August 2008

MINUTES OF THE BOARD OF TRUSTEES

August 14, 2008

CALL TO ORDER

President David Marino called the meeting of the Board of Trustees of the Los Angeles Firemen’s Relief Association to order at 11:31 a.m.

ROLL CALL

MEMBERS PRESENT:

David Marino, President
Trustee James Coburn – Battalion 1
Trustee Juan Albarran, Battalion 3
Trustee Chris Hart – Battalion 4
Trustee Mark Akahoshi, Battalion 5
Trustee Tim Larson – Battalion 6
Trustee Doak Smith – Battalion 9
Trustee David Peters – Battalion 10
Trustee John Jacobsen – Battalion 13
Trustee Glen Prine – Battalion 15
Trustee Francisco Hernandez – Battalion 17
Trustee David Ortiz – Headquarters 1
Trustee Kurt Stabel – Headquarters 2
Trustee Warren Braun – Pension 1
Trustee Robert Henderson – Pension 3
Andrew Kuljis, Secretary-Treasurer
Executive Director – David Ned Smith
Controller – Todd Layfer

MEMBERS ABSENT:

Robert Steinbacher, Vice President (Excused)
Trustee Gary Matsubara – Battalion 2 (Unexcused)
Trustee Gene Bednarchik – Battalion 7 (Excused)
Trustee Chris Stine – Battalion 11 (Unexcused)
Trustee William Dunn – Battalion 12 (Excused)
Trustee Michael Overholser – Battalion 14 (Excused)
Trustee Dennis Mendenhall – Battalion 18 (Excused)
Trustee Tom Stires – Pension 2 (Excused)

GUEST PRESENT:

Garth Flint, Beacon Pointe Advisors

INVOCATION

Trustee Warren Braun led the invocation.

BY-LAWS COMMITTEE REPORT

Asst. Chairman Juan Albarran presented the following motions.

The committee recommends and I so move that the Board accept the recommendation presented that in even numbered years when two Pensioned Trustee positions are to be elected, the two individuals receiving the highest number of votes will be declared the winners. There will be no run off election. In odd numbered years when one Pensioned Trustee position is to be elected, the individual receiving the highest number of votes will be declared the winner. There will be no run off election. On the question, there was an objection. Thirteen voted in favor of the motion, one voted opposed.

Motion carried.

The committee recommends and I so move to that we accept the changes to the By-laws presented to the membership. There was no discussion or objections.

Motion carried to accept the changes to the By-laws presented to the membership.

INVESTMENT COMMITTEE

Chairman Kurt Stabel stated he was pleased to report that our portfolio has outperformed LAFRA’s composite benchmark index for the second quarter of 2008. He reported for the year, the total fund is down 2.4% however, in light of the current market situation our portfolio has performed quite well. He mentioned that our composite benchmark during that same time frame had been down 6.3%. He stated that much of our positive performance could be attributed to the two new equity managers, Cohen & Steers and Stralem. He also mentioned that PIMCO has done very well in the last year.

He informed the Board that they had received an additional capital call from PIMCO for the Distressed Income Fund a few days ago and that he had called Scott Martin to determine the reason for the call. He indicated that Scott stated they are seeing a lot of opportunities in the market for their Distressed Income Fund which is why they are calling for additional monies.
He informed that the Board that Knightsbridge, which has been placed on the “watch list”, has substantially improved their performance during Q2 2008. He mentioned Knightsbridge sold out of their position in Fannie Mae which is part of the reason for their improved performance.

Market Commentary

Kurt Stabel stated that during the first quarter dislocation from the credit crisis impacted the equity markets and caused financials stocks to decline sharply. The second quarter mirrored the first quarter due to additional bank write-downs and he mentioned that IndyMac was being taken over by the Feds. He indicated there still may be continued weakness in the housing market for the next 1 – 2 years according to what many industry professional are saying. However, hopefully we are beginning to see a bottom developing in the equity markets. He also indicated that we will continue to see weakness in the U.S. economy which is now following through to many other emerging and developed markets throughout the world. He indicated that this may give us additional buying opportunities and hopefully we will add an emerging market and international manager within the next six months.

