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									                   Minutes of the Regular Meeting held September 23, 1996.



The meeting was called to order at 8:02 a.m. by Chairman Pelzek.

PRESENT: Gary J. Brazgel, William C. Carey, Alvin Madison, James A. McCann,
W. Martin Morics, Ald. Michael J. Murphy, Linda Stewart and Timothy J. Pelzek; also,
Thomas E. Hayes - Legal Advisor, Robert G. Nehls - Secretary, Patrick J. Cronin - Assistant
Secretary and Lisa Behnke - Board Stenographer.

ALSO PRESENT: Charles Mulcahy - Whyte Hirschboeck Dudek, S.C. - Mike Nichols -
Journal/Sentinel Reporter, Toe Polasky - Retiree, Kevin Lynch - The Townsend Group, Hank
Wolf - Retiree, and Anita Paretti - Deputy Comptroller.


      The Secretary presented the minutes of the Regular Meeting held July 31, 1996, and
Investment Committee Meeting of July 31, 1996, and the Member, Intergovernmental Relations
and Legislative Committee Meeting of July 30, 1996, and Special Meeting of July 8, 1996.

      Discussion ensued with respect to the matter of verbatim sections being in the minutes.
Mr. Brazgel said that the minutes are an official record and should only show what the Board's
actions were and what they did in their decision making.

      The Secretary said that in the future, staff will only produce a verbatim at the direction of
the Board. Mr. Brazgel said that there should be a future policy, i.e., to provide a copy of the
tape at the current charge and let the requesting department produce their own verbatim. Mr.
McCann felt that was a good suggestion. The Secretary reiterated, that if a request from a
Board member for a verbatim comes in, it will have to come to the full Board. There were no
objections voiced that the Secretary follow that procedure.

(Mr. Brazgel momentarily stepped out.)

      Chairman Pelzek mentioned that if this needs to be incorporated in the Board's rules, then
it should be done, otherwise, it will be a policy of the Board.

     It was moved by Mr. McCann, seconded by Mr. Madison and unanimously carried, to
approve the minutes as reported.
 (At this point in the meeting, the agenda was taken out of order.)

                  Milwaukee Police Association vs. City of Milwaukee, et al.
                                  Case No. 95-CV-011251

      The Secretary reported that the Annuity and Pension Board may vote to convene in closed
session on this item, as provided in Section 19.85 (1)(g), Wisconsin State Statutes, to confer
with legal counsel concerning strategy the Board may adopt with respect to this litigation. The
Board will then reconvene in open session following the closed session.

      It was moved by Mr. Carey and seconded by Ms. Stewart, that the Board convene in
closed session pursuant to 19.85 (1)(g), Wisconsin State Statutes, to confer with legal counsel
concerning legal strategies in litigation.

      The motion prevailed by the following vote:

AYES:       Members Brazgel, Carey, Madison, McCann, Stewart and Pelzek.

NOES:     None.

      Board members proceeded to convene in closed session.

(During closed session, Mr. Morics entered the meeting at 8:10 a.m. and Ald. Murphy entered
at 8:26 a.m.)

     After the discussion, Mr. Brazgel made a motion, seconded by Mr. Carey and
unanimously carried, to convene in open session.

      The Chairman reported that the Board met in closed session with its legal counsel, Mr.
Charles Mulcahy, of Whyte, Hirschboeck, Dudek, regarding Case No. 95-CV-011251. After
the Board received a status report from Mr. Mulcahy, a motion was made to appoint a
Litigation Committee consisting of the Chair, Messrs. Brazgel, McCann and Morics. The vote
passed 7-1 with Mr. Carey voting "No". Mr. Carey asked that the minutes reflect that he had
requested the motion to be a roll call vote.

       The Secretary reported that the other item discussed, was the $1.9 million plus interest
due from the City in employer contributions, and asked if the Board would like to send a letter
to the City asking for payment again? Mr. Brazgel said that he would like the Board's attorney
to check into that again and what the judge did say regarding this, and at that time, the City can
be notified. The Chair so directed.

(Mr. Lynch entered the meeting and Mr. Cronin momentarily stepped out.)
       Status Report on Revised Rules and Procedures (Whyte, Hirschboeck)

      Mr. Mulcahy reported that he has a working document in which he will highlight the
fiduciary responsibility areas and the procedures of the new

committees and recommendations made by him. He will redline all the recommended changes.

(Mr. Morics stepped out.)

      Mr. Mulcahy further said that he would like to discuss this document with the City
Attorney and Mr. Hayes. He informed the Board that any changes requested by the City
Attorney will be disclosed to the Board.

(Mr. Morics returned.)

      Discussion ensued relative to the length of time the City Attorney will have to review the
document. Mr. Mulcahy informed that he will tell the City Attorney that he is attempting to
have the document for the next monthly meeting of the Board. Mr. Mulcahy is proposing that
the City Attorney have one week to 10 days for review.

       Ms. Stewart mentioned that when Mr. Mulcahy meets with the City Attorney, she would
like the Secretary to be present too.

      The Chair reported to Mr. Mulcahy that "by consensus, you are authorized to proceed on
this matter." The Chair then asked if any Board member disagrees. There was no response from
the members present.

       Review of Board's Policies and Procedures relative to Disabilities

     The Secretary reported that this matter is on the agenda at the request of the Chairman.
The City of Milwaukee Employes' Retirement System has experienced a large increase in the
number of applications for duty disability retirement. This is caused primarily by the following:

      Pikalek Decision
      Older Worker's Act

      ERS believes this will continue and if the appellate courts uphold the DeBraska Decision,
the numbers may increase. In the past two months, ERS has received many letters from the
City of Milwaukee (EBD) challenging our procedures relative to disability. These procedures
have been in place for many years and were developed to implement the law.

      The Secretary said that the Board, at this time, may be interested in having its consultant
review the Board's policies and procedures for disabilities.
      Mr. Mulcahy explained that there are at least five (5) legal issues that have come up with
respect to how these applications are being processed. He said that there is a need that was
discussed to set up some type of clarification in this area so that they don't run into a lot of
unnecessary litigation. This is called preventive law. one is if an Administrative Law

Judge rules concerning a disability area as it applies to whether or not a person is eligible, the
question comes up as to whether or not that should be controlling in terms of the process.

(Mr. Hayes entered the meeting.)

       Mr. Mulcahy went on to say that the Administrative Law Judge decision could be
appealed. There ought to be some way to deal with that. The City has come in with several
requests pertaining to surveillance reports and videos where people may or may not be eligible
for disability pension. That is another area, and another one is of clarification. Another is the
stress area and finally, the cases similarly situated in terms of disability versus vacation pay.
Another area is the amount of longevity pay a member would be eligible for once the time
comes to convert the disability. Mr. Mulcahy said that if the Board wants to avoid litigation in
this area, it would be a good idea to take a look at this area and come up with procedures on it.

       Ald. Murphy agrees with Mr. Mulcahy and asked if the Board can get a copy of the State
audit that recently addressed this area. The Secretary said that he is obtaining a copy. Ald.
Murphy continued to report that he has sent a recent letter to the City Comptroller to conduct an
audit of our own disability procedures. (Ald. Murphy then distributed a copy of a letter to Mr.
Morics, dated September 16, 1996.)

      Mr. Mulcahy asked if the Secretary is holding up all disability pensions. The Secretary
responded in the negative. He informed that the Pikalek Decision is finalized and staff is
experiencing an increase in disability retirements. He informed that the DeBraska case is
different and staff is processing these applications under the current law.

       Chairman Pelzek said that he would like to see a fair and equitable process of disability
applications between the members of the System and the City taxpayers. Mr. Brazgel pointed
out that the disability process is negotiated between the City and the Unions. The Board was
told that it is the "rubber stamp".

      Mr. Mulcahy explained that after his analysis of the procedures, he will inform the Board
what issues need to be dealt with within their scope, the City's scope and the Union's scope.

      The Chair informed that a motion would be in order for Whyte, Hirschboeck to work with
the Secretary and the Board, on a consultant basis, to develop some recommendations regarding
the handling of duty disability cases. Specifically, the cases brought to the Board's attention by

     It was moved by Ald. Murphy, seconded by Mr. McCann and unanimously carried, to
proceed with this project. Whyte, Hirschboeck, Dudek will review the cases before the Board
             regarding the process of duty disability that it is using for approval, along with the questions
             from EBA and some suggestions offered by the City Attorney's office.

