Part 10 — BOARD OF ADMINISTRATION FOR FEDERATED CITY EMPLOYEES' RETIREMENT SYSTEM

"Board of Administration for the Federated City Employees' Retirement System," hereinafter in this Part 10 referred to as the "board," is hereby created and established. Subject to the provisions of this part and Part 1 of this chapter, and other applicable laws and ordinances, it shall be deemed to be a continuation of the board of administration for federated city employees' retirement system heretofore existing immediately prior to the effective date of this section, hereinafter referred to as the "preexisting board."

(Ords. 25209, 26354.)

A.

The board shall consist of seven members as follows:

Four members of the board shall be members of the public appointed by the city council.

Until at least three public members have been appointed, one of the members shall be the member of the civil service commission appointed by the city council prior to the effective date of the ordinance increasing the number of public board members to four.

Two of the members shall be city employees, each from a different city department except as provided in Subsection B. of this section, who are members of the federated city employees' retirement system.

Until at least two public members have been appointed, two members of the city council as designated by the council, or the mayor, if authorized by the council, shall be members of the board.

One of the members shall be a person who has retired under the provisions of the federated city employees' retirement system.

B.

Notwithstanding the provisions of subsection A.3. of this section, if one of the city employee members of the board, subsequent to his or her appointment to the board, is transferred, for any reason including promotion or demotion, to an employment position in the same city department as the other city employee member, such transfer shall not disqualify either city employee from membership on the board, not shall such transfer disqualify either incumbent city employee from reappointment to the board.

(Ords. 25209, 26354, 28788.)

A.

Each public member of the board appointed on or before March 31, 2011 shall reside or have a primary place of employment or business within a fifty-mile radius of San José City Hall at all times during the board member's term of office.

B.

Each public member of the board appointed on or after April 1, 2011 shall reside within a fifty-mile radius of San José City Hall at all times during the board member's term of office.

C.

Each public member of the board shall possess a baccalaureate degree from an accredited college or university in finance, actuarial science, law, economics, business or other relevant field of study. An advanced degree in a relevant field of study or professional certification is desirable but not required.

D.

Each public member of the board shall possess a high level of knowledge and expertise, and at least twelve years experience, relevant to the administration of a public retirement plan. Knowledge and expertise relevant to the administration of a public pension system may include but is not limited to experience in: a senior executive position in pension administration; pension actuarial practice; institutional investment management; auditing; accounting; legal; heath and welfare and/or employee benefits management; investment management; banking; asset/liability management for an insurance company;

college or university professor with a focus on fiduciary or trust fund law or a quantitative background in financial theory or actuarial math. Twelve years combined experience in related field may meet this requirement.

E.

The following individuals shall be ineligible for appointment as public members of the board: current and former city employees; current or former elected or appointed city officials; retired members of, or persons participating in or receiving benefits from the police and fire department retirement plan or the federated city employees' retirement system; a representative from any union representing city employees; or any immediate family member of a city employee or persons participating in or receiving benefits from the police and fire department retirement plan or the federated city employees' retirement system.

F.

No person having a conflict of interest, significant potential for conflict of interest, or appearance of conflict of interest, shall be appointed as a public member of the board. For the purpose of evaluating conflicts of interest, potential conflicts of interest and the appearance of conflict of interest of board members, all applicants for public member board positions shall be required to provide disclosure information, in such form and substance as may be required by the council, to allow council to evaluate conflicts of interest, significant potential for conflicts of interest, or appearance of conflicts of interest, including but not limited to disclosure of information related to investments, ownership of real property, employment and business positions, income sources and loans of the prospective public member applicant and members of the applicant's immediate family. Disclosure of such conflict of interest, significant potential for conflict of interest, or appearance of conflict of interest information as may be required by council shall be provided by the applicant at the time of submission of an application for a public member position on the board, and annually thereafter, concurrently with such conflict of interest disclosure as board members may otherwise be required by law to file.

G.

For the purpose of this Section 2.08.1020, immediate family member means a person having any of the following relationships to a city employee or person participating in or receiving benefits from the police and fire department retirement plan or the federated city employees' retirement system:

By blood: Parent, child, grandparent, grandchild, brother, sister, nieces, nephews, uncles, aunts, great grandchildren, great grandparents.

