirement Board Contractors
FEDERATED RETIREMENT PLAN
List of Administrative and Investment Vendors as of November 8, 2022 Vendor
CHEIRON, INC
SEGAL COMPANY, THE
VERIZON WIRELESS
MARTHA E BOYER
BNY MELLON
THE BERWYN GROUP
GRANT THORNTON LLP
CALAPRS CALIF ASSOC OF PUBLIC RETIREMENT SYSTEM
CORTEX APPLIED RESEARCH INC.
LIBERTY MUTUAL INSURANCE
RISK STRATEGIES COMPANY
ALBOURNE AMERICA, LLC
KOFF & ASSOCIATES, INC
MEKETA INVESTMENT GROUP
ABEL/NOSER CORP
BARRA, LLC
BCA RESEARCH INC.
BLOOMBERG FINANCE L.P.
BLOOMBERG INDEX SERVICES LIMITED
DYNAMO SOFTWARE, INC.
EVESTMENT ALLIANCE, LCC
FRANK RUSSELL COMPANY
INSTITUTIONAL LIMITED PARTNERSASSOCIATION
JP MORGAN BANK
KLARITY FX INC
MSCI, INC
PITCHBOOK
VERUS ADVISORY, INC
PENSION REAL ESTATE ASSOCIATION
HANSON, BRIDGETT, LLP
AMERIPRISE FINANCIAL INC
ARTISAN PARTNERS LIMITED PARTNERSHIP
BLACKROCK INSTITUTIONAL TRUST COMPANY, NATIONAL ASSOCIATION
COVE STREET CAPITAL LLC
INSIGHT NORTH AMERICA LLC
INVESCO ADVISERS, INC
MELLON INVESTMENTS CORPORATION
NORTHERN TRUST INVESTMENTS
1973557
Category
Actuary
Actuary Auditor
Cellular Service
Communication Consultant
Custodian Bank
Death Audit
External Auditor
General Dues & Subs
Governance Consultant
Insurance
Insurance
Investment Consultant
Investment Consultant
Investment Consultant
Investment Data Processing
Investment Data Processing
Investment Data Processing
Investment Data Processing
Investment Data Processing
Investment Data Processing
Investment Data Processing
Investment Data Processing
Investment Data Processing
Investment Data Processing
Investment Data Processing
Investment Data Processing
Investment Data Processing
Investment Data Processing
Investment Dues & Subs
Investment Legal
Investment Manager
Investment Manager
Investment Manager
Investment Manager
Investment Manager
Investment Manager
Investment Manager
Investment Manager
Honorable Mayor and City Council
Subject: Federated Retirement Board Conflicts Review
November 8, 2022 -
OBERWEIS ASSET MANAGEMENT INC
RUSSELL INVESTMENTS IMPLEMENTATION SERVICES, LLC
VOYA INVESTMENT MANAGEMENT
WHITE OAK GLOBAL ADVISORS, LLC
DELOITTE & TOUCHE LLP
SEI INVESTMENTS GLOBAL FUND SERVICES
CASEWARE INTERNATIONAL INC.
COMPUTERLAND OF SILICON VALLEY
FLEXENTIAL COLORADO CORP. (F/K/A VIAWEST,INC)
GRANICUS, LLC
IRON MOUNTAIN INC.
J & J AIR CONDITIONING, INC
OFF-SITE RECORDS MANAGEMENT
SHI INTERNATIONAL CORP
SMARTWAVE TECHNOLOGIES, LLC
SRP/SOCIALSELLINATOR
TOSHIBA BUSINESS SOLUTIONS
ZOOM VIDEO COMMUNICATIONS, INC
ICE MILLER LLP
REED SMITH LLP
SALTZMAN & JOHNSON LAW CORP
CALIFORNIA MEDLINK INC
EXAMWORKS, INC
WORK HEALTH SOLUTIONS
ANTHEM BLUE CROSS LIFE & HEALTH INSURANCE COMPANY
KAISER FOUNDATION
KAISER PERMANENTE HEALTH PLAN
PRUDENTIAL INSURANCE COMPANY
VISION SVC PLAN
LIFE INSURANCE COMPANY OF NORTH AMERICACL.I.N.A.