                   Mr. Morics said that if this isn't part of the original agreement with Whyte, Hirschboeck,
             he would like to see a contract, a not to exceed figure, what was the substance, and the
             deliverables, etc. He reiterated that this Board is a public body. He feels that a memo of
             understanding be developed and come back for approval.

                    Mr. Mulcahy informed that it is his intent to honor the lower hourly rate and do it on an
             hourly basis, and have that information provided every month so that the Board can terminate
             the relationship with one day's notice anytime they want. He wants to see this case settled. Mr.
             Mulcahy informed that he will be happy to send an engagement letter to the Board, similar to
             the one he did for the rules and regulations. Mr. Morics reiterated the importance of having
             something in writing. Ms. Stewart said that she would like the contract to contain language that
             says this will be expedited.

                    Mr. Brazgel feels that rather than having an attorney involved now, the Committee that
             was formed to deal with these issues should meet with EBA and find out the problem. He
             wants to know what letters were sent by EBA to the doctors. He thinks that EBA is confusing
             this process with worker's compensation. He feels the Board needs to sit down and talk with
             them (EBA) prior to setting this up to see what we need to do in the future.

                   Chairman Pelzek said that he still feels it would be useful for the Board to have some
             information from Mr. Mulcahy relative to the general procedures we are using in terms of some
             of the questions that have been raised.
             Discussion ensued.

                   Ald. Murphy thinks the Committee should meet with Mrs. Dukes, the audit should
             provide some information, and at the same time, entering into a contract negotiation with Mr.
             Mulcahy is not an inappropriate idea. That will take a month anyway. By the time he comes
             back, we could have that in place and maybe we can make a decision then.

                    With respect to Ald. Murphy's letter requesting an audit, Mr. Morics informed that he
             will run the scope passed Mr. Mulcahy as well. He said that there are more parties of interest
             and he does not want to surprise anyone on this. Mr. Mulcahy informed that he will provide, in
             writing, an average hourly rate of the original hourly rate from the letter that he did for the rules
             and regulations, and the contract can be terminated at anytime.

                   Ms. Stewart offered to amend the motion, to Mr. Mulcahy working directly with the duty
             disability sub-committee and the Chair informed that he did not have a problem with that.

Mr. Hayes said to the members, "Remember, you don't have Mr. Langley's approval for any of this."

             The motion passed with Messrs. Carey and Brazgel opposing (6-2). With Mr. Hayes present,
Mr. Mulcahy proceeded to give a summary explanation to Mr. Hayes of what was discussed.

      As another matter of concern, Mr. Carey reported that he has heard a rumor that MPS will
attempt to succeed from this Pension Fund and establish their own. Chairman Pelzek said that
this would be a separate issue if it comes up.

     There being no further discussion on this matter, Mr. Mulcahy was excused from the
meeting at 9:41 a.m.

(The Chairman called a short recess.)

The meeting reconvened and the Board took up item II. C.

                              Joseph Polasky Request for Interest

      The Secretary reported that Mr. Polasky, a former police officer, retired July 16, 1995 and
had previously affirmatively elected to be covered by the terms of the 1994 contract. The
Milwaukee Common Council, on May 14, 1996, passed CCFN 960022, a charter ordinance
which allowed Mr. Polasky and five (5) others to revoke their election.

Mr. Polasky and the others revoked their election in the 30 days provided by the ordinance
(August, 1996) and their pensions were adjusted on the August check. Mr. Polasky is now
requesting that he and the others be given the interest earned by the Fund on their money while
their money was "illegally kept

      Mr. Polasky proceeded to distribute a copy of the legal opinion, dated 3-15-96. For the
record, the opinion concludes:

      "Mr. Polasky claims that he did not know the terms of the 1995-97 Labor Agreement
      and, therefore, the waiver is not enforceable against him. Mr. Nehls does not dispute that
      he did not advise Mr. Polasky of the terms of the 1995-97 Labor Agreement and, in fact,
      states that because he was not a party to the negotiation process, he had no knowledge of
      the benefits in the unsettled agreement. Mr. Nehls does state, however, that he advised
      Mr. Polasky to confer with his Union. There is no indication as to whether Mr. Polasky
      followed this advice or as to the substance of what Mr. Polasky was told relative to the
      benefits in the 1995-97 Labor Agreement. If Mr. Polasky, and those he represents, were
      informed by their Union of the benefits that would be included in the 1995-97 Labor
      Agreement, we would have no difficulty in offering an opinion that the waiver, as
      executed, is enforceable. However, if the pension benefits for 1995 had not been
      negotiated and were, in fact, unknown at the time the waivers were executed, we would
      be of the opinion that the waivers are not legal and enforceable against Mr. Polasky or
      any of the six he represents and, therefore, they may revoke their election."

      Chairman Pelzek asked if the Board has the ability under the Board rules or the law to
provide interest on a payment, such as the one presently before the Board?
       Mr. McCann asked if the common Council had authorized interest back to 1995 and the
secretary responded in the negative. Discussion ensued. Chairman Pelzek asked Mr. Hayes if
the Board has the ability, either under the Board rules or the ERS law, to provide the interest
payment (as requested by Mr. Polasky) or if that needed Common Council action? Mr. Hayes
responded, "here's the thing that I think we have to look at. This was solved by an ordinance.
So, it isn't a matter of ever resolving whether somebody had a right, either in fact or in law,
under the law of the facts, it's a matter of a solution that was arrived at by the passage of an

(Mr. Morics left the meeting.)

      Mr. Carey moved, that Mr. Polasky's request be denied.

      Chairman Pelzek again asked Mr. Hayes if the Board has the authority to do it (pay the
interest). Mr. Hayes responded, "if somebody had a legal right under the ordinance to the sum
of money at a certain time, and that money was not, in fact, paid when the ordinance required it,
we have in the past paid the benefits together with interest from the date it was due. Now, the
problem we have here, is that, it never was determined that somebody had a legal right under
the ordinances as they previously existed. The matter was resolved by passage of another

(Ms. Paretti entered for Mr. Morics.)

      After more discussion, the motion was seconded by Al-d. Murphy and unanimously

(Mr. Polasky was excused from the meeting.)

      It was thereupon moved by Mr. Brazgel, seconded by Ms. Stewart and unanimously
carried, to recess the Regular Board and take up the Investment Committee. Ald. Murphy was
excused from the meeting.

     The Investment Committee adjourned their meeting at 10:51 a.m. The Regular Board
reconvened at 10:59 a.m.

                                 Investment Committee Report

      Mr. McCann, Chairman of the Investment Committee, reported that the Investment
Committee authorized Townsend to invest up to $7.5 million in REITS. The money is to cane
from funding wherever the Pension Board determines it should come from. Possibly Nicholas-

      Mr. McCann made a motion to approve the Investment Committee Report. The motion
was seconded by Mr. Carey. Ms. Stewart added to the report, that the investment is for the
purpose of funding the Greystone project. She explained that it is not permanently $7.5
million. The Secretary said this money will be brought into the real estate market and then
when the Greystone project is scheduled, to draw down the REITS. Mr. McCann pointed out
that this is all in the overall plan. The motion was unanimously carried.

     Mr. McCann reported that the Investment Committee also had a presentation from Mr.
Kevin Lynch, of the Townsend Group, relative to the following topics:

      Real Estate Separate Account Manager
      Real Estate Portfolio Performance
      Update on the REIT Investment Program
      Possible co-investment with AMB - L.A. Industrial Portfolio (LAPCO).

      Refer to the Investment Committee minutes under the same date (9-23-96) for detailed
discussion on each of the above listed topics.

(Messrs. Brazgel and Madison returned to the meeting.)

                            Retirements, Death Claims and Refunds

     The Secretary presented lists of activity since the last Board meeting, copies sent with
meeting notice and made a part of these minutes.

         Retirements for the months of August and September, 1996.

                      Active Death Benefits reported             None.

                      Retired Death Benefits reported
                        July, 1996                               $ 10,706.06
                        August, 1996                             $ 8,215.48

         Refund of Member Contributions paid -
           July, 1996            $121,681.51
           August, 1996           $181,670.71

     It was moved by Ms. Paretti, seconded by Mr. Brazgel and unanimously carried, that the
above indicated retirements, death claims and refunds be approved.

                                      Conference Requests

     The Secretary reported that staff is requesting authorization from the Board to use
Security Lending Revenue to fund attendance by Board members to attend the following

      James A. McCann - International Foundation of Employee Benefit Plans - 42nd Annual
      Employee Benefits Conference - San Diego, CA, November 8-13, 1996. The estimated
      cost is $2,200.00.

