MINUTES OF THE BOARD OF TRUSTEES
May 7, 2009
CALL TO ORDER
President Pro-tem John Jacobsen called the Meeting of the Board of Trustees of the Los Angeles Firemen’s Relief Association to order at 9:52 a.m. President Marino was attending a LAFD conference at the beginning of the meeting.
- David T. Marino, President (arrived at 10:15am)
- Robert Steinbacher, Vice President, (arrived at 10:55am)
- Andrew Kuljis, Secretary
- Trustee James Coburn – Battalion 1
- Trustee John Jacobsen – Battalion 2
- Trustee Juan Albarran, Battalion 3
- Trustee Chris Hart – Battalion 4
- Trustee Doak Smith – Battalion 9
- Trustee David Peters – Battalion 10
- Trustee Chris Stine – Battalion 13
- Trustee Michael Overholser – Battalion 14
- Trustee Steven Domanski – Battalion 15
- Trustee Francisco Hernandez – Battalion 17
- Trustee Dennis Mendenhall – Battalion 18
- Trustee David Lowe – Pension 1
- Trustee Tom Stires – Pension 2
- David Ned Smith – Executive Director
- Controller – Todd Layfer
- Trustee Mark Akahoshi, Battalion 5 (Excused)
- Trustee Tim Larson – Battalion 6 (Excused)
- Trustee Gene Bednarchik – Battalion 7 (Excused)
- Trustee Gary Matsubara – Battalion 11 (Excused)
- Trustee Craig White – Battalion 12 (Excused)
- Trustee David Ortiz – Headquarters 1 (Excused)
- Trustee Kurt Stabel – Headquarters 2 (Excused)
- Barry Hedberg
- Garth Flint, Beacon Pointe Advisors
- Tonetta Conner, The Harrington Group
Andrew Kuljis led the invocation.
RATIFICATIONS OF MINUTES
John Jacobsen entertained a motion to ratify and dispense with the reading of the minutes of the Board of Trustees meeting held April 2, 2009. Doak Smith so moved. Chris Hart 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 April 2, 2009.
The Board of Trustees presented Dennis Mendenhall with his retirement badge and honored him for his many years of dedication and contributions to the Relief Association. Dennis will continue to serve on the Board until the end of the year.
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 $242,844.56. There was no discussion or objections.
Motion carried to pay the usual and customary bills in the amount of $242,844.56.
The committee recommends and I so move to pay the professional fees in the amount of $270. There was no discussion or objections.
Motion carried to pay the professional fees in the amount of $270.
EXECUTIVE DIRECTOR’S REPORT
1) David Smith mentioned the Scholarship Award Program and informed that they had sent a mailing to the membership with dependents in the high school senior age bracket reminding them about the Scholarship Program. He indicated that there were not many applicants participating until the mailing were sent. There are now approximately 28 qualified applicants for the scholarships.
2) Todd Layfer presented the 2009 first quarter expenditures/revenue and compared them to the budget. He reviewed revenue sources and mentioned that the donations were up over budgeted projections. He mentioned that revenue is on target and consistent with expectations.
He reviewed medical benefit payments for the 1st quarter and mentioned that they were 30% below from what was projected. He noted that high dollar claims could change this if it occurs. He mentioned that Pharmaceuticals were within 3% of the budget. He stated that the Sick & Injury Relief payments were down due to fewer deaths than budgeted and less Estate Benefit claims submitted. He reported that Life & Accident benefit payments were similarly under budget. DME expenditures are just under what was projected with a $29,000 difference. Assistance is basically on target from what was projected.
Todd indicated that the contribution numbers were on target from payroll deductions of both active and retired members. He stated that bequests had slightly increased. He referred to Operating Expenses and stated that they were slightly under from what was budgeted. Professional fees were down slightly as well.
Todd reviewed the Dalmatian Store sales and operating expenses. He stated that the net sales were down with an average $5,000 per month deficit. The projected net loss for the 1st quarter was $27,000 which actually came in at $31,000. Todd stated that he and David Smith were working closely with store management to reduce the loss.
Todd stated that the bottom line is that for all fund accounts revenue exceeds expenditures and are on track with the budget within a reasonable amount of variation.
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.
