MINUTES OF THE BOARD OF TRUSTEES
February 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 10:36 a.m.
ROLL CALL
MEMBERS PRESENT:
- David Marino, President
- Robert Steinbacher, Vice President
- Andrew Kuljis, Secretary
- Trustee James Coburn – Battalion 1
- Trustee Gene Bednarchik – Battalion 2
- Trustee Juan Albarran, Battalion 3
- Trustee Mark Akahoshi, Battalion 5
- Trustee Tim Larson – Battalion 6
- Trustee Gary Matsubara – Battalion 7
- Trustee Doak Smith – Battalion 9
- Trustee Chris Stine – Battalion 11
- Trustee Steven Domanski – Battalion 15
- Trustee Francisco Hernandez – Battalion 17
- Trustee Dennis Mendenhall – Battalion 18
- Trustee David Ortiz – Headquarters 1
- Trustee Kurt Stabel – Headquarters 2
- Trustee David Lowe – Pension 1
- Trustee Tom Stires – Pension 2
- Trustee Robert Henderson – Pension 3
- Executive Director – David Ned Smith
- Controller – Todd Layfer
MEMBERS ABSENT:
- Trustee Chris Hart – Battalion 4 (Excused)
- Trustee David Peters – Battalion 10 (Excused)
- Trustee John Jacobsen – Battalion 13 (Excused)
- Trustee Michael Overholser – Battalion 14 (Excused)
GUESTS:
- Garth Flint, Beacon Pointe Advisors
INVOCATION
Trustee David Ortiz led the invocation.
OATH OF OFFICE
Secretary Andrew Kuljis administered the Oath of Office for Trustees David Ortiz, HQ1 position and Frank Hernandez, Battalion 17 position.
David Marino informed the Board that Craig White has volunteered to accept the vacant Battalion 12 position. Dennis Mendenhall motioned to accept Craig White as the Battalion 12 Trustee. David Lowe seconded the motion. There was no discussion or objections.
Motion carried to accept Craig White as the Battalion 12 Trustee.
Oath of Office was given to Craig White.
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 January 8, 2009. David Lowe so moved. Gary Matsubara 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 January 8, 2009.
INVESTMENT COMMITTEE REPORT
Chairman Kurt Stabel informed the Board of the Investment Committee’s trip to New York visiting three managers; Cohen & Steers, Stralem, and J.W. Seligman. He stated that the managers were fairly downbeat about the economy and the outlook for the economy in the next six to twelve months. He stated that while visiting Cohen & Steers, they reviewed LAFRA’s equity holdings and performance which have been performing well. They stated that they manage that product out of Washington State and have outperformed their benchmark. He also stated that they were seeking more information about their REIT products which Cohen & Steers stated they see a lot of opportunity in REITs. He mentioned that it may take about six to twelve months to determine what would happen with REITs going forward due to market situation.
Kurt mentioned that Stralem feels that equities are currently fair priced and they have been good at anticipating the market’s direction. He also stated that Stralem has outperformed their benchmark by 10% last year which is unheard of for an active manager. He mentioned that they have gotten out of financials which may have been one of their saving graces.
Kurt reported on J.W. Seligman and stated that they have not been performing well due to poor stock selection decisions. He mentioned that he spoke with the manager and pointed out that they’ve made some bad choices to which they agreed. He indicated that they may do a manager search in that area to replace Seligman. He stated that they will continue to watch Seligman for the two quarters. He stated that they are comfortable with the management situation however, in terms of the outlook with their performance has not been good.
He reported that LAFRA’S total portfolio has performed very well, being down 18%. He stated that relative to their benchmark, they have outperformed substantially compared to other companies that were down by 30% to 40%.
Beacon Pointe Advisors
Garth Flint reviewed the last quarter performance for 2008 using a multipage presentation. He stated that the portfolio has done fairly well for the environment compared to others. Referring to the seizure of credit markets, he stated that there was a systematic meltdown of the financial system and a fear of global failure that has worked its way from September through October and November. The credit markets came close to a stand still which affected businesses’ that finance their day to day activities. He stated that in October, the fear intensified and massive deleveraging began which led businesses to sell off and reduce debt. He mentioned that the decline has slowed down a bit however businesses are still in the midst of deleveraging and may continue to take some time.
Garth referred to the year in review with performances on index values and global stock markets. He reviewed the graph which reflects the historical selling of mutual funds by individual investors which historically was done at the wrong time of the down market. He stated that one should not monetize their losses.
