MINUTES OF THE BOARD OF TRUSTEES
February 10, 2010
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 11:22 a.m.
ROLL CALL
MEMBERS PRESENT:
- David T. Marino, President
- John Jacobsen, Vice President
- Andrew Kuljis, Secretary
- Trustee Jeff Cawdrey – Battalion 1
- Trustee Gene Bednarchik – Battalion 2
- Trustee Juan Albarran, Battalion 3
- Trustee Mark Akahoshi, Battalion 5
- Trustee Tim Larson – Battalion 6
- Trustee Robert Steinbacher – Battalion 7
- Trustee Doak Smith – Battalion 9
- Trustee David Peters – Battalion 10
- Trustee Gary Matsubara – Battalion 11
- Trustee Craig White – Battalion 12
- Trustee Chris Stine – Battalion 13
- Trustee Michael Overholser – Battalion 14
- Trustee Chris Hart – Battalion 18
- Trustee Kurt Stabel – Headquarters 2
- Trustee David Lowe – Pension 1
- Trustee Barry Hedberg – Pension 2
- Trustee Ralph Brownell – Pension 3
- David Ned Smith – Executive Director
- Controller – Todd Layfer
MEMBERS ABSENT:
- Trustee James Coburn – Battalion 4 (Excused)
- Trustee Steven Domanski – Battalion 15 (Excused)
- Trustee Francisco Hernandez – Battalion 17 (Excused)
- Trustee David Ortiz – Headquarters 1 (Excused)
GUESTS:
- Robert Ridley, Attorney
- Shawn Connelly, Member
- Felix Lin & Travis Ponchetti of Beacon Pointe Advisors
INVOCATION & Flag Salute
Tim Larson 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 January 7, 2010. David Peters so moved. Gene Bednarchik 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 7, 2010.
PRESIDENT’S REPORT
1) Relief Association Attorney Robert Ridley addressed the Trustees on their duties and fiduciary responsibilities as a Trustee. He addressed the importance of Trustees attending the annual IFEPB conference for education purposes and to ensure compliance with rules for California law. He informed the Trustees of their personal liabilities and being prudent with the Association’s funds. He stated that trustees must take an active role in fulfilling their responsibilities as a trustee. He indicated that the Association has maintained good record keeping and have policies and procedures in place. This process needs to continue.
INVESTMENT COMMITTEE REPORT
Kurt Stabel informed that Felix Lin and Travis Ponchetti of Beacon Pointe Advisors were present to address the Board.
Felix presented the Executive Summary displaying the 4th Quarter Year-End investment report. He referred to the composite numbers and stated that for the 4th quarter, the portfolio is up 3.46%. He also mentioned that the portfolio was up 24.7% for 2009. He stated that the benchmark was only up 21%. He indicated that if you look through the 3, 5, 7 and 10 year numbers, the portfolio has performed very well relative to the benchmarks. He briefly reviewed the individual investment managers’ performance as well as the asset allocations.
Kurt Stabel Report
For FY 2009 I am glad to report that LAFRA’s portfolio was up 24.7% even with a very heavy exposure to the bond market through PIMCO’s Total Return Fund. Standouts during the year were Emerging Markets, with Lazard and T. Rowe Price’s funds up 71.6% and 87.1% respectively. Our investment in PIMCO’s senior distressed credit fund was up 45.8%, which was a strong contributor to overall performance. We have met all of our capital calls for this fund and are fully invested. Overall, strong performance was exhibited by all of our managers with the exception of Stralem, which lagged the market rally as the market moved up sharply from March lows. Regarding this point, we will follow up with them to ensure they are sticking to their investment philosophy and conduct a review of their portfolio and report back to the Board.
Looking back on 2009, this was by far the most difficult “correction” for capital markets, which has now followed through to impact the overall economy, in recent memory. The “lost decade” has become a common description for anyone heavily invested in the equity markets during the past ten years. Being disciplined was key during the market meltdown as many participants simply couldn’t take the heat and got out of the kitchen, selling near market lows and often realizing large losses, as the DOW bounced around in the 6,500-8,000 range (peak to trough DOW down over 50%). This turned out to be when return of principal rather than return on principal was foremost in investor’s minds. Asset allocation and a long-term perspective have allowed LAFRA’s investments to weather this storm quite well and during the downturn we have taken advantage of some opportunities. Specifically investing in super senior distressed debt (through PIMCO) and Emerging Markets at or near market lows has paid off for the Association. During 2009 we have executed on making strategic changes to our asset allocation model and will continue implement this plan during 2010.
