AREA AGENCY ON AGING 1-B



AREA AGENCY ON AGING 1-B

Board of Directors Meeting

Friday, July 22, 2011, 9:30 a.m.

29100 Northwestern Highway, Ste. 400, Southfield

MINUTES

Members Present: Jan Dolan, Chair Walter Ernst

Sandra Hann Andy Hetzel (by phone)

Amin Irving (by phone) Comm. Maggie Jones

Comm. Terry London Robert McMahon

Tom Miree Comm. Toni Moceri

Mark Rottermond Jamie Verdi

Comm. Helaine Zack

Members Absent: Vurn Bartley, Jr. Comm. Barbara Bergman

Comm. R. LaMar Frederick Peter Lichtenberg

Jim Seegert

Guests Present: Steve Betterly, Michigan Office of Services to the Aging

Kimberlea Dungy, Banel Learning Center

|Staff Present: |Tina Abbate Marzolf |Sandra Carter |

| |Carrie Harnish |Joe Hehir |

| |Richard Ison |Karen Jackson Holzhauer |

| |Jenny Jarvis |Kathleen Kueppers |

| |Becki Kugler |Ann Langford |

| |Barbara Lavery |Andrea Layman |

| |Leslie Lemanski |Jim McGuire |

| |Deanna Mitchell |Gerilyn Selmek |

| |Shavon Walton |Kristin Wilson |

Call to Order/Roll Call/Introductions

Jan Dolan, Chair, called the meeting to order at 9:30 a.m. Roll was called, and a quorum was present. New Board member, Sandra Hann, was introduced as the Older Adult Representative from Macomb County.

Call to the Public

None.

Consent Agenda

I. Minutes of the June 24, 2011, Board of Directors Meeting

Action requested to approve minutes of June 24, 2011, Board of Directors Meeting

II. Summary of Financial Performance

A. Contractor Expenditure Report

B. 10% Over/Under Report

C. Income Statement Summary

Action requested to accept and file reports

III. Western Oakland MOW Pilot Congregate Meal Site

Action requested to approve establishment of Colonial Acres Congregate Meal Site

IV. Evidence-based Disease Prevention RFP Update

Action requested to accept and file report

V. AAA 1-B Aging Matters Summer 2011 Training Schedule

Action requested to accept and file report

VI. Minutes of April 13, 2011, Advisory Council Meeting

Action requested to accept and file report

ACTION: Walter Ernst moved, supported by Commissioner London, to approve the Consent Agenda. Motion carried unanimously.

Agenda Items

I. Executive Report – Tina Abbate Marzolf, Chief Executive Officer

AAA 1-B Fundraising Event

The AAA 1-B will be holding a special fundraiser, Treasure of Hope, to benefit our organization and raise funds to support services for older adults and adults with disabilities.  The event will be held on Friday November 4, 2011, from 6:00 p.m. to 9:00 p.m., at Prlanta located at 888 W. Big Beaver Road in Troy.  Be sure to save the date on your calendar.  Sallie Justice is organizing this event with representatives from our Board of Directors and Advisory Council. Individuals will have the opportunity to purchase keys to open a special treasure chest containing jewelry and other gifts while enjoying hors d’oeuvres and other light refreshments.

AAA 1-B and Other News

On behalf of the AAA 1-B, Jim and Jodi McGuire accepted the National Area Agency on Aging Association (N4A) Innovation Award for our IndePendant program! The AAA 1-B was also selected as runner up for the national award, and awarded a $1,000 check that will be used to serve non-elderly disabled individuals who were not eligible to participate in the IndePendent program due to age restrictions.

