2/1/2010 CFO's Report

At the General Membership Meeting on January 5, 2010, there were four items on our agenda: 1) Oath of Office for POA Board of Directors, 2) State of the City, 3) Vacation Call-in and 4) Building Update. There were 223 members present, and the following is a synopsis of the meeting.

Judge Ron Del Pozzo proceeded over the installation of our new Board of Directors and Officers. President George Beattie then spoke to the membership regarding what issues he addressed during the last year in office as Vice President and what issues he will be addressing this year as our new President. Our highest priority will to be the new contract negotiations. Our biggest concern regarding the contract negotiations is the economy and the effects it will have on the City's finances. Falling revenues from sales tax has lead to declines in the city and state budgets. The current shortfall for the City of San Jose is estimated at $100 million. President Beattie pledged to continue to try to settle our contract in a fair and careful manner. He told the membership that the City will be trying to roll back benefits and the POA will be playing defense to stop the roll back. The reason that we will be playing defense is because of the economy. Furthermore, there appears to be a state ballot measure heading to the voters in November that will limit public safety pensions to 75% at age 58. We will be forming partnerships to defeat this ballot measure and will work hard to maintain all of our benefits. Next, Vice President Jim Unland discussed the problem that not all officers can bid one full week off for vacation during vacation call-in. We feel strongly that every officer needs to be able to bid vacation in full weeks! We will be putting this information on our website this month and taking a survey of the membership on ideas to improve our current vacation call-in procedures. The last item that we discussed was the spending of one half million dollars on remodeling the building. There needs to be seismic retrofitting of the roof, updating of the electrical, and better use of the floor plan with modern fixtures. Jeff Ricketts made the motion to approve the re-model; the motion was seconded by Mike Lloyd and passed unanimously.

Board of Directors' Meeting

At the Board of Directors' meeting that was held immediately after the Membership meeting, there were three items that we discussed which required voting.

q President George Beattie made a motion to appoint Director Jim Unland to the office of Vice President for the remainder of the term. The motion was seconded by Director Bob St. Amour and passed unanimously. Jim Unland was not present for the vote.

q President George Beattie then made a motion to appoint Robert Avila to take the Director position open from Jim Unland's appointment and Juan Vallejo to take the position of Director from Jeff Martin who is retiring later this month, Motion was seconded by Vice President Jim Unland and passed unanimously.

q President George Beattie announced the Negotiation Team for the upcoming contract. The team will consist of President Beattie, Vice President Jim Unland, CFO Jeff Ricketts, General Counsel John Tennant and Director Franco Vado.

q Motion was made by Director Vado to approve minutes from December 1, 2009 Board Meeting. The motion was seconded by Director Conrad Taylor.

q The Board then discussed the new Board Assignments so everyone would know what committees and responsibilities they had for the upcoming year.

q Vice President Jim Unland passed out materials on opportunities for future Board training through PORAC.

q Vice President Unland also passed out a calendar of in-house Board training that will take place during future Board meetings. Training will be done by directors that have direct knowledge in these areas. This is in an effort to keep the Board up to date and knowledgeable in all of these different areas.

q John Tennant explained in brief the Negotiation Process as part of this month's board training.

The Association's investments continue to be sound and our financial statements and reports are up-to-date. The Board of Directors then went into Executive session to discuss confidential matters regarding upcoming contract negotiations and member legal matters.