      Mr. Carey also requested to attend this conference. His trip will be funded through the
      Budget for one Board member to attend a conference. The Secretary indicated that
      ground transportation will be supplemented through Security Lending.

       The Board also approved one Board member to attend the Institute for
       International Research, 5th Anniversary Public Fund Boards Forum, San
       Francisco, CA, November 17-19, 1996.

     The Chair directed to approve these requests and to use Security Lending Revenue. There
were no opposing votes.

                           Scheduling Quarterly Manager Meetings

       The Secretary reported that in the past, the Pension Board would schedule two Special
meetings each quarter with its managers and evaluators. During the past two years, we have
scheduled semi-annual meetings with the understanding that additional meetings could be
called if necessary. The Pension Board has added additional managers and further diversified
its investments. At this point, it is necessary to again look at the structure of our manager

      The Board may wish to consider one of the following options:

      Semi-annual whole day meetings, or

      Two semiannual half-day meetings either back-to-back or staggered one week apart.

      The Board Chairman has also asked that the Board consider switching the performance
review meetings from Special Board meetings to the Investment Committee.

      Chairman Pelzek directed that this matter be referred to the Investment Committee for
further recommendation.

                       EBD Request for Re-examination re: Bonnie Newell
      For the record, Bonnie Lofquist (Newell), a police officer since 7-2081, applied for duty
disability on November 15, 1995. Employee Benefits Division supplied a complete copy of
their medical file and a copy of the accident report.
       Both doctors appointed to the Medical Panel certified as to her disability as a result of the
cited injury at a specific time and place while in the performance of duty.

      Before the Board now is a request from Mrs. Florence Dukes for re-examination along
with a letter from Dr. Stiehl that he has changed his opinion from his original certification.

      The City charter provides in Section 36.05-3-c-l-b: "...The board may at any time request
information concerning such person or investigate his

status or request a medical examination of such person..." The Board may ask for a re-
examination at this time, or hold for the annual review.

     Upon being asked, the Secretary informed that Ms. Newell is up for her annual
reexamination in February, 1997.

      Mr. Brazgel expressed concern that the Board has a letter from EBD that says they are
requesting re-examination, however, the Board doesn't have the letter that EBA sent to the
physician asking for that statement. The Secretary confirmed that ERS did not receive a copy
of that letter.

       Mr. Brazgel then expressed concern that the Board's procedures is that everything goes
through the Pension System, and he is asking now if EBD is contacting the doctors on their
own. The Secretary responded in the affirmative. Mr. Brazgel asked "Why?" The Secretary
responded, because the Board has not taken the position that there will be no contact between
the City and the doctors, nor the Union and the doctors. Further discussion ensued. Ms.
Stewart added to Mr. Brazgel's concern, that this doctor (Dr. Stiehl) has reviewed 150 cases
and he was not totally clear on this (process for duty disability). Chairman Pelzek said that this
raises the point, of what do we do with the other 150 cases that he has seen already.

    This matter was referred by the Chairman to the Litigation Committee (Messrs. Brazgel,
McCann, Morics and Pelzek; also, Charles Mulcahy and the Secretary).

      Mr. Brazgel feels that we should meet with EBA to find out some more information
before we make a final decision. (There was no one from EBA present to ask any questions.)
More discussion.

      Mr. Hayes stated that the problem he sees is something he's brought up years ago, is that
you allow the parties to communicate as to the legal standard as to the examination or whatever,
and you don't know whether these parties are giving erroneous information or not.

      After more discussion, Chairman Pelzek said that this matter is being referred to the
Litigation Committee.

                         Communication from Bradley DeBraska, MPA
     The Secretary reported that the correspondence, dated August 5, 1996, covers the
demotion in work of Officers Edward Connelly and David Schildt.

      Mr. DeBraska is requesting:

            "In any event, the MPA requests this correspondence be made part of the Boards
            (sic) Regular Meeting Agenda to facilitate an understanding upon a request to be
            made whole in retirement allowance by either officer in the future. Thank you for
            your consideration in this request."

(Messrs. Wolf and Nichols entered the meeting.)

      After discussion on this matter, it was moved by Mr. Carey, seconded
by Mr. Brazgel and unanimously carried, to receive and place on file and also attach this
correspondence in each of the two member's files.

                  Communication from City Attorney on DDR Examinations

      The Secretary reported that Mrs. Heidi Wick-Spoerl, Assistant City Attorney, has
provided a letter, dated August 19, 1996, outlining some of the potential problems in our
current procedures for duty disability examinations.

      Mrs. Wick-Spoerl recommends some suggestions made at the National Association of
Public Pension Attorney's Conference.

    The Secretary said that a motion would be in order to refer this communication to the
Member, Intergovernmental Relations and Legislative Committee, or the Board's Consultant.

       Mr. Carey expressed concern with respect to this matter being referred to the above
mentioned committee. He was under the impression that, that committee would handle
legislative matters and did not feel this subject was a matter of legislation.

      After more discussion, Ms. Paretti asked if this information could be communicated to
the City and ask them to consider these points as well. Mr. Carey also wants staff to review this
information and make thorough recommendations to the respective committees.

      Mr. Brazgel explained that the Board is already having an attorney review this type of
information to see if the Board can do anything or if this whole disability issue is negotiated.
Mr. Hayes said that you haven't asked the City Attorney for this. Mr. Carey said, "No, outside

     Ms. Paretti assumes that the City Attorney would not have sent this information to the
Board without saying that these are subject to bargaining.
       Mr. Hayes explained that this is material that was made available to him while he
attended the National Association of Public Pension Attorneys, and they had a session related to
disability applications. They found nationally that plans that have more than just a barren
certification, that if they had a questionnaire, this forced the doctors to go through an analytical
process that is necessary in order to certify a disability and consequently, avoided the problems
you have seen where the doctors say they don't know what they are doing. What they presented
out there, was a sample questionnaire that they felt would be something you could start with
and work from to develop a questionnaire for your panel physicians. Even though you don't
select the panel physicians, you could require them to go through this process in addition to
certifying, and it would fill a gap. He said he made it available to Heidi so that she could make
it available to the Board for whatever work they are doing.

      After discussion, the Board asked to receive a copy of the document handed out from the

       Mr. Hayes informed that these are administrative items. He further pointed out that the
administration of this law is the responsibility of this Board. The current form being used to
certify, is in the very terms of the legal standard. Some discussion followed.

     Chairman Pelzek said that this matter is referred to the Litigation Committee (Messrs.
Brazgel, McCann, Morics, and Pelzek; also, Charles Mulcahy and the Secretary).

      It was moved by Mr. Brazgel, seconded by Ms. Stewart and unanimously carried, to take
the agenda out of order.

                                  Retiree Catch-Up and COLA

      The Secretary reported that on July 14, 1995, the Common Council passed File No.
942016, a charter ordinance providing for retiree Catch-Up and COLA. This ordinance
excluded some retirees (list provided members). Since its passage, the aldermen, mayor, unions
and the ERS office have received numerous calls and sent many letters to those not included.

      The Secretary informed that members received a copy of a draft of a letter to be sent to
Mrs. Dale Marquard (widow of a disability death). Also, members received a copy of a letter,
dated July 29, 1996, received from Messrs. Thomas Casper and Dennis Eigenfeld, regarding
being classified as deferred and being excluded from the 3.0% Police COLA.

      The Secretary reported that the Chairman and Mr. Brazgel have asked that this matter be
on the agenda. Mr. Wolf was present for this item.

        Members discussed that career employees who defer are not eligible. Mr. Brazgel
mentioned that the Council was going to take care of the bulk of retirees now and look at these
little groups later, and he has not heard of anyone looking into this issue thus far. The Board is
pressing it, but nothing is getting done by the Council. Mr. Brazgel went on to report that the
Board has been told by the Special City Attorney that the Board has to treat people equally
within the Fund, because they are all representatives and these groups of people are not being
treated equally. He feels the Council has "deaf ears" because of all the other lawsuits. This
needs to be looked at. He would like this to be an agenda item for next month.

      Chairman Pelzek informed that the response to the Council contained some options, and
one was to cover all persons under the Catch-Up and COLA. The Chair would like to send
another letter to the Council, again renewing our recommendation, suggestions or options, and
again request that all persons be covered. It's grossly unfair to persons with long service, or left
out years ago and found they are not eligible for this benefit and that it may also be illegal.