II. Finance Committee Report – Mark Rottermond, Finance Committee Chair

Defined Benefit Pension Portfolio Investment Strategy

Joe Hehir advised that the current investment policy of the defined benefit pension portfolio is to have the available funds fully invested when prudent, and to maintain approximately one-third of the assets in fixed income securities and two-thirds in equities. The portfolio is expected to earn a rate of return comparable to the return of the S&P 500 index. Tri Star Trust Bank has achieved the targeted rate of return for the time it has managed the portfolio. The unfunded balance is being driven by the historically low interest rates and their impact on the actuarial calculations. As interest rates increase, the unfunded balance will decline. While the source of the current unfunded balance comes from the “liability” side of the equation (investment portfolio), there is concern over the ability of the current investment strategy to maintain the necessary asset balance.

An alternative investment strategy that involves a technical analysis of financial market dynamics with frequent shifts in investments has a successful long-term track record and would offer a better return than the S&P 500 index. Three companies which utilize this strategy have been identified: Stadion Investments, Athens, Georgia; Tactical Allocation Group, LLC, Birmingham, Michigan; and Morgan Stanley Smith Barney, Farmington Hills, Michigan. The Finance Committee approved the pursuit of discussions with these companies to consider moving the defined benefit pension investment portfolio from Tri Star Trust Bank.

Termination of Tax Deferred Annuity (403b) Plan

Deanna Mitchell explained that the AAA 1-B Tax Deferred Annuity (403b) Plan with Mutual of America, is an employer-sponsored plan, even though payroll deductions were ceased as of 12/12/08. Currently, participants can only withdraw their funds if they: 1) cease employment with the AAA 1-B; or 2) attain the age of 59 ½ years. While it was the intention of the agency to terminate the Plan years ago, a resolution was never adopted. Current employees, therefore, do not have access to these funds for withdrawal or rollover to another account unless meeting one of the two requirements above. Deanna presented a resolution that terminates the Tax Deferred Annuity Plan effective August 1, 2011; adopts Amendment #2 to the Plan (attached), and grants authority to the appropriate corporate officers to take the necessary actions to effectuate the Plan’s termination and distributions of the assets to the participants.

ACTION: Bob McMahon moved, supported by Tom Miree, to approve the Finance Committee’s recommendation to adopt the resolution and Amendment #2 to the Tax Deferred Annuity (403b) Plan to terminate the Plan effective 8/1/11 and distribute the assets to the participants. Motion carried unanimously.

Establishing Subsidiaries for AAA 1-B

The Articles of Incorporation of the AAA 1-B are very specific and limit the current legal entity to the sole purpose of receiving and dispersing funds under the Older Americans Act and Older Michiganians Act within a six-county service area. The new business development engagement currently underway is intended to identify business opportunities that might be different in scope, scale and objective from that of an Area Agency on Aging. The potential long-term consequences of maintaining a single legal entity suggest that the AAA 1-B consider establishing alternative legal structures to have the flexibility to take advantage of new business opportunities and support them with the proper management and governance structure.

Steve Betterly addressed the Board and expressed concern about protecting the AAA 1-B’s assets. Joe Hehir responded that under attorney advisement, the subsidiaries will be structured to protect the AAA 1-B and its assets.

ACTION: Bob McMahon moved, supported by Commissioner London, to approve the Finance Committee’s recommendation to establish a for-profit LLC subsidiary and non-profit subsidiary of the AAA 1-B. Motion carried unanimously.

InfoPath

The InfoPath upgrade will allow more of the care managers’ responsibilities to be completed without having to be connected to the Internet. This will save time and create a more efficient work flow by creating an option to ‘check out’ various forms to their laptops and complete them without an internet connection.

ACTION: Walter Ernst moved, supported by Commissioner Zack, to approve the Finance Committee’s recommendation to execute a level of effort agreement, not to exceed $120,000, with Harmony Information Systems to commence work on the InfoPath upgrade. Motion carried unanimously.

Finance Committee Report

ACTION: Bob McMahon moved, supported by Tom Miree, to accept and file the report. Motion carried unanimously.

III. Governance Committee Report – Tom Miree, Governance Committee Chair; Deanna Mitchell, Director of Admin Services/Corporate Secretary

Rehire Policy

The current Rehire Policy retains the seniority of terminated employees who return to full-time employment with the agency within one year, after five or more years of service, except in cases of performance issues. Staff recommended a change to two years of service, rather than five.