MEMBER APPLICANTS COMING ON PLAN EFFECTIVE DATE
- Albarran, Daniel Cole Brewer, Cynthia R. (Dom. Partner) 4/10/09
- Barrera, Daniel Juarez, Tina (Dom. Partner) 4/3/09
- Bantle, John William Bantle, Brooke Marie (Dtr.) 4/8/09
- Carcamo, Joseph Anthony Chambliss, Rebecca (Dom. Partner) 4/1/09
- Custudio, Eric Custudio, Julie (Spouse) 4/1/09
- Galvez, Gregory M. Galvez, Joey Charlotte (Dtr.) 2/18/09
- Kneisler, Brent Allen Kneisler, Laine Cooper (Son) 4/7/09
- Lowe, Kevin Scott Cotter, Andrew W. (Step-Son) 3/23/09
- Mashack, Elton Mashack, Kwesi (Son) 5/1/09
- Mashack, Jahmair (Son) 5/1/09
- Mashack, Malika (Dtr.) 5/1/09
- Navarro, Elber Navarro, Lily Kaylin (Dtr.) 4/22/09
- Quan, Nelson Jack Quan, Natalyn Janelle (Dtr.) 4/10/09
- Riddall, Nicolas A. Ridall, Aiden Tyler (Son) 3/30/09
- Wersterman, Loth Westerman, Nellie Graham (Spouse) 3/20/09
- Woods, harry Bryan Woods, Magdalen (Spouse) 2/26/09
MEMBER APPLICANTS COMING ON PLAN EFFECTIVE DATE
- Fong, Tyrone Ta-Jen Self 6/1/09
- Saegusa, Keiko, (Spouse) 6/1/09
- Mileham, Graham Joseph Self 6/1/09
- Smith, Austin Matthew Self 6/1/09
Peters informed the Board that they have received a $2.3 million claim in the system and indicated that Bradawn and HealthScope are working to negotiate a decrease in the billing.
Peters also informed that there will be new I.D. Cards issued to out of California members because of the Beech Street network affiliates that operate in a few states. He also mentioned that Medco will be increasing their mailing rates by $ .07 per item.
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 $22,158.50,
Estate Planning benefits in the amount of $5,500,
Relief Death benefits in the amount of $31,500,
Life & Accident Death Benefit in the amount of $12,000,
Life & Accident withdrawals in the amount of $2,166.
There was no discussion or objections.
Motion carried to pay the above Relief benefits.
Dale R. Booth
Joseph L. Corrigan
Clyde N. Stimson
Andrew J. Abels, Jr.
Joseph F. Oronoz
Andrew J. Waters
John L. Willis
James Coburn read the names of members who recently passed and asked for a moment of silence from the Board.
Chairman James Coburn presented the following motions.
The committee recommends and I so move to accept the donations in the amount of $7,793.97 to the Widows, Orphans & Disabled Firemen’s Fund. There was no discussion or objections.
Motion carried to accept the donations in the amount of $7,793.97 to the Widows, Orphans & Disabled Firemen’s Fund.
Donation to Widows, Orphans & Disabled Firemen’s Fund April 2009
- WHITEHAWK RANCH AT HUBBARD HOA ASSOC.
- AL S. WEAVER IN APPRECIATION OF OUR MEDICAL PLAN AND STAFF
- DANIEL LEON IN MEMORY OF RICHARD LANG, JOSEPH CORRIGAN & RICHARD ARAUJO
- DRILL TOWER 81
- HOWARD L. KELLEY IN MEMORY OF NANCY & MARGIE KELLEY
- BERTHA L. KALP IN GRATITUDE FOR THE “CELEBRATION OF LIFE” THAT WAS HELD FOR MY HUSBAND JAMES W. KALP
- WELLPOINT ASSOCIATE GIVING CAMPAIGN
- DAVID D. VIVIAN
- ROBERT D SCHULZ IN MEMORY OF “MY BROTHERS” WHO HAVE PASSED ON RECENTLY
- THERESA KOSAK IN MEMORY OF MY HUSBAND JOSEPH KOSAK WHO PASSED AWAY ON MARCH 24, 1984
- DENNIS L. MENDENHALL IN MEMORY OF GEORGE CUMMINGS
- JO ANN MILLS
- DOROTHY APPLE
- ROBERT P LUTZ
- JOHN W. POTTER IN MEMORY OF ARTHUR RAMIREZ
- BETTY V. LARSON
- MARCIA M. HALPERIN IN APPRECIATION FOR FIRE STATION 88BS’ EFFORTS DURING YOUR RECENT MEDICAL EMERGENCY
- AARON R. HALL IN MEMORY OF RICHARD ARAUJO
- JOHN HOLST IN MEMORY OF LARRY MILLER
- PATRICIA M. KESSEN
- MARY ANN KIELTY IN MEMORY OF THOMAS KENYON, JR.
