Report to Board of Administration
From: Thomas Moutes, General Manager
SUBJECT:
Agenda of:
JUNE 13, 2017
ITEM:
III-A
CONTINUED CONSIDERATION OF BOARD GOVERNANCE CONSULTING
SERVICES REQUEST FOR QUALIFICATIONS FINALISTS AND POSSIBLE BOARD
ACTION
Recommendation:
That the Board:
1. Affirm the three firms that responded to the Board Governance Consulting Services Request
for Qualifications as finalists;
2. Interview the finalists for possible contract award(s); and,
3. Direct and authorize the General Manager to negotiate contract terms and execute the
required documents, as necessary.
Discussion:
On February 28, 2017, the Board approved the Request for Qualifications (RFQ) for board
governance consulting services. The purpose of this RFQ is to establish a bench of qualified firms
available to assist the LACERS Board of Administration and executive management with various
board governance projects. As projects are identified, LACERS will request project proposals from
the contracted firms. The firm with the best fit of experience for the specified project will be selected.
The scope of services include, but are not limited to: 1) Board Development, 2) Executive and
Management Team Development, 3) Governance Reviews, and 4) Organizational Development
Services.
The RFQ was released on March 1, 2017 and closed on April 7, 2017. LACERS received three
responses: Cortex Applied Research Inc. (Cortex), Funston Advisory Services LLC (Funston), and
Mosaic Governance Advisors, LLC (Mosaic). Staff performed an evaluation of the proposals which
involved a review of the firms’ qualifications, experience, and references as well as their
administrative responsiveness. All three firms passed this preliminary review. Attached are the RFQ
review summary matrices.
The final portion of the review process is the interview with the Board for possible contract award(s).
On May 23, 2017, the Board interviewed Funston. The remaining finalists, Cortex and Mosaic, will
appear before the Board for their separate interviews on June 13, 2017.
1
Strategic Plan Impact Statement:
The consideration of responses to the Board Governance Consulting Services RFQ, and possible
contract award(s), conforms to the LACERS Strategic Plan Organizational goals of upholding good
governance practices which affirm transparency, accountability, and fiduciary duty (Goal V) as well as
maximizing organizational effectiveness and efficiency (Goal VI).
This report was prepared by Edeliza Fang, Senior Management Analyst, Administrative Services
Division.
TM:DWN:EF
Attachments: Board Governance Consulting Services RFQ Summary Matrices – Level I and Level II
2
LOS ANGELES CITY EMPLOYEES' RETIREMENT SYSTEM (LACERS)
BOARD GOVERNANCE CONSULTING SERVICES RFQ
LEVEL I REVIEW (QUALIFICATIONS AND EXPERIENCE)
MAJOR CRITERIA
Funston Advisory Services LLC
ATTACHMENT
Cortex Applied Research Inc.
Mosaic Governance Advisors LLC
FIRM'S EXPERIENCE AND CAPABILITIES
Years of Experience
7 Years (Founded in 2010)
16 Years (Founded in 1991)
Less than 1 Year (Founded in 2017)
Office Location
Bloomfield Hills, Michigan
Toronto, Canada
Westminster, Colorado
List of Major
Services Provided
1. Board Governance
2. Fiduciary Governance
3. Investment Operations
4.Benefits and Administration Operations
5. Investment Fee Management
6. Stakeholder Relations and Communications
7. Strategy and Risk Intelligence
8. Management Development and Team Building
9. Board Performance Evaluation and Education
1. Fiduciary audits and governance reviews
2. Benchmarking fiduciary practices relative to industry
practices and published standards
3. Investment consultant research services
4. Advising clients on their internal investment advisory
and oversight structures
5. Reviews of organizational structure
6. Designing governance decision-making and oversight
structures
7. Developing governance and related policies
8. Board education and education needs assessment
9. Board performance evaluation
10. Strategic and business planning
11. Ad hoc special projects of a governance nature
1. Governance Facilitation
2. Board development
3. Governance reviews
Areas of Expertise
1. Board Assistance
2. Independent Board Evaluation
3. Board Governance Assessment
1. Board Education Session
2. Governance Review
3. Governance Policies
1. Strategic planning
2. New trustee orientation
3. Board performance evaluation
4. Review of Board and Management policies
5. Conducting special best practices research projects
Page 1 of 4
LOS ANGELES CITY EMPLOYEES' RETIREMENT SYSTEM (LACERS)
BOARD GOVERNANCE CONSULTING SERVICES RFQ
LEVEL I REVIEW (QUALIFICATIONS AND EXPERIENCE)
MAJOR CRITERIA
Funston Advisory Services LLC
Cortex Applied Research Inc.
Mosaic Governance Advisors LLC
Tom Iannucci (President and Senior Consultant) –
Governance and Board Effectiveness; Strategic Planning;
Board Education; Investment Consultant Searches
Dr. John Por (Senior Advisor, former owner, part-time
contractor) – Pension Governance; Fiduciary Risk
Management and Education
Arif Sayeed (Senior Consultant) – Fiduciary Knowledge
and Education; Investment Policy; Investment and
Governance Policies
Valter Viola (Senior Consultant) – Investment Research;
Risk Management; Portfolio Management; Consulting;
Board Education.