By marriage: Husband, wife, stepparent, stepchild, father-in-law, mother-in-law, brother-in-law, sister-in- law, daughter-in-law, son-in-law, half-sister, half-brother.

By law: Guardianship relationships and adoptive parent/child relationships.

Domestic partner: Individuals registered with the human resources department and/or the State of California.

(Ords. 28788, 28899.)

The member of the civil service commission who was a member of the preexisting board immediately prior to the effective date of the ordinance creating four public member positions shall continue to serve as a member of the board established by this part until four public members of the board have been appointed by council, or his or her seat becomes vacant under the provisions of Part 1 of this chapter.

(Ords. 25209, 26354, 28788.)

A.

Each City employee appointed to the seat of either of the employee members shall be appointed for a term expiring four (4) years after the date of expiration of the preceding member's term, to serve as a member until the expiration of his or her term or until the earliest of one (1) of the following:

His or her seat becomes vacant under the provisions of Part 1 of this Chapter;

The member ceases to be a City employee; or

The member ceases to be a member of the Federated City Employees Retirement System.

B.

Employee members of the Board shall be eligible for reappointment to successive four (4)-year terms.

C.

Upon the happening of any event described in Subsection A, above, the member shall thereupon cease to serve as a member of the Board, and a vacancy in office shall be deemed to exist for the unexpired term of said member. Thereupon, the Council, or the Mayor, if authorized by the Council, shall appoint a successor for the unexpired portion of such member's term in conformance with the provisions of Section 2.08.1070 of this Code.

(Ords. 25209, 26354, 29771, 30723.)

A.

The member of the public who was appointed for a term expiring at the end of November, 2010 shall continue to serve as such member until the end of November, 2010; and such public member shall not be disqualified from reappointment at the expiration of his or her current term.

B.

Each member of the public appointed to the board, after the effective date of the ordinance providing for four public board members, shall be appointed for a term expiring four years after the date of expiration of the preceding member's term, to serve until the expiration of his or her term or until his or her seat becomes vacant under the provisions of Part 1 of this chapter.

C.

Public members of the board shall be eligible for reappointment to successive four-year terms.

D.

Whenever a vacancy occurs in the seat held by a member of the public, the council, or the mayor, if authorized by the council, shall appoint a successor in conformance with the provisions of Section 2.08.1070 of this Code.

(Ords. 25209, 26354, 28788.)

A.

The member who is required to be a person who retired under the provisions of the Federated City Employees Retirement System (hereafter "retired member") shall be appointed for a term expiring four (4) years after the date of expiration of the preceding member's term, to serve as a member until the expiration of his or her term or until his or her seat becomes vacant under the provisions of Part 1 of this Chapter.

B.

Whenever a vacancy occurs in the seat held by a retired member, the Council, or the Mayor, if authorized by the Council, shall appoint a successor in conformance with the provisions of Section 2.08.1070 of this Code.

C.

A retired member may not serve more than two (2) consecutive terms unless no other retired member is recommended pursuant to Section 2.08.1070.

(Ords. 25209, 26354, 30723.)

A.

The members of the board who are required to be members of the public not connected with city government shall each be paid, as compensation for services, an amount as determined by resolution of the city council.

B.

Such compensation shall be in addition to such reimbursement, if any, as such members may become entitled to for expenses incurred by the members in the performance of the duties and functions of office.

C.

No compensation shall be paid for any month in which the member was absent from the regular meeting of the board and the absence was unexcused under the provisions of this Chapter 2.08.

D.

The compensation paid to the members shall be paid from the federated city employees retirement fund as an administrative expense of the federated city employees' retirement system.

(Ords. 26845, 28788, 29574.)

A.

Whenever a scheduled vacancy exists in a seat on the Board held by a City employee, the City employees who are members of the Federated City Employees Retirement System shall recommend, at an election to be conducted among them by the City Clerk, one (1) of such employees as a successor for such seat, provided there is more than one (1) eligible employee applying for the vacancy. If there is only one (1) eligible employee applying for the scheduled vacancy, an election shall not occur and that candidate will be recommended to the City Council for consideration. Upon any unscheduled vacancy or vacancies in such office during the unexpired regular term, the City Council shall, in accordance with procedures prepared by the City Clerk, appoint to such vacant seat for the remainder of the unexpired term, a City employee who is also a member of the Federated City Employees' Retirement System. For unscheduled vacancies, the candidate recommended by election may be appointed by the City Council to fill the remainder of the unexpired term plus the full four year term if by such time of the Council appointment, there is less than twelve (12) months left on the vacated term.