Beacon Pointe Advisors

Garth Flint referred to the portfolio and reviewed the U.S. market’s performance for the first half of 2008 and mentioned that the month of June had been the worst in 78 years for the DOW. He referred to the sectors and indicated that energy was strong and financials were weak. He stated that the Global Stock Markets had been down. He referred to housing inflation and stated that in terms of Global inflation, they at Beacon Pointe do not feel that there will be an inflation problem. He stated that if you combine the peak in the housing market in June 2006 and the peak in the stock market in October 2007, the economy is down about $5.2 trillion which is deflation.
He referred to the Executive Summary of the portfolio which is down -1.2% for the quarter in 72nd percentile. He stated that we should focus on the 3, 5 and 7 year numbers and indicated that our returns were annualized at 8% for the 3-year period. He stated that overall, good progress is being made. Referring to the Domestic Equity mangers, Garth stated that they have overall performed quite well and noted that J.W. Seligman has been placed on the “watch list” due to the sale to Ameriprise. He is tracking them to see if they change how they manage the investments. International has been tough in the value area in that Artisan was at -5.2% for the quarter and Columbia at -0.6. He stated that PIMCO has had a great year and mentioned that they were negative for the quarter due to reversing trade in the fixed income markets and coming back into mortgage bonds, which hurt them. However, this was nothing to be concerned about. He referred to the PIMCO Distressed fund and indicated that we had made our investment at the end of the quarter and it is too early to have any performance numbers.

Chainman Stabel stated the committee recommends and I so move that we adopt as presented, the recommended Mix 3 allocation plan. There were questions about the Alternative Investments and how their volatility has been impacting the markets. Kurt Stabel indicated that current market volatility is partially due to hedge funds. This has been magnified by the fact that many funds have been unwinding their positions and having been moving money out of commodity funds. There was no further discussion or objections.

Motion carried.

Kurt Stabel mentioned that he would be flying to New York and talking with J.W. Seligman on their plan and performance. He also mentioned that he had spoken to Garth about performing a preliminary search to replace these managers if they continue to fall

PRESIDENT’S REPORT

1) David Marino mentioned that Mark Khitikian was present to address the Board on the Battalion News articles.

Mr. Khitikian thanked the Board for the opportunity to write articles in the Grapevine in Battalion News. He indicated that he was aware of the complaints regarding articles he had written in the Battalion News and indicated that he has no agendas but to bring light to issues around the department. He expressed concern about censorship and removing the ability to write such articles in the Grapevine. He mentioned that there had been accusations of slander in regards to the last article and stated that he is not written any slanderous statements nor has he included any names. He indicated that the Grapevine Battalion News articles are a great way to express opinions, ideas and emotions.

Mr. Khitikian referred to a letter written to the Association with suggestions of discontinuing the Battalion News, adopting constringent content guidelines or the refusal to publish personal vendettas of malcontents. He indicated that he felt the letter written was a threat. He stated that it was the American way and that right of freedom of speech.

2) David Marino entertained a motion to ratify and dispense with the reading of the minutes of the Board meeting held July 1, 2008. David Peters so moved. Tim Larson seconded the motion. There was no discussion or objections.

Motion carried to ratify and dispense with the reading of the minutes of the Board meeting held July 1, 2008.

David Marino entertained a motion to ratify and dispense with the reading of the minutes of the Special Board meetings held July 17th and July 31st. David Peters so moved. David Ortiz seconded the motion. There was no discussion or objections.

Motion carried to ratify and dispense with the reading of the minutes of the Special Board meetings held July 17th and July 31st.

3) David Marino referred to the issue of a Trustee Expense Voucher submitted for payment on May 8th. He indicated that the signatures on the voucher approving the expenditures were out of policy. He also mentioned that the expenditures submitted for reimbursement were incurred when the member was not a Trustee. He stated that since the incurred expenditures were out of policy, 2/3 of the Board would have to vote to overrule the policy and approve the reimbursement. James Coburn questioned some of the expenditures incurred by the member and asked that the Board take into consideration the “notary” service the trustee has provided to the membership.