Going forward, we have positioned LAFRA to be both more diversified (adding some asset classes) and have a lower risk exposure by reducing investment concentrations among some managers. The main reasoning behind this is to help reduce our overall risk exposure while seeking to add incremental positive returns with targeting specific investments. A consensus is developing among market participants that we are entering an investment climate that will be characterized by a “new normal” where investment returns, on average, will be lower than historical assumptions and there will not be any free lunch. We have attempted to position the portfolio accordingly.
A recent correction at the beginning of 2010 has again reminded us that markets have been and continue to be volatile, sometimes selling off for reasons that don’t seem to be material to a worldwide long-term recovery that appears to be developing. Many who are “just hoping to get back to even” and still holding a large equity allocation in their portfolio have seen a sharp decline in January. Late in 2009 it was a potential debt default in Dubai that rattled markets and was quickly brushed away. Now, a sovereign debt crisis in Greece seems to be the headline that is driving markets lower. In the grand scheme of worldwide GDP, Greece is a bit player but apparently it carries headline risk that can move markets. Could it be a foreshadowing of larger problems with certain EU countries (Portugal, Italy, Greece and Spain, now called PIGS because of their high government debt levels) possibly but that is hard to predict. Clearly we are not out of the woods yet as many government and municipal governments are feeling the pinch of reduced business activity, lower tax revenue, and a consumer that is cautious and has begun to rebuild their savings. Importantly most now agree that the economy is recovering.
Locally California and the City of L.A are grappling with ongoing reduced revenues and strained budgets, which has now rolled down hill to most employees (our own F.D.’s MCP is a good example). A report issued by the CAO’s office dated January 29, 2010 should be read by those interested in the current budget issues facing L.A. and our Department. Current projections are for an approximate $200 million dollar shortfall for FY 2010 and well over $400 million for FY 2011. Whether the predictions for 2011 come to pass exactly as projected is not the point, it is simply stating that the city is facing some very large budget problems that somehow need to be addressed. There are many details in this report but one which should be emphasized, the current recession is much worse that the previous ’91-’92 downturn and city revenues did not substantially recover to pre-recession levels for approximately five years. Clearly economic activity has begun to build a base and recover on a worldwide basis but in the U.S (specifically in California and the LA area) a recovery will be slow, may take an extended period of time and this will be reflected in the City’s budget going forward.
SECRETARY’S REPORT
Andy Kuljis reported on the member funerals and the member statistics report. He mentioned that he was working with Marlene on how to obtain grants for the aging members.
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.
The committee recommends and I so move to increase the medical premium rates at 3% for actives and 7% for retirees. David Peters provided explanation for the increase. There was no further discussion or objections.
Motion carried to increase the medical premium rates at 3% for actives and 7% for retirees.
The committee recommends and I so move to add the following plan design enhancements; increase orthotic benefit, increase hearing aid benefit, increase dependent age limit from age 25 to 26, eliminated student requirement for dependents with signed affidavit, increase vision frames benefit with VSP and added Lasik benefit under vision. There was no further discussion or objections.
Motion carried to approve the above stated plan design enhancements.
AUDIT COMMITTEE REPORT
Doak Smith reported that the Harrington Group was in office performing their preliminary audit. He mentioned that they will have their 2009 audit complete with a final report in April.
ADMINISTRATIVE COMMITTEE REPORT
Chairman David Peters presented the following motions.
The committee recommends and I so move to spend up to $6,000 to market the new website with the marketing campaign as presented to the committee. There was no discussion or objections.
Motion carried to spend up to $6,000 to market the new website with the marketing campaign presented to the committee.
The committee recommends and I so move to approve up to $10,000 for a member appreciation event to be held at the Saddle Ranch in Universal City on October 17, 2010. There was no discussion or objections.
Motion carried to approve up to $10,000 for a member appreciation event to be held at the Saddle Ranch in Universal City on October 17, 2010.