Referring to the Long-term Trend of the S & P Returns, Garth reviewed the movement of the market since the 1950’s and indicated that there have been periods of time when it was flat to down. Kurt Stabel asked Garth to elaborate on the period of 1974 when the return was down 48.2%. Garth stated that there was more cash on the side lines as a percentage of the market than there is at this point in time. Kurt Stabel indicated that if you over laid the two charts, the worst bear market was in the ’72 – ’74 period. Garth stated that they go through periods of corrections and markets do come back. He also stated that markets do recover, however it just takes time.
Garth stated that overall, they recommend maintaining current asset allocations and selectively rebalancing. He also stated that the bond market was going to have to recover before the stock market. He reviewed the Executive Summary and the manager’s rate of return for the quarter as well as YTD.
EXECUTIVE DIRECTOR’S REPORT
1) David Smith informed the Board that the Administrative Committee has approved holding the Open House event on Saturday, November 21st from Noon to 5:00pm.
2) David Smith informed that they have received a check in the amount of $15,000 from U.S. Bank to participate and be the title sponsor for the Hope For Firefighters event this year. He also mentioned that U.S. Bank has committed another $15,000 for Hope For Firefighters for 2010.
3) David Smith informed that the Administrative Committee has approved LAFRA’s participation for a second year with the California Firefighters Celebrity Poker Tournament. He stated that the WODFF, as well as four other firefighter organizations will each receive a $5,000 donation for participating in the event.
4) David Smith reported on the website development and mentioned that Chris Hart and David Wagner were fully engaged in meetings and feedback with Ciplex. He mentioned the Web Administrator position and indicated that they have interviewed two candidates so far and will continue to interview until the position is filled.
ADMINISTRATIVE COMMITTEE REPORT
David Marino stated that the Administrative committee recommends that we increase the annual Grapevine assessment from $18 to $36. He also mentioned that it was recommended to do so by the Grapevine Committee. James Coburn asked if members elected to receive the Grapevine on the web opposed to getting a hard copy, what their cost would be. David Smith requested to defer the decision on this option until the new web site is running and the Grapevine is in place on the site. David Marino stated that the issue was that the Grapevine is currently losing about $350,000 annually and increasing to $36 per year would reduce that loss about $108,000. He also indicated that they have not raised the cost for about five years. There was no further discussion or objections.
Motion carried to increase the annual Grapevine assessment from $18 to $36.
David Smith informed the Board that the Administrative Committee thoroughly reviewed the 2009 budget in detail and made minor changes. The budget has been distributed to the Board for review twice. He indicated that at their last meeting, the Administrative Committee approved the proposed budget. He indicated that the budget is a plan expressed in numerical terms. He stated that they will be reporting back to the Board every quarter on how expenditures are doing compared to the budget and will continue to ask for approvals on significant expenditures. He also mentioned that when asking for approval on expenditures, they will inform if the expenditure is included in the budget, not included and if it would adverse or be favorable to the budget. He stated that the purpose of the budget is to avoid surprises at year end and enable to have revenue in balance with expenditures. He indicated that they do not plan on taking any money out of investments; however, they do plan to utilize a small amount of interest earned on the investment. The most important issue is that the budget is balanced with forecast revenue exceeding expected expenditures.
David Smith stated that the Administrative Committee recommends that they approve the proposed 2009 budget. Chris Stine so moved. Dennis Mendenhall seconded. There was no further discussion or objections.
Motion carried to approve the proposed 2009 budget.
Robert Steinbacher presented the following motions.
The Administrative committee recommends and I so move to pay the usual and customary bills in the amount of $180,822.77. There was no discussion or objections.
Motion carried to pay the usual and customary bills in the amount of $180,822.77.
The Administrative committee recommends and I so move to pay the professional fees in the amount of $4,242.90. There was no discussion or objections.
Motion carried to pay the professional fees in the amount of $4,242.90.
David Smith mentioned that the DVD presented at the last Board meeting has begun playing at the Clippers games as an advertisement leading up to the Firefighters Night on March 2nd. He asked that Trustees encourage the Fire Stations to get out and compete for the hour of playing time on the court. He mentioned that the L.A. King’s Firefighter Night will be on Saturday, February 14th.
VICE-PRESIDENT REPORT
1) Robert Steinbacher confirmed the names of those Trustees attending the Healthcare Management Conference in Carlsbad. He also confirmed those attending the Investment Conference in New Orleans. Frank Hernandez stated that he wanted to attend the Investment conference. Robert Steinbacher mentioned that he will be attending the Washington Legislative forum with Dawna Gray, our medical consultant. He stated that new Federal Legislation may affect LAFRA’s self funded plan.
