Treasurer’s Message

Shawn Welch

PORAC Treasurer

On Saturday, September 11, my youngest son and I were at LaTour Demonstration Forest hunting for deer and bear. Last Christmas, I decided to get into bow hunting and bought a bow for both my boys and myself. I did ask my wife if she also wanted to go hunting, and she said, “NO.” We outfitted ourselves and began honing our skills in archery. We all took hunter safety classes, purchased hunting licenses and started planning our hunting trips. I had hunted for years as a child and when I was in the Marine Corps, but I had never taken my two sons hunting because of sports and other numerous youthful activities.

During the planning stage of our hunting trip, several fires broke out in Northern California. The fires began to grow and the national forests began shutting down public access due to extreme fire danger. This was followed by forestry companies also closing their land to public access. This left us with few choices of land to go hunting on. I began scouring the onX Hunt app for places where we could possibly find deer or bear. onX Hunt identifies property lines, roads and terrain, and color-codes public access and hunting zones. This is how I found state-owned Forest and Wildlife Management Areas. I contacted the California Department of Fish and Wildlife to confirm the areas were still open to the public and we could hunt for deer and bear.

Thus, we found LaTour Demonstration Forest, an area on the east side of Shasta County between Redding and Lassen National Forest. LaTour is 9,033 acres of managed forest at 3,800 to 6,740 feet. Precipitation is approximately 46 inches per year and the temperature ranges from 90 to –30 degrees Fahrenheit. The forest primarily consists of sugar, ponderosa, Jeffrey, western white and lodgepole pine; Douglas, white and red fir; incense cedar and mountain hemlock. The state property was purchased in 1930 and became LaTour State Forest, named after a pioneer squatter, James C. LaTour. In 1951 it became a “demonstration” forest used for wildland research, crop forestland and practical economic forest practices. LaTour has four campgrounds (Old Station, Old Cow Creek, Butcher Gulch and South Cow Creek) with toilets, picnic tables and camping spaces. Old Station is the only one with plumbed water. However, the others have the old hand-pumped wells, not for drinking.

On Saturday morning, August 21, my youngest son and I arrived at camp and began scouting out the area. There were numerous signs of deer and bear, but we only spotted does (female deer) the first weekend. I would return that Wednesday with my oldest son and hunt until Friday morning. We continued to see does and spotted two bears. The next couple of weekends, we continued to return and spot does and bears. We never found or saw any bucks in LaTour.

Which brings me back to September 11. My youngest son and I had been stalking a couple of bears all day but were never able to get close enough. At about 1800 hours, I texted my wife to say we were not having any luck and would be done on Sunday at about 1700 hours. We decided to check the area one more time for a bear we had spotted at least three times. As we approached the area, I spotted the bear approximately 100 yards away. We moved in and at about 40 yards out, I took my first bear and first animal with a bow.

This experience was one I will always cherish and hopefully will be able to continue for the rest of my life.

Treasurer’s Message

Shawn Welch

PORAC Treasurer

Over half the year has passed, and 2021 has proven to be just as crazy as 2020. COVID is in the news every day, the stock market is up and down with the sunrise and sunset and PORAC is fighting for all law enforcement officers in California on a daily basis.

This month, the Budget Committee will be submitting a recommended budget to the full PORAC Board for 2022. The budget captures the following: revenue expectations from membership, Conference/seminars, PORAC Law Enforcement News and investment income. The good news is that revenue is up. Secondly, the budget covers our projected expenses for 2022. With the amount of work PORAC is doing, our expenses are also going up. The Budget Committee met in June and worked tirelessly to come up with a reasonable budget that will allow PORAC to continue to protect our members from whatever comes in 2022. During the annual Conference, I will present the budget to the members, and hopefully I won’t bore you to death.