David Peters acknowledge the Fresh & Easy Company and their donation to the WODFF in the amount of $1,000.
The committee recommends and I so move to adopt the 2010 budget as presented by Todd Layfer. Todd Layfer mentioned a couple of minor changes from the previous presented 2010 budget due to initiatives adopted at the Trustee Strategic Planning Meeting. There was no further discussion or objections.
Motion carried to adopt the 2010 budget as presented by Todd Layfer.
EXECUTIVE DIRECTOR’S REPORT
1) David Smith that the initiatives and goals agreed upon at the Strategic Planning session assigned to specific staff and/or Trustees for completion along with completion dates. He asked Trustees to send him any questions or comments on the handout containing these assignments.
2) David Smith referred to the Policy Manual and indicated Thursday, April 29th is proposed for committees to meet and hold a “workshop” to review the section of policy that refers to their committee.
3) David Smith reported that the website has been transferred to the new hosting company and stated that they were correcting some programming errors that happen with the transfer. He indicated that they will continue to fine tune the website in the next couple of weeks.
4) Chris Hart referred to the benefit statement that was discussed previously and asked when they would be sending out to the membership. He indicated that by doing this, members would have a chance to update their beneficiaries and view all of their current benefits with the Relief Association. He mentioned that there were a few members that were under the assumption that they were participating in certain benefits and were not actually enrolled. There was discussion on whether to sent notice to members by mail and costs associated to do so.
Chris Hart motioned to approve sending the benefits statement to the members. Juan Albarran seconded. There was no further discussion or objections.
Motion carried to approve sending the benefits statement to the members.
VICE PRESIDENT’S REPORT
1) John Jacobsen mentioned to the Trustees that he has produced a Battalion Flyer to be sent out to the fire stations. He indicated that it will have contact information for Trustees so that members can call if they have any questions about benefits or need any type of assistance.
2) John Jacobsen asked Trustees if they were interested in attending any conferences to let him and/or Robert Steinbacher know so that they may make arrangements.
3) John Jacobsen mentioned that he and David Marino had meet with Chief Millage Peaks and members of the Credit Union to discuss how they could coordinate help for the members in these difficult financial times.
RELIEF COMMITTEE REPORT
Juan Albarran presented the following motion.
The committee recommends and I so move to pay:
The Sick & Injury benefits in the amount of $70,534.55,
The Estate Planning benefit in the amount of $3,422,
The Life & Accident benefit in the amount of $12,000.
There was no discussion or objections.
Motion carried to pay the above Relief benefits.
MEMORIALS
Billy H. Hargett
Victor C. Brewster
Dudley P. Schumacher
Bryce Mirtle
Phillip E. McKim
William H. Wescombe
Juan Albarran read the names of members who recently passed and asked for a moment of silence from the Board.
ASSISTANCE COMMITTEE
Juan Albarran presented the following motions.
The committee recommends and I so move to accept the donations in the amount of $37,668 to the Widows, Orphans & Disabled Firemen’s Fund. There was no discussion or objections.
Motion carried to accept the donations in the amount of $37,668 to the Widows, Orphans & Disabled Firemen’s Fund.
