MINUTES OF THE BOARD OF TRUSTEES
October 6, 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 11:11 a.m.
- David T. Marino, President
- Robert Steinbacher, Vice President
- Andrew Kuljis, Secretary
- Trustee James Coburn – Battalion 1
- Trustee John Jacobsen – Battalion 2
- Trustee Juan Albarran, Battalion 3
- Trustee Chris Hart – Battalion 4
- Trustee Mark Akahoshi, Battalion 5
- Trustee Tim Larson – Battalion 6
- Trustee Gene Bednarchik – Battalion 7
- Trustee Doak Smith – Battalion 9
- Trustee Gary Matsubara – Battalion 11
- Trustee Craig White – Battalion 12
- Trustee Chris Stine – Battalion 13
- Trustee Michael Overholser – Battalion 14
- Trustee Steven Domanski – Battalion 15
- Trustee Francisco Hernandez – Battalion 17
- Trustee Kurt Stabel – Headquarters 2
- Trustee Tom Stires – Pension 2
- Trustee Ralph Brownell – Pension 3
- David Ned Smith – Executive Director
- Controller – Todd Layfer
- Trustee David Peters – Battalion 10 (Excused)
- Trustee Dennis Mendenhall – Battalion 18 (Excused)
- Trustee David Ortiz – Headquarters 1 (Excused)
- Trustee David Lowe – Pension 1 (Excused)
Lee Kebler, Retired Fire & Police Association
John Keys, Pension 2 Candidate
Barry Hedberg, Pension 2 Candidate
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 September 2, 2009. Tom Stires so moved. Juan Albarran 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 September 2, 2009.
David Marino informed that the Pension 2 position is up for election and indicated that the ballots will be mailed later this month. Ballots will be counted in December. He informed that Barry Hedberg and John Keys were running for the position.
ADMINISTRATIVE COMMITTEE REPORT
Chairman John Jacobsen presented the following motions.
The committee recommends and I so move to pay the usual and customary bills in the amount of $741,468.98. There was no discussion or objections.
Motion carried to pay the usual and customary bills in the amount of $741,468.98.
The committee recommends and I so move to pay the professional fees in the amount of $47.85. There was no discussion or objections.
Motion carried to pay the professional fees in the amount of $47.85.
The committee recommends and I so move to approve contracts with Daniel Marino to produce 10 military flag boxes at $180 each and 100 regular flag boxes at $140 each. He disclosed that the bid and quality were considered when making the decision to contract with Daniel Marino. There was no discussion or objections.
Motion carried to approve contracts with Daniel Marino to produce 10 military flag boxes at $180 each and 100 regular flag boxes at $140 each.
The committee recommends and I so move to approve up to $1,000 for the LAFD Historical Society’s Memorial event at Fire Station 27. There was no discussion or objections.
Motion carried to approve up to $1,000 for the LAFD Historical Society’s Memorial event at Fire Station 27.
John Jacobsen informed that the Marketing Department was compiling a list of attorneys that may be used for the Estate Planning benefit. He stated that the Relief Association was not endorsing any of the attorney’s on the list but was only referring those that are qualified. He stated that the Administrative didn’t feel there was any conflict of interest having Chung Ho on the list. He is on the UFLAC Executive Committee,
The Board entered into Executive Session at 11:25am.
The Board adjourned from Executive Session at 11:54am.
John Jacobsen stated that the Board made decisions on settlements and personnel matters.
David Marino asked Lee Kebler to address the Board on Pension issues. Lee Kebler reported that there are five new Mayor appointed Pension Commissioners. He referred to the amount money it took to run the pension system and the three sources of income which are: City subsidies, employee contributions and investment earnings. Because of investment losses, he stated that the amount of money required to be added to the pension fund will substantially increase over the next few years. He felt that the Board should be aware of the arising issues with pension funding.
EXECUTIVE DIRECTOR’S REPORT
1) David Smith informed that the Golf and Administrative Committees had confirmed that the LAFD Invitational Golf Tournament will be held on September 13, 2010 at the Mountaingate Golf Course. He mentioned that this date does not conflict with any other LAFD golf tournament.