Over the past couple of months, I have been writing about association directors’ fiduciary responsibility and spending members’ money on Bitcoin and other cryptocurrency. On June 4, the Bitcoin 2021 Conference took place in Miami. It was a two-day event with dozens of “Bitcoin rich” people and celebrities talking about how great Bitcoin is and what great things it will do in the future for the common man and poor countries. Now, I will admit that I did not watch every speaker because I didn’t want to go crazy. But it reminded me of the Amway tapes from the 1980s (“I am rich from Amway, and if you do what I did, you too can be rich”). If you think about it, Elon Musk took millions of dollars and bought Bitcoin. Thus, if he can get 100,000 people to buy Bitcoin then he makes money. As if the conference wasn’t enough, there was also an online conference where attendees paid $249 to listen to several billionaires talk about how great Bitcoin is going to be for the world. 

As of July 20, Bitcoin is at $29,789.90, which is down more than 50% from its high in April of over $64,000. Just crazy.

Finally, I would like all law enforcement officers to protect each other. Please ensure that you are not taking unnecessary risks that could lead to internal or external complaints. If your partner needs to be sat down and talked to, then get a hold of your association leadership and pull them aside and talk with them. I truly don’t believe California law enforcement officers are intentionally making mistakes, but we are human and can get sidetracked from our goals as law enforcement officers. We joined this profession because something inside of us wanted to help the communities we serve.

 

Law Enforcement Code of Ethics

As a law enforcement officer, my fundamental duty is to serve; to safeguard lives and property; to protect the innocent against deception, the weak against oppression or intimidation, and the peaceful against violence or disorder; and to respect the constitutional rights of all to liberty, equality and justice.

I will keep my private life unsullied as an example to all; maintain courageous calm in the face of danger, scorn or ridicule; develop self-restraint; and be constantly mindful of the welfare of others. Honest in thought and deed in both my personal and official life, I will be exemplary in obeying the laws of the land and the regulations of my department. Whatever I see or hear of a confidential nature or that is confided to me in my official capacity will be kept ever secret unless revelation is necessary in the performance of my duty.

I will never act officiously or permit personal feelings, prejudices, animosities or friendships to influence my decisions. With no compromise for crime and with relentless prosecution of criminals, I will enforce the law courteously and appropriately without fear or favor, malice or ill will, never employing unnecessary force or violence and never accepting gratuities.

I recognize the badge of my office as a symbol of public faith, and I accept it as a public trust to be held so long as I am true to the ethics of the police service. I will constantly strive to achieve these objectives and ideals, dedicating myself before God to my chosen profession … law enforcement.

Treasurer’s Message

Shawn Welch

PORAC Treasurer

Happy Independence Day. July 4, 1776, commemorated the Declaration of Independence of the United States. The Continental Congress declared that the 13 American colonies were no longer subject (and subordinate) to the monarch of Britain, and were now united, free and independent states: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”

That passage has allowed our country, the United States of America, to grow into the greatest country humanity has ever known. It has been a rough go and we have made mistakes along the way, but in the end, I believe we are better off today because of the people who believed in the ideas expressed in the Declaration of Independence. We are all individuals who can control our own path in life. It might be a little more difficult for some than others, but we as Americans can choose what we want in life and work hard to achieve our goals.

So, this Fourth of July, when you are sitting around with family and friends, remember that it was not without bloodshed and heartache that we gained our freedom. God bless America.

 

Update on Bitcoin

After my June article, PORAC received a tweet regarding a CNN article about El Salvador adopting Bitcoin as legal tender. Salvadoran President Nayib Bukele proposed that Bitcoin could be used as legal tender in the country alongside the U.S. dollar. However, giving a currency legal tender status typically means that it can be used by borrowers to repay debts. It does not mean a person or business must accept the currency as payment.1

Obviously, the person who sent the tweet was not happy about my article and was trying to justify the action of using association funds to invest members’ money in an extremely risky investment.

On June 16, Reuters published an article headlined “World Bank rejects El Salvador request for help on bitcoin implementation.”2  The World Bank spokesperson stated, “We are committed to helping
El Salvador in numerous ways including for currency transparency and regulatory processes.” The problem with Bitcoin, according to the International Monetary Fund (IMF), is that it causes several macroeconomic, financial and legal issues that require a careful analysis.