Nella Lee (Operations Manager)
Jenny Tam (Analyst) – Governance Review; Board and
Staff Evaluations; Administration of Investment
Consultant Searches.
Amy McDuffee (Founder and CEO) – Strategic
Planning, Policy Development, Board Self-Assessments,
Executive and Consultant Evaluations, Benchmarking
Review, Organizational Assessments, Board
Development
Allyson Zoellner (Senior Consultant) – Strategic
Planning, Organizational Assessments, Brand
Architecture and Positioning, Strategic and Tactical
Marketing, Communications
Saba Hashmi (Analyst) – Strategic Planning, Trustee
Education, Board Self-Evaluations, Executive
Performance Evaluations, Research and Policy
Development
Tom Iannucci – $485/hour
Valter Viola – $485/hour
John Por – $450/hour
Arif Sayeed – $350/hour
Jenny Tam – $180/hour
Amy McDuffee – $375/hour
Allyson Zoellner – $295/hour
Saba Hashmi – $160/hour
QUALIFICATIONS AND EXPERIENCE OF ASSIGNED PERSONNEL
Core Team and Their Rick Funston (Managing Partner) – Governance,
Strategy, Operations, and Risk Intelligence
Areas of Focus
Girard Miller (Primary Client Liaison) – Investment Fee
Policies and Strategies
Randy Miller (Project Manager) – Board Governance,
Investment Operations, Overhead Cost Structure,
Information Technology Strategies, and Business
Transformation Strategies
Keith Johnson (Fiduciary and Legal) – Investment,
Benefits, Insurance, Tax and Fiduciary Counsel
Ken Johnson (Operations and Administration) –
Support Services in Financial Operations, Information
Technology, Communications, Cost-Effectiveness
Benchmarking
Jon Lukomnik (Investment Policies and Practices) –
Risk Management, Product Development, Due Diligence,
Fund Selection and Portfolio Construction
Kelly Kenneally (Communications) – Finance and Public
Policy Communications
PROPOSED RATES
$500/hour for each team member
Page 2 of 4
LOS ANGELES CITY EMPLOYEES' RETIREMENT SYSTEM (LACERS)
BOARD GOVERNANCE CONSULTING SERVICES RFQ
LEVEL I REVIEW (QUALIFICATIONS AND EXPERIENCE)
MAJOR CRITERIA
Funston Advisory Services LLC
Cortex Applied Research Inc.
Mosaic Governance Advisors LLC
• LACERS
• Alameda County Employees’ Retirement Association
• Alberta Teachers’ Retirement Fund
• Arlington County Employees’ Retirement System
• Arizona Public Safety Personnel Retirement System
• Arizona State Retirement System
• California State Teachers’ Retirement System
• College of Applied Arts & Technology Pension
• Colorado Public Employees’ Retirement Association
• Fairfax County Retirement Systems
• Fresno County Employees’ Retirement Association
• Illinois Teachers’ Retirement System
• Indiana Public Employees’ Retirement Fund
• Indiana State Teachers’ Retirement Fund
• Kansas Public Employees’ Retirement Association
• Kern County Employees’ Retirement Association
• Labourers’ Pension fund Centra/East. Canada
• Los Angeles County Employees’ Retirement Association
• Los Angeles Fire and Police Pensions
• Louisiana State Employees’ Retirement System
• Maryland State Retirement Agency
• Missouri Local Government Employees Retirement
System
• Public School & Education Employee Retirement
Systems of Missouri
• MoDOT & Patrol Employees’ Retirement System
• Missouri State Employees’ Retirement System
• Ontario Pension Board
• Orange County Employees’ Retirement System
• Public Sector Pension Investment Board
• Saskatchewan Healthcare Employees’ Pension
• Saskatchewan Municipal Employees’ Pension
• Saskatchewan Public Employees’ Retirement
Association
• San Bernardino County Employees’ Retirement
Association
• San Diego County Employees’ Retirement Association
• San Francisco Employees’ Retirement System
• City of San Jose Retirement Services Dept.