2) David Smith mentioned that the Grapevine Assessment had been implemented in June for active members, however, the City Controller neglected to increase the assessment from $18 to $36 on retirees. He indicated that the Administrative Committee approved requesting the City to take the second $18 out of retiree checks in October. He stated that there may be some phone calls from the retired members questioning two assessments.
3) David Smith reported that the Dalmatian move is still on track with the November 15th date. He indicated that the full Credit Union banking operation will not move until December 15th. He stated that they are hoping to get access to the storage facility in a couple of weeks to begin moving merchandise.
4) David Smith provided an update to the website and indicated that Ciplex has a new managing partner in place to turn their company around. He indicated that the realistic launch date for the website is November 15th. He mentioned that they have a detailed work plan which is available for Trustees to review.
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.
The committee recommends and I so move to pay the usual and customary bills in the amount of $151,053.27. There was no discussion or objections.
Motion carried to pay the usual and customary bills in the amount of $151,053.27.
Robert Steinbacher informed that on October 13th, the Medical Committee will meet to discuss the budget for the 2010 medical plan.
Robert Steinbacher also informed the Board that the Medical Committee has decided to provide up to $30 per flu shot for reimbursement when obtained at any Medco participating pharmacy. Subsequent to the meeting it was learned that Medco is unable to accommodate this process and another process was established.
David Marino referred to the open enrollment materials and indicated that there have been questions arising about body scan coverage. Robert Steinbacher mentioned to the Board that members can utilize their annual physical benefit to pay for a body scan. The Plan will also pay for a body scan when prescribed from a physician when necessary. He also indicated that a physician will not normally order a complete body scan if not necessary because of the amount of radiation exposed to the body.
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 $19,745.73,
Estate Planning benefits in the amount of $5,258,
Relief Death benefits in the amount of $45,000,
Life & Accident Death benefits in the amount of $12,000
There was no discussion or objections.
Motion carried to pay the above Relief benefits.
Woodrow E. Haskin
Robert L. Tichenor
David O. McCary
Charles C. Dodge
Carl T. Johnson
Junior L. Parker
John H. Heilman
Walter M. Greenleaf, Jr.
John R. Schindler
Ralph M. Sias
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 $17,651.65 to the Widows, Orphans & Disabled Firemen’s Fund. There was no discussion or objections.
Motion carried to accept the donations in the amount of $17,651.65 to the Widows, Orphans & Disabled Firemen’s Fund.
Donations to WODFF for September 2009
- DEAN CASE IN MEMORY OF MY PARENTS DONALD & BEVERLY CASE
- JEFFREY A. CASE IN MEMORY OF MY PARENTS DONALD & BEVERLY CASE