All this being said, the point of last month’s article was to inform PORAC members that they need to ensure that association board members are not investing the association’s money inappropriately. The volatility of Bitcoin and other cryptocurrencies makes it too big of a risk as an investment. In the last month, values have been as high as 40,000+ and as low as 29,000+. So, educate yourself and find out if your association leadership is being fiscally responsible with the members’ funds.

Treasurer’s Message

Shawn Welch

PORAC Treasurer

Liability of Bad Investments

“The City of Purple Police Officer Association (CPPOA) has saved a large amount of money, $500,000, over the past four years. The board of directors came up with a plan for each of the 100 members to pay an extra $100 per month for four years. This would allow them to place $500,000 into savings and have it be used for political aspirations, morale and welfare of members, emergency situations and board-directed projects. The members voted to move forward with the plan, and after four years, they were all excited to have accomplished their goal.

Two months after finishing the plan, the CPPOA treasurer decided they should invest 50% of the money. The investment would be able to expand on what they have accomplished and grow their funds. The treasurer started to read The Wall Street Journal and numerous blogs on the internet about investing. After his one week of investment knowledge, he thought he found a perfect investment. There was a new type of investing that was not governed by rules, and you did not need to pay a broker. He was going to be able to just handle everything himself. Plus, people were making quick money and had returns of 10–40%. The treasurer presented the plan to the board of directors, and they all were excited about the plan, except for the newest member, Jim. Jim wanted the board to consult with a broker or go through a financial firm. The treasurer advised the board that there was no stipulation on what they did with the money per the bylaws. The board voted to move forward with the treasurer’s plan.

After three months of investing, the treasurer had gained 15%. He was ecstatic and planned on preparing a report to the board for their next meeting once he got off work at 4 p.m. The treasurer arrived at home and logged on to the account, and his stomach sank to his feet. He thought, ‘What the f***.’ That morning he checked the investments, and they were up by 15%, but now the investments were negative 120%.”

Obviously, the above story is not true, and probably not the fictitious story you have read this year or ever. The purpose was to give an example of what can happen if a police union board of directors does not have a clear policy on how they invest the association financials. I am sure most police unions have a statement in their bylaws about fiduciary responsibility for the funds of the association. This might not be enough to stop a board from investing in high-risk markets or cryptocurrency.

Why are high-risk markets or cryptocurrencies not fiduciary responsible? Because it’s not the board’s money is the simple answer. The board of directors has the responsibility to ensure the association can meet its obligations of negotiating for pay, benefits and working conditions. If you lose your money by making bad financial decisions, then you are not being responsible.

Recently, an association in California decided to invest in Bitcoin despite it being a “highly volatile asset.”1 At the time of investment, Bitcoin was at approximately $50,000 and is now at just over $38,000. The association also requested cryptocurrency donations from the public, as well as Elon Musk, Jeff Bezos, Mark Cuban and Jack Dorsey.2 The board of directors said they “took careful consideration” to invest in “a very aggressive investment.” At the time of the decision, Bitcoin was approximately $63,000, but the president said, “We were lucky that a market correction occurred, and we were able to buy Bitcoin at a lower price. I like to say at a discount!” One month later, I wonder if they still feel lucky about the correction.

On May 19, UBS editorial wrote that the China government would prohibit financial institutions from providing services related to crypto transactions. The official statement added that speculative activity in cryptos was “seriously infringing on the safety of people’s property and disrupting the normal economic and financial order.” The basic function of modern currency is to store value and act as a medium of exchange. The high volatility of cryptos makes them unreliable when it comes to storing value.

This takes me back to the point of the CPPOA story. As board of directors, it is your responsibility to be fiduciarily responsible for the financials of the association. You should never be making risky decisions with association money because it is not yours. Therefore, it is important to have a bylaws rule to stop the association and board of directors from making this type of mistake. Try to remember, we are not billionaires and don’t have $1 million to lose or even $1,000. Contact a financial advisor and allow them to make the investments based on your goals.

