MINUTES OF THE BOARD OF TRUSTEES
August 5, 2009
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 10:48 a.m.
ROLL CALL
MEMBERS PRESENT:
- David T. Marino, President
- Andrew Kuljis, Secretary
- Trustee James Coburn – Battalion 1
- Trustee Juan Albarran, Battalion 3
- Trustee Chris Hart – Battalion 4
- Trustee Tim Larson – Battalion 6
- Trustee David Peters – Battalion 10
- Trustee Chris Stine – Battalion 13
- Trustee Steven Domanski – Battalion 15
- Trustee Francisco Hernandez – Battalion 17
- Trustee Dennis Mendenhall – Battalion 18
- Trustee Kurt Stabel – Headquarters 2
- Trustee David Lowe – Pension 1
- Trustee Tom Stires – Pension 2
- Trustee Ralph Brownell – Pension 3
- David Ned Smith – Executive Director
- Controller – Todd Layfer
MEMBERS ABSENT:
- Trustee John Jacobsen – Battalion 2 (Excused)
- Trustee Mark Akahoshi, Battalion 5 (Excused)
- Trustee Gene Bednarchik – Battalion 7 (Excused)
- Trustee Doak Smith – Battalion 9 (Excused)
- Trustee Gary Matsubara – Battalion 11 (Excused)
- Trustee Craig White – Battalion 12 (Excused)
- Trustee Michael Overholser – Battalion 14 (Excused)
- Trustee David Ortiz – Headquarters 1 (Excused)
- Robert Steinbacher, Vice President (Excused)
GUESTS:
- Bill Quinn, Retired Fire & Police Association
- Bob Olsen, Retired Fire & Police Association
INVOCATION
Ralph Brownell led the invocation.
RATIFICATIONS OF MINUTES
David Marino entertained a motion to ratify and dispense with the reading of the minutes of the Board of Trustees meeting held July 8, 2009. Dennis Mendenhall so moved. Tim Larson seconded the motion. There was no further discussion or objections.
Motion carried to ratify and dispense with the reading of the minutes of the Board of Trustees meeting held July 8, 2009.
INVESTMENT COMMITTEE REPORT
Chairman Kurt Stabel informed that Garth Flint of Beacon Pointe was going to provide the 2nd Quarter review. Garth indicated that he was going to review the last quarter as well as last year. Garth reviewed the investment returns for various markets. He referred to Hedge Funds and Alternative Investments and stated that they overall had a bad year. He indicated that if you look at their 5 and 10 year numbers, they are solid relative to the S & P 500. He reported that interest rates were down globally which shows a positive shaped yield curve. He mentioned that the personal savings were up in May at 6.9% because people were nervous about the economy and not spending. He indicated that until a consumer comes back into the market, it will delay the recovery. He mentioned that a big concern was inflation. He stated that inflation is driven from labor wage rates and factory capacity. He indicated they don’t feel that inflation will occur soon because banks are not lending money and the high unemployment rate. He also stated that factories are running at a 65% capacity and until that gets to 85%, inflation won’t occur which is not likely to occur for 3 – 4 years.
Garth stated that their recommendation was not to abandon our well conceived investment strategy because of the current market. He also indicated their pool of assets has a very long term approach and they do not want the short-term situation change what their asset allocation strategy is. He also suggested balancing the risk of losing money and the risk of missed opportunity and being patient.
Garth reviewed the portfolio objectives which were to outperform the benchmark of S & P 500 weighted at 75% and the Bond Index weighted at 25%. He also stated that they want to beat the trailing 12-month Treasury rate by 4%.
Garth reviewed the Executive Summary of the quarterly report and stated that the portfolio has done well. He indicated that the portfolio had good returns for the quarter and has outperformed the benchmark 13.1 to 12.4%. He referred to the performance by managers and their rank in percentile and their long term performance. He mentioned that the Distressed Credit investment managed by PIMCO has done well with a 16.9% return YTD. He referred to the Asset Allocation vs. Policy and indicated that we need to rebalance the account. He stated that they would talk with the investment committee about slowly rebalancing over time.
Kurt Stabel mentioned that he had met with Garth to discuss current issues and the real estate outlook. He referred to the composite returns and mentioned that the stock returns are much lower than what was returned on the bond fund. He also stated that International Funds have beaten domestic funds over the five and ten year periods.
