MINUTES OF THE BOARD OF TRUSTEES
November 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 10:00 a.m.
ROLL CALL
MEMBERS PRESENT:
- David T. Marino, President
- Robert Steinbacher, Vice President
- Andrew Kuljis, Secretary
- Trustee James Coburn – Battalion 1
- Trustee Juan Albarran, Battalion 3
- Trustee Chris Hart – Battalion 4
- Trustee Gene Bednarchik – 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 Steven Domanski – Battalion 15
- Trustee Francisco Hernandez – Battalion 17
- Trustee Kurt Stabel – Headquarters 2
- Trustee David Lowe – Pension 1
- 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 Tim Larson – Battalion 6 (Excused)
- Trustee Michael Overholser – Battalion 14 (Excused)
- Trustee Dennis Mendenhall – Battalion 18 (Excused)
- Trustee David Ortiz – Headquarters 1 (Excused)
- Trustee Tom Stires – Pension 2 (Excused)
GUESTS:
- John Keys, Pension 2 Candidate
- Robert L. Olsen, L.A. Retired Fire & Police Assoc.
- Garth Flint, Beacon Pointe Advisors
INVOCATION & Flag Salute
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 October 6, 2009. David Peters so moved. David Lowe 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 October 6, 2009.
INVESTMENT COMMITTEE REPORT
Garth Flint was present to address the Board on the 3rd quarter investment’s results. He reviewed the portfolio and performance by the investment managers. He indicated that they were recommending moving out of T.Rowe Price because of volatility and moving the assets to Lazard. He mentioned that the PIMCO Distressed Fund has performed very well and is up 19.2%.
Chairman Kurt Stabel Investment Report
In general, strong performance was returned from all of our managers during Q3 with LAFRA’s portfolio returning 11.2% for Q3 and 19.2% year to date. Standouts in the portfolio include Emerging Markets and PIMCO’s Distressed Debt Fund which has returned 35.5% year to date. During longer time periods the total portfolio has returned 7.6%, 4.3%, and 6.7% for the last 1, 3, and 5 year periods respectively. These returns can be directly attributed to a healthy bond allocation and solid manager performance across all asset classes during these periods.
Regarding our asset allocation strategy, we will move forward with the transition plan prepared by our consultant that has been previously reviewed and approved by both the Investment Committee and the full Board of Trustees. We have already identified two additional managers in the “alternatives” space and will continue search for a REIT manager. The committee will continue to look for managers in the alternative space.
Garth and I met with representatives of PIMCO to discuss the PIMCO Commodity Real Return Fund. Bob Greer, the funds portfolio manager, discussed the fund and the potential benefits of adding a new asset class which is negatively correlated with equities to our portfolio. When inflation picks up, which is a likely possibility, having a commodity allocation can be an excellent diversifier and hedge against inflation. Research has shown that across a full market cycle potential returns has been reduced because of a lack of to this asset class.
PIMCO held its’ quarterly conference call reviewing the Distressed Debt Credit Opportunities Fund. The fund has benefited from a general tightening of spreads across all credit qualities and has taken profits in the Mortgage Backed Securities market, as this market has greatly appreciated over the last several months. Going forward the fund will seek to continue to exploit areas of the fixed income market that suffer from liquidity issues and be providers of “balance sheet” for overleveraged banks and financial companies. Overall fund leverage is currently at 1.7 times, with a potential to increase leverage and increase the fund’s total return. The fund is participating in the government TALF program as this seen by many to be a strategy with a government “backstop” to invested capital.
From both our in person meeting at PIMCO and their conference call several common themes were discussed (and many other institutional money managers are saying the same thing), of which the firm incorporates into their overall strategy. Near term deflationary pressures may be present while the economy has been exhibiting initial weakness. At some point, this will give way to slow U.S. economic growth, which, coupled with strong Emerging Market economies and a general recovery abroad inflationary pressures are expected to greatly increase. The U.S the consumer is expected to undergo and extended deleveraging process, credit provided to consumers and business is expected to remain tight, and asset values will remain below pre-bubble levels which, vs. other economies, will act as a headwind for U.S. growth for some time. The wildcard going forward will be how markets react to the eventual actions of the Fed increasing interest rates and the government unwinding their asset purchase programs.