LEVI, RAY, AND SHOUP INC
PITNEY BOWES INC
SENDNLINK
UNITED PARCEL SERVICE
UNITED STATES POSTAL SVC
U S BANK CORPORATE PAYMENT SYSTEMS
PACIFIC RESOURCES FIRST AMERICAN, LLC
TRENDTEC INC
1973557
Investment Manager
Investment Manager
Investment Manager
Investment Manager
Investment Misc
Investment Misc
Legal
Legal
Legal
Medical Consultant
Medical Consultant
Medical Consultant
Payroll Medical Insurance
Payroll Medical Insurance
Payroll Medical Insurance
Payroll Medical Insurance
Payroll Medical Insurance
Payroll Medical Insurance
Pension Administration System
Postage
Postage
Postage
Postage
Procurement Card
Rent
Temp Agency
COUNCIL AGENDA: 11/29/2022
ITEM:
1976906
TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: Nora Frimann
City Attorney
SUBJECT: PUBLIC MEMBER APPLICANT
FOR POLICE AND FIRE
RETIREMENT PLAN BOARD
DATE: November 17, 2022
BACKGROUND
Thi
s Office routinely reviews applications for appointment to City boards and commissions for conflicts of interest, appearance of bias and incompatible office.
The applications generally do not provide complete information; however, they do occasionally disclose potential conflicts of interest or incompatible offices.
The pur
pose of this memorandum is to summarize our review of the applications submitted by the individuals who will be considered by the City Council for a public member trustee position on the Police and Fire Department Retirement Plan’s Board.
BOARD DUT IES
In or
der to analyze potential conflicts, it is necessary to consider the duties of the particular board or commission for which the applicant is seeking appointment.
The Board of Trustees of the Police and Fire Department Retirement Plan is established under the Municipal Code to manage, administer and control the plan. The Board’s scope of authority and duties include determining employee eligibility for benefits, establishing contribution rates for employees and the City based on actuarial valuations, commenting on ordinances that propose modifications to the retirement plan and investing retirement funds. The Board is expressly authorized to secure the following types of contractual services:
1. Act
uarial service
2. Auditing services
3. Investment management services
4. Investment performance evaluation services
5. Proxy voting services
6. Legal services
7. Other consulting services as the Board deems necessary to carry out its duties and responsibilities under the retirement plan.
3.3 Honorable Mayor and City Council
Subject: Police and Fire Retirement Board Conflicts Review November 17, 2022
1976906
SUBSTANCE OF CONFLICTS REVIEW
Incompatible Office
The doctrine of incompatible offices is contained in Government Code section 1099. To fall within the Doctrine of Incompatible Offices, two elements must be present.
• Hold two public offices simultaneously, and
• A potential conflict or overlap in the functions or responsibilities of the two offices must exist.
Appearance of Bias
There may be facts which would not amount to a legal conflict of interest, but which could require a Board trustee to recuse him or herself from a Board vote or discussion, because of an appearance of bias on the part of the Board. City Council policy requires Board members to be free from bias in their decision making, and may require a Board member to recuse him or herself if the facts could reasonably lead one to conclude that the Board member would be biased for or against a person or entity.
Legal Conflicts That May Preclude Board Contracts
Because the Board has independent contracting authority, Board member conflicts of interest preclude the Board from contracting with entities in which a trustee has a financial interest. (Government Code Section 1090) For the Police and Fire Department Retirement Plan’s Board, it is not adequate for a trustee to recuse him or herself from participating in a Board discussion or from voting on matters coming before the Board. The trustee with the conflict must either resign, or the Board must forgo the contractual opportunity.
While this list is not complete, conflicts generally arise in one or more of the following situations:
• A trustee has “sources of income” within the 12 months preceding the start of the trustee’s term or during the trustee’s term, as defined under the Political Reform Act.