MEDICAL COMMITTEE REPORT
Robert Steinbacher 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.
ACTIVE
MEMBER APPLICANTS COMING ON PLAN EFFECTIVE DATE
- Brown, Adam D. Mizuno, Ashley (Dom. Partner) 12/1/08
- Chitwood, Jeremy Daniel Chitwood, Kelly Daniel (Son) 11/24/08
- Combes, Nathaniel Combes, Alyssa Michelle (Dtr.) 12/1/08
- Goetze, James A. Goetze, Brooklyn Marie (Dtr.) 12/19/08
- Havron, Wayne A. Havron, Lucas (Son) 11/18/08
- Kenoi, Keith Jr. Kenoi, Camilla (Dtr.) 1/12/09
- Levine, Brian Michael Levine, Mackay Sawyer, (Son) 1/20/09
- Lumas, Grover A. Moret, Janine (Dom. Partner) 1/7/09
- Miller, Nicholas Matthew Miller, Ashley, (Spouse) 12/1/08
- Park, Ban J. Park, Gavin Bo (Son) 12/17/08
- Prusa, Ryan Phillip Prusa, Cortney Rae (Spouse) 12/1/08
- Ritchie, Richard Lee Ritchie, Virginia D. (Spouse) 1/1/09
- Rodriguez, Valentine Rodriguez, Irene (Spouse) 10/22/08
- Sapp, Ross E. Sapp, Victoria (Spouse) 1/1/09
The committee recommends and I so move to accept the proposed medical plan enhancements.
1. Amend mid-wife coverage to 100% not to exceed $2,500 per delivery.
2. Add coverage for IUD’s 80% of UCR, subject to a $10 co-pay.
3. Acupuncture – Increase calendar year maximum from $300 to $600 per person.
4. Cover wigs (in conjunction with hair loss resulting from cancer treatment – 1 wig up to
$350.
5. Amend out patient mental health benefit from a maximum of 20 visits or $2,000 per
calendar year to a maximum of 40 visits or $2,500 per calendar year.
6. Pay for emergency care at a non-PPO facility at the PPO level of benefits (not to
exceed UCR)
There was no discussion or objections.
Motion carried to accept the proposed medical plan enhancements stated.
The committee recommends and I so move to approve the increase to medical premium rates at 3.5% for Active members and 7% for Retirees effective July 1, 2009. It was noted that some of the increases may be off set by increases in subsidies. There was no further discussion or objections.
Motion carried to approve the increase in medical premium rates at 3.5% for Active members and 7% for Retirees effective July 1, 2009.
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 $42,415.37,
Relief Death benefits in the amount of $31,500,
Life & Accident Death benefits in the amount of $12,000,
Life & Accident withdrawals in the amount of $2,733,
Estate Planning benefits in the amount of $4,606.
There was no discussion or objections.
Motion carried to pay the above Relief benefits.
MEMORIALS
Robert J. Coffman
Otis F. Kirkman
Deforest B. Webber
Robert W. Bolls
Elmer G. Miller
Larry G. Miller
Ralph C. Linville
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 $11,260 to the Widows, Orphans & Disabled Firemen’s Fund. There was no discussion or objections.
Motion carried to accept the donations in the amount of $11,260 to the Widows, Orphans & Disabled Firemen’s Fund.