In addition there was an expense reimbursement requested for attending a retirement dinner by the former trustee. As this person was no longer a trustee and not representing LAFRA it was agreed that this was not to be reimbursed.

James Coburn motioned to approve reimbursement of the notary update training expenses plus mileage for the class and mileage for notarizing for a member. Juan Albarran seconded the motion. On the question, there was an objection. Twelve voted in favor of the motion, two voted opposed.

Motion carried to approve reimbursement of the notary update training expenses plus mileage for the class and mileage for notarizing for a member.

David Peters referred to the Trustee Expense Voucher and stated the following motion.

The committee recommends and I so move to that with regards to a Trustee’s Expense voucher that they do not pay the mileage dated June 5, 2008 and require an explanation to the Board why the reimbursement had been requested. David Peters explained what the item was that had been denied by the Admin. Committee. There was no discussion or objections.

Motion carried to deny payment of the item dated June 5, 2008 on the Trustee’s Expense voucher and requested the Trustee explain why he had made the request to the Board.

AUDIT COMMITTEE REPORT

Chairman Doak Smith informed that the Audit Committee had set a date to meet and discuss how they would select accounting firms for the next audit. The meeting is scheduled for August 26th at 8:00am.

ADMINISTRATIVE COMMITTEE REPORT

Chairman David Peters presented the following motions.

The committee recommends and I so move to approve the usual and customary bills in the amount of $257,061.79. There was no discussion or objections.

Motion carried to approve the usual and customary bills in the amount of $257,061.79.

The committee recommends and I so move to approve the professional fees in the amount of $22,896.37. There was no discussion or objections.

Motion carried to approve the professional fees in the amount of $22,896.37.

The committee recommends and I so move to approve up to $20,000 for the Open House budget. There was no discussion or objections.

Motion carried to approve up to $20,000 for the Open House budget.

David Marino indicated that several trustees had been discussing a widow’s support group that would include Jan Graf, Lori Harris and Rose Kemper. He indicated that some of their duties would be assisting widows of deceased members in organizing their household when needed and assisting with general support for their well being. He asked that the Board approve reimbursing mileage for members of this support group

The committee recommends and I so move to approve mileage reimbursement to those members in the Widows Support Group which is to be paid from the WODFF. There was no discussion or objections.

Motion carried to approve mileage reimbursement to those members in the Widows Support Group which is to be paid from the WODFF.

David Marino informed the Board of the Firefighter Colorado Memorial Policy and indicated it had been approved by the Administrative Committee. He discussed the details of the policy and UFLAC’s involvement. He asked that it be approved by Board

The committee recommends and I so move to approve the Firefighter Colorado Memorial Policy. There was no discussion or objections.

Motion carried to approve the Firefighter Colorado Memorial Policy.

The committee recommends and I so move to accept the consignment agreement with the L.A. Visitors & Convention Bureau. David Smith mentioned that the Convention center will place Dalmatians merchandise in their store and website and will charge 10% of gross sales. There was no discussion or objections.

Motion carried to accept the consignment agreement with the L.A. Visitors & Convention Bureau.

David Smith reported on the Dalmatian Store operations and stated that they have implemented having the Accounting Manager spend a portion of her time with Linda on going through financial aspects. He mentioned that they will now have weekly meeting to discuss the store operations. One of the outcomes is pricing on some items will be increased soon. He indicated that they were going to also test sending the white van to the fire stations to increase sales since the other Dalmatians van has been doing well. He mentioned that the store has lost 10% of its revenue since the move which is why they wanted to send out another vehicle for sales.

David Peters mentioned there are other vendors selling L.A. City Fire merchandise who do not donate their proceeds to the Widows, Orphans and Disabled Firemen’s Fund however even though they say otherwise.

EXECUTIVE DIRECTOR REPORT

David Smith stated that he and Todd Layfer had prepared a Powerpoint presentation that shows the Association’s expenditures for the first six months of the year. He also stated he would like feedback if this level of detail was appropriate for reporting expenditures to the Board quarterly.