Donations to WODFF for January 2010
- RALPH BROWNELL EBAY MOTORHOME AUCTION
- BUZZARD BAIT EVENT FOR THE BUZZARD BAIT RIDE
- DANIEL HATTON IN MEMORY OF CLARENCE L. PARSONS
- LARRY COBAR
- SILVY ALCALAY IN HONOR OF NICK DOBUET & TIM GUNTHER
- ANTHONY J. GRADY IN MEMORY OF WILLIAM H. WESCOMBE
- ROBERT J. MUNOA FOR THE BUZZARD BAIT RIDE
- HARLAN R WOOD YOUR YEARLY CONTRIBUTION
- ROBERT J. HROMADKA IN GRATITUDE FOR THE WORK OF FS-107 IN SAVING MY LIFE
- JOHN KURY IN MEMORY OF RALPH C. ROOK
- WILLIAM E SUMMERS
- WILLIAM SAUNDERS (1) PATIENT LIFT WITH SLING AND (1) WHEELCHAIR
- JULIE A APODACA FOR THE BUZZARD BAIT RIDE
- DEBRA M. PAIZ FOR THE BUZZARD BAIT RIDE
- JERRY SHAPIRO FROM YOUR “COMMUNITIES FOR CHANGE” PROGRAM
- BILLY D. CHRISTIAN IN MEMORY OF BROTHER FIREFIGHTERS JOHN R. SHINDLER & TRUMAN R. CHRISTIAN
- HOWARD L KELLEY IN MEMORY OF MARGIE & NANCY KELLEY
- DON & BARBARA RICKLES
- BRIAN K. HISHINUMA FOR THE BUZZARD BAIT RIDE
- GEOFFREY LITE FOR THE BUZZARD BAIT RIDE
- HARRY A. PETERSON FOR THE BUZZARD BAIT RIDE
- HAROLD A. DILS IN MEMORY OF JIM PERRY, MICKEY PARR & WILLIE BRAUN
- SHANNON P. LOMBARD IN GRATITUDE TO ALL OUR FALLEN HEROS AT HOME AND ABROAD WE WILL NEVER FORGET YOU
- DENISE ALVARADO FOR THE BUZZARD BAIT RIDE
- JOSEPH D. STEFANO FOR THE BUZZARD BAIT RIDE
- JULIE LEONARD FOR THE BUZZARD BAIT RIDE
- LAURA L ROBINSON FOR THE BUZZARD BAIT RIDE
- JEFF M. PARKER FOR THE BUZZARD BAIT RIDE
- PATRICIA A LONNEE FOR THE BUZZARD BAIT RIDE
- BARBARA J COY FOR THE BUZZARD BAIT RIDE
- JANET DEPACKH FOR THE BUZZARD BAIT RIDE
- BRIAN K. HISHINUMA FOR THE BUZZARD BAIT RIDE
- JUDY GATENA FROM THE RECYCLING PROGRAM
- BETTY V LARSON
- BERNICE HALLAM IN MEMORY OF JAMES JUST
- DANNY LEON IN MEMORY OF RALPH URQUIZA
- JAMES J BOYLE IN MEMORY OF JIM PERRY
- A.B.C. CASKET COMPANY IN HONOR OF FRANK LOCKETT, ERIC DODD, AND RUDY PRENDIZ
- LAWRENCE D. BURGER IN GRATITUDE FOR THE ASSISTANCE MY WIFE AND I HAVE RECEIVED FROM THE LAFD
- HELEN L. SCHULZ
- DANA R. LAINE IN MEMORY OF JIM PERRY
- DAWN HROMADKA
- AES WIND GENERATION MATCHING FUNDS FOR ROSE SNOW’S DONATION
- HENRY HUIZINGA JR IN HONOR OF PHIL MCKIM
- MARK B STAFFORD FOR THE BUZZARD BAIT RIDE
- JEANNE M. JUNGERS FOR THE BUZZARD BAIT RIDE
- CHRISTOPHER BROOKS
- BETTY LARSON
- HELEN L. SCHULZ
- JOHN HOLST IN MEMORY OF JIM PERRY MY CLASSMATE AND FRIEND
- ENRIGUE MERCADO FOR THE BUZZARD BAIT RIDE
- KAREN WALLER FOR THE BUZZARD BAIT RIDE
- ALBERTO ROS, JR FOR THE BUZZARD BAIT RIDE
- ROBERT E. LOWE (1) WALKER, (1) COMMODE, (1) SHOE HORN, AND (1) LEG ELEVATOR WEDGE
- JOSEPH D. LEE FOR THE BUZZARD BAIT RIDE
- JANINE B BAILEY FOR THE BUZZARD BAIT RIDE
- FIRE STATION NO. 90 FROM OUR FIRE EXTINGUISHER FUND
- ROBERT DAVENPORT FOR THE BUZZARD BAIT RIDE
- CAROLYN STEINBACHER IN HONOR OF TOM BAUMGARTNER, MATT COPPING, AND FLO GARWOOD
- PAUL MCKIM IN MEMORY OF PHIL MCKIM
- ALBERT BOCTOR FOR THE BUZZARD BAIT RIDE
- BRIAN K. HISHINUMA FOR THE BUZZARD BAIT RIDE
- MICHAEL MOORE FOR THE BUZZARD BAIT RIDE
- LEON SANCHEZ FOR THE BUZZARD BAIT RIDE
- MARK B. STAFFORD FOR THE BUZZARD BAIT RIDE
- DONALD J PAONE FOR THE BUZZARD BAIT RIDE
- WESLEY R SCHROEDER FOR THE BUZZARD BAIT RIDE