Treasurer’s Message

Shawn Welch

PORAC Treasurer

Take a deep breath and slowly push out. First off, PORAC’s UBS performance as of April 23. Our UBS investment total assets are $18,109,956 with a performance of +6.81%.

Over the last several days, PORAC’s Executive Board and association leaders have conducted over 25 meetings with California House representatives, senators and committee chairs for the U.S. House of Representatives. In the meetings, we spoke on commonsense and long-lasting police reform, law enforcement funding initiatives, Social Security reform for public employees and lowering the Medicare eligibility age for first responders. The meetings were extremely productive and allowed for some much-needed face time with our representatives in the U.S. Capitol.

So what was all that money talk about? Obviously, law enforcement funding initiatives such as Edward Byrne Memorial Justice Assistance Grants (Byrne JAG), Community Oriented Policing Services (COPS) grants, High Intensity Drug Trafficking Areas (HIDTA) programs and Body-Worn Camera (BWC) pilot programs. PORAC’s position is to support maintaining and expanding funding for these essential grant programs, and we will actively resist efforts to cut funding. PORAC also actively opposes efforts to place cumbersome and counterproductive policy strings to funding, especially at a time when law enforcement agencies need funding to implement effective reform. Thus, PORAC has asked members of Congress to maintain and expand law enforcement funding and to not allow counterproductive restrictions, or “strings attached,” on funding.

The Social Security reform for public employees is extremely important to our members who have had a career prior to becoming a public employee or who plan on having a second career after they retire. Currently, workers who have contributed to Social Security and split their careers between public service and private jobs do not receive a full Social Security benefit. Since the 113th Congress, PORAC has actively supported legislation that recognizes the Social Security Act’s debilitating Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). Currently, there are two bills in the House that would correct these provisions — the Social Security Fairness Act (H.R. 82) and the Public Servants Protection and Fairness Act (H.R. 2337). H.R. 2337 also forces transparency of the WEP program, so it is not a surprise to public employees upon retirement.

Final word: Based on what is going on in America with regard to relationships between law enforcement and the community, I ask that you protect each other on every call for service. Do not try to handle anything on your own and always have a partner with you. Leaders, be prepared to deal with the worst type of incident you can imagine and reach out to fellow leaders for assistance. We are still a law enforcement family, and family should always take care of each other.

Treasurer’s Message

Shawn Welch

PORAC Treasurer

April is always a fun month for everyone. In doing research on what to write about, I looked up all the holidays in April. I discovered there is a holiday for just about everything. What does this have to do with being a treasurer or money? I will answer that after listing out the holidays.