• A trustee’s spouse or domestic partner has “sources of income” within the 12 months preceding the start of the trustee’s term or during the trustee’s term, as defined under the Political Reform Act. • A trustee or trustee’s spouse or domestic partner is an Officer or Honorable Mayor and City Council
Subject: Police and Fire Retirement Board Conflicts Review November 17, 2022
1976906
Board Member of an entity other than the Retirement Board and the entity is involved in a matter coming before the Board.
APPLICANTS
1. Sunita Ganapati
Employer
N/A
Spouse Employer
The Liver Company Chief Business Officer
Conflict of Interest
Ms. Ganapati is a current member of the Police and Fire Department Retirement Plan Board. Ms. Ganapati did not identify any organization, association, or entity in which she was active or which she is involved or associated which might be affected by decisions of the Board. Ms. Ganapati further indicated that she would have no financial interest to disclose other than her interest in her spouse’s employment.
2. Howard Lee
Employer
Weild & Co Managing Director
Spouse Employer
N/A
Conflict of Interest
Mr. Lee is a current member of the Police and Fire Department Retirement Plan Board. Mr. Lee did not identify any organization, association, or entity in which he was active or which he is involved or associated which might be affected by decisions of the Board. Mr. Lee further indicated that he would have no financial interest to disclose other than his interest in his employment.
Honorable Mayor and City Council
Subject: Police and Fire Retirement Board Conflicts Review November 17, 2022
1976906
3. Eswar Menon
Employer
Self-Employed Investor
Spouse Employer
N/A
Conflict of Interest
Mr. Menon is a current member of the Police and Fire Department Retirement Plan Board. Mr. Menon did not identify any organization, association, or entity in which he was active or which he is involved or associated which might be affected by decisions of the Board. Mr. Menon further indicated that he would have no financial interest to disclose other than his interest in his employment.
LEGAL REVIEW OF POLICE AND FIRE RETIREMENT BOARD APPLICANTS
Our office reviewed the applications submitted by the applicants to be considered for a public member position on the Police and Fire Department Retirement Plan’s Board by the City Council. Our review was limited to the information provided by the applicants and was not intended to be a comprehensive investigation of potential conflicts involving the applicants. The results of our review are as follows:
• T he applicants did not disclose an incompatible office. • The applicants did not disclose an appearance of bias. • The applicants did not disclose any existing conflict of interest, e.g. no disclosure of an existing financial interest in any organization, association, or entity that has an existing contractual relationship with the Police and Fire Department Retirement Plan’s Board.
• Two applicants indicated that they would not have any financial interests other than their own employment.
• One applicant indicated that she would not have any financial interests other than her interest in her spouse’s employment.
Honorable Mayor and City Council
Subject: Police and Fire Retirement Board Conflicts Review November 17, 2022
1976906
Attachment A is a list of the entities with which the Police and Fire Department’s Retirement Plan’s Board has a contractual relationship with as of November 16, 2022. We note that some of these are forms of entities (partnerships or private companies) in which it is unlikely that the applicant would have a financial interest if the applicant is not employed by the firm. However, even if the Board does not currently have a contractual relationship with any firm in which the applicant has a financial interest, the list of entities with which the Board contracts with changes from time to time and we would expect a Board member’s financial interests to change over time as well. Thus, both staff and any individual appointed to this Board will need to exercise vigilance to avoid conflicts from arising in the future.