He mentioned that the Administrative committee discussed the real estate environment and decided to form a committee to define parameters of what they would look for in a real estate investment.
Kurt mentioned that they were going to move some of the cash at U.S. Bank into Union Bank and allocate $3 million amongst the investment mix.
EXECUTIVE DIRECTOR’S REPORT
1) David Smith informed that Todd Layfer was going to review the Year-To-Date expenditures through June 30th and compare them to the budget.
Todd Layfer referred to the Association’s revenue sources and stated that they are in line as expected and budgeted for the first six months of the year. He mentioned that the dividends interest net income was up 36% over the budget due to the PIMCO total return fund. He referred to the benefits paid and mentioned that Medical was down 16% from what was projected, pharmaceutical was at a 2% difference and the Sick, Injury and Relief benefits show $100,000 below budget due to retirements, fewer leave no pay or payments capped out at maximum. He also mentioned that the Relief Death benefit had been under what was projected. He indicated that the DME benefit was on target from what was anticipated. Assistance is up 6% from what was anticipated. He reviewed the contributions through payroll deductions are on target with only a $2,000 difference. Operating costs are 3% under budget. He mentioned that this year, the Grapevine assessment will be in the month of July. He mentioned that the revenue at the Grapevine expenditures at the end of September will be offset in part due to the assessment income. Net sales are down about 4% from what was projected for the Dalmatian store. The costs of good sold were projected about 54% net sales and are coming in at 48% due to increase in prices. David Smith mentioned that since the Dalmatian store is relocating at the end of the year, the monthly rent will go from $6,200 per month to $3,000 per month. That would amount to $36,000 less overhead associated with Dalmatians. He also mentioned that they now have two vans going to fire stations six days per week.
2) David Smith referred to the relocation of the Dalmatian store and presented the principles to the Board for review. He mentioned that the Credit Union has come back with a favorable agreement from negotiations. He indicated that the rent per square footage will remain the same and they have agreed to pay for all relocation costs. He stated that LAFRA is being made whole by the Credit Union for the relocation.
The Administrative Committee recommends and so moves to approve the Dalmatian Relocation principles. There was no discussion or objections.
Motion carried to approve the Dalmatian Relocation principles.
David Smith informed that the Credit Union has sold the 1520 Colorado building and the requirement is that the Credit Union must vacate the building by the end of the year. He indicated that Dalmatian is planned to move to the 815 building the same time the Credit Union retail function move and this is currently scheduled for the weekend of December 12th.
3) David Smith referred to the website and mentioned that Ciplex’ contract has a launch date of September. He stated that they are doing everything possible to get the site launched as quickly as possible and yet still have a high quality site at the time of the launch.
4) David Smith referred to the Golf Tournament and mentioned that several Trustees had concerns or issues with the location. He mentioned that Trustees Lowe, Bednarchik, Larson and himself will meet with Juliet to discuss next year’s event after Committee meetings on August 20. He also mentioned that on August 26th, David Lowe, Tim Larson, Juliet and he will visit alternative sites for next year and bring back recommendations to the Board.
ADMINISTRATIVE COMMITTEE REPORT
Trustee David Peters presented the following motions.
The committee recommends and I so move to pay the usual and customary bills in the amount of $784,810.97. There was no discussion or objections.
Motion carried to pay the usual and customary bills in the amount of $784,810.97.
The committee recommends and I so move to pay the professional fees in the amount of $21,130.61. There was no discussion or objections.
Motion carried to pay the professional fees in the amount of $21,130.61.
The committee recommends and I so move to approve Privacy Policy relative to the website. There was no discussion or objections.
Motion carried to approve the Privacy Policy relative to the website.
The committee recommends and I so move to approve the Dalmatian Shipping & Return Policy. There was no discussion or objections.
Motion carried to approve the Dalmatian Shipping & Return policy.
The committee recommends and I so move to approve seed money of $3,500 for the L.A. Athletic Club Handball/Poker Tournament. This tournament’s proceeds benefit the WODFF. There was no discussion or objections.
Motion carried to approve the seed money of $3,500 for the L.A. Athletic Club Handball/Poker Tournament.