- NORMA THOLEN IN RECOGNITION OF MILLAGE PEAKS PROMOTION TO FIRE CHIEF OF THE CITY OF LOS ANGELES
- CRAIG MURRAY PRODUCTIONS, LLC IN GRATITUDE FOR ALL THE FIREFIGHTERS EFFORTS DURING THE RECENT FIRES
- KATHY J. KUCHTA ON BEHALF OF CRAIG MURRAY PRODUCTIONS
- SUSAN M. RAYMOND
- PAUL R. OLSON IN MEMORY OF HAROLD REED & JEAN ATKIN
- RICARDO J ORTIZ FROM MY DAUGHTER DIANAS’ CO-WORKERS AT QUEST LABORATORIES
- RACHEL TASH
- SCOTT A. GOLDMAN ON BEHALF OF CRAIG MURRAY PRODUCTIONS
- STEPHEN C. DODGE IN MEMORY OF YOUR FATHER CHARLES C. DODGE
- LILLIAN D. DODGE IN MEMORY OF MY HUSBAND CHARLES C. DODGE
- JUDITH K ROBBINS
- THEA L. CHRISTENSON ON BEHALF OF CRAIG MURRAY PRODUCTIONS
- STEPHEN W. HULL ON BEHALF OF CRAIG MURRAY PRODUCTIONS
- SCOTT REHORN IN MEMORY OF LYLE LENTZ
- JAMES E. BUTLER IN MEMORY OF LEON PARKER
- LAUREL WOLLWEBER IN MEMORY OF ROBERT HARVEY
- HELEN L. SCHULZ
- ELIZABETH NELSON IN MEMORY OF RET. CAPTAIN WALTER GREENLEAF
- ARTHUR LEAL IN MEMORY OF A FINE MAN BOB HARVEY
- PATRICIA Z RISSER IN MEMORY OF LOUIS R. NOWELL
- DELBERT C. THOMPSON IN MEMORY OF ENGINEER HAROLD A. REED
- ALAN R. DIETZ IN MEMORY OF HAROLD REED
- WILLIAM NEVILLE IN MEMORY OF WILLIAM GOSS
- KENNETH MYERS IN MEMORY OF ROBERT E. HARVEY
- BETTY V. LARSON
- CAROLYN N. MORRIS IN MEMORY OF MY HUSBAND FIREMAN II MORRIS WAYNE MORRIS
- FRANCHON MCINTYRE ON BEHALF OF CRAIG MURRAY PRODUCTIONS
- REEB L. VENNERS ON BEHALF OF CRAIG MURRAY PRODUCTIONS
- TROY A. HUTCHINSON ON BEHALF OF CRAIG MURRAY PRODUCTIONS
- ROBERT J. ENGELKE IN MEMORY OF OUR SON GARY ENGELKE
- JOHN J. ADAMS IN MEMORY OF A WONDERFUL WOMAN GLORIA ORTIZ
- VICTOR PATRON
- RICARDO J. ORTIZ IN MEMORY OF MY WIFE GLORIA V. ORTIZ A CLASSY LADY IN EVERY RESPECT
- CARL LONG IN GRATITUDE FOR THE USE OF THE DURABLE MEDICAL EQUIPMENT
- HELEN L. SCHULZ
- HAZEL W. GROVER IN MEMORY OF ESTHER JONES
- DANIEL P. SCHARF
- WILLIAM NEVILLE IN MEMORY OF JUNIOR PARKER
- ROBERT A. HANSON IN MEMORY OF KAY A. HANSON, HER SISTER ANN HAYDEN, AND FRED HAYDEN
- SHILOH FRANCO
- JACK MOORE IN MEMORY OF JUNIOR PARKER
- MARIE D. SHAFER
- EDWARD CHILSON IN MEMORY OF ELMER NORDQUIST
- SARAH BANNEN IN HONOR OF MY FATHER BOB CUNNINGHAM’S BIRTHDAY
- HARRY MORCK IN MEMORY OF WARREN “WILLY” BRAUN
- JOHN M. BEHNE IN MEMORY OF DEPUTY CHIEF JUNIOR PARKER
- ALAN I. IRELAND ON BEHALF OF CRAIG MURRAY PRODUCTIONS
- MELINDA QUIGAN ON BEHALF OF CRAIG MURRAY PRODUCTIONS
- KATHLEEN D. PHILIPS ON BEHALF OF CRAIG MURRAY PRODUCTIONS
- JOHN J. CONN IN MEMORY OF HAROLD REED
- REAMES W. RAINEY IN MEMORY OF ROBERT E. HARVEY
- BARBARA J. BROWN IN MEMORY OF LYLE LENTZ
- CARL RASMUSSON IN MEMORY OF LYLE LENTZ
- JOHN AYRES IN MEMORY OF LYLE LENTZ
- EDWARD T CHILSON
- ANSELMO J GARRIDO IN MEMORY OF CHUCK MERRIMAN & JOHN LES WILLIS
- MICHAEL CONSOLI IN MEMORY OF HAROLD REED
- CHARLOTTE T. LEAMY IN MEMORY OF JUNIOR PARKER
- NORMAN STEPHENS IN MEMORY OF ROBERT HENDERSON
- CHESTER B. PORT IN MEMORY OF PAT TIERNEY
- LESLEY FOX ON BEHALF OF CRAIG MURRAY PRODUCTIONS
- MARY C. MCBRIDE IN MEMORY OF LEON PARKER
- STUART ALLISON ON BEHALF OF CRAIG MURRAY PRODUCTIONS
- JUNE G. SMITH IN MEMORY OF WOODY HASKIN
Chairman James Coburn presented the following motion.