• San Luis Obispo County Pension Trust
• Santa Barbara County Employees’ Retirement System
• Sonoma County Employees’ Retirement Association
• Texas Teachers’ Retirement System
• Universities Academic Pension Plan
• Ventura County Employees’ Retirement Association
• Virginia Retirement System
• Washington State Investment Board
The members of the team have worked, individually and
not as a company, with the following:
• LACERS
• California State Teachers’ Retirement System
• Texas Municipal Retirement System
• Colorado Public Employees Retirement Association
EXPERIENCE WITH SIMILAR CONTRACTS
• Los Angeles County Employees Retirement Association
– Board Assistance
• San Francisco Employees’ Retirement System –
Independent Board Evaluation
• Utah Retirement Systems – Board Governance
Assessment
• Ohio Retirement Study Council
• California Public Employees’ Retirement System
• San Jose Police and Fire
• Oregon Investment Council
• Texas State Auditor
• Washington State Investment Board
• New York State Common Retirement Fund
• New York City Bureau of Asset Management
• New York City Office of the Comptroller
• Employee Retirement System of Rhode Island
• Pennsylvania State Employees Retirement System
• Utah Retirement Systems
• Indiana Public Retirement System
• South Carolina Retirement Investment Commission and
Public Employee Benefit Authority
• School Employees Retirement System of Ohio
Page 3 of 4
Systems of Missouri
• MoDOT & Patrol Employees’ Retirement System
Missouri State RETIREMENT
Employees’ Retirement
LOS ANGELES CITY• EMPLOYEES'
SYSTEMSystem
(LACERS)
• Ontario Pension
Board SERVICES RFQ
BOARD GOVERNANCE
CONSULTING
• Orange
County Employees’
System
LEVEL I REVIEW
(QUALIFICATIONS
AND Retirement
EXPERIENCE)
• Public Sector Pension Investment Board
• Saskatchewan Healthcare Employees’ Pension
Funston Advisory Services LLC
Cortex
Applied
Research
Inc.
• Saskatchewan
Municipal
Employees’
Pension
• Saskatchewan Public Employees’ Retirement
Association
• San Bernardino County Employees’ Retirement
Association
• San Diego County Employees’ Retirement Association
• San Francisco Employees’ Retirement System
• City of San Jose Retirement Services Dept.
• San Luis Obispo County Pension Trust
• Santa Barbara County Employees’ Retirement System
• Sonoma County Employees’ Retirement Association
• Texas Teachers’ Retirement System
• Universities Academic Pension Plan
• Ventura County Employees’ Retirement Association
• Virginia Retirement System
• Washington State Investment Board
MAJOR CRITERIA
Mosaic Governance Advisors LLC
PAST ENGAGEMENTS WITH LACERS
None
• In 2002, Cortex Applied Research Inc. provided the
Board and staff with a two-hour presentation on board
governance and strategic planning at an offsite.
• In 2012, Cortex Applied Research Inc. was hired by P2E
Consulting to serve as a key independent sub-contractor
to assist in performing a management audit of LACERS.
The audit was completed in 2013.
Page 4 of 4
Amy McDuffee and Saba Hashmi worked for the firm
Aon Hewitt EnnisKnupp which provided the following
services to LACERS:
• Refreshing the strategic plan
• Updating and participating in the delivery of new
trustee orientation
• Facilitating the Board’s self-evaluation discussion
• Reviewing Board and Management policies and
providing advice
• Conducting special best practices research projects
LOS ANGELES CITY EMPLOYEES' RETIREMENT SYSTEM (LACERS)
BOARD GOVERNANCE CONSULTING SERVICES RFQ
LEVEL II REVIEW (ADMINISTRATIVE RESPONSIVENESS)
FIRM NAME
Main Contact
Phone
Fax
ATTACHMENT
Funston Advisory Services LLC
Cortex Applied Research Inc.
Mosaic Governance Advisors LLC
Rick Funston, Managing Partner
Tom Iannucci, President
Amy McDuffee, Founder and CEO
313-919-3014
416-967-0252
720-316-1919
248-502-0991
416-967-2711
[email protected]
[email protected]
[email protected]
Girard Miller, Primary Client Liaison
Valter Viola, Senior Consultant
Allyson Zoellner, Senior Consultant
Randy Miller, Project Manager
Jenny Tam, Analyst
Sabra Hashmi, Analyst
Keith Johnson, Ken Johnson, John Lukomnik,
Kelly Kenneally
D. John Por, Arif Sayeed, Nella Lee
N/A
1. Experience and Qualifications
Yes
Yes
Yes
2. Questionnaire Responses
Yes
Yes
Yes
Request for Alternatives
and/or Substitions
No
Waiving of Workers Compensation coverage, but
does have Employer's Liability Insurance, which
insures against employee injuries.
Yes - PSC-12 - Use of Contractors, PSC-20,
Indemnification, PSC-26 - Warranty and
Responsibility of Contractor, BTRC Pending
E-mail
A. COVER LETTER
Key Personnel
Phone/Cell/Fax
Email
Key Personnel
Phone/Cell/Fax
Email
Additional Staff
C. PROPOSAL ITEMS
3.
D. GENERAL REQUIREMENTS
AND COMPLIANCE
DOCUMENTS
1. Warranty/Affidavit
Yes
Yes
Yes
2. EEO
Yes
Yes
Yes
3. Affirmative Action Plan
Yes
Yes
Yes
4a. Proposer Disclosure Form
Yes
4b. Bidder Certification
Yes
Yes
Yes
Yes
5. Bidder Contributions
Yes
Yes
Yes
Iran Contracting Act of 2010
6.
Compliance Affidavit
Yes
Yes
Yes
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