ADMINISTRATIVE COMMITTEE REPORT
David Peters presented the following motions.
The committee recommends and I so move to provide up to $200 in gift certificates from the Dalmatian store for the L.A. Retired Fire & Police annual Christmas Celebration. There was no discussion or objections.
Motion carried to provide up to $200 in gift certificates from the Dalmatian store for the L.A. Retired Fire & Police Annual Christmas Celebration.
The committee recommends and I so move to pay the usual and customary bills in the amount of $649,303.81. There was no discussion or objections.
Motion carried to pay the usual and customary bills in the amount of $649,303.81.
The committee recommends and I so move to pay the professional fees in the amount of $5,740.07. There was no discussion or objections.
Motion carried to pay the professional fees in the amount of $5,740.07.
David Peters informed that the Administrative Committee has recommended that we have attorney Robert Ridley pursue Richie Vallin and his assertions that he donates funds to the WODFF and to cease and desist. It was determined that Mr. Valen has posted on his website that proceeds from the sales of his company are donated to WODFF along with other charities.
The committee recommends and I so move to enter into contract with R. A. Santiago at $400 – $800 initial fee plus $150 per month service fee to host the LAFRA website. There was no discussion or objections.
Motion carried to enter into contract with R.A. Santiago at $400 – $800 initial fee plus $150 per month service fee to host the LAFRA website.
David Peters informed the Board that David Smith had sent a letter to Michael Eakman, organizer of the Playboy Mansion Poker Tournament, inquiring about the $5000 donation promised to the WODFF. David Smith will follow up with a letter from Ridley for him to pay us immediately.
EXECUTIVE DIRECTOR’S REPORT
1) David Smith discussed the website and indicated that it continues as a work in progress. He mentioned that they had met with the owners of the company had have given them a list of problem areas for them to fix.
2) David Smith mentioned that the Dalmatians store will be moved the evening of November the 13th. He indicated that we had taken possession of the storage unit on P1 and have been moving items from P3 to P1. This will make room for the Dalmatian inventory in the P3 storage unit. He mentioned that the store will be open before November 21st.
3) Todd Layfer presented the year-to-date expenditures compared to the budget for the first 9 months. He reviewed revenue and expenditures by funds and explained the financial position compared to the end of 2008. Expenditures in all major categories are under budget and revenue exceeds expenses in all areas except Life and Accident and the store. There was discussion on reduced sales for the Dalmatian store due to loss of Drill Towers and the economy. After reviewing the investment balances, Todd Layfer stated that the bottom line balance was at a healthy position.
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.
1) David Peters mentioned that they will be sending letters to those members with presumptive I.D. codes on their claims. The letters will inform those members that they may have an IOD claim and would encourage them to seek an IOD claim recovery status.
2) David Peters mentioned that they are currently working on the M.O.U. with the Pension Department.
3) David Peters informed that they are currently looking into Long-term care insurance and how we may offer to members.
VICE PRESIDENT’S REPORT
1) Robert Steinbacher informed the Board that the Burchfield Group had attended a Medical committee meeting. He mentioned that they discussed the implementation of more control over specialty drugs such as sending a 30 day supply, when appropriate, instead of the current practice of providing a 90 day supply. .
2) Robert Steinbacher addressed HIPAA regulations and clarified what would be classified as a HIPAA violation. He indicated that if a member divulges information that has nothing to do with a medical condition, it would not be considered a HIPAA violation.
3) Robert Steinbacher mentioned the L.A. City Firefighter Appreciation Night with L.A. Kings that was held on October 25th and mentioned that Valerie Lawrence was the honored guest on behalf of John Lawrence. He mentioned that they had set up a firefighter photo booth at the event with Kurt Stabel.
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 $42,504.75,
Estate Planning benefits in the amount of $7,749,
Relief Death benefits in the amount of $49,500,
Life & Accident Death withdrawal in the amount of $2,082
There was no discussion or objections.
Motion carried to pay the above Relief benefits.
MEMORIALS
Edwin E. Stuart
Robert J. Rouleau
Robert E. Harvey
Mitchell A. Flatos
Nelson B. Howe
Robert P. Cullen
Lyle L. Lentz
Nathan W. Neal
George W. Segelke
Robert G. Hansen
Jack K. Littleford
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 $13,577.89 to the Widows, Orphans & Disabled Firemen’s Fund. There was no discussion or objections.