NORA FRIMANN
City Attorney
By___________________________
Suzanne Hutchins
Sr. Deputy City Attorney
cc: Jennifer Maguire, City Manager
Toni Taber, City Clerk
Roberto Pena, Director Retirement Services
ATTACHMENT A
Retirement Board Vendors
1976906
POLICE AND FIRE DEPARTMENTS’ REIREMENT PLAN
List of Administrative and Investment Vendors as of November 16, 2022
Custodian Bank Bank of New York Mellon
Investment Consultant Meketa Investment Group
Absolute Return Consultant
Koff & Associates
Albourne
Governance and Joint Personnel Cortex Applied Research
General Counsel
Investment Counsel
Reed Smith
Hanson Bridget LLP
Tax Counsel Ice Miller
Actuary
Actuary Auditor
Cheiron
The Segal Company
Disability Counsel Saltzman & Johnson
Auditor
Risk Advisory Services
Portfolio Overlay Services
Pension Administration System
Medical Consultant
Medical Providers
Communication Consultant
Temp Agency
Cellular Service
Death Audit
Membership
Insurance
Investment Data Processing
Investments Dues & Subscriptions
Grant Thornton
Verus Advisory
Russell Investments
LRS
Work Health Solutions
Medlink and Examworks
Communication Advantage - Marty Boyer
Trendtec
Verizon Wireless
The Berwyn Group
CALAPRS
Liberty Mutual Insurance and Risk Strategies Company
Abel/Noser Corp
Barra, LLC
Bloomberg Finance LP
Bloomberg Index Services Limited
Dynamo Software, Inc.
Evestment Alliance, LLC
Frank Russell Company
Institutional Limited Partners Association
JP Morgan Bank
Klarity FX Inc
MSCI, Inc
Pitchbook
Pension Real Estate Association
Honorable Mayor and City Council
Subject: Police and Fire Retirement Board Conflicts Review November 17, 2022
1976906
Investment Miscellaneous
IT Vendors
Rent
Deloitte & Touche
SEI Investments Global Fund Services
Caseware International
Computerland of Silicon Valley
Flexential Colorado Corp (ViaWest)
Granicus LLC
Iron Mountain
J&J Air Conditioning
Off-site Records Management
SHI International Corp
Smartwave Technologies LLC
SRP/Social Sellinator
Toshiba Business Solutions
Zoom Video Communications
Pacific Resources First American LLC
Investment Managers:
57 Stars
Aether Investment Partners
AIG Global Real Estate
Angelo Gordon
Arbour Lane
Artisan Partners
BlackRock
Blackstone
Blue Bay Asset Management
Berkeley SkyDeck Fund
Bow Capital
Brookfield Asset Management
BSF
Canvas Ventures
CCMP Capital
Centerbridge
Clarion Partners
Columbia Threadneedle Investments
Cove Street Capital
Crabel Capital Management
Credit Suisse Asset Management
Crescent Capital Group
Crestline Investors
Cross Ocean Partners
Honorable Mayor and City Council
Subject: Police and Fire Retirement Board Conflicts Review November 17, 2022
1976906
DE Shaw
Dimensional Fund Advisors
DRA Advisors
Eagle Point Credit Management
EQT Exeter
Exeter Property Group
First Eagle
Francisco Partners
GCP SecureSpace Property Partners
GEM Realty Capital, Inc.
Global Infrastructure Partners
GQG Partners
Harbour Vest Partners
HIG Realty Partners
HPS
Hudson Bay Capital
Hull Street Energy
Industry Venture
Innovation Endeavors
Insight Investment
Invesco
JD Capital
Kepos Capital
Kimmeridge
KSL Capital
Kotak India
Lerer Hippeau
Lime Rock Partners
Medley Capital
Mellon Investments Corporation
Morgan Stanley
Mountain Capital
Neuberger Berman
Nortgage Venture Partners
Northern Trust
Next Play Capital
Northgate Capital
Oberweis Asset Management
Octagon Credit Investors
Orion Capital
Orion Mine Finance
Pantheon Ventures
Payden & Rygel
Honorable Mayor and City Council
Subject: Police and Fire Retirement Board Conflicts Review November 17, 2022
1976906
Park Square Capital, LLP
Pine River Capital
Portfolio Advisors
Praedium Group
Rockpoint
RWC
Redwheel
Sculptor Capital Management
Shoreline Capital
Signia Venture Partners
Siguler Guff
Strategic Value Partners
TA Realty
TCW
Tembo Capital
Tiger Iron Capital
Top Tier Capital
Torchlight Investors
TPG Capital
Tristan Capital
Voya Investment Management
Warburg Pincus
Wellington Management
White Oak Global Advisors
Wilson Sonsini