April 1: April Fools’ Day, Major League Baseball Opening Day, Maundy Thursday and National Burrito Day. April 2: Good Friday, National Peanut Butter and Jelly Day, and World Autism Awareness Day. April 3: National Find a Rainbow Day and World Party Day. April 4: Easter, International Carrot Day, National Hug a Newsperson Day, Qingming Festival and Tell a Lie Day. April 5: National Deep Dish Pizza Day. April 6: National Siamese Cat Day, National Sorry Charlie Day, National Student Athlete Day, National Tartan Day and New Beer’s Eve. April 7: National Beer Day, National No Housework Day, National Walking Day and World Health Day. April 8: National Empanada Day. April 9: National Name Yourself Day, National Unicorn Day and National Winston Churchill Day. April 10: National Hug Your Dog Day and National Siblings Day. April 11: National Barbershop Quartet Day, National Eight-Track Tape Day, National Pet Day and National Submarine Day. April 12: National Grilled Cheese Sandwich Day. April 13: International Be Kind to Lawyers Day, National Make Lunch Count Day, National Peach Cobbler Day and National Scabble Day. April 14: National Ex-Spouse Day, National Gardening Day and National Look Up at the Sky Day. April 15: National High Five Day, National Laundry Day and Tax Day. April 16: National Eggs Benedict Day, National Librarian Day, Selena Day and Wear Pajamas to Work Day. April 17: Husband Appreciation Day, International Bat Appreciation Day, International Haiku Poetry Day and National Cheese Ball Day. April 18: National Animal Crackers Day, National Lineman Appreciation Day and National Velociraptor Awareness Day. April 19: National Garlic Day. April 20: Chinese Language Day, National Look-Alike Day and National Pineapple Upside-Down Cake Day. April 21: Administrative Professionals Day, National Bulldogs Are Beautiful Day, National Kindergarten Day, National Tea Day and Tiradentes Day. April 22: Earth Day and National Jelly Bean Day. April 23: Day of Silence, National Cherry Cheesecake Day, National Picnic Day, National Take a Chance Day, St. George’s Day, Take Our Daughters and Sons to Work Day, and World Book Day. April 24: National Pigs in a Blanket Day and National Skipping Day. April 25: Anzac Day, Kiss and Make Up Day, National DNA Day, National Drug Take Back Day, National Hairstylist Appreciation Day, National Hug a Plumber Day, National Pet Parents Day, National Telephone Day and World Malaria Day. April 26: National Pretzel Day. April 27: National Prime Rib Day. April 28: International Guide Day, National Blueberry Pie Day, National Superhero Day and Stop Food Waste Day. April 29: International Dance Day and National Shrimp Scampi Day. April 30: Honesty Day, International Jazz Day, National Arbor Day, National Bubble Tea Day, National Hairball Awareness Day and National Raisin Day.

As leaders of our associations, we like to do things for our members — building a union hall or holding barbecues, paint nights, appreciation days … basically, any reason to have a party. All of these celebrations cost money, some much more than others, but little things can add up to a lot in a short period of time. Recently my association started to give an annual amount of money to one group, because every special day, they requested money so the department could do something for the members. I am all about having an appreciation day, but if you did something for every appreciation day, you would never have a week without a party — and shame on you if one appreciation day party or gift was better than another. In the end, everyone would be mad and blame you for the whole thing. So do we just not do anything? No, start a committee and assign it to come up with celebrations throughout the year, budget for the events and don’t allow any other appreciation days.

Have a wonderful April and try out some of the fun holidays listed above. They might just become an annual event for you.

Treasurer’s Message

Shawn Welch

PORAC Treasurer

Two months down for 2021. While writing this article, the stock market is hitting new heights, the governor is getting close to being recalled, the majority of the state is still in the purple tier of COVID restrictions and the second impeachment trial for former President Trump has concluded. And we all thought 2021 was going to be less exciting.

Regarding the current financials of PORAC, here are some positives for 2020. Due to COVID and the state lockdown, PORAC was able to save hundreds of thousands of dollars. Which is not great, but just the reality. PORAC was able to use some of this money to pay for a portion of the furniture for the new building. PORAC also was able to put $300,000 into our investments, which is projected to grow considerably in 2021 (please refer to your broker for investment advice). As Vice President Kurtz continues to actively bring more members to join PORAC, we will continue to grow financially.

The final financial state for 2020 will be concluded soon, and hopefully, I will be able to share with you the actual numbers. I will also be able to give you an unaudited first quarter for 2021. 

Now, let’s talk about savings and checking accounts. What should we do for a bank account? The short answer would be a checking and savings account. At the least, all associations should have a business or corporation checking account. These types of accounts usually have a lot more paperwork to sign and rules on how the finances are distributed. One important difference is a business checking account (should) require multiple signatures on all checks. An important reason for having a business account is that association money is not tied to the treasurer or other association members. Regarding savings, we all know that a savings account is going to make little to nothing in interest. But if you do not have any money in investments, it is a good place to start.

Treasurer’s Message

Shawn Welch
PORAC Treasurer

So you were elected to be the treasurer for your association and you have attended your first board meeting. During the meeting, you gave a treasurer’s report to the board and they more than likely voted to approve the report. For many treasurers, this report is extremely simple because you have a checking account and possibly a savings account. There is not a lot of money moving from the association to other businesses or bills. So does this mean that the treasurer and board should not worry about having rules on the duties of the treasurer, rules on the expenditure of finances and oversight on budgeted funds?