Motion carried to accept the donations in the amount of $13,577.89 to the Widows, Orphans & Disabled Firemen’s Fund.
Donations to WODFF for October 2009
- HILTON HOTELS CORPORATION
- MINDFOX PRODUCTIONS LLC
- SHERRY ROOK IN MEMORY OF MY FATHER RALPH C. ROOK WHO PASSED AWAY OCTOBER 31, 2000
- THOMAS E SMITH IN MEMORY OF MY WIFE LOUISE SMITH WHO PASSED AWAY NOVEMBER 17, 2008
- DEAN E CATHEY IN MEMORY OF GLORIA ORTIZ
- EVELYN L MORRISSETTE IN MEMORY OF WILLIAM GOSS
- WILLIAM FRANDSEN IN MEMORY OF RALPH URQUIZA
- ROLAND R. LEWIS IN MEMORY OF ESTHER JONES
- WELLPOINT FOUNDATION
- REBECCA STOLZ
- CHRIS LOGAN IN GRATITUDE TO THE FIREFIGHTERS OF BATTALION 2A
- FIRE STATION NO. 49 FROM OUR FIRE EXTINGUISHER FUND
- CHARLES M. BABCOCK IN MEMORY OF ESTHER JONES
- JOHN E. SQUIRE IN MEMORY OF RALPH URQUIZA
- MARIE O. MICHELL IN MEMORY OF BEVERLY CASE
- JOHN HOLST IN MEMORY OF JUNIOR PARKER
- GEORGE HANDY IN MEMORY OF ESTHER JONES
- FUMIKO HUMBRED IN LOVING MEMORY OF BEVERLY A. CRAIG WIDOW OF LEE R. CRAIG
- WILLIARD M. KESSEN IN GRATITUDE FOR THE LOAN OF THE WHEELCHAIR
- LAWRENCE C. SCHULER IN MEMORY OF JUNIOR L. PARKER
- BETTY V LARSON
- LORRIE THOMAS IN MEMORY OF HAROLD REED
- THOMAS E SMITH IN MEMORY OF EARL GIBBS
- FIRE STATION NO. 38 FROM OUR FIRE EXTINGUISHER FUND
- FIRE STATION NO. 6 FROM YOUR FIRE EXTINGUISHER FUND
- RICHE NICHE IN MEMORY OF J.R. ‘JAKE” HOLT
- JOHN L. PECEL IN MEMORY OF RALPH URQUIZA
- JOAN V. ROSE IN MEMORY OF LYLE LENTZ
- MARIE D. SHAFER
- IRENE E. HASKIN IN MEMORY OF GEORGE SEGELKE
- DANIEL L. PETERS IN MEMORY OF ESTHER K. JONES
- CELESTE M. MCCREARY IN MEMORY OF ESTHER JONES
- TANYA PAULSEN IN MEMORY OF RALPH URQUIZA, JESSICA URQUIZAS’ FATHER
- FUMIKO HUMBERD IN MEMORY OF JOHN H. HEILMAN
- RITA E. KURTZ – TREASURER
- ROBERT O. PURCELL IN MEMORY OF J.R. “JAKE” HOLT
- DANIEL G. ENGSTROM IN MEMORY OF HAROLD REED
- BARBARA L. BLASE IN MEMORY OF ESTHER JONES
- IRENE E. HASKIN IN MEMORY OF HAROLD REED
- LISA BAER IN MEMORY OF J.R. HOLT
- DINKO KLARIN IN MEMORY OF HARRY P. STIRES
- ALAN R. COWEN IN MEMORY OF BOB G. HANSEN
- FUMIKO HUMBERD IN MEMORY OF HARRY STIRES
- FIRE STATION NO. 36 FROM OUR FIRE EXTINGUISHER FUND
- HAROLD H GEERDES IN MEMORY OF LYLE LENTZ
- HAZEL A MARKHAM IN MEMORY OF LYLE LENTZ
- VIOLET I BROWNLOW IN MEMORY OF LYLE LENTZ
- DAWN L ARNONE
- THOMAS MURO IN MEMORY OF JUNIOR PARKER
- THOMAS MURO IN MEMORY OF JUNIOR PARKER
- ANSELMO J. GARRIDO IN MEMORY OF LOIS CATE
- PATRICIA SCHAEFER IN MEMORY OF ESTHER JONES
- DONALD FULLER IN MEMORY OF ESTHER JONES
- DAVID R. BUCHANAN IN MEMORY OF ROBERT G. HANSEN
- MARLENE HOUCK IN MEMORY OF ESTHER JONES
- ROBERT F JOHNSON IN MEMORY OF ESTHER JONES
- JEAN W. MAWHINNEY IN MEMORY OF MRS. ESTHER JONES
- LIN SUNSHINE IN MEMORY OF GEORGE SEGELKE
- CHRISTOPHER HOWELL
- CARLA MITCHELL IN MEMORY OF GEORGE SEGELKE
- WILLIAM P. SCHAEFER IN MEMORY OF ESTHER JONES
- JUDY L. CANE IN MEMORY OF HARRY STIRES
- LYNNE E. MICHAELIS THE BILL GOSS SCHOLARSHIP FUND
- BARBARA J BERG IN MEMORY OF LYLE LENTZ
- JUNE J. SMITH IN MEMORY OF HAROLD REED
- KAREN I. JONES IN MEMORY OF ESTHER K. JONES
- ELIZABETH A KOCH IN MEMORY OF LYLE LENTZ
- PHYLLIS RUBEL IN MEMORY OF J.R. HOLT
- KEN M IKEDA IN MEMORY OF GLORIA JEAN DOWNEN
- MARJORIE LAIN IN MEMORY OF ESTHER JONES