Donations to WODFF for January 2009
- RICHARD C. ZIEN IN GRATITUDE AND RECOGNITION OF THE FALLEN FIREFIGHTERS DURING THE YEAR OF 2008
- FRED A. TURNER IN MEMORY OF OUR FATHER HARLAN L. TURNER
- KEN WIGCHERT
- BRIAN WHITE IN MEMORY OF DICK COLEMAN
- MARILYN ACERRA IN MEMORY AND GRATITUDE TO JOHN LAWRENCE FOR HIS SUPPORT OF THE GRATEFUL HEARTS EVENT
- IVAR L MIHLD IN GRATITUDE FOR THE DURABLE MEDICAL EQUIPMENT
- RICHARD T. SAKURAI
- THOMAS M PHILLIPSON IN MEMORY OF JOHN LAWRENCE
- JOY E. LUEBKE
- DON RICKLES
- DEBRA DUVOISIN
- MICHELINE KING IN MEMORY OF RONALD LANGE
- PATRICIA A. CONWELL
- KAREN A LARSON IN MEMORY OF OUR FATHER ROBERT C. HEDGES
- CHRISTOPHER LEVY
- ELIZABETH H. SMITH-MOHN IN MEMORY OF YOUR DAD GUY SMITH AND TOM DOWLING
- TONI S. GOLDHAMMER IN MEMORY OF MY MOTHER SYKA J. PICKEREL WIDOW OF HAROLD PICKEREL
- RUTH E. VAUGHAN IN GRATITUDE FOR THE SUPPORT OF THE RELIEF ASSOCIATION
- NORMA LAINE IN MEMORY OF RAY LAINE
- ALMA VARELA IN MEMORY OF JOHN LAWRENCE FATHER OF LAKEWOOD SHERIFF STATION COMMANDER CAPTAIN CHRISTY GUYOVICH
- SANDRA RICHARDSON IN MEMORY OF GEORGE W. RAYCRAFT
- DOUGLAS BOKA IN MEMORY OF LARRY MILLER FROM FRIENDS DOUG & GERI BOKA
- JAY PORTER IN MEMORY OF RONALD LANGE
- JOANNA SANTOR IN MEMORY OF WILLIAM KING
- MICHAEL BINKOW
- DENNIS L. MENDENHALL IN MEMORY OF BILL KING
- KENNETH W DRINNON IN GRATITUDE FOR THE USE OF VARIOUS DURABLE MEDICAL EQUIPMENT
- ALLIED OFFICE INTERIORS, INC. IN MEMORY OF RONALD LANGE
- JOHN J. ADAMS IN MEMORY OF WILLIAM (BILL) J. KING
- WILLIAM H. LATHAM IN MEMORY OF MY GOOD FRIEND RALPH LINVILLE
- DAVID TAYLOR D.D.S. IN HONOR OF KEN BUZZELL
- ROBERT N. JONES IN MEMORY OF JOHN LAWRENCE
- CHARLYN A PAINE IN MEMORY OF FLOYD D. PAINE FROM J. STEVE LEE
- JUDITH E. MCCLURE IN MEMORY OF SYKA JOYCE PICKEREL A VERY SPECIAL FRIEND
- CAROL H. SCHUH IN MEMORY OF LARRY MILLER
- JOHN C. MCKILLIP IN MEMORY OF CAPTAIN TONY & ANTOINETTE DIDOMNICO
- ERNESTINE R PRIEST IN MEMORY OF RONALD LANGE
- FRED E. IHDE IN MEMORY OF GROVER “COWBOY” THOMAS
- GREGORY B. STONE IN MEMORY OF SYKA PICKEREL WIDOW OF HAROLD PICKEREL
- MICHELE ROMAS-ABDULAZIZ IN MEMORY OF JOHN LAWRENCE
- DEBRA RILEY IN MEMORY OF CAPTAIN JOHN E. LAWRENCE
- JOHN ROCK IN MEMORY OF RONALD LANGE
- COLLEEN SAUNDERS IN MEMORY OF RON LANGE
- PHILIP WEHR IN MEMORY OF RONALD LANGE
- DIANE NOWOTNY IN MEMORY OF RONALD LANGE
- SAMANTHA HERRERO IN MEMORY OF WILLIAM J. KING
- JOHN W POTTER IN MEMORY OF JOE SCHALLER
- JUDY L. TOMLINSON IN MEMORY OF JOHN LAWRENCE
- RICHARD E ALLEN IN MEMORY OF RONALD LANGE
- FIRE STATION NO. 104
- VINCENT J CARDINALE IN MEMORY OF LARRY MILLER ONE OF THE GRASS VALLEY GOOD GUYS!!
- O. DEAN MENDENHALL IN MEMORY OF VIOLA G. HENDERSON WIDOW OF DONALD E. HENDERSON
- ROBERT L. VOGEL IN MEMORY OF ROBERT COFFMAN
- ANSELMO J. GARRIDO IN MEMORY OF RONALD LANGE
- BARBARA A. WAGNER IN MEMORY OF RON LANGE
- ROBERT GRAHAM IN MEMORY OF RONALD LANGE
- DENISE PLACENCIO IN MEMORY OF WILLIAM J. KING
- CATHERINE M NAEGLE
- CYRENE LAYNE
- JIMMY F. CLIFFORD IN MEMORY OF RONALD LANGE
- HELEN FRANK IN MEMORY OF RONALD LANGE
- CATHERINE M. NAEGLE IN MEMORY OF LARRY MILLER A GRASS VALLEY REUNION MEMBER
- CATHERINE M. NAEGLE IN MEMORY OF ROBERT COFFMAN
- ARTHUR SORRENTINO
- MARVIN GAINER
The committee recommends and I so move to assist;
A widow with medical premiums with a six month review,
A widow with medical premiums with a six month review,
A widow with medical premiums with a six month review,
A widow with medical premiums with a six month review,
A widow with $400 per month with a six month review for living expenses,
A member with a continued $3,000 per month for physical therapy and in-home care,
A non-member with $6,000 for a wheelchair ramp,
A member with up to $1,300 for therapy paid from out-of-pocket expenses.