     Mr. Brazgel said that he would like to have, along with the letter, a more detailed report
showing who was out there, if we have numbers, and if there's a cost estimate and push that.

      Mr. McCann said he had a discussion m this with the Mayor, at his request, and Mr.
McCann mentioned the point that that was one of the things that was really a problem with this,
was all the people who were left out of this. We should be taking care of it, but it seems to be
not moving. Mr. Carey also informed that at the last meeting, we sent a letter to Ald. Kalwitz
and Ald. Pratt informing them, based on the previous verbal contact with them, about this, and
this was sent down to them also. He said that he is all for sending another complete letter to all
the aldermen, because he thinks some of these aldermen are confused on this and they are
getting bad information.

      Mr. Brazgel said that he would like to see this deferred retirement broken to show
deferred retirees and deferred retirees with 25 years public safety and 30 years general

     Chairman Pelzek said he thinks originally we put our heads together and said it should be
everyone, and that's the point we should keep in mind here.

      Ms. Paretti said that she sees this as two issues. One, is the administrative clean-up issues
where you might have some individuals who fell through the cracks based on some arbitrary
decision that was made. The second would be whole groups of employees that were not
included, and she questions whether it's the job of the Board to advocate for the employees as
opposed to being a trustee of the funds, and perhaps the appropriate forum for the individuals,
would be to go to the current negotiators of their prospective unions that they were members of.
 Discussion ensued.

      Chairman Pelzek requests to send another letter to the Common Council regarding this
issue as far as the Board's recommendation or suggestion or options to cover all the members in
the System. Also, he would like to refer this question of non-coverage for 2,000+ people to the
Member, Intergovernmental Relations and Legislative Committee, and to also include this
matter on the next month's agenda for possible further action. The Chair is also referring the
Marquard draft letter to the committee.
       Mr. Wolf presented his case, whereby he retired after 32 years at the age of 58 and is not
eligible. His wife, who worked 7 years and retired at the age of 62, was eligible. Mr. Wolf
feels he's on the outside looking in.

      Some discussion followed. Mr. Wolf was excused from the meeting.

               Communication from Florence Dukes re: Thomas Kondrakiewicz

       The Secretary reported that Mr. Kondrakiewicz applied for a duty disability in 1995 and
withdrew the application because he was 52 years old and he would not receive a pension as a
result of a worker's compensation offset. The application listed injuries to both his back and
knees. Mr. Kondrakiewicz is now applying for a life disability benefit and is only citing injury
to his back that he claims as disability.

      In a letter, dated September 17, 1996, Mrs. Dukes, Director of Employee Benefits
Division, is refusing to appoint a doctor until Mr. Kondrakiewicz lists all injuries he has
sustained in his employment.

      Mr. Brazgel again expressed concern that this matter involves EBA and yet no one from
that Department is present at this meeting.

      The Secretary informed that Heidi Wick-Spoerl, Assistant City Attorney, indicated that
someone can, there is nothing preventing someone to cite one specific injury (Mr.
Kondrakiewicz had more than one injury). EBA wants this confirmed from the City Attorney's
office. The Secretary said he could not get back to Heidi for this. He thinks it will be handled
by the City Attorney sending a letter to EBA about this. He found this out last Friday

       It was moved by Mr. Brazgel, that EBA be directed to appoint a doctor, and if the City
Attorney says otherwise, than it's otherwise. Mr. Carey seconded the motion, with the caveat
that the Staff follow through on this.

      Mr. Hayes then asked, "Are you referring this other thing to the City Attorney, Bob, is
that what you are saying, this question?" The Secretary responded that he is going to have Heidi
confirm to EBA. Mr. Hayes then asked "Are you referring it to the City Attorney?" The
Secretary responded in the affirmative.

      Mr. Brazgel asked if that is going to hold up this application then? The Secretary
responded, "I believe that, Yes it will." More discussion. Mr. Brazgel mentioned that an
individual could receive a worker's comp claim for a specific injury, yet file for duty disability
on another injury, therefore, he doesn't have to claim that he received a worker's comp claim for
partial disability for a disability he is not filing for.

      Mr. Hayes said, "You do whatever you want, but I'm telling you, that if you want our
office to answer something, you have got to refer it. It's not going to be done on some informal
conversational basis."

      Mr. Brazgel said to Mr. Hayes, "We have decisions from you on worker's compensation
claims, and your decision is already there that says, if a person files for a disability and it's
regarding an injury that they received a worker's comp claim, they have to pay back the
retirement system, correct?" Mr. Hayes responded, "Through an offset. I don't know what the
answer is."

      Ms. Paretti asked, "Can we ask Mrs. Dukes on what legal basis she is failing to appoint a
doctor?" The Secretary informed Board members that Richard Reiter, of EBA, wants this
confirmed from the City Attorney's office.

        Chairman Pelzek clarified, that the motion is to direct EBA to appoint a doctor (not refer
it to the City Attorney's office). The motion was unanimously carried.

                  Request to hold Application for Duty Disability Retirement
                                     for Earl Ridgeway

       The Secretary reported that Mr. Earl Ridgeway has applied for a duty disability to be
effective September 10, 1996. He has since reapplied for a December 10, 1996 effective date.
Since Mr. Ridgeway's original application, he has been advised that he needs corrective surgery
on a work-related injury he sustained this year. He is requesting that the Annuity and Pension
Board hold his application until he has had this surgery.

      Subsequently, the Secretary informed that Mr. Ridgeway, on Thursday, September 19,
1996, withdrew his application for duty disability retirement. There is no action required by the
Board on this item.

                            Kenneth Elias Notice of Injury and Claim

     The Secretary reported that the ERS has been served with a Notice of Injury and Notice of
Claim for Kenneth Elias, received August 23, 1996 (copy in Board's packet).

      The Secretary stated, as Board members may recall, Mr. Elias was dismissed from the
DeBraska case for not filing a claim. This claim then is similar to the others in the DeBraska
case and we have mailed a copy to both the City Attorney and Friebert, Finerty and St. John.

      Chairman Pelzek requested that this matter be on the agenda for discussion.

      The Secretary then reported on two letters, both dated September 11, 1996, that were
received from Mrs. Heidi Wick-Spoerl, Assistant City Attorney on this matter (furnished
members with their agenda packets). Mrs.
       Wick-Spoerl's letter to Aetna transmits this claim to the insurance company. Her second
letter to ERS office confirms that the claim raises similar issues as currently being litigated in
the DeBraska case. She advises that we retain Friebert, Finerty and St. John for this case. She
is also asking that the Annuity and Pension Board authorize the City Attorney to represent the
City of Milwaukee in this matter. A third letter, dated September 17, 1996, was received from
Aetna (also in the Board's packet).

       Discussion ensued. Mr. Carey expressed concern on when this is all going to end. In
other words, if there is an individual next time that comes in, the Board again hires special
counsel. It was his understanding that the DeBraska case is being processed and is going to be
on appeal. He asked why we are initiating another case on it. He said that the court ruled that
these individuals are not to be included in this and is wondering why we are starting all over on
this again.

      Mr. Hayes said that he filed suit as an individual; he was dismissed because the court held
that he did not file a claim timely.

      Mr. Brazgel said that he would like to have two motions on this, and moved, to go ahead
with the recommendation to hire this outside attorney, because the City Attorney feels there is a
conflict. The motion was seconded by Mr. McCann.

      Mr. Hayes explained that there is one other case, Dunn. This case was referred to
Friebert, Finerty. He said that Friebert entered into a stipulation then with Plaintiff's counsel to
hold his position in abeyance until the DeBraska case was decided.

       Chairman Pelzek said that he is considering consolidation, because Cordelia is gone.
(Cordelia was with Friebert, Finerty.) Matt O'Neill (from the same law firm) was before the
Board in July, and at that time the Board had asked him for sane information. He has not
provided the information from the July meeting that the Board was asking for. The Secretary
said that he did not follow-up formally with Matt O'Neill for this information. No claim has
been filed by the individual yet.

      Chairman Pelzek asked Mr. Brazgel if he wanted to hire Whyte, Hirschboeck as the
outside attorney. Mr. McCann said that the Board should follow the recommendation of the
City Attorney for Friebert, Finerty. They have already been working on this case. Concern was
expressed that the new individual assigned to this case, hasn't even responded to the Board's
request yet.