- NELL G. HULSEY IN MEMORY OF BARBARA SCHOLE FROM HER CARD PLAYING FRIENDS
- ROBERT P LUTZ IN MEMORY OF ROY WALTERS
- JAMES J MULLEN IN GRATITUDE FOR THE LOAN OF THE MEDICAL EQUIPMENT
- DON L. TOLLEY IN MEMORY OF ROY A. WALTERS & JOSEPH F. ORONOZ
- DIANE L. GREGG IN MEMORY OF BARBARA SCHOLE
- EARL MAZZARI IN MEMORY OF A GREAT FIREMAN & FRIEND GROVER THOMAS
- ROBERT P. LUTZ IN MEMORY OF BOB HENDERSON
- DONALD IVERSON IN MEMORY OF BARBARA SCHOLE
- DINKO KLARIN IN MEMORY OF CAPTAIN ROBERT E. HENDERSON
- TRENT J. HUGHES IN MEMORY OF RICHARD ARAUJO RETIRED FIREMAN
- MARIA FENYES IN GRATITUDE TO THE FIREFIGHTERS DURING THE RECENT SAYRE FIRES
- ANN M. NIX IN MEMORY OF MRS. BARBARA SCHOLE
- HENRY O. HUIZING, JR. IN MEMORY OF ART RAMIREZ
- CHERYL CHAPNICK
- F F PACHECO FIRESTATION #95
- FIRE STATION NO. 95 FROM YOUR FIRE EXTINGUISHER FUND
- MARIE D. SHAFER
- ZELLDA E. SNYDER IN MEMORY OF CHIEF RICHARD ANDERSON
- GIL SIEGEL IN MEMORY OF CAPTAIN LARRY FARRIS
- DORIS TUCKER IN MEMORY OF ROY A. WALTERS
- EDWARD BURNS IN MEMORY OF DALE R. BOOTH
- JOYCE S. HILDEBRAND IN MEMORY OF BETTY WEAVER
- ANN HAM IN MEMORY OF BARBARA SCHOLE
- FRANCIS G. CLINITE IN MEMORY OF DICK DENNING
- WILLIAM C. SANDERSON IN MEMORY OF ART RAMIREZ
- MATTHEW SCHWINGER
- GREGORY E. NEWLAND IN MEMORY OF CHUCK MERRIMAN
- FRANCIS G. CLINITE IN MEMORY OF ROY WALTERS
- FRANCIS G. CLINITE IN MEMORY OF WILLIE YOUNG
- JUDY D. MATTERA IN MEMORY OF BARBARA SCHOLE
- GWEN ROZESKI IN MEMORY OF BARBARA SCHOLE
- GIVING TREE LLC
- JENNIFER LUTZKY
- BOB LOHMAN & “THE TRIBE’ IN MEMORY OF ROY A. WALTERS
- TIMOTHY R. TOGNERI
- TIMOTHY R. TOGNERI
- GEORGE ENCINAS WALKERS
The committee recommends and I so move to assist;
A widow with a one time payment of $12,500,
A widow with $500 per month with a six month review,
A widow with $600 per month with a six month review,
A widow with medical premiums with a six month review,
A spouse with continued $265 per month for medical premiums with a six month review,
There was no discussion or objections.
Motion carried to approve the above assistance as stated.
Chairman James Coburn presented the following motion.
The committee recommends and I so move to advance:
A member $68,452 for out of pocket expenses for dependent,
There was no discussion or objections.
Motion carried to approve emergency advancement as stated.
