COUNCIL AGENDA:
FILE:
11/19/24
22-2219
ITEM: 3.4
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TO: HONORABLE MAYOR
AND CITY COUNCIL
FROM: Nora Frimann
City Attorney
SUBJECT: PUBLIC MEMBER APPLICANTS
FOR POLICE AND FIRE
RETIREMENT PLAN BOARD
DATE: November 6, 2024
BACKGROUND
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 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 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 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. 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.
Honorable Mayor and City Council
Subject: Police and Fire Retirement Board Conflicts Review November 6, 2024
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
Since 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 Departments' 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:
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• 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 6, 2024
Board Member of an entity other than the Retirement Board and the entity is involved in a matter coming before the Board.
APPLICANTS
1. David Kwan
Employer
Retired
Spouse Employer
Retired
Conflict of Interest
Mr. Kwan is a public member on the Board for the Police and Fire Department Retirement Plan and his term expires on November 30, 0224.
He 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. He further indicated that he would have no financial interest to disclose other than his interest in his spouse's pension from Bank of New York.
2. John Cleveland
Employer
Retired
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Spouse's Employer
Retired
Conflict of Interest
Mr. Cleveland 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 neither he nor his spouse would have any financial interest to disclose.
Honorable Mayor and City Council
Subject: Police and Fire Retirement Board Conflicts Review November 6, 2024
3. Gretchen Flicker
Employer
Retired
Spouse's Employer
Retired
Conflict of Interest
Ms. Flicker did not identify any organization, association, or entity in which she is active or which she is involved or associated that might be affected by decisions of the Board. She further indicated that neither she nor her spouse would have any financial interest to disclose.
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 Retirement 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:
• The applicants did not disclose an incompatible office. • The applicants did not disclose an appearance of bias. • The applicants did not disclose an existing conflict of interest, e.g. the applicants did not disclose an existing financial interest in any organization, association , or entity that has an existing contractual relationship with the Board.
• Two applicants indicated that they would not have any financial interests to disclose .
• One applicant indicated that he would not have any financial interests, other than his interest in his spouse's pension , to disclose .
Attachment A is a list of the entities with which the Police and Fire Departments' Retirement Board has a contractual relationship with as of October 9, 2024. We note that some of these are forms of entities (partnerships or private companies) in which it is unlikely that the applicants would have a financial interest if they are not employed by the firm. However, even if the applicants do not currently have a contractual relationship with any firm in which the Board 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 2157823
Honorable Mayor and City Council
Subject: Police and Fire Retirement Board Conflicts Review November 6, 2024
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. cc: Jennifer Maguire, City Manager
Toni Taber, City Clerk
John Flynn, Director Retirement Services
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NORA FRIMANN
City Attorney
By __ h __ A--.~- -----
~ Hutchins
Sr. Deputy City Attorney
ATTACHMENT A
Retirement Board Vendors
List of Administrative and Investment Vendors as of October 9, 2024 Custodian Bank
Investment Consultant
Absolute Return Consultant
Governance and Joint Personnel
General Counsel
Investment Counsel
Tax Counsel
Actuary
Actuary Auditor
Disability Counsel
Auditor
Risk Advisory Services
Portfolio Overlay Services
Pension Administration System
Medical Providers
Communication Consultant
Temp Agency
Cellular Service
Death Audit
COBRA Administers
Membership
Insurance
Investment Data Processing
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Bank of New York Mellon
Meketa Investment Group
Albourne
Cortex Applied Research
Reed Smith
Hanson Bridget LLP
Ice Miller
Cheiron
Vacant until next year
Saltzman & Johnson
Macias Gini & O'Connell
Verus Advisory
Russell Investments
LRS
Medi ink and Examworks
Communication Advantage - Marty Boyer
Trendtec
Verizon Wireless
Longevity Holding (The Berwyn Group)
West Publishing
P&A Group
CALAPRS
GFOA
SACRS
NCPERS
Liberty Mutual Insurance
Risk Strategies Company
Abel/Noser Corp
Alpine Macro
BCA Research
Bloomberg Finance
Bloomberg Index Services
Burgiss
Dynamo Software
Evestment Allia nee
Frank Russell Company
Institutional Limited Partners Association
JP Morgan Bank
Honorable Mayor and City Council
Subject: Police and Fire Retirement Board Conflicts Review November 6, 2024
Investments Dues & Subscriptions
Investment Miscellaneous
IT Vendors
Rent
Investment Managers:
57 Stars
Aether Investment Partners
AIG Global Real Estate
Angelo Gordon
Arbour Lane
Artisan Partners
BlackRock
Blackstone
Blue Bay Asset Management
Bow Capital
Brookfield Asset Management
BSF
Burgundy
Canvas Ventures
CCMP Capital
Centerbridge
Charlesbank Capital
Clarion Partners
Collective Global Aduro Advisors
Columbia Threadneedle
Grabel Capital Management
Credit Suisse Asset Management
Crescent Capital Group
Crestline Investors
Cross Ocean Partners
Crosslink
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Klarity FX
MSCI
Pension Real Estate Association
Pacific Pension & Investment
Grant Newsletter
WSJ
Financial Times
Deloitte & Touche
SEI Investments Global Fund Services
Caseware International
Granicus
Iron Mountain
J&J Air Conditioning
Greenvelope
Social Sellinator
Pacific Resources First American
Honorable Mayor and City Council
Subject: Police and Fire Retirement Board Conflicts Review November 6, 2024
DE Shaw
Dimensional Fund Advisors
ORA Advisors
Eagle Point Credit Management
EQT Exeter
Exeter Property Group
First Eagle
Francisco Partners
GCP SecureSpace Property
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
I Pl Partners
JD Capital
Kepos Capital
Kimmeridge
Kotak India
KSL Capital
Lerer Hippeau
Lime Rock Partners
Medley Capital
Mellon Investments Corporation
Morgan Stanley
Mountain Capital
Next Play Capital
Northern Trust
Northgate Capital
Oberweis Asset Management
Octagon Credit Investors
Orion Capital
Orion Mine Finance
Paine Schwartz Partners
Pantheon Ventures
Park Square Capital
Payden & Rygel
PE Strategic Partners
Pine River Capital
Portfolio Advisors
Praedium Group
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Honorable Mayor and City Council
Subject: Police and Fire Retirement Board Conflicts Review November 6, 2024
Real Asset Coinvest GoExpedi
Ridgewood
Rockpoint
RWC
Scout Energy
Sculptor Capital Management
Seraya Partners
Silverpoint
Shoreline Capital
Sierra Ventures
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
Unifi India
Upfront by Cooley
Voya Investment Management
Warburg Pincus
Wellington Management
White Oak Global Advisors
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