     Discussion ensued as to the time factor on this. Mr. Hayes mentioned that it would be
deemed denied if the Board did nothing.

      Mr. Brazgel withdrew his motion and Mr. McCann was in agreement (he seconded the
motion). The Chair reported that there is a request by the City Attorney's office to represent the
City in this matter. Mr. Brazgel asked if we were going to contact somebody on this. Chairman
Pelzek felt that it would be good to hold that also, just to hold that other issue until we decided
what to do on this one. Mr. Hayes said that if you don't approve that, they have to go to the
Council to get outside counsel. Chairman Pelzek stressed that the Board isn't denying it, they're
just holding it. Mr. Hayes said, III understand, but if the lawsuit is filed, the Council meets
once a month. That gets to be a problem if you've got to answer the thing." Chairman Pelzek
said that it hasn't been filed yet.

      Mr. Carey then asked Mr. Brazgel if he wanted to hold it and make a separate one for the
City Attorney's request. Mr. Brazgel responded, "I'm

only asking that if we hold ours, at least there be contact with Friebert, Finerty before we even
come back with ours to see if they want to take this."

       The Chair asked if this was before we approve the City Attorney's request also? He asked
if that was Mr. Brazgel's motion or not. Mr. Brazgel responded, "My motion was 'Us'."

      It was thereupon moved by Mr. McCann, seconded by Mr. Carey and unanimously
carried, to authorize the City Attorney to represent the City in this case. (Mr. Brazgel's motion
was withdrawn.)

              Raymond M. Banach Notice of Circumstances and Notice of Claim

       The Secretary reported that Mr. Banach has applied for a service retirement to be
effective October 1, 1996. Mr. Banach is a Police Sergeant with more than 42 years of service
and would have accrued 105.62% of his final average salary. The pension law, however,
provides a maximum retirement for police officers after November 3, 1988, of 100% of final
average salary, and for service after July 1, 1989, of 90% of final average salary.

      The Secretary said that this claim, received September 16, 1996, is one of diminution of a
contractual right. He said that the Board could take a position on this matter and/or refer it to

     Discussion ensued with respect to a similar case that was before the courts. Chairman
Pelzek said that the judge ruled that you could not diminish the benefit in that case.

      It was moved by Mr. Carey and seconded by Mr. McCann, to refer this matter to the City
Attorney for an opinion. The Board wants the answer by the next meeting so we are not stuck
behind the eight ball on this as far as the time frame on this.

      With respect to a claim discussed earlier in the Board meeting relative to interest, Mr.
Brazgel said that we have an individual who may be entitled to 105.62%, and if this goes to
court a year or two down-the-road and if this individual wins, are they entitled to interest or
does it start after the court case is finished? He said that we should let this individual know up
front what's going to happen. If he's due to it now under diminution of benefits, the DeBraska
lawsuit, is he not entitled to interest from now, from his retirement date? Chairman Pelzek said
that it's a good question and asked Mr. Hayes how fast we can get it. Mr. Hayes responded, "I
do my best." He further stated that he is going to have to give the Board a response timely
enough so they can make all the arrangements. It was pointed out that this individual can't start
a lawsuit at this time. He has to give the Board an opportunity to respond to the Claim. Mr.
Hayes said that it is a precondition to starting a lawsuit that the Claim be denied.

       Upon being questioned what Mr. Banach will be paid, the Secretary said that he's going to
retire October 1st and will get paid 90%, because that is what the law says. We have the judge's

      Mr. Brazgel said that if the City wins the lawsuit, it goes into effect immediately, before
the appeals. But when the City loses the lawsuits, we have to wait for all the appeal processes.
How does that work? Mr. Hayes responded that he could give the Board the answer if they
want it. He said that the answer was in the DeBraska case, when the order was being approved,
the argument was over precisely that. Whether that should be stayed or whether that should go
into effect immediately. The court decided it. Further discussion ensued with respect to some
other cases.

      Mr. McCann asked, when the DeBraska case was going on, was there anyone else with
over 100% benefits involved? Mr. Brazgel said, "No." Mr. McCann then asked, isn't there a
public policy question here for something about over 100%? Chairman Pelzek said that's
policy, this is a contractual right question.

      Chairman Pelzek clarified that the motion is to refer this matter to the City Attorney for
an opinion. The motion was unanimously carried.

                            Letter from Mr. Ron Szymanski on PSO

      The Secretary reported that before the Board is a letter, dated July 25, 1996, from Mr.
Ronald Szymanski, a Heavy Tractor Driver for Municipal Equipment. On January 1, 1996, he
qualified for election of a protective survivorship option. He was over 55 and had more than 30
years of creditable service. An amendment to the City Charter allowed a period of time to June
30, 1996, to make this election. Mr. Szymanski contacted the ERS office on March 8, 1996,
requesting an estimate. This request was misfiled and not completed until July 1, 1996, and
mailed to Mr. Szymanski.

      The Secretary said that staff's recommendation is that the Board waive the time limit.
This was caused by clerical error and Mr. Szymanski should not be penalized.

     It was moved by Ms. Stewart and seconded by Mr. McCann, to waive the time limit. Mr.
Carey added, based on the recommendation of staff.

     Mr. Hayes said, wait a minute, just remember there's a difference between errors and
omissions and benefits under the Act. For example, Grady Turner, an individual who claimed
he took the wrong option and was misadvised by the Board's representative, his relief was not
to get his pension changed, it was to get damages based on the alleged errors and omissions of
the staff and it's covered by the policy. If somebody in the office does something that's an error
or omission, that doesn't mean the law changes and that you are eligible for a PSO, under
circumstances you wouldn't otherwise be eligible. It means, in most instances, that there's an
independent right to damages

that you get the benefits that are prescribed. Mr. Hayes said that he doesn't feel the Board ought
to waive the provisions of the Act. It's a legal issue whether you have the authority to waive to
provisions of the Act based on your own staff's errors and omissions. There is a remedy for that
and it doesn't have to do with benefits; it has to do with damages and that's why you have a
fiduciary policy.

      Mr. Brazgel mentioned that counsel is telling the Board that this would be nice if we
could do this, but legally this individual is stuck with no survivorship, because he didn't come
in because of an error on our part. The individual has the right to sue us for damages, because
of our error, and if the individual dies, the spouse gets no survivorship. more discussion. Mr.
Hayes said that it's a sensitive issue. The issue is, can the Board use errors of its staff as a
means of changing the terms of the Act to provide benefits when the Act doesn't provide them.
He said that he isn't prepared to tell the Board they can do that.

      Mr. Brazgel informed that the motion was made to let this individual sign up for the PSO,
which the City Attorney may say it's illegal, but at least they have a PSO, and then advise the
individual that we'll send it to the City Attorney for an opinion, and they can tell us "no", and
the individual can file the lawsuit.

       Ms. Paretti pointed out that the individual also has a responsibility to contact the office.
He waited three and a half months and didn't even send a follow-up letter or contact staff
relative to what happened to his March estimate.

       Mr. Hayes said, "there's another question, as fiduciaries, you are personally responsible."
Mr. McCann said that common sense isn't all that common. This to him is just common sense
that the Board would authorize this waiver. He said that he, as a Board member or a fiduciary
or anything else, is willing to take any responsibility for doing this.

     Chairman Pelzek said that there is a motion on the floor to waive the time limit. The
motion carried with Ms. Paretti being recorded as voting No.

       Mr. Hayes further stated that, "fiduciary liability is a personal liability of the fiduciary, it's
not a liability of the System. You can't use the assets of the System to satisfy your personal
liability." Mr. McCann said that, "I've got my attorney on a retainer basis."

      Ms. Paretti asked staff to check its procedures and also asked how do these fall through
the cracks. The Secretary proceeded to explain to Ms. Paretti what happened.
                 Loomis-Sayles Contract and Proposed Investment Guidelines

The Secretary reported that the contract between the City of Milwaukee
ERS and Loomis-Sayles will expire on November 30, 1996. Loornis-Sayles

continues to be the Board's best performing fixed income manager. Staff recommends renewal
of this contract. The Board may consider authorizing Mr. Larry Davanzo, Asset Strategy
Consulting, and Mr. Pat Cronin, ERS Financial Manager, to negotiate a renewal of this

       The Secretary also reported, that the Annuity and Pension Board, at its meeting of
September 5, 1996, discussed altering the current investment guidelines for Loomis-Sayles.
Asset Strategy Consulting's draft of new investment guidelines for Loomis-Sayles were
discussed in a conference call with Loomis-Sayles and Patrick Cronin on September 18, 1996.
During the conference call, Loomis-Sayles proposed changes in the draft guidelines which will
be reviewed by Asset Strategy Consulting and ERS staff. The review process will include
modeling the ERS fixed income portfolio's exposure to various sectors in the bond market and a
revision of the benchmark used to measure the performance of Loomis-Sayles. The results of
this review will be scheduled for the November 25, 1996 Board meeting.

