Smoke signals., April 15, 2002, Page 3, Image 3

APRIL 15, 2002
Smoke Signals 3
Finance Officer Makes Presentation at General Council Meeting
Larry Kovach introduces PaineWebber Vice President Mark Barnum to the mem
bership, outlines changes in Tribal investment strategies.
By Brent Merrill
The April General Council meeting was held on
Sunday, April 7 at the Tribal Community Center
in Grand Ronde. Here are the highlights:
Tribal Chair Cheryle Kennedy called the meet
ing to order just after 11 a.m. Tribal Council mem
ber Jan D. Reibach gave the invocation.
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Finance Officer Presentation
Tribal Investment Process
Chief Financial Officer Larry Kovach gave a run
down on the Tribe's investment practices and the
outcome of the relationship between the Tribe and
our past investment managers Strategic Wealth.
Kovach explained the way investments were
handled prior to 2001 when Tribal Council decided
to look into the investment practices of Strategic
Wealth.
Kovach explained how things would change now
that the Tribe has changed investment policies,
strategies and the management of those assets. He
introduced Mark Barnum, Senior Vice President of
UBS PaineWebber. Barnum is the lead consultant
for Prime Asset Consulting Group who will now be
advising the council on investment strategies.
Prime Asset is based out of Seattle.
Kovach detailed how Strategic Wealth Manage
ment was the consultant, as well as the investment
managers, master custodians and trust record keep
ers for the Tribes investments at a cost of approxi
mately $2.1 million.
He outlined how the Tribe will now use indepen
dent parties to handle each separate function of the
investments strategies and practices. Prime Asset
will serve as the investment consultant. Security
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Tribal Attorney Rob Greene is now part of a
Tribal Council-appointed Investment Committee
that will oversee the Tribe's future investment
policies and strategies.
Trust Company of Phoenix will serve as the master
custodian and REDW a Certified Public Accountant
firm in Albuquerque, New Mexico will serve as the
trust record keeper.
The Independent Investment managers have not
been selected yet. Interviews to choose the invest
ment managers will be held in May.
Kovach said PricewaterhouseCoopers, LLP
through their Portland and Las Vegas offices, would
do the external audit process. Their Las Vegas of
fice will handle the Tribe's gaming operations and
their Portland office will handle everything else.
The Internal Auditor position within the Tribe is
currently being recruited.
According to the information provided by Kovach,
the overall cost of the new investment process is a mil
lion dollars cheaper at $1.1 million.
Kovach said PaineWebber gets a flat fee for its
services to the Tribe and has no personal stake in
the investments.
During Barnum's presentation, he went over what
the Tribe has done so far to make changes and what
some of the changes will be in the future. The Tribe
sent out a request for proposals and engaged a new
investment consultant (PaineWebber) in October of
2001. A new trust record keeper was engaged in
November of 2001 and new external auditor was
engaged in December of last year. A new master
custodian was engaged in January of 2002.
According to Barnum, the Tribe will have a new
investment policy and a new asset allocation policy
in place by the end of this month (April).
In response to the investment situation with Stra
tegic Wealth Management, the Tribal Council has
put in place an Investment Committee made up of
Tribal Council members, Kovach, Barnum and
Tribal Attorney Rob Greene. Their goal is to make
sure the Tribe does not end up in the same type of
wealth management situation now that the new pro
cess is being put into place.
In response to a question from a Tribal member,
Kovach said that losses that had previously been
reported in the children's trust accounts had been
absorbed into other areas and the losses were now
covered. He said that when the new trust account
statements were delivered to membership later this
month, they would reflect three to four percent gains
PaineWebber's Mark Barnum
rather than the average 12 percent losses that had
been previously reported.
Kovach also responded to a question about when
the Tribe started to realize that something had gone
wrong with the relationship with Strategic Wealth
Management. Kovach outlined that the Tribe au
thorized him to start looking into the relationship in
March of 2001. PaineWebber was asked to look at
the Tribe's portfolio in July of 2001 and it was dis
covered that there were problems. In August,
PaineWebber detailed these problems in a presenta
tion to Tribal Council. In September, Tribal Coun
cil issued a notice of termination to Strategic Wealth
thus ending the relationship.
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Elder Marce Norwest and Tribal Council Mem
bers Reyn Leno (right) and June Sell-Sherer
(not pictured) presented the volunteer driv
ers for Steve Bobb's Walk from Table Rock with
certificates for dinner for two at Legends.
Health & Wellness
Center's Annual Report
Dr. Tom Austin, Executive Director of the Tribe's
Health & Wellness Center, made copies of the
department's 2001 Annual Report available to the
General membership and informed the membership
that Dr. Wilbert James of the Swinomish Tribe in
Washington has been hired a new family practitio
ner. Austin said that Dr. James started working
for the Tribe on Monday, April 1 and started seeing
patients on Friday, April 5.
Door Prizes
Nancy Coleman, Albert Peters and David Nelson
won $50. Nelson donated his winnings to the Vet
erans' Memorial Fund. Lorry McKnight won $100.
Next Meeting
The Next General Council meeting will be held
on Sunday, May 5 at the Tribal Community Center
at 11 a.m. This will be the meeting at which Tribal
members can make their nominations for Tribal
Council and it will also be the last General Council
Meeting for the summer months. General Council
meetings will begin again Sunday, September 8 fol
lowing Tribal Council elections on Saturday, Sep
tember 7.
Tribal Safety Day 2002 "Hazard Awareness
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103 participants showed up for the Tribes 5th
annual Safety Day. Jimmy Brandon was
awarded the safety leadership award, and the
Dental department in the Health & Wellness
Center received the most improved department
award based upon the reduction of accidents
or incidents from 2000 to 2001. Multiple guest
speakers were on hand. Food and beverages
were provided and games of skill and knowl
edge were used to award prizes to those that
showed their familiarity with safety practices.
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Pearl Mekemson (L) and Kathleen
Marquart