The simple answer is, of course you should worry. Without rules, regulations and policies regarding the financials of an association, you are asking for problems.

First, as treasurer, you should be able to look in the association’s bylaws and find out your duties as the elected/appointed treasurer. Usually, the section is not that long, but it outlines the great responsibilities carried by the treasurer. PORAC’s Bylaws read as follows: “The Treasurer shall be the chief financial officer responsible for ensuring compliance with the fiscal policies of these Bylaws, the Board of Directors, and Executive Committee. (S.R.).” A chief financial officer (CFO) is the officer of the company/association responsible for managing the company’s finances, including financial planning, management of financial risks, record-keeping and financial reporting. PORAC also clarifies this by stating that the CFO will ensure compliance with the Bylaws and Standing Rules. Now, most associations will not have a long list of standing rules, such as those of PORAC, but you can. According to PORAC’s Standing Rules, the treasurer’s duties include the preparation and filing of state and federal taxes, audits, financial reports (quarterly reports to the Board), keeping financial records/transactions of PORAC, expending budgeted funds and managing reimbursements. As I said before, most associations do not go this in-depth, but it might be a good idea to do so to protect the association. 

Second, as the treasurer, you should have a budget committee and possibly a financial committee. These committees would be organized by the president, and the treasurer should be the chair of the committees. The budget committee should meet at a minimum once a year to review the previous year’s expenditures and to finalize the budget for review by the board of directors. Once the board of directors approves the budget, the treasurer now has guidance to oversee and ensure compliance with the fiscal policies of the bylaws. So who checks the treasurer and board on the expenditure of the financials? This is the purpose of a financial committee. The financial committee reviews the books, vouchers and records to assure compliance with the fiscal policies of the bylaws. At the end of the year, the financial committee reports to the members of the association on its findings.

All these steps might seem like a lot of work for the treasurer and committee members. The short answer is, yes, it is a lot of work. But it is extremely important to members of any association to be informed of the financials of their organization. As leaders in small or large associations, we have a responsibility to protect the financials of the association. Any member of any association should be able to ask for the financial records of the association. And the treasurer or board of directors should be happy to share the information without worry of their actions on expenditures.

Finally, and probably the most important part, is to contact your labor representatives and ask them to review your bylaws. The following are some examples of questions that should get answered: What is my responsibility as the treasurer? Is there ability for wrongdoing? Do we need to set standing rules for reporting expenditures, financials and budgets annually? Do you know of an attorney to look over our state and federal tax requirements? There are several more questions we could all come up with — there are no stupid questions. Once you believe your bylaws are satisfactory, take all your records to a CPA or labor representative and have them review the association financials.

I truly believe that if you just spend some time reviewing your bylaws and how the financials of your association are managed, you will be much more confident as a treasurer. Stay safe and make it to retirement healthy.

Treasurer’s Message

Shawn Welch
PORAC Treasurer

Hello, fellow PORAC members. I hope everyone had a wonderful holiday season with their family and friends.

I would like to thank everyone who has put their trust in me to be PORAC’s new treasurer. In the next two years, I look forward to being more involved in PORAC and working with the Board of Directors and PORAC staff to represent you all as the treasurer.

Throughout 2021, I plan to keep you all informed on PORAC’s financials and the essential responsibilities of an association treasurer.

PORAC’s financials encompass a wide variety of accounts, ranging from general funds to political activity to all our invested portfolios. Knowing I do not have a lot of space to write and not wanting to bore you all to death, when needed I will be giving updates on the status of the funds. If something big happens, I will try to focus on one aspect and still give the basic status of all the funds.