There was no discussion or objections.
Motion carried to approve the above assistance as stated.
EMERGENCY ADVANCEMENTS
Chairman James Coburn presented the following motions.
The committee recommends and I so move to advance:
A member $2,272 per month for four months,
A member with monthly tuition at $8,000 for disabled dependent,
A member $5,000 per month with a six month review for a reversed mortgage,
A widow with a reversed mortgage at $206,323 for legal fees and home.
There was no discussion or objections.
Motion carried to approve emergency advancements as stated.
PRESIDENT’S REPORT
1) David Marino asked Tom Stires and Juan Albarran if they would help with updating the Policy Book. He mentioned that they would review and perform the same program as done with the By-laws.
2) David Marino mentioned the Grass Valley event and indicated that this was going to be the last year that the historical organizing committee would be putting this on. He asked for those attending to let him know so that appropriate hotel arrangements are made.
3) David Marino indicated that he would like to have a luncheon with past individuals that have contributed to the Relief Association as well as the current management staff to review what the Association has accomplished over the years and obtain their perspective which would be presented to the Board.
SECRETARY REPORT
Andrew Kuljis mentioned that they have spent a substantial amount of money for the printing of obituaries in the Los Angeles Times. He reported that the L.A. Retired Fire & Police have withdrawn from contributing for the printing of the obituaries and have started purchasing pavers at the Museum in lieu of the L.A. Times expenditure. He indicated that we may want to consider doing the same. He also mentioned that we will move the obituary column to the website when it becomes available.
James Coburn motioned that they make an offer to split costs with the L.A. Retired Fire & Police on their paver purchases for firefighters at the Museum. David Lowe seconded. There was no discussion or objections.
Motion carried to make an offer to split costs with the L.A. Retired Fire & Police on their paver purchases for firefighters at the Museum.
AUDIT COMMITTEE REPORT
Chairman Doak Smith referred his report to Controller, Todd Layfer.
Todd indicated that the new auditor, the Harrington Group, have started their annual audit process last week. He stated that the auditors will be here after President’s Day to audit the 2009 expenditure records. He indicated that there have not been any significant issues to date and the auditors appear to be comfortable with the Association’s policies and procedures. He also mentioned that they seem to be comfortable with the accounting policies. He stated that they will make a report to the Audit Committee some time in April, which will then be presented at the May Board meeting. David Smith added that the auditors verified that the Store inventory was being done properly and spot checked for accuracy.
SETTING DATES
1) L.A. Kings Firefighter Night – February 14th
2) Clippers Firefighter Night – March 2nd
3) IFEBP Healthcare Management Conference – March 30 – 31
4) Hope For Firefighters – June 4th
5) LAFD Invitational Golf Tournament – July 27th
6) Open House November 21st
7) Holiday Party – December 5th
RETIREMENT DINNERS
1) Gregory Stone – February 5th Porter Valley Country Club (Marino)
2) Jeremiah “JBO” Johnson – February 25th Marina Del Ray Marriott
3) Benjamin “Benny” Gonzalez – February 27th Sheraton Los Angeles Downtown
4) Glen Wilkenson – March 18th Policy Academy (Akahoshi)
5) Frank K. Comfort – March 27th Downtown Marriott
6) John “Min” Lee – April 7th Odyssey Restaurant (Andy)
7) Craig Fletcher – April 15th Sagebrush Cantina, Calabasas (Doak)
8) Mark Khitikian – April 30th Taix Restaurant (Lowe)
9) Tim Wilson – April 30th Sagebrush Cantina, Calabasas (Steinbacher)
10) Arthur “Doug” Moore – May 12th Ports O’Call Restaurant (Andy)
ADJOURNMENT
David Marino entertained a motion to adjourn. James Coburn so moved. David Lowe seconded the motion. There was no discussion and no objections.
Motion carried to adjourn. The Board of Trustees meeting adjourned at 11:55am.
David Marino, President