The committee recommends and I so move to advance:
A member $3,300 for rent,
A member $2,000,
A member an additional $3,000,
A member $2,000.
There was no discussion or objections.
Motion carried to approve emergency advancement as stated.
INVESTMENT COMMITTEE REPORT
Chairman Kurt Stabel gave the following report:
From Sept 21st – 24th Bob Steinbacher and I attended the IFEBP “Advanced Investments Management Program” at the Wharton School, University of Pennsylvania. The conference covered advanced portfolio management concepts including portfolio construction with an emphasis on how to properly position asset classes for an anticipated shift in return characteristics from historical norms, with consideration given to reducing market risk inherent in many investment portfolios. The conference was helpful in that it stressed the importance of both quantitative measures, Sharpe Ratios, standard deviation, Alpha, tracking error, etc. vs. qualitative measures like quality of management, style drift, organizational stability, etc. which have to both be addressed when evaluating money managers.
A common theme emerged throughout the conference, which was that historical norms many investors have been accustomed to in the past will not be relevant in the future or will be greatly diminished. Specifically, emphasis was made regarding the issue that investors should rely less on using historical return assumptions in constructing portfolios, moving from historical returns to expected returns will help investors determine which asset classes to overweight in the coming years coupled with relying more on International and Emerging Market equity markets for growth. This is a clear divergence from traditional asset allocation construction methods which mainly rely on historical returns as a main data point in deciding which asset classes to rely upon for increasing returns. International and Emerging Market stocks were consistently referenced as an asset class that has historically been underrepresented in investors portfolios, frequently called “home bias”. Going forward this “home bias”, if not corrected, may have a very detrimental impact on portfolio returns. This is primarily attributed to the commonly cited expectation from many presenters at the conference that International and Emerging Markets will continue to grow at a faster rate than U.S equities, and their economies, for the foreseeable future.
A large portion of the conference was devoted to “alternative investments” (hedge funds, REITs, commodities, etc.) and how this field has both grown in importance and adoption rates among market participants, while experiencing elevated volatility during the recent market meltdown. REITs were covered in a standalone session and new market dynamics in this asset class were illustrated. Historical correlations between interest rates and asset values have been throw out the window during the market meltdown. Typically when interest rates are low REITs have performed well coupled with REITs being a strong hedge against inflation. In the last couple of years REITs have continued to post negative returns (except for the last quarter with what some have called a “dead cat bounce”) while interest rates have been reduced to historic lows. The new concern for asset values is that interest rates have no where to go but up and how this may have negative effects on REIT valuations. Clearly REIT valuations are a function of multiple market dynamics that do not always move according to historic expectations but many market watchers expect that this is an area where investors will have many opportunities due to low valuations but will be full of potential pitfalls. While recent returns have not proven to be a safe haven, commodities are still considered to be one of the best diversifiers for an investor’s portfolio. Coupled with the fact that commodities are seen as one of the best safe havens from the negative effects of high inflation rates and a strong negative correlation to the equity markets, commodities should be included as a part of a properly diversified portfolio.