     It was moved by Ms. Stewart, seconded by Mr. Carey and unanimously carried, to
approve the renewal of the contract for Loomis-Sayles.

                               Request for Proposal Schedule

       As a matter of information, the Secretary reported that on September
16, 1996, the Employes' Retirement System received proposals from the following
providers of Global Custody Services (Bank Custodian):

Bankers Trust
Chase Manhattan Bank
Mellon Trust
Northern Trust Company
State Street

     ERS staff and Asset Strategy Consulting are in the process of reviewing these proposals.
We anticipate interviewing 3 or 4 candidates during the week of October 14, 1996. The Board
may consider one of the following options for the interview process:

     1.    Full Board participation in the interview process.

     2.    Sub-Committee of the Board participates in the interview process.
      3.    ERS Staff and Asset Strategy Consulting conduct the interview process.

       Each interview is expected to be 2-3 hours in length in order to gain
a full understanding of the potential transition process and on-line reporting capabilities of each
custodian. An expected recommendation and final decision would be at the October 28, 1996
Board meeting.

     With respect to the Auditor, the Secretary reported that the RFPs were completed and
mailed approximately September 20, 1996, and are due back November 1, 1996.

       Chairman Pelzek requested that this be at the Investment Committee and the Board will
then approve. The date of the Investment Committee meeting will be October 16th at 9:00 a.m.
and it will be all day to 4:00 p.m. Mr. Brazgel, Mr. McCann and Ms. Stewart can make the
meeting. Mr. Carey will be out-of-town. Mr. Morics has a conflict, but may be able to get out
of it.

                 Conferring with Legal Counsel concerning potential litigation
                           where the Board may likely be involved

      The Secretary reported that the Annuity and Pension Board may vote to convene in closed
session on this item, as provided in Section 19.85 (1)(g), Wisconsin State Statutes, to confer
with legal counsel concerning strategy the Board may adopt with respect to this litigation. The
Board will then reconvene in open session following the closed session.

     For the record, the Secretary reported that Board members received information in their
packet relative to the following:

      Actuarial Contract. The contract between the City of Milwaukee Employes' Retirement
System and the Wyatt Company was effective January 1, 1994 for a period of five years unless
terminated sooner as provided. The contract may be terminated at any time by the Board.

       The January 1, 1995 Actuarial Valuation produced in September, 1995 reflected a
liability for the Retiree Catch-Up and COLA that was passed by the Common Council on July
14, 1995 of approximately $124 million. This was the number that the actuary had provided
the City in several estimates and the City had insisted that it not be exceeded. The January 1,
1996 Actuarial Valuation reflects an additional $77 million for this liability.

      ERS asked the Actuary to reconcile this difference and Deloitte and Touche has held up
the audit until a reconciliation is received. Before the Board are two letters from the Wyatt
Company that attempt to explain the difference; they are unsatisfactory. During a telephone
conversation with Mr. Paul W. Robberson, Consultant, Watson/Wyatt, it was admitted that the
difference was caused by a programming error.
      ERS staff believes that the error is of such magnitude, that the contract should be
terminated and the matter sent to the City Attorney to determine if any grounds exist for legal

      ERS also noted that the original Actuary for this account was Mr. Robert Barnes. Mr.
Barnes had more than 20 years of experience with this Fund. He was followed by Mr. Norman
Losk, who produced the erroneous numbers. Mr.

Losk was followed by Mr. Robert Ryan, who has been transferred to Dallas.
He will be followed by an Actuary yet to be assigned. The support staff over this period of
time, has changed drastically and we are not receiving the level of service we had received in
the past. This, we understand, is part of Watson/Wyatt's downsizing.

      The Secretary said that a motion would be in order for the staff to immediately send out
an RFP for Actuarial Services, and to also send this matter to the City Attorney's office for
review. The contract should be terminated contiguous with the selection by the Annuity and
Pension Board of a new Actuarial firm.

      It was moved by Mr. Carey and seconded by Mr. Brazgel, that the Board convene in
closed session pursuant to 19.85 (1)(g), Wisconsin State Statutes, to confer with legal counsel
concerning legal strategies with respect to this litigation.

      The motion prevailed by the following vote:

AYES:       Members Brazgel, Carey, Madison, McCann, Paretti, Stewart and Pelzek.

NOES:       None.

      Board members proceeded to convene in closed session.

     After the discussion, Mr. Carey made a motion, seconded by Ms. Stewart and
unanimously carried, to convene in open session.

       The Chairman reported that the Board met in closed session with its legal counsel, Mr.
Thomas Hayes, and that a motion was made to send out the RFP for Actuarial Services as soon
as possible. The motion passed. Another motion was made to refer the Wyatt letter regarding
the additional liabilities (9-11-96) to the City Attorney and to ask for advice and counsel on
how the Board should proceed. Also, a letter should be sent to the Wyatt Company explaining
that the numbers are not acceptable.

                                         New Business

      As a matter of information, the Secretary discussed Wendolyn Tanner, a police officer
killed in the line of duty the beginning of September, and advised the City Attorney the
following day to respond to a legal opinion request (can benefits be paid to the unborn child and
what documentation must be submitted).

                                        Medical Reports

Medical Council Report (August)

As a matter of information, the Secretary reported on the Disability
Retirements from the August 15, 1996 Medical Council meeting which were

accepted by the Secretary under resolution at the July 31, 1996 Board meeting as follows:

                     New Applications - ordinary Disability                                         Recommend

                     Edward Tetzlaff (53138)                                                        Approval
                       eff. 7-10-96

                     Jesse Zuniga (38919)                                                           Approval
                        eff. 8-2-96

                     Ronald Izydor (37450)                                                          Approval
                       eff. 9-2-96

                     Robert Plechas (41202)                                                         Approval
                       eff. 7-12-96

                     Richard Lee Johnson (52872)                                                    Approval
                        eff. 9-7-96

                     Re-examinations - Ordinary

                     Ovid LaPlante                                                                  Approval
                     Yvonne G. Cruickshank                                                          Approval
                     Rufus Powell                                                                   Approval
                     Charles Forney                                                                 Approval
                     Gregory D. Lewis                                                               Approval
                     Frank Prisuda                                                                  Approval
                     Richard J. Grzeca                                                              Approval

                     Re-examinations - Duty Disability

                     Ronald A. Lewandowski                                                          Approval
                     Jerry Lutz                                                                     Approval

               Medical Council Report (September)
                     New Applications - Ordinary Disability

                     Laura Moore-Rainey (38731)                                                  Approval
                       eff. 8-13-96

                     New Applications - Duty Disability

                     Cleo Alexander (45715)                                                      Denial*

                     George Korkos (58623)                                                       Denial*

*Mr. Alexander (effective 02-22-96) was approved for ordinary Disability Retirement, and Mr. Korkos
(effective 08-24-96) was approved for Limited Payment Ordinary Disability Retirement.

                     Re-examinations - ordinary

                     Flowers Nash, Jr.                                                           Approval
                     Laurence J. Bruch                                                           Approval
                     Richard H. Wolter                                                           Approval

                     Re-examinations - Duty Disability

                     Robin Drezdon                                                               Approval
                     James E. Krutke                                                             Approval
                     Aubrey Walker                                                               Approval

     It was moved by Mr. Brazgel, seconded by Mr. McCann and unanimously carried, to approve the report as
submitted by the Secretary for the August Medical Council meeting, and to accept the recommendations of the
Medical Council for the September meeting.