AUDIT COMMITTEE REPORT
Chairman Doak Smith informed the Board that the Audit Committee had met with the Harrington Group on April 15th to review the draft audit report. He mentioned that there were a few minor changes to the report. He mentioned that the auditor had explained the details of the audit to the Audit Committee. The Committee asked the audit partner, Tonetta Conner, to present a summary of the audit to the Board and answer any questions that may arise. The audit report had been sent to the Board a week ago for their review.
Tonetta Conner provided an overview on the findings of their audit and also mentioned that because it was their first year with LAFRA, they were getting familiarized with the Association’s internal controls. This resulted in a very detailed review. She indicated that they have certain standards that they expect operationally within all of their non-profit clients and look to see how the organizations are operating and meeting those standards and expectations from internal controls. They determined that LAFRA’s internal controls are appropriate.
Tonetta mentioned that her staff interviewed key individuals in the accounting area to determine job responsibilities and if adequate controls are in place. She indicated that this action helps them identify any weaknesses that may expose LAFRA to potential harm or to make recommendations that might strengthen control.
Tonetta commented that the staff as well as outside individuals providing information for the financial statements were very cooperative. She stated that from an overall prospective on the actual audit, LAFRA is in a healthy position. She reported that LAFRA has about $80,000,000 in assets which is a combination of fixed assets, investments, cash on hand and receivables. She indicated that in terms of liabilities, LAFRA only owes out about $8 or $9 million which results in assets about 8 times liabilities. This is an excellent ratio. She stated that overall, there was a bottom-line loss in 2008, but this was due to stock market unrealized losses. She stated there is net positive income from core operations.
An exert from their letter, dated April 15, 2009, to the Board states: “In our opinion, the consolidated financial statements referred to above present fairly, in all material respect, the consolidated financial position of LAFRA and WODFF as of December 31, 2008, and the consolidated change in their net assets and their cash flows of the year then ended in conformity with accounting principles generally accepted in the United States of America.”
Chairman Doak Smith presented the following motion.
The committee recommends and I so move to accept the audit for 2008 as written and prepared by the Harrington Group. There was no discussion or objections.
Motion carried to accept the audit for 2008 as written and prepared by the Harrington Group.
Secretary Andrew Kuljis asked for the Board’s direction on whether or not to continue with the Los Angeles Times obituaries.
David Lowe motioned to discontinue with the Los Angeles Times obituaries just as soon as the website is up and running. Michael Overholser seconded the motion. There was no discussion or objections.
Motion carried to discontinue with the Los Angeles Times obituaries just as soon as the website is up and running.
PRESIDENT PRO-TEM’S REPORT
1) John Jacobsen informed the Board that there were three members that have stopped communicating and paying dues and/or medical premiums. He indicated that there were several attempts to contact these members for payment or compliance and we have not heard from them. He stated that the Relief Committee’s recommendation was to suspend the three members from membership. He mentioned that we will send another letter informing those members of their seriously delinquent status and suspension.
David Peters motioned to suspend stated members for non-payment of Relief Dues and Medical Premiums. Chris Stine seconded the motion. There was no further discussion or objections.
Motion carried to suspend stated members for non-payment of Relief Dues.
(David Marino joined the meeting)
1) David Marino updated the Board on his and Robert Steinbacher’s visit to HealthScope Benefits in Littlerock, AR. He mentioned that HealthScope will present a recommendation to the Medical Committee on replacing the current claims processing system (RIMS) with the system they are using for all other clients (HealthAxis). He stated that Dawna Gray, our medical consultant will discuss the issue with HealthScope before it is presented to the committee.
2) David Marino mentioned that he had attended a two-day meeting with the Chief Officers Association and discussed funerals, injuries and communication between the organizations and Fire Department. He presented an overview of LAFRA’s progress over the past 18 months.
INVESTMENT COMMITTEE REPORT
John Jacobsen informed that Garth Flint from Beacon Pointe Advisors was present to review the 1st quarter investment results.
Garth Flint presented a visual presentation reviewing the 1st quarter investment results and what has been happening in the global markets.
Garth reviewed the composite returns on the portfolio for various time periods and stated that the quarter ending March 31st, shows that the portfolio was down -5.2% and in the 52nd percentile. He stated that we should look at the 3, 5 and 7 year numbers to determine managers’ performance over time. He indicated that overall, there were relatively good long-term numbers. He mentioned that Stralem had a tough quarter yet Knightsbridge performed very well. He indicated that Cohen & Steers and Knightsbridge benchmarked against the Russell 1000 Value and stated that they need to outperform going forward to be retained. He mentioned J.W. Seligman and indicated that the Investment Committee was going to begin a search to replace them as investment managers in the Small Cap Value area.