The committee recommends and I so move to approve the new job description position for a LAFRA staff employee plus a 5% salary adjustment. The job description title will be Graphic Arts/Website Project Coordinator and he will supervise duties and manage projects of staff. This is replacing an existing position and will not result in the hiring of additional personnel. There was no discussion or objections.
Motion carried to approve the new job description position for a LAFRA staff employee plus a 5% salary adjustment.
The committee recommends and I so move to maintain a balance at U.S. Bank medical checking account of approximately $6 million with the amount over the “peg” balance required covering banking fees invested into a Sweep Account. The Sweep Account currently pays approximately .7%. There was no further discussion or objections.
Motion carried to maintain a balance at U.S. Bank medical checking account approximately $6 million with any overage investing into a Sweep Account.
The committee recommends and I so move to increase the payment for subscription cost to Netloop.com to $60 per month. There was no discussion or objections.
Motion carried to increase the subscription cost to Netloop.com to $60 per month.
David Peters informed the Board that a motor-home had been donated by a member to LAFRA. He indicated that currently, they are transferring title to the Association and placing in on our vehicle insurance. There was discussion on what to do with the motor-home, but no decision was made.
MEDICAL COMMITTEE REPORT
Chairman 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.
RELIEF COMMITTEE REPORT
Chairman James Coburn presented the following motion.
The committee recommends and I so move to pay:
Sick and Injury benefits for active and retired members in the amount of $6,629.40,
Estate Planning benefits in the amount of $3,000,
Relief Death benefits in the amount of $45,000,
Life & Accident Death benefit in the amount of $12,000
Life & Accident withdrawals in the amount of $2,271.
There was no discussion or objections.
Motion carried to pay the above Relief benefits.
MEMORIALS
Roy A. Schreiner
Merle E. Wilsey
Elmer E. Nordquist
Warren B. Braun
Lester B. King
Charles C. Hilzer
John R. Quinlan
William D. Stanis II
Orlen R. Whitson
Louis R. Nowell
James Coburn read the names of members who recently passed and asked for a moment of silence from the Board.
ASSISTANCE COMMITTEE
Chairman James Coburn presented the following motions.
The committee recommends and I so move to accept the donations in the amount of $20,055.20 to the Widows, Orphans & Disabled Firemen’s Fund. There was no discussion or objections.
Motion carried to accept the donations in the amount of $20,055.20 to the Widows, Orphans & Disabled Firemen’s Fund.
The committee recommends and I so move to assist:
A widow with a one time $1,834.51 for past due medical premiums, plus additional medical premiums for six months,
A widow with $550 per month plus medical premiums with a six month review,
A widow with $275 per month plus medical premiums with a six month review,
A widow with medical premiums with a six month review.
There was no discussion or objections.
Motion carried to approve the above assistance as stated.
Donations to WODFF for July 2009
- VINCENT CARDINALE IN HONOR OF THE 30TH ANNUAL GRASS VALLEY REUNION
- KENNETH R. GOSS IN HONOR OF OUR FATHER BILL GOSS
- REBECCA STANIS (1) ONE LIFT CHAIR IN HONOR OF YOUR HUSBAND WILLIAM STANIS