Medical Panel Physicians - Fire

      The Secretary presented certifications of the Fire Medical Panel Physicians relative to Duty Disability
Retirement as follows:

                     Re-examinations - Duty                                                      Recommend

                     Warren S. Hornik                                                            Approval
                     Willie Hyche                                                                Approval
                     Dana M. Schimke                                                             Approval
                     Robert F. Shaw                                                              Approval
                     Aldwin Taylor                                                               Approval
                     Charles L. Zacharias                                                        Approval
                     Re-examinations - Duty (Heart & Lung T-aw)

                     Bruce J. Dalton                                                             Approval
                     Thomas A. Davey, Jr.                                                        Approval
                     Norman H. Kadow                                                             Approval
                     Mitchell H. Perry                                                           Approval
                     Oscar W. Pollnow                                                            Approval

Medical Panel Physicians - Police

      The Secretary presented certifications of the Police Medical Panel Physicians relative to Duty Disability
Retirement as follows:

      New Applications - Duty                           Recommend

      Patrick Ellis (SP-32268)                        Approval
      eff. 10-4-96

                      Sandra J. Ross (SP-49313)                                                   Approval
                        eff. 8-29-96

                      Ada Wright (SP-42389)                                                       Approval
                        eff. 8-30-96

                      Richard L. Thompson (SP-51374)                                              Denial

                      Re-examinations - Duty

                      Melvin L. Marshall                                                          Approval
                      Joseph D. Pintor                                                            Approval
                      Stanley A. Strzykalski                                                      Approval
                      Daniel E. Trampe                                                            Approval
                      Paul M. Wroblewski                                                          Approval

                Special Three-Physician Panel

     The Secretary presented certifications of the Special Three-Physician Panel relative to the 90% Enlarged Duty
Disability Benefit as follows:

      Re-examination - (90% Enlarged Duty Benefit)               Recommend

      Paul R. Hibbard (Police)                        Approval
      It was moved by Mr. Brazgel, seconded by Mr. Madison and unanimously carried, to accept the
aforementioned recommendations of the Fire and Police Medical Panel Physicians and the Special Three-Physician

      Some discussion ensued with respect to the age requirement for re-examinations.

Fire Annuity and Benefit Re-examinations

      The Secretary presented the reports and certifications of the Fire Department Medical Panel relative to duty
disability retirement from the Fire Annuity and Benefit Fund as follows:

                       Re-examinations - Duty                                                     Recommend

                       William Bellin                                                             Approval
                       William E. Carmody                                                         Approval
                       Fredinand Toepfer                                                          Approval
                       Werner E. Weissenborn                                                      Approval

     It was moved by Ms. Stewart, seconded by Mr. Madison and unanimously carried, to accept the
aforementioned recommendations of the Fire Department Medical Panel.

      It was discussed to refer the medical examination policy to the Litigation Committee
(beneficiaries over a certain age not to be examined any longer and to submit a personal
physician report).

                           Duty Disability Suspension - Vernon Drew

       The Secretary reported that Mr. Drew is a firefighter on duty disability since April 28,
1988. He is currently scheduled for re-examination. He has been seen and certified by the
doctor appointed by the Fire Union. He has scheduled and missed two appointments with the
City doctor. ERS staff has attempted to notify Mr. Drew by both registered letter and regular
mail, that if he does not notify ERS office of scheduling and keeping the appointment, the
Pension Board would discontinue his benefits, as provided in Section 3607-1 until he consents
to the examination.

      Ms. Stewart asked if we received Mr. Drew's return receipt from the post office. The
Secretary responded in the negative.

      It was directed by the Chair to hold this matter to October and put a final notice on his
pension check that this will be final payment, unless he complies, and also notify the
Milwaukee Professional Firefighters' Association.

                      Job Description for Independent Person (Examiner)
      The Secretary reported that last year, the Board asked that staff develop a job description
for the Independent Person (hearing examiner) designated by the Board to perform reviews and
conduct hearings. Before the Board is a draft of a job description for that independent person.

      The Secretary said that it would be staff's intention, if this is approved by the Board, to
advertise in the Daily Reporter and The Business Journal. Resumes could then be reviewed by
the Administration and Operations Committee with a recommendation coming back to the

       Mr. Brazgel asked why the individual would have to be a lawyer. Mr. Hayes responded
that, first of all, they have to be able to conduct a hearing, second, they have to be able to apply
the law, and third, that they have to make findings of fact and conclusions so that they have a
recommendation to the Board which is sustainable in the court.

      Mr. Brazgel pointed out that arbitrators do that all the time and not all arbitrators are
attorneys. Mr. Hayes responded that arbitrators are not reviewable on the same standards as
hearing examiners.

      Upon being asked, the Secretary said that there has never been a job description in the
past and proceeded to explain the procedure that was used in the past. Discussion ensued.

      Ms. Stewart expressed concern, that if it has to be a lawyer, we will then end up with no
minorities and no women doing these hearings. Discussion ensued as to where other
organizations get their examiners and what their requirements and qualifications are.

       Mr. Hayes then said that he feels the fees should be adjusted from $75-$90. The
Secretary then explained the problems arising with the present examiners (age and health). Mr.
Brazgel suggested, that under "Qualifications" on the draft of the job description presented, to
note, that it would be helpful if you have law background, helpful if you practiced law in
Wisconsin, and have five (5) years experience, (not 10 years as noted in the draft).

     It was moved by Mr. McCann and seconded by Mr. Carey, to proceed on the Secretary's
recommendations as presented (for new hires only). The motion carried, with Ms. Stewart, Mr.
Brazgel and Ms. Paretti being recorded as voting No.

                                City of Milwaukee E-Mail Policy

      The Secretary reported that before the Board is a copy of the City's E-mail policy. This
policy prohibits the use of E-mail for personal business or political endeavors (Section A-1).
He said that a recommendation would be to send a copy of the policy to the election candidates
running for the Pension Board.

      It was moved by Mr. Brazgel, seconded by Mr. Carey and unanimously carried, to send a
copy of the policy to the election candidates. Some discussion followed.

                               1997 Budget Request Progress Report

      Before the Board is a copy of the 1997 budget submitted by the ERS staff. The Mayor
will submit his Executive Budget recommendations to the Common Council on September 27,
1996. The Secretary reported that the Mayor's budget will be the end of this week and the
proposed budget will then go to the Common Council, and we have a meeting scheduled in
October; a hearing before the Council.

      Mr. Brazgel asked if we had a preliminary meeting yet with anybody on our budget, and
the Secretary responded that he has only met with the Mayor. Mr. Brazgel then asked if
anything was said about our budget. The Secretary responded in the negative. He said that they
did not want any dispute at the preliminary; it was just presenting the information.

      Mr. Brazgel then asked Mr. Hayes, that for information we need for our budget, they have
to pay for this, correct (office furniture, equipment, salaries,, wages, fringe benefits, office and
supplies)? Mr. Hayes responded, Awell, there's several opinions that basically you have ... they
should not

be reviewing except to make sure that it's necessary and appropriate for your fiduciary
responsibilities." He further stated, "they should not be reviewing it as an independent matter to
either grant it or deny it." The Secretary stated that he will again bring that opinion out for the
meeting. Mr. McCann asked that a copy of that opinion be furnished all Board members.

       Ms. Stewart said that "all during this meeting, we were talking about staff issues,
particularly support staff type issues, and just in the number of items that were referred to
committees today, even though we're going to go into a summary mode in terms of minutes, it's
still going to be time consuming. I think that alone, not to mention these other things, adds to a
significant workload that can't just be given to someone else. And I guess my question from
staff is, whether or not we have a plan for how to handle that or have we addressed that need in
the budget?" The Secretary responded that we have addressed the need in the budget. In our
current budget, Pat has an assistant, there is a space problem for that, we have 3.5 positions
requested in the new budget in the area of a stenographer. We have an additional position in
there. With that, the City doesn't support those skills anymore, but we have addressed it. He
said that he feels this will have to be looked at again next year and see how we are coming.
But, we have 3.5 positions plus we have a request for remodeling or relocating our office. He
said that we can't put people in it, we're beyond that point.

      Mr. Carey asked if the Mayor and/or the Budget Committee or the Finance Committee
can delete these items? Mr. Brazgel also expressed that this too is his concern, that we need
them, they have to pay for them. Mr. McCann also asked if they can reduce or eliminate these
items that we feel are necessary to perform our fiduciary responsibility? Mr. Hayes responded,
"our view is if they are necessary or appropriate, I don't even think it has to be if it's appropriate,
then that's the end of their inquiry." Mr. McCann interjected that we make that determination.
Mr. Hayes responded in the affirmative. He went on to say, "in other words, they don't have the
full review that they would have over a departmental budget." Mr. Brazgel pointed out that we
are just advising them what we're doing.

