These minutes are a draft subject to approval by the Retirement Board at their next regular meeting.

PUBLIC EMPLOYEES' RETIREMENT BOARD MEETING MINUTES
March 18, 2002
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The agenda for this meeting was mailed to every public employer, the news media, and other groups and individuals as requested.

The regular monthly meeting of the Public Employees' Retirement Board was called to order at 8:00 a.m., March 18, 2002, in the PERS' Conference Room, 693 West Nye Lane, Carson City. Members present: Charles Silvestri, Marvin Leavitt, Earl Greene, Andy Anderson, Sue DeFrancesco, Purisimo Hernandez, and Warren Wish. Members absent: None.

I. INVESTMENTS

1. Richard Gilmartin and John Graham, Rogge Global Partners gave an organizational overview and presented an update on their international fixed income portfolio.
   
   
2. Jeff Wardlow, Loomis, Sayles, discussed his organization's changes and gave an update on their domestic equity portfolio.
   
   
3. Ruthann Moomy, Callan Associates and staff presented the U.S. bond index manager search criteria. On motion of Marvin Leavitt, the Board voted unanimously to approve the Lehman Aggregate Bond Index manager search criteria, as submitted.
   
   
4. Staff and Callan discussed results from their active U.S. bond manager review. The Board requested Bradford & Marzec be invited to the April 17th meeting in Las Vegas, along with Criterion Investment Management and Patterson Capital for a special report. No action was taken on this item.
   
   
5. Staff presented a name change in Directive 15 for the PERS' fund, to reflect the Bank of New York's purchase of Axe-Houghton Associates. On motion of Andy Anderson, the Board voted unanimously to approve the Interim Investment Directives, PERS' fund, as submitted.

II. BOARD

1. The December 12, 2001 Retirement Board meeting minutes were placed on the agenda in error. The February meeting minutes will be presented at the April 2002 meeting for approval.
   
   
2. On motion of Sue DeFrancesco, the Board voted unanimously to change the Retirement Board August 2002 meeting date to Wednesday, August 14th, 2002.

III. ADMINISTRATION

1. For the record, Earl Greene declared that Pedro Alvarez works for his fire department but Chief Greene does not know him personally. Board member Purisimo Hernandez declared that Irma Hernandez was no relation to him. On motion of Marvin Leavitt, the Board voted unanimously to:
   
   
   1. Approve total and permanent disability retirement for: Pedro Alvarez, Klaus Altemueller, Melba Burton, Jeffrey Clark, Kathy Cole, Naomi Flemming, William Graham, Irma Hernandez, Ann Hornbarger, Marie Kirkpatrick, Paula Kos, Max Lowery, Larry McKay, Christine Prince, Melinda Richards, Andrea Saylor, Margaret Underhill, Vytas Vaitkus, Daryl Venger, James Willis, and Charlotte Wilson.
      
      
   2. Approve reemployment requests by disability recipients: James Cooper, Pauline Marchese, Robert Melendy, Lester Morton, Steven Smith, and Carmen Soto Gaff.
      
      
2. The C*A*R*S*O*N project contract will end this month including warranty and the production support agreement is in place.
   
   
3. Staff has completed review of two property sites under consideration for PERS new Las Vegas office, Point Flamingo Office Park and McCarran Corporate Plaza. Staff is recommending McCarran Corporate Plaza for the following reasons:
   
   
   • Easily accessible from both I95 and the I215 extension;
     
     
   • Location is more lightly trafficked when compared to Pointe Flamingo;
     
     
   • The property has immediate access to McCarran International Airport;
     
     
   • The usable space is approximately 2500 square feet after build out compared to 2302 rentable square feet at Pointe Flamingo;
     
     
   • Proposed basic rental is $1.60 on a Modified Gross Basis; and
     
     
   • The property is within walking distance to restaurants and service retail.

   On motion of Purisimo Hernandez, the Board voted unanimously to approve the lease for new Las Vegas office space in McCarran Corporate Plaza, located at 5740 South Eastern Avenue, subject to successful negotiations.

4. Staff reviewed and discussed the current post-retirement increase structure and the importance of these increases in maintaining our retirees' purchasing power. Staff also discussed the associated cost impact the post-retirement increases have on the System.
   
   
5. Staff presented background information on the request of Mr. Don Hataway for PERS to review his prior independent contract relationship with the state. This request is in light of prior findings by both PERS and the IRS that a similarly situated individual was determined to be an employee and not an independent contractor. Upon review by the Deputy Attorney General Tina Leiss, she recommends that Mr. Hataway be considered an employee eligible for PERS' membership from March 1, 1987 through June 30, 1987. Staff concurs with the Deputy Attorney General's assessment. On motion of Earl Greene, the Board voted unanimously to determine that Don Hataway was an employee eligible for PERS' membership for the period March 10, 1987 through June 30, 1987 to include billing the State Department of Administration for contributions and interest due PERS.
   