I would like to review the basic responsibilities of an association treasurer: the legal responsibilities you have to the association, fiduciary responsibilities to the membership and some possible issues that you can face if you do not properly handle the finances of your association. Managing the association finances is one of the biggest responsibilities a board of directors has. Strong finances allow your association to pay for charity work in your local area, conduct public outreach (political or nonpolitical), assist during contract negotiations and help out your members.

For these reasons, the directors need to ensure the proper amount of dues is being collected from the association’s members. If an association is not interested in politics (not sure why that would be), all you should need is money to pay for legal defense and negotiations at a minimum. That can cost a lot, depending on politics in your area or the legal issue. You might only need 1% to 2% of monthly salary or a flat fee from all members. Whatever you choose, it has to be sufficient to the needs of the association. It is the job of the treasurer to ensure you keep to the budget and/or request a large enough amount of money.

The directors, and especially the treasurer, need to know how to set up financial accounts that will prevent illegal activities. We have all read about associations losing money to someone because there were not redundant checks and balances on distributing money. The easiest is a dual signature on checks. This means two people have to sign the check and agree to the distribution of the money. Other steps are monthly or quarterly audits or reconciliation of the accounts.

The above are just a few of the basics of being a treasurer for an association. Over the next year, I will be covering these in greater detail and having question-and-answer interviews with financial organizations PORAC uses. Hopefully, it will be informative and helpful to you as members and association leaders.

Treasurer’s Message

Timothy Davis
PORAC Treasurer

December will be my last month as treasurer of PORAC. It has been an honor to serve PORAC as its treasurer for these last two years. I will continue to serve on the PORAC Board of Directors and will continue to be available to PORAC as a resource whenever I am needed. This year, there was no PORAC Conference due to COVID-19. As a result, my end-of-year Treasurer’s Report was sent electronically to the membership. I will run through some of the highlights from my report.

PORAC is in an excellent financial state. PORAC is a stable organization due to its good employees and its sound financial principles. Stable finances, a well-prepared budget and an efficient staff allow PORAC to achieve its mission and to have the resources it needs to fulfill its mission of serving California’s public safety officers.

PORAC has long had a tradition of ensuring that its finances are stable and that there are sufficient safeguards and oversights in place to prevent and detect misuse and fraud. Those safeguards continue to function and create an environment in which PORAC and its finances are stable. This stability allows the organization to focus on its core mission of serving law enforcement officers.

PORAC Bylaws require an audit to be conducted each year. PORAC contracts each year with an outside accounting firm to conduct an independent audit of PORAC and its financials. For the year 2020, PORAC contracted with Winkler & Forner CPA to review our 2019 finances. The audit conducted by Winkler & Forner encountered no problems and confirmed that PORAC was acting “in conformity with accounting principles generally accepted in the United States of America.”

PORAC investments are controlled by the PORAC Investment Policy, which was enacted by the PORAC Board of Directors. The policy calls for diversity in our investments and sets a ratio of 75% equities and 25% fixed incomes. This balanced approach has served PORAC well and is the hallmark of an intelligent investment strategy. Our investments are managed by Mark Sikorski from UBS Financial Services.  PORAC has had a long relationship with Sikorski and UBS, and they have done an outstanding job of managing PORAC’s investments. Sikorski and his team of account managers handle the day-to-day placement of our investments.

PORAC ended 2019 with our investments up 22.28% for the year. In February and March of 2020, the markets saw a significant decline as a result of the COVID-19 outbreak. This was the fastest decline on record and was followed by the fastest recovery on record. PORAC stayed the course, and as a result, this year we have seen growth in our investments. As of the time of writing, our investments are up 7.52% on the year. PORAC has seven accounts with UBS Financial with a total balance of over $16.5 million. Five of the accounts are investment accounts and are invested in the market with the 75/25 ratio. The other two accounts are low-risk investment accounts. Our pension fund is invested in an ultra-short duration bond fund that currently pays 1.90% and has a value of over $7.1 million. While this account is earning a significantly lower rate than our other investments, this was at the direction of the Board of Directors to ensure security of the investment and instant access to funds. (All numbers in the paragraph above are as of close of business on November 11, 2020.)