Referring to the report, he stated that the revenue sources comparing 2008 and 2007, there were not many big changes. He stated that the unrealized gains verses the gain dividends were down however, the revenues were ahead. He mentioned that the contributions had increased by $100,000 in the first six months compared from last year due to efforts to obtain new donors and marketing events. He referred to the investments area and reported on the funds being transferred from Mellon Bank into the investment accounts.

There was discussion on the fund accounts and how salaries and expenses were being allocated. David Smith stated that they were in the process of building a budget for the rest of the year. James Coburn referred to the WODFF and the percentage allocated from salaries verses the payroll deductions. He stated that 10% of the payroll deduction for WODFF was to be allocated for administrative costs. There was discussion on the actual percentage of allocation to manage the WODFF. David Smith indicated that they would work on the allocation with Coburn’s input and report back to the Board.

MEDICAL COMMITTEE REPORT

David Peters presented the following motions.

The committee recommends and I so move to accept the applications to the Medical Plan. There was no discussion and no objections.

Motion carried to accept the applications to the Medical Plan.

ROOKIES

ACTIVE
MEMBER APPLICANTS COMING ON PLAN EFFECTIVE DATE

Adrijo, Christopher Self 7/21/08
Apparis, Philip Self 7/21/08
Boutte, Michaela A. Self 7/21/08
Brown, Adam David Self 7/21/08
Cummings, Kris Alan Self 7/21/08
Donahue, Christopher M. Self 7/21/08
Gallardo, Ian Self 7/21/08
Gaspar, Cade J. Self 7/21/08
Gaspar, Vanessa (Spouse) 7/21/08
Gaspar, Ella (Dtr.) 7/21/08
Gaspar, Luke (Son) 7/21/08
Guzman, Ryan Henry Self 7/21/08
Horst, Christopher J. Self 7/21/08
Howard, William Cody Self 7/21/08
Jimenez, Manuel Self 7/21/08
Jones, Abel Nathan Self 7/21/08
Jones, Olin Craig Self 7/21/08
Knoll, Jason Robert Self 7/21/08
La Rue, Brock Joseph Self 7/21/08
LaCaille, DeAndre Gary Self 7/21/08
Lee, Matthew D. Self 7/1/08
Mammone, Matthew John Self 7/1/08
Mihaljevich, David R. Self 7/1/08
Moffatt, Jacob James Self 7/1/08
Muus, Mark William Self 7/1/08
Paez, Robert Ricardo Self 7/1/08
Rash, Kern H. III Self 7/1/08
Rashad, Jeffries Drew Self 7/1/08
Robbins, Blake Stephen Self 7/1/08
Rojo, Richard Self 7/1/08
Schnepp, Jennifer Self 7/1/08
Sierra, Marco Enrique Self 7/21/08
Steffen, Garrett Paul Self 7/21/08
Tanguay, Richard Self 7/21/08
Truppa, Jonathan Amico Self 7/21/08
Truppa, Marjorie (Spouse) 7/21/08
Ward, Robert James Self 7/21/08
Ence, Tyloer Jacob Self 9/1/08
Gomez, Raul Gomez, Lilian H. (Spouse) 7/1/08
Johnson, Daniel Self 9/1/08
Johnson, Danielle (Spouse) 9/1/08
Kelly, Shawn Kelley, Heather (Spouse) 9/1/08
Matte, John Thomas I Self 9/1/08
Moreno, Gabe Self 9/1/08
Pritchett, Kevin Earl Self 9/1/08
Robinson, Zachariah Lee Self 9/1/08
Santana, Daniel Self 9/1/08

The committee recommends and I so move to pay the usual and customary bills in the amount of $461,578.94. There was no discussion or objections.

Motion carried to pay the usual and customary bills in the amount of $461,578.94.

RELIEF COMMITTEE REPORT

Chairman James Coburn presented the following motions.

The committee recommends and I so move to pay the Sick and Injury benefits for active and retired members in the amount of $57,114.89. There was no discussion or objections.

Motion carried to pay the Sick and Injury benefits in the amount of $57,114.89.

The committee recommends and I so move to pay the Estate Planning benefits in the amount of $9,948. There was no discussion or objections.

Motion carried to pay the Estate Planning benefits in the amount of $9,948.