- RUTH E. SAMUEL IN MEMORY OF MY HUSBAND INSPECTOR JAMES E. SAMUEL WHO PASSED AWAY JANUARY 1999
- ADELE J. MERRIMAN IN MEMORY OF MY HUSBAND CHUCK MERRIMAN
- FIRE STATION NO. 26 FROM OUR FIRE EXTINGUISHER FUND
- PATRICIA A. WHITSON IN MEMORY OF CAPTAIN ORLEN R. WHITSON
- VICTOR VILLA IN MEMORY OF WILLIE DUNN
- HOWARD L. KELLEY IN MEMORY OF NANCY & MARGIE KELLEY
- MICHAEL W. GOWELL
- WELLPOINT ASSOCIATE GIVING CAMPAIGN
- ALBERT G HAMILTON IN MEMORY OF MY DEAR WIFE PEGGY HAMILTON WHO PASSED AWAY ON JUNE 9, 2009
- PAT JESSUP
- CASH FROM THE TED MAYR FUNERAL HOME IN MEMORY OF ORLEN WHITSON
- FIRE STATION NO. 60 FROM OUR FIRE EXTINGUISHER FUND
- FIRE STATION NO. 48 FROM OUR FIRE EXTINGUISHER FUND
- SHARDA R. PATEL IN MEMORY OF BILL GOSS AND THE SCHOLARSHIP FUND
- HELEN SCHULZ
- BILLIE MCCULLAH IN MEMORY OF JOHN RONALD QUINLAN
- WILLIAM A. BURNIDGE IN HONOR AND GRATITUDE OF THE ACCOMPLISHMENTS OF THE GRASS VALLEY REUNION COMMITTEE OVER THE LAST 30
- DENNIS L. MENDENHALL IN MEMORY OF LES KING
- DENNIS L MENDENHALL IN MEMORY OF WILLIE BRAUN
- THOMAS D. MCCONICA IN MEMORY OF ORLEN WHITSON
- NINA M. FULLER IN MEMORY OF BOB MARK
- NINA M. FULLER IN MEMORY OF WOODIE HASKIN
- SUSAN B. STONE IN MEMORY OF LOUIE NOWELL
- DIANE WETHERBEE IN MEMORY OF JOHN R. QUINLAN
- RONALD R. PADGETT IN MEMORY OF JOHN R. QUINLAN
- WILLIAM Y. WINANS IN REMEMBRANCE OF LOUIS R. NOWELL
- FELIX V. PIERE IN GRATITUDE FOR THE DURABLE MEDICAL EQUIPMENT
- KATHY H. CANNON IN MEMORY OF “UNCLE LOUIE NOWELL”
- THOMAS V. ROHRBACK IN MEMORY OF JOE VITALE
- PATRICIA A. WHITSON IN MEMORY OF MY HUSBAND
- RHEA F. SCHREINER IN MEMORY OF MY HUSBAND ROY H. SCHREINER
- RUDOLPH FOODS COMPANY INC. IN MEMORY OF GEORGE CUMMINGS
- HELEN L SCHULZ
- BETTY V. LARSON
- ANOYMOUS DONATION IN MEMORY OF MARV MORRIS
- BETTY SUE HARDESTY IN MEMORY OF MY HUSBAND TOMALEE “TOM” HARDESTY
- JOHN J. ADAMS IN MEMORY OF ELMER NORDQUIST
- RHONDA STONE IN MEMORY OF ORLEN WHITSON
- PETER A. FOREST IN MEMORY OF CARL T. JOHNSON
- JUDY DENNY IN MEMORY OF LOUIS “LOUIE” NOWELL
- JEFF FERGUSON IN MEMORY OF BILL GOSS
- MARIE D. SHAFER
- FIRE STATION NO. 90 IN MEMORY OF ELMER NORDQUEST
- ROBERT R MALLICOAT IN MEMORY OF DEPUTY CHIEF BILL GOSS
- HOWARD R DUNFORD IN MEMORY OF RETIRED CAPTAIN LOUIS R. NOWELL
- IRENE E. HASKIN IN MEMORY OF BOB MARK
- WILLIAM R GOSS ESTATE IN MEMORY OF WARREN BRAUN
- WILLIAM R. GOSS ESTATE IN MEMORY OF LOUIE NOWELL
- ROBERT R. MALLICOAT IN MEMORY OF CHUCK MERRIMAN
- WILLIAM F. HAMMEL IN MEMORY OF WILLIE BRAUN
- MICHAEL T. HUBBARD IN MEMORY OF JOE VITALE
- LYN C. CALLISON IN HONOR OF THE 30TH ANNUAL GRASS VALLEY REUNION
- BETTY & NANCY CHEW IN MEMORY OF FRANCES WONG
- MARJORY M. TALBOTT IN MEMORY OF ORLEN WHITSON
- JANET SOEKEN IN MEMORY OF ORLEN WHITSON
- FAYE STONE IN MEMORY OF ORLEN WHITSON
- ANNIE CHRYS IN MEMORY OF JAMES TAYLOR MAGRUDER
- AL KALUNIAN IN MEMORY OF JAMES TAYLOR MAGRUDER
- SHERRI MCLOUGHLIN IN MEMORY OF ORLEN WHITSON
- KYOZO MORI IN MEMORY OF JAMES T. MAGRUDER
- DIANN T. STONE IN MEMORY OF ORLEN WHITSON
- HOMER CLARK IN MEMORY OF ORLEN WHITSON
- FIRE STATION NO. 26 FROM OUR FIRE EXTINGUISHER FUND
- CLARENCE R. STAPEL IN HONOR OF THE 30TH ANNUAL GRASS VALLEY REUNION
- EARL E. JOSEPH IN MEMORY OF ORLEN WHITSON
- RICK CHEW IN MEMORY OF FRANCES WONG
- WALTER K KORNBLUM IN MEMORY OF ROBERT S. MARK
- ROBERT DECUIR
EMERGENCY ADVANCEMENTS
Chairman James Coburn presented the following motion.
