Retirement Board Update - Special Meeting - January 30, 2006 - By Joe Flynn

   The Retirement Board met today to consider the Navigant Report and give direction to the Committee formed to implement the findings of the report. Mark Sullivan, chair of the committee gave a presentation on the highlights of the report and the committee's outline. Thomas Hebrank and Richard Kippermen were on the committee and the Board decided to add Bill Sheffler. Board President Peter Preovolos also has extended invitations to the Mayor, though his new representative (to be appointed) and the City Attorney's office. Response is pending. The committee is looking at a timeline of 90 to 120 days. Meetings will be held in the SCDERS Board meeting room; the meetings will be open and those present will have opportunities to add their concerns or offer testimony. The first meeting was tentatively set for Feb. 10, 2006 at 9 AM. Please verify SDCERS website for meeting before attending. If I get a notice, I will forward it as well.
    City Attorney Mike Aguirre was present to assert his claim that he is the attorney for the Board and that we are operating at our own peril.
    Two action items were on the agenda dealing with the question of requested indemnification and defense for Larry Grissom and Lori Chapin in the U.S. Attorney Case of U.S. v Ronald Saatoff et al, Southern District of California Number 06CR0043-BEN. The Board had previously provided legal defense for Grissom and Chapin while they were witnesses in litigation and later when they were "targets" of the US Attorney's investigation. That indemnification ceased when the indictments were handed down. These action items were requests to reinstate that indemnification and defense.
    After considerable public testimony, including individuals primarily in support of Lori Chapin, attorney's representing Lori and attorney's representing Larry G., M. Aguirre also spoke against the issue. He also stated that "...every person who contributed to the problem will be brought to justice."    Harvey Lieberman, outside counsel for the Board, represented the Board during this matter and advised the Board on options available and findings necessary to provide a defense in the above request. After considerable discussion a motion to provide indemnification for Larry Grissom failed on a vote of 5 for, 2 against, and one abstention. A similar motion to provide indemnification for Lori Chapin also failed on a vote of 5 for, 2 against and one abstention. In both cases, I voted against the motions to provide indemnification.
    Having heard from many of you previously on the earlier indemnification, I recognize that a number of you will not agree with the Board's action in general and my action in particular. That is unfortunate. I recognize and understand many of your reasons for supporting indemnification and I heard some of the same justifications raised by other Board members. In looking at the history of indemnification by the City and by SDCERS, however, and in view of the history of our current pension crisis, I could not make the case for reinstating indemnification and voted accordingly.

Joe Flynn, Retiree Rep. to the Board