The committee recommends and I so move to pay the Relief Death benefits in the amount of $54,000. There was no discussion or objections.

Motion carried to pay the Relief Death benefits in the amount of $54,000.

The committee recommends and I so move to pay the Life & Accident Death benefits in the amount of $23,830. There was no discussion or objections.

Motion carried to pay the Life & Accident Death benefits in the amount of $23,830.

MEMORIALS

JAMES C. WEHR JOHN H. HORN
DONALD K. PIERSON DOUGLAS C. MURPHY
GUY B. SMITH JOHN F. NOLAN
JAMES R. DANSKIN WILLIAM E. RAINE
TOMALEE HARDESTY ROBERT J. FIERS
CECIL W. MCLINN ALFRED A. D’ALESSANDRO

ASSISTANCE COMMITTEE

Chairman James Coburn presented the following motions.

The committee recommends and I so move to accept the donations in the amount of $10,423.40 to the Widows, Orphans & Disabled Firemen’s Fund. There was no discussion or objections.

Motion carried to accept the donations in the amount of $10,423.40 to the Widows, Orphans & Disabled Firemen’s Fund.

Donations to the Widows, Orphans & Disabled Firemen’s Fund

FIRE FAMILY FOUNDATION IN MEMORY OF BRENT LOVRIEN
JACK HALSTEAD (1) SCOOTER, (1) SCOOTER TRAILER LIFE, (1) TRUCK TOOL BOX AND (1) CARDIO FIT LIFESTYLER
DRILL TOWER 81 IN GRATITUDE FOR A “JOB WELL DONE” IN THE TRAINING AND EDUCATION OF THE RECRUIT CLASS OF 07-4
OLIVIA F. HOSPE IN MEMORY OF MY HUSBAND LOUIS HOSPE III
EILEEN WELLS IN MEMORY OF VERNA BEAVER WIFE OF CAPT. JOHN BEAVER
GERALD E. MOORE IN GRATITUDE FOR ALL THE WORK OF LAFRA
ESTHER M. WILKINSON IN MEMORY OF MY HUSBAND BEN WILKINSON
ABRAHAM JOSHUA HESCHEL DAY SCHOOL FROM OUR KINDERGARTEN CLASS “TZEDAKA” PROJECT
LOIS L. DANSKIN IN MEMORY OF JAMES “POPO” DANSKIN
CARS 4 CAUSES
JOYCE CORRELL IN MEMORY OF MY HUSBAND HARRY CORRELL
EVELYN L. MORRISSETTE IN MEMORY OF MY HUSBAND BILL MORRISSETTE
F. ELLIOT RYDER IN MEMORY OF CECIL MCLINN
TERESA FURUTANI IN MEMORY OF C.G. CURTIS
ANDREA PAPAC IN MEMORY OF OUR COUSIN BILL RAINE
TOM CINGIERE IN HONOR OF INSPECTOR BEN FLORES FOR HIS ASSISTANCE WITH THE L.A. MARATHON
BILLEE E. MURPHY IN MEMORY OF DOUG MURPHY
NORMAN B. COWDREY IN MEMORY OF ROBERT FIERS
LAWRENCE W. JOHNSON IN MEMORY OF JOHN A. NARP
BEVERLY J. HARRIS IN MEMORY OF ALFRED D’ALESSANDRO
EDWARD R. VILLAVICENCIO IN MEMORY OF CAPTAIN DOUGLAS “MURPH” MURPHY ONE OF THE “GOOD OL BOYS”
THOMAS BURKE IN MEMORY OF VERNA BEAVER WIFE OF CAPT. JOHN BEAVER
PAMELA AUSTIN IN MEMORY AND HONOR OF ROBERT “BOB” FIERS