- BARNEY PACKMAN IN MEMORY OF ESTHER JONES
- JOHN KESLER
- FRED MARTINEZ
- JOHN A. JACOBSEN
- BRUCE FROUDE
The committee recommends and I so move to assist;
a widow with $2,400 per month with a six month review,
a widow with medical premiums with a six month review,
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 $500 per month 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 member with $1,500 per month with a six month for physical therapy for dependent,
a member with $5,500 for additional expenses for service dog for dependent.
There was no discussion or objections.
Motion carried to approve the above assistance as stated.
EMERGENCY ADVANCEMENTS
Chairman James Coburn presented the following motion.
The committee recommends and I so move to advance:
a member with $2,395 per month with a three month review.
a member $5,300 for outstanding bills,
a reversed mortgage for spouse at $3,000 per month with a six month review,
a surviving child medical premiums with a six month review plus $2,321 for dental work.
There was no discussion or objections.
Motion carried to approve emergency advancement as stated.
PRESIDENT’S REPORT
1) David Marino addressed the Social Security number issue for the medical plan members and informed that from the 702 letters sent, all have been sent back the information needed except one.
2) David Marino asked the Trustees to complete the Trustee Bio summary sheet that was passed out. He indicated that the information would be posted on the website under the Board of Trustees.
3) David Marino mentioned that they were going to send five different letters to the membership. David Smith indicated that there were several different letters due to medical plan status, Relief members, COBRA participants and other required federal law mailings. In addition to the legal notices all letters informed of the holiday party made a request for their e-mail address as well as a reminder to check out the new website in January 2010.
4) David Marino mentioned that he, Andy, Ana Salazar and Loan Tran had visited the Orange County Retiree Breakfast the previous week. He indicated that they had asked everyone for their email address to send notifications. Ana and Loan were able to answer questions for the members on their benefits and medical issues.
SECRETARY’S REPORT
Andy Kuljis informed that the Election was on track. He mentioned that they had a minor issue with the post office box but it had been resolved. Ballots will be counted on December 2.
GRAPEVINE COMMITTEE REPORT
Chris Hart indicated that they continue to work on saving money from publishing the magazine. He also indicated that there have been discussions and opinions on certain articles placed in the Grapevine.
SETTING DATES
1) IFEBP Annual Conference – November 8 – 11th
2) Open House – November 21st
3) Relief Holiday Party ESPN Zone – December 5th
4) Strategic Planning Conf. – January 26th – 27th
RETIREMENT DINNERS
1) John Christman – November 11th John Christman’s Home
ADJOURNMENT
David Marino entertained a motion to adjourn. David Peters so moved. Doak Smith seconded. There was no discussion and no objections.
Motion carried to adjourn.
The Board of Trustees meeting adjourned at 11:40am.
David Marino, President