B.

The City Council shall appoint all public members of the Board.

C.

One (1) of the public members of the Board shall be appointed by the City Council only after the candidates for such seat have been interviewed by the then existing Board and a recommendation for appointment has been made by the Board to the Council.

If a majority of the Board recommends one (1) candidate, only that candidate will be forwarded to the City Council for consideration.

If a majority of the Board does not recommend one (1) candidate, the top two (2) candidates will be forwarded to the City Council for consideration.

Any vacancy in the seat held by such public member shall always be filled pursuant to this Section 2.08.1070 C.

D.

Whenever there is a scheduled vacancy in the seat on the Board held by a retired member of the Federated City Employees' Retirement System because of the expiration of a retired member's term of office, the following procedures apply:

Retired members of the Federated City Employees' Retirement System who want to serve on the Board in the retired member seat must file an application with the Office of the City Clerk. All applications must be submitted on a form provided by the City Clerk, and submitted on or before the date and time set by the City Clerk.

If four (4) or more candidates apply to serve on the Board in the retired member seat, the retired members of the Federated City Employees' Retirement System shall nominate, through a nomination process established by the City Clerk, three (3) candidates to be interviewed by the panel established under Section 2.08.1070, subsection (D)(4). However, the nomination process among the retired members of the Federated City Employees' Retirement System shall not occur if less than four (4) candidates apply.

The panel shall interview the three (3) candidates nominated through the nomination process conducted among the retired members of the Federated City Employees' Retirement System. However, the panel shall interview all candidates if less than four (4) candidates applied to serve on the Board in the retired member seat. The purpose of the interview is to ensure that the candidates will be able to attend Board meetings, fulfill the time commitment of a Board member, and have the requisite qualifications and experience to fulfill the duties of a Board member.

The panel must consist of:

a.

a representative from the employee organizations affiliated with the American Federation of State, County and Municipal Employees, AFSCME Local 101;

b.

a representative from the employee organizations other than the organizations affiliated with AFSCME, Local 101;

c.

a representative from the City Manager's Office; and

d.

two (2) representatives from the City of San José Retired Employees Association.

The panel shall select one (1) of the candidates it interviewed for the City Council to consider for appointment to the Board. The panel's selection is the candidate who received a majority of affirmative votes on the panel; provided that a dissenting member of the panel may submit a minority report. If there is no majority for the recommendation of a retired member, each member of the panel may submit a written report to the City Council.

E.

Whenever an unscheduled vacancy occurs in a seat on the Board held by a retired member of the Federated City Employees' Retirement System prior to the expiration of a retired member's term of office, the following procedures apply:

The City of San José Retired Employees Association shall recommend to the Board up to three (3) candidates for appointment for the remainder of the unexpired term.

The Board shall interview the recommended candidates and recommend one (1) or more of them for appointment by the City Council for the remainder of the unexpired term.

F.

The appointment of employee and retiree members is routine business on the Council agenda and may be an item on the consent calendar.

Council may only reject the employee recommended in accordance with Section 2.08.1070, subsection (A), upon a finding of cause for rejection.

Council may only reject the retiree selected by the panel, in accordance with Section 2.08.1070, subsection (D)(5), upon a finding of cause for rejection.

For the purposes of this Section, cause for rejection may include, but is not limited to, Council finding that the recommended candidate will not be able to attend meetings of the Board and fulfill the time commitment of a member of the Board, or to act in accordance with fiduciary duties or carry out the requirements of governing legislation, including the requirements of Chapter 3.28 of Title 3 of this Code.

(Ords. 25209, 26354, 28788, 28899, 29771, 29997, 30723.)

The board shall have all powers, functions and duties given to it by the provisions of Chapters 3.20 and 3.28 of Title 3 of the San José Municipal Code.

(Ords. 25209, 26354, 29771.)

The director of the department of retirement services shall be the secretary of the board.

(Ords. 25209, 26034, 26354.)