   
6. Deputy Attorney General had nothing to report.
   
   
7. There were no individual statements and/or requests by the members, retired employees and/or the public.
   
   
8. Administrative Report by Staff:

   Operations Officer:
   
   

   1. Staff informed the Board that a meeting with the Director of Police Officers Standards Training (P.O.S.T.), Richard Clark is scheduled for March 20th to discuss the Police/Fire eligibility study currently underway. Another ad hoc meeting is tentatively scheduled for April in Las Vegas.
      
      
   2. Staff mentioned that the budget process has begun. Summary budget packets for the current biennium will be presented at the April board meeting.
      
      
   3. Staff is currently scheduling PERS' presentations all over the State for employers and employees to attend to find out about their PERS' benefits. If you have any requests for presentations contact Dana Bilyeu, Karen Kimball or Holly Zimmerman and we will schedule the meeting.
      
      

   Executive Officer:
   

   1. Staff is currently working on the Judicial Retirement System Summary Plan descriptions. Laura Wallace and George Pyne will be attending the District Judges conference in April to discuss the investment program and the Judges choices available once the Judicial Retirement System begins on January 1, 2003.
      
      
   2. Staff has received a settlement proposal from NDOT in the matter PERS vs. NDOT. Staff has distributed the proposal to the Retirement Board for their review. At the April board meeting, staff will hold a closed session to discuss the proposal under the authority of NRS 286.150. A settlement conference is scheduled for April 30th where staff will share the Board's determination of the NDOT settlement proposal.
      
      
   3. The next meeting to discuss the DROP study is tentatively planned for April 16th in Las Vegas, with time and location yet to be determined. Once the location is determined notices will be distributed to employee/employer associations, all employers and interested parties.
      
      
   4. The budget augmentation request for the e*C*A*R*S*O*N project has been submitted to the Legislative Counsel Bureau for review by the Interim Finance Committee at their April 10, 2002 meeting.
      
      
   5. Staff has received a request from the Paiute Shoshone Indian tribe for membership in PERS. Due to the complexity of the federal taxation issues, continued research would require significant cost to the PERS' trust fund on behalf of non-members. The matter is being referred back to the tribe for their consideration whether to pursue at their expense.
      
      
   6. In July 2001, when staff presented the annual self- evaluation of the executive staff, the board requested information on an executive officer evaluation process. The current self-evaluation reviews six areas:
      
      
      • Operations
        
        
      • Investment Program
        
        
      • Legislative Program Management
        
        
      • Actuarial Management
        
        
      • Public Relations; and
        
        
      • Board Relations
        
        
      Chairman Silvestri appointed a sub-committee to review this process consisting of Sue DeFrancesco, who will serve as Sub-committee Chairman, Andy Anderson and Warren Wish.

9. Chairman Silvestri complimented PERS' staff on having answers readily available to the Board's questions.

   Warren Wish asked about the staff denial section of the board packet. Staff explained the staff denial process. No action is taken on the denials but they can be placed on a future agenda to be heard as an official appeal at the request of a board member.

   Earl Greene requested clarification on the use of Japanese securities in the Rogge international bond portfolio. Staff explained that it is a damage control move to include Japan as it is a large component of the benchmark index.

IV. RATIFICATION AGENDA

On motion of Sue DeFrancesco, the Board voted unanimously to:

1. Approve the Administrative Fund disbursements.
   
   
2. Approve personnel action taken since the last meeting.
   
   
3. Approve out-of-state travel for investment staff to attend an on-site meeting at PMRealty Advisors' office in Newport Beach, California.
   
   
4. Approve out-of-state travel for the Investment Officer to participate on a panel during the 25th anniversary conference of the Association of Investment Management and Sales Executives (AIMSE) in Florida, April 29-30, 2002.
   
   
5. Approve a contract renewal for the Benefit Payment Audit with Security Software Solutions for the period of April 1, 2002 through March 31, 2003.
   
   
6. Approve out-of-state travel for the Network Specialist II to attend the Computer Security Institute's Network Security Conference in San Francisco, California scheduled for June 17-19, 2002.
   
   
7. Approve the membership request by Nevada Tahoe Conservation District effective July 1, 2002.
   
   
8. Approve a Phase-In Retirement Agreement between Steven Chai and the University of Nevada, Reno.
   
   

VI. REPORTS

The following is the time schedule for the meeting:

March 18, 2002, the meeting was called to order at 8:00 a.m. At 9:50 a.m. a break was taken for approximately 10 minutes. The meeting was recessed at 11:45 p.m. until 1:20 p.m. at which time the meeting was called to order. On motion of Marvin Leavitt the meeting was closed for consideration of disability matters and opened at 1:40 p.m. by motion of Andy Anderson. The meeting adjourned at 2:40 p.m.