WEST VALLEY MEDICAL PARTNERS IN MEMORY OF VERNA BEAVER
ALBERT J. BEAVER IN MEMORY OF VERNA BEAVER
DENNIS L. COVILLE IN MEMORY OF DOUG MURPHY
RICHARD L. WATTERS IN MEMORY OF DOUG MURPHY
ALVIN RUDDICK IN MEMORY OF RETIRED ENGINEER ROBERT HILL
DIANNE COWDREY IN MEMORY OF ROBERT FIERS
SHIRLEY A. SCHNELLER IN MEMORY OF A GOOD FRIEND ROBERT FIERS
ALFRED D. BREKKE
ROBERT W. BORGMAN IN GRATITUDE FOR THE ASSISTANCE DURING MY WIFE’S BILLIE ILLNESS
ANNE E. GUGISBERG IN MEMORY OF ROBERT “BOB” FIERS
ANOYMOUS IN MEMORY OF ROBERT FIERS
GREGORY WEST IN MEMORY OF JIM DANSKIN
ROBERT F. GOSIN IN MEMORY OF A DEAR FRIEND JIM DANSKIN
JOHN J. ADAMS IN MEMORY OF DOUG “MURPH” MURPHY A GREAT GUY TO KNOW
JOHN J. ADAMS IN MEMORY OF A GOOD FRIEND BOB FIERS “MR. 98”
HENRY KLEHN, JR. HONORING CAPT. BOB KILPATRICKS’ RETIREMENT FROM THE L.A.F.D.
VIRGINIA MARTIN IN MEMORY OF ALFRED A. D’ALESSANDRO
IRVING SCOTT IN MEMORY OF ALFRED A. D’ALESSANDRO
KEITH A. THOMAS IN MEMORY OF ROBERT RADKE
BURDETTE CREATH IN MEMORY OF DOUG MURPHY
WILL UMLAND IN MEMORY OF DOUGLAS C. MURPHY
CHARLOTTE KENWORTHY IN MEMORY OF ROBERT FIERS
DAVID F. FORD IN MEMORY OF MY MOTHER MARY E. FORD WHO PASSED AWAY A YEAR AGO
DAVID FORD IN MEMORY OF DOUGLAS MURPHY, “MURPH” WAS IN A CLASS ALL OF HIS OWN
ZORA M. KOLAR IN MEMORY OF BILL RAINE
THERESA JOHNSON IN MEMORY OF JIM DANSKIN
AUDREY MARSTON IN MEMORY OF ROBERT J. FIERS
MARCIA H. BREWER IN MEMORY OF BILLIE BORGMAN WIFE OF ROBERT BORGMAN
WILLIAM BERNDT IN MEMORY OF JIM DANSKIN
HOWARD R. DUNFORD IN MEMORY OF NANCY O’CONNOR WIFE OF RAY O’CONNOR LAFD RETIRED
ANN M. ZULIANI IN MEMORY OF ROBERT J. KELLY
ROBERT BARRETT IN MEMORY OF C.G. CURTIS
LINDA L. HUGHES
DOLORES M. BUECHE IN MEMORY OF BOB FIERS
PHYLLIS M. MILLER IN MEMORY OF BOB FIERS
LARRY G. THOMAS IN MEMORY OF ROBERT J. FIERS
KELLY VAN GORDER
MARIE D. SHAFER
MARIE D. SHAFER
MARY L. WHITELEY IN MEMORY OF CECIL W. MCLINN
LEONARD C. VOGEL IN MEMORY OF BOB FIERS
EVERETT L. MOORE IN MEMORY OF BOB FIERS
EVERETT L. MOORE IN MEMORY OF DOUG MURPHY
HARVEY B. ABRAM IN MEMORY OF BOB FIERS
CHERYL GREENLEAF IN HONOR OF ALL FIREFIGHTERS
ALICE B. TYKAC IN MEMORY OF A GOOD FRIEND ROBERT FIERS
WINIFRED MARICICH IN MEMORY OF RETIRED CAPTAIN ROBERT KELLY
DONALD E. ANGUS IN MEMORY OF ROBERT J. FIERS
JAMES A. SMITH IN MEMORY OF ROBERT J. FIERS
SYLVESTER LORENZETTI IN MEMORY OF ALFRED A. D’ALESSANDRO
LYLA E. FIERS IN MEMORY OF BOB FIERS
BABAK NADERI
HENRY BELTRAN OF ONE SET OF CRUTCHES
GLENN W. JAYNES
FRANCIS E. HILL