                     Legal Opinions Requests Pending and Legal Opinions

Requests Pending

     As a matter of information, the Secretary presented a list of legal opinion requests

Legal Opinion - Recent Supreme Court Decision in Woznicki v. Erickson (Case No. 94-2795,
dated 8-13-96)

      The Secretary reported that this opinion is relative to open records. He said that this
opinion was sent to all record custodians. The opinion concludes:

      "We advise that in the future, if any records custodian has balanced the competing
      interests involved, and determined that any portion of a record involving privacy or
      reputational interests will be provided to a records requester, then the person whose
      privacy or reputational interests are implicated should be advised of that decision, in the
      event that s/he wishes to oppose the release."

       He said that in the past, we had to waive the public's right to know against the person's
right to privacy, and make the decision on that. He said that this opinion goes one step further.
It says that if we say that the public has a right to know, if there's still some things that we're
disclosing, we have to notify the member that we're going to disclose it so that they can file
appropriate action. He mentioned that the State has statutory authority to keep all pension
records confidential. He informed that we don't come under that provision. He asked Mr.
Hayes if he was correct, that when he does the balancing, if the public has the right to know,
then he has to notify the member prior to release of any information.

      Mr. Hayes responded in the affirmative. He further said that if you look at this Arreola
request on the DDR (duty disability retirement) applications, that's the opinion that really
implements that. The Secretary asked, that in the case of Arreola, could they make it general or
would they have to make it specific for each case (each person applying)? Mr. Hayes
responded that they could make it more general. They could ask for all duty disability
applications. You would go through and decide what's public and what isn't. Before you
release what you determine is public, you have to look at that material and see whether it might
involve individual privacy interests. Then you notify the individual that if they don't take some
remedial action within, e.g., 10 days, you're going to release it. More discussion followed.

      Mr. Brazgel asked if an individual still doesn't have privacy with respect to medical
records? Mr. Hayes responded in the affirmative. He said that the case in point here, is
requesting the applications. Mr. Brazgel mentioned that Mr. Mike Nichols, Reporter, is
requesting medical information.

      The Secretary said that Arreola's case, we would indicate to the member that this is at the
request of the department. Mr. Brazgel felt that we should send a letter and ask that if Arreola
is gone, is this still needed.

      With respect to the request of Mr. Nichols, the Secretary said that the applications for
these members, anything medical would be deleted. The question would be., even the fact the
person applied as of such a date for these incidents, that I would think you would notify the
member of. More discussion. The Secretary asked, "what right have I, if it's non-medical, to
say the public doesn't have a right to know?" He reiterated that Mr. Nichols wants people
already on disability as far as their application forms. He said that he wants certain individuals
on disability, application forms, effective dates cited and the incidents cited.

      Mr. Brazgel said that he would like to send it to the City Attorney for an opinion on this.
He said that with respect to medical, he isn't going to get sued here. He said that the Board
needs to find out if they can do this and to what aspect of it.

    The Chairman directed that the Arreola issue and Mike Nichols request, be referred to the
Member, Intergovernmental Relations Committee, and the Attorney for advice.

Legal Opinion: State Service Credit, Age 55/30 years service (dated 8-30-96)

       The Secretary reported that the Annuity and Pension Board, at its meeting of July 31,
1996, had before it a request from Mr. Charles Songstad, of Milwaukee Area Technical
College. Mr. Songstad has prior State service that he is asking to have counted toward the age
55/30 years retirement requirements. He said that the City Attorney, in an opinion dated 8-30-
96, concludes that State Service is not creditable service in the ERS and does not count toward
this requirement.

      It was moved by Mr. Brazgel, seconded by Ms. Stewart and unanimously carried, to
receive and advise Mr. Songstad.

Legal Opinion: Granville Rodgers (dated 8-28-96)

      The Secretary reported that Mr. Rodgers was a former police officer covered by the
Pikalek case and was approved for a duty disability retirement. He is represented and is
claiming that he was not properly notified of his appeal rights subsequent to the denial of his
original application in 1993. The City Attorney, in an opinion, dated August 28, 1996, advises
on our response to his attorney.

      It was moved by Ms. Stewart, seconded by Mr. Madison and unanimously carried, to
accept the opinion and advise Mr. Fuchs (Mr. Rodgers Attorney). Some discussion followed.
Legal Opinion: Information request from Chief Arreola on Duty Disability Applications (dated

       The Secretary reported that Chief Arreola had requested, in a letter dated March 5, 1996,
notification of each application for duty disability and an estimated effective date. The Annuity
and Pension Board voted, at its March 28, 1996 meeting, to send this matter to the City
Attorney's office for an opinion whether this is public information. The opinion concludes that
we must first balance the privacy interests of an individual against the public interest in
disclosure. If the public interest prevails, we would then have to advise the individual and
provide sufficient time for the individual to appeal the decision.

     Chairman Pelzek held this opinion for more discussions with the City Attorney on it (see
earlier discussion on this issue).

Legal Opinion: Robert Szymkowski (dated 9-10-96)

     The Secretary reported that Mr. Szymkowski received a pension estimate the day he signed for
retirement and it was incorrect. It overstated the benefit by $300 per month. The estimate was
done by an existing estimate program. The City Attorney recommends that we advise Mr.
Szymkowski of his right to file a claim with the Board. The Secretary stated that we have reiterated
to staff involved in this case, that any changes made to a program must be thoroughly tested prior to
using it to calculate actual benefits. This was a matter of information only. Mr. Hayes pointed out
that if he's got any claim at all, he should file a claim, and we'll refer it to the insurance company.

                     Legislation Requests Pending and Proposed Legislation

Requests Pending

    As a matter of information, the Secretary presented a list of legislation requests pending. The
Secretary then reported that the City of Milwaukee Finance and Personnel Committee met on
September 18, 1996. Following is the status of pension items:

      #960701 - Introduced 7-30-96 by the Chair is a resolution authorizing the Annuity and
      Pension Board to retain the services of the firm, D'Ancona & Pflaum, for the purpose of a
      lawsuit between the ERS and the Frank Russell Trust Company. The recommendation of the
      Finance & Personnel Committee was for approval.

      #960794 - Introduced 9-3-96 by the Chair is communication from the ERS transmitting a
      report relative to the Actuary's Valuation of the ERS and the employer contribution as
      certified. The reccnynendation of the Finance & Personnel ComLittee is to receive and place
      on file. It was pointed out that Judge Wells indicated he would stay any action on this matter
      until the appeal process is completed. Mr. Hayes stated that the 1996 contribution of $1.9
      million will be made using the 1996 funds.

     The Secretary pointed out that the $1.9 million contribution payment will be made, and there's
a dispute over the appropriate interest.


      The following is a list of informational items:

      1.   Report on Claims and Litigation - Memorandums dated August 13, 1996 and September
           12, 1996, which gives the status of litigations involving the ERS, as prepared by staff of
           the City Attorney's office.

 2. List of conferences from October through December, 1996.

      The following is a list of activity since the last Board meeting, copies sent with meeting
notice and to be attached to the minutes:

      3.    Report on Bills for the months of July and August, 1996.

      4.    Deployment of Assets.

      5.    Securities Lending Revenue and Budget Report.

      6.    Preliminary Performance Report/Asset and Manager Allocation Pie Charts.

      7.    ERS Holdings Report.

      8.    New Business. Mr. Madison mentioned that he's trying to get information on health
            insurance. The Secretary is to request the information from EBA and provide it to Mr.
            Madison and everyone else.

      It was moved by Mr. Brazgel, seconded by Ms. Stewart and unanimously carried, to receive
the informational items and place on file.

       Mr. Hayes asked to speak. He said that "the question is whether New Business is adequate
under the Open Records Law as opposed to Miscellaneous. I think we can look at it further, but I
think the answer is you're supposed to give the best notice you have. If you know that there's new
business to come before this Board, you should notice it. It's only new business that you don't
know. If it does come before the Board, the appropriate thing to do then, is refer it to a committee."
Some discussion followed. Mr. Hayes said, AIf you know about it, post it. If you don't know about
it, you can take it up under New Business. That's all you should do, no formal action, but to refer
        The Secretary said that we have to enforce our cut-off in the future, more than we have in the

      Chairman Pelzek then spoke to Mr. Hayes requesting that the two opinion requests of 11-22-
95 be answered, since they are coming to being outstanding for one year. (Outside Counsel and
Trustee Responsibilities.)

     There being no further business, it was moved by Mr. Brazgel, seconded by Ms. Stewart and
unanimously carried, to adjourn the meeting at 1:55 p.m.


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