On September 30th Kurt attended a conference hosted by PIMCO titled “Investing in the New Normal”. This is a subject that PIMCO has placed substantial time and effort to communicate to their clients due to their assessment that the investing landscape has been substantially altered post-meltdown and may not return to “normal” for the foreseeable future. The general thesis of their investing premise has been to move away from dollar denominated assets (de-lever exposure to U.S. equities) and move to a more robust portfolio with an increased allocation to foreign bonds and International and Emerging Market Equities. Their outlook is for a continued slow recovery for the U.S. economy, with the near-term possibility of deflation, turning to a long-term view of our massive stimulus spending policy placing downward pressure on the U.S. dollar (causing increases in long-term inflation). Going forward, economic growth will be dominated by BRIC and EAFE counties with the U.S. relegated to a slow growth status due to long-term consumer de-leveraging (a return to a positive savings rate for households) and massive Federal budget deficits. PIMCO has been “knocking the lights out” with incredible out-performance in the Total Return Fund relative to bond market indexes due to an extreme overweight in Mortgage Backed Securities (MBS). They have begun to trim back this position and lock in profits in this area of the market while buying long dated treasury bonds due to their outlook for near-term deflationary pressures.
Clearly the investing landscape has changed and we will remain vigilant with an effort on reducing risk in the investment portfolio while continuing to look for strategic opportunities to add value when they arise. Kurt presented a short video to the Board produced by PIMCO, which discussed the changing investment landscape.
Kurt Stabel also discussed the potential of a future real estate investment. He indicated that the Building Committee needs to determine what type of building, location and size they would seek to investment in as well as the financial aspects of a purchase. He will bring back to the Board the committee’s recommendations.
1) David Marino mentioned that he, Chris Hart and John Jacobsen attended a concert by Go Country radio 105. He stated that they presented an axe to Shaun Par for his tremendous support to LAFRA and the WODF Fund. He indicated that they were also able to speak about the WODFF in front of thousands of concert attendees.
2) David Marino mentioned that plaques were presented to several organizations in the Mountaingate community in appreciation for the nearly $30,000 they donated to WODFF. He indicated that the community has already begun raising funds for WODFF for next year.
3) David Marino referred to the motor home that had been donated to WODFF and mentioned that they are currently getting the smog check for the vehicle and getting ready to place an ad on ebay to sell it. He mentioned that they already have a couple of firefighters interested in buying the motor home.
4) David Marino mentioned the Colorado Springs Memorial and indicated that he, Tim Larson and Robert Steinbacher had attended. Tim Larson stated that it was one of his proudest moments as a firefighter to stand there and present a flag to the Just family. He encouraged the Board to attend the memorial in future years if they had the chance. He indicated that there were about 900 people in the honor guard and almost 300 bag pipers and drummers. He also added that it was important for LAFRA representatives to be there for the families and represent the LAFD and LAFRA.
Chris Hart mentioned that he was inquiring on his status information with LAFRA and indicated that there was important information missing. He mentioned the importance of updating the beneficiary information on LAFRA’s database. He indicated that it may be valuable to send a print out to each member containing their information to determine of something needs to be changed or updated. Juan Albarran suggested that they not send the mailer yet because it may cause confusion with the November Mailer we are already sending. The Board decided to wait on mailing the personal data sheet to the membership.
Andrew Kulis mentioned that they had been very busy with funerals and assisting widows.
VICE PRESIDENT’S REPORT
Robert Steinbacher mentioned the IFEBP Annual Conference and informed those attending that there will be a free brunch on the Sunday before the conference begins. He also mentioned that there is a list of all the classes to be offered on the conference website.
GRAPEVINE COMMITTEE REPORT
Chairman Chris Hart indicated that they had been seeking a new printer to save money and indicated that they were able to renegotiate with the current printer resulting in a saving of $4,000 per month.
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
1) David Fair – October 7th Ports O’Call Restaurant
2) Thomas C. Czubek – October 7th Los Angeles Police Academy
3) Douglas Barry – October 18th Milennium Biltmore Hotel
4) Alan P. Barrios – October 23rd Renaissance Agoura Hills Hotel
5) Ralph Rodriguez – October 24th Calamigos Equestrian Center
6) Armando Martinez – October 25th Woodland Hills Country Club
7) John Christman – November 11th John Christman’s Home
David Marino entertained a motion to adjourn. Juan Albarran so moved. Tom Stires seconded. There was no discussion and no objections.
Motion carried to adjourn.
The Board of Trustees meeting adjourned at 1:11pm.
David Marino, President