The committee recommends and I so move to advance:
A member $1,500 for move-in expenses,
A member $3,476 for funeral expenses,
A member $2,000 for move-in expenses,
A member with continued $3,500 with a six month review for physical therapy and in-home care,
A member $13,454 for dental care for spouse.
There was no discussion or objections.
Motion carried to approve emergency advancement as stated.
PRESIDENT’S REPORT
1) David Marino informed the Board that they are required to nominate President and Vice President candidates for the following year as stated in the approved By-laws.
David Lowe nominated John Jacobsen for Vice President for the year 2010. Chris Stine seconded. Nomination for Vice Present is John Jacobsen however, he was not present to accept the nomination.
David Peters nominated David Marino for President for the year 2010. David Lowe seconded. Nomination. David Marino accepted the nomination for President.
David Marino stated that in accordance with the By-laws the nominations for President and Vice-President for 2010 will remain open until the September Board meeting. At that time the Board will vote and elect the President and Vice-president for 2010.
2) David Marino mentioned the upcoming election and stated that the Even Battalions and Pension 2 were up for election. He mentioned that the October Grapevine will state the names of those running, ballots will be mailed out to the membership in November and in December the ballots will be counted.
3) David Marino informed the Board that they have revised the beneficiary form and it is now available on the website. He stated that there must me a live signature on the form in order to be accepted.
4) David Marino mentioned that they have been working on a benefits pamphlet to give to the membership and new recruits. This brochure will give a general idea of the benefits offered by the Relief Association. He stated that once the pamphlet was completed it would be available for Trustees to pass out at fire stations.
5) David Marino mentioned the Open House event and indicated that they needed to nominate and determine who they would honor at this year’s event. The Board discussed several organizations and individuals. Dennis Mendenhall suggested honoring a past Trustee as well as the honoree. The Buzzard Bait group was nominated as this year’s honoree.
David Lowe motioned to honor the Buzzard Bait group at this year’s Open House event. James Coburn seconded. There was no discussion or objections.
Motion carried to honor the Buzzard Bait group at this year’s Open House event.
NEW BUSINESS
1) David Marino presented a plaque to Wayne Sherman for his dedication and 20 years of service to LAFRA.
SETTING DATES
1) Firefighter Night Magic Mountain – August 28th
2) Colorado Springs Memorial – September 17 – 20
3) SIIA Conference – September 21 – 24
4) Wharton Investment Conference – Sept. 20th – 25th
5) IFEBP Annual Conference – November 8 – 11th
6) Open House – November 21st
7) Relief Holiday Party ESPN Zone – December 5th
8) Strategic Planning Conf. – January 26th – 27th
RETIREMENT DINNERS
1) Bruce Young – August 15th Home of Dana Larsen
2) Ernie Cabral – August 22nd Alamitos Bay Yacht Club
3) David Lilly – August 29th David Lilly’s Backyard
4) Thomas Prange – September 20th Knollwood Country Club
5) George E. Lavallee – September 23rd Knollwood Country Club
6) Steward Premmer – September 23rd George Petrelli’s Steak House
7) David Fair – October 7th Ports O’Call Restaurant
8) Thomas C. Czubek – October 7th Los Angeles Police Academy
9) Alan P. Barrios – October 23rd Renaissance Agoura Hills Hotel
10) Armando Martinez – October 25th Woodland Hills Country Club
ADJOURNMENT
David Marino entertained a motion to adjourn. David Peters so moved. Chris Stine seconded. There was no discussion and no objections.
Motion carried to adjourn.
The Board of Trustees meeting adjourned at 12:26pm.
David Marino, President