- BRENT M BALICH FOR THE BUZZARD BAIT RIDE
- JEFF FERGUSON IN MEMORY OF JIM PERRY
- DANA R. LAINE IN MEMORY OF RAY LAINE
- DANIEL J. KEMP IN MEMORY OF PHIL MCKIM
- LYNN D. MCKIM IN MEMORY OF PHILLIP MCKIM
- JERRY MINER IN MEMORY OF PHILLIP MCKIM
- JOHN C. MCKILLIP IN MEMORY OF CAPTAIN TONY & ANTOINETTE DIDOMENICO
- HELEN A NORTON
- ELENA GERLI
- JOHN SQUIRE IN MEMORY OF JIM PERRY
- RONALD VOHL IN MEMORY OF PHIL MCKIM
- ANONYMOUS DONATION
- LUCILLE PENNA IN MEMORY OF CONNIE ACTON WIDOW OF RICHARD ACTON WHO PASSED AWAY 01/16/2010
- CYNDI FEDELE FOR THE BUZZARD BAIT RIDE
- FERNANDO DELGADO FOR THE BUZZARD BAIT RIDE
- DEBRA L. PAIZ FOR THE BUZZARD BAIT RIDE
- RICHARD F. RUSH IN MEMORY OF GLORIA V. ORTIZ
- LARRY W. SMITH IN MEMORY OF PHILLIP E. MCKIM
- JACK BENNETT IN MEMORY OF BROTHER JIM PERRY
- DOROTHY M. CLARK IN MEMORY OF GLORIA ORTIZ
- CYNDI FEDELE FOR THE BUZZARD BAIT RIDE
- WESLEY B SHEPARD FOR THE BUZZARD BAIT RIDE
- JANINE B. BAILEY FOR THE BUZZARD BAIT RIDE
- KAREN WALLER FOR THE BUZZARD BAIT RIDE
- TARA E. KEIM FOR THE BUZZARD BAIT RIDE
- PAUL GIBBS & FAMILY IN MEMORY OF PHILLIP MCKIM
- DAVE MALAFRONTE
The committee recommends and I so move to assist twelve members with monthly assistance and medical premiums. There was no discussion or objections.
Motion carried to approve assisting twelve members with monthly assistance and medical premiums.
EMERGENCY ADVANCEMENTS
Juan Albarran presented the following motions.
The committee recommends and I so move to advance six members emergency advancements. Juan Albarran informed that the emergency advancements included one that was over the approval amount of $35,000 for legal costs. There was no discussion or objections.
Motion carried to approve emergency advancements as stated.
GRAPEVINE/WEBSITE REPORT
Chris Hart mentioned that he and Kurt Stabel will meet with the Dalmatian store manager to come up with new ideas on how to improve sales. He asked Trustees to get opinions from the members on improvements and types of items they would like to see sold at the store.
Chris Hart mentioned the Grapevine and indicated that they had been discussing other options on publishing and posting on the new website. He also stated that they would need to work on considering those who advertise in the Grapevine and if they would also like to advertise on the website.
SETTING DATES
1) Hope for Firefighters – June 3rd
2) Colorado Springs Memorial – September 11th
3) LAFD Invitational Golf Tourn – September 13th
4) Open House – November 6th
5) Annual IFEPB Conference (Hawaii) – November 14th – 17th
RETIREMENT DINNERS
1) Doug Graft – March 4th PD
2) Dale Gant – March 28th LAFD Air Operations
3) Tim G. Larson – April 9th Ports O’Call Restaurant
4) George Clock – April 21st Taix Restaurant
5) Jim Clark – April 29th Knollwood Country Club
6) Thomas L. Derby – May 1st Airtel Plaza Hotel Van Nuys
ADJOURNMENT
David Marino entertained a motion to adjourn. Gary Matsubara so moved. Chris Stine seconded. There was no discussion and no objections.
Motion carried to adjourn.
The Board of Trustees meeting adjourned at 1:00pm.
David Marino, President