ACTION: Commissioner London moved, supported by Mark Rottermond, to approve the Governance Committee’s recommendation to approve the revised Rehire Policy. Motion carried unanimously.

Policies

To meet the requirements for CARF accreditation, several policies dealing with governance and compliance have been drafted, and are recommended for Board approval by the Governance Committee.

ACTION: Tom Miree moved, supported by Mark Rottermond, to approve the Governance Committee’s recommendation to adopt the following policies:

1) Board Governance

2) Board Committees

3) CEO Evaluation

4) CEO Compensation

5) Succession Plan for CEO

6) Code of Ethics

7) Corporate Compliance

8) Fraud, Waste & Abuse

Motion carried unanimously.

Corporate Compliance Plan

The Affordable Care Act (ACT) requires the adoption of compliance programs that meet a core set of Office of Inspector General (OIG) requirements. In addiction to the ACA, as a requirement for accreditation by the Commission on Accreditation of Rehabilitation Facilities (CARF), organizations must have a policy on corporate compliance that has been adopted by the organization’s leadership. While the AAA 1-B has always maintained several aspects of a corporate compliance program, including annual fiscal audits, compliance with HIPAA laws and regulations, and compliance with federal and state regulatory requirements associated with programmatic funding, the AAA 1-B is seeking to further formalize the compliance process.

ACTION: Tom Miree moved, supported by Walter Ernst, to approve the Governance Committee’s recommendation to authorize the:

1. Approval of the appointment of the Chief Financial Officer as designated Corporate Compliance Officer;

2. Adoption of the Corporate Compliance Plan and granting internal oversight for deployment of the plan to the Compliance and Risk Management Committee; and

3. Approval of the designation of the Corporate Compliance Officer to also serve as the organization’s Risk Management Officer and chairperson of the Compliance and Risk Management Committee.

Motion carried unanimously.

Board Appointments

Karen Wintringham, Vice President, Medicare Programs at HAP, and Lauri Oakes, Director of Regulatory Affairs and Compliance at United Healthcare Great Lakes Health Plan, were interviewed by the Governance Committee, and both were found to be excellent candidates for Board membership. Both have exceptional experience in the field of health care. In addition, Karen is well versed in Medicare, and Lauri has a background in compliance and regulatory affairs.

ACTION: Tom Miree moved, supported by Commissioner Zack, to approve appointment of Lauri Oakes and Karen Wintringham to the AAA 1-B Board of Directors as recommended by the Governance Committee for a term ending 12/31/11. Motion carried unanimously.

Governance Committee Report

ACTION: Maggie Jones moved, supported by Jamie Verdi, to accept and file the report. Motion carried unanimously.

IV. Harmony Post-Implementation Audit Results and Follow-up Activities – Becki Kugler, Director of Operations

Becki Kugler provided a PowerPoint presentation of the Harmony post-implementation audit (PIA) and follow up activities. The PIA identified issues from the five system components: 1) people; 2) procedures; 3) data; 4) hardware; and 5) software, and several of these have been addressed by Harmony at no charge. Many of the original goals of the project, which applied to AAA 1-B employees, service providers, consumers, and the management team, have been met.

In response to Tom Miree’s suggestion, Becki stated that a post-recommendation survey will be conducted as well. Becki also pointed out that steps have been taken to ensure the security of the Harmony application and data. Such steps include the use of https encrypted connections, which are often used for sensitive transactions in corporate information systems, and the use of user credentials which are required to access the Harmony application.

V. Member Information Exchange

None.

VI. Adjournment

Jan Dolan, Chair, adjourned the meeting at 11:29 a.m.

Respectfully submitted,

Leslie Lemanski, Executive Administrative Assistant

Approved:

__________________________________ __________________________

Jan Dolan, Chairperson Date

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