Garth mentioned that the International Large Cap Value Managers, Columbia and Artisan, although in the negative, have good numbers relative to the Value EAFE Index. He indicated that they have had some trouble. He was disappointment with T. Rowe Price in that they are behind the Emerging Market benchmark. He stated that PIMCO has performed exceptionally well in the current environment. For the quarter, they are up at 1.6%. He referred to the PIMCO Distressed Credit and mentioned that it shows positive numbers.
(Bob Steinbacher joined the meeting)
GRAPEVINE COMMITTEE REPORT
Chairman Chris Hart mentioned that they had hired the new Web Administrator, Tammy Gann. He mentioned that Dave Wagner has been dealing with the printer of the Grapevine and trying to re-price. He indicated that they’ve been seeking bids from different printers to hopefully cut costs. He indicated that they have had an increase in advertisements
Chris asked Trustees to encourage members to volunteer and write articles for Battalion News.
There was discussion on certain articles placed in the Grapevine and whether or not they should be considered as advertisements.
SPECIAL EVENTS COMMITTEE
David Marino informed the Board of the upcoming events and asked for Trustee participation on selling raffle tickets for the Golf Tournament. He mentioned the Hope for Firefighters event and indicated that they have already raised $50,000 in donations. He stated that they will begin selling Fire Bucks on June 2nd and 3rd.
David Peters referred to a situation regarding a member that had been given an advancement of approximately $35,000 several years ago. He stated that the President at that time had failed to secure the proper documentation for the member to pay back the loan. The member claims that he cannot afford to pay back the loan. After legal reviews of the situation, he asked for the Board’s direction to send a 1099 to the member and write-off the loan amount or to pursue a legal recourse which is not the recommendation of legal counsel
Juan Albarran motioned to issue a 1099 form to the member for the full balance owed to the Association. Chris Hart seconded the motion. There was no further discussion or objections.
Motion carried to issue a 1099 form to the member for the full balance.
VICE PRESIDENT’S REPORT
Robert Steinbacher informed the Board that he and Dawna Gray from Bradawn had attended the Pension Board meeting held early in the day. He mentioned that the audit performed by the Segal Company of our retiree medical plan went very well and Segal presented these findings to the Pension Board. This successfully concludes the Pension Board audit as required by our MOU with them. Also, he noted that all of the Associations were doing well with their medical plans.
1) Medco Conference (Florida) – May 12 – 15
2) Grass Valley Reunion – May 12 – 17
3) Lane Kemper Softball Tournament – May 13th
4) Washington Legislative – May 16 – 20
5) Hope For Firefighters – June 4th
6) Dodger Game Firefighter Night – June 17th Heroes Day June 27th
7) LAFD Invitational Golf Tournament – July 27th
8) Colorado Springs Memorial – September 17 – 20
9) IFEBP Annual Conference – November 8 – 11th
10) Open House – November 21st
11) Relief Holiday Party – December 5th
1) Arthur “Doug” Moore – May 12th Ports O’Call Restaurant (Kuljis & Larson)
2) Jimmy Nishimura – May 29th Fire Station 74
3) Richard Markota – May 21st Odyssey Restaurant (Doak, Steinbacher)
4) Barry Hedberg – May 22nd Ports O’Call Restaurant (Marino, Lowe)
5) Gale E. Sanderson & William H. Koenig – May 26th Sage Brush Cantina
6) Reginald Williams & Delano Roberts – May 27th Kyoto Grand Hotel (Marino)
7) Terry S. Cooper – May 30th Dave’s Garage (Larson)
8) Jean C. Samson – July 23rd TBA
9) Bruce Young – August 15th Home of Dana Larsen
John Jacobsen entertained a motion to adjourn in memory of Bill Goss. David Peters so moved. David Lowe seconded. There was no discussion and no objections.
Motion carried to adjourn in memory of Bill Goss.
The Board of Trustees meeting adjourned at 12:15pm.
John Jacobsen, President Pro-tem