HomeMy WebLinkAbout1968-07-01 MinutesMINUTES
• OF
REGULAR MEETING OF THE HOARD OF TRUSTEES
OF
THE FIREMEN'S PENSION & RELIEF FUND
E
0
The regular meeting of the Firemen's Pension & Relief Fund Hoard of Trdstees of
Fayetteville, Arkansas, was held in the City Clerk's Office on Monday, July 1, 1968,
at 4:45 P. M.
Present: City Manager Gerald Fox, Secretary George J. Davis, Fire Chief Burl Skelton,
and Board Members: Morrison, McWhorter, Harris, and Tune.
Absent: Treasurer Albert J. Jones.
The minutes of the regular meeting on Monday, June 3, 1968, were read and approved.
The Secretary presented the Authorization Forty to pay the June pensions.
Mr. Tune moved that the disbursements be allowed. The mobton was seconded by Mr. Harris
and upon roll call the following vote was recorded, "Aye" Skelton, Morrison, McWhorter,
Harris, and Tune.
"Nay" None.
There being Five "Ayes" and No "Nays", the Chairman declared the motion passed.
A brief discussion was held concerning the reinvestment of the surplus funds now
invested by the Pension Board in Savings & Loam ¢ss i tip .agci,gn F_ ec�B2 In �
Bpnks but no a tion was02 at ,his time.e/ �E`f9 " ""� c.+w+
Therep being no furt er business, Mr. Morrison moved to adjourn. The motion was seconded
by Mr. Harris and passed unanimously, whereupon the Chairman decl4red the meeting
adjourned.
ATTEST:
GEORGE � , SECRETARY
•
�Ge FOX
9w7livViv
•
CITY OF FAYETTEVILLE, ARKANSAS
TO: Fireman's Relief and Pension Board of Trustees
FROM: City Manager and Chairman of Board of Trustees
SUBJECT: Investment of Pension Funds
DATE: June 28, 1968
Attached you will find a report from the City Controller on Fire Pension Funds
and investments as of June 21, 1968 also, attached is an opinion of the City
Attorney and the Attorney General on Pension Fund investments.
Yop will note that on the second page of the Attorney General's opinion,
he states that the Fireman's Pension Fund could invest in AAA, AA or A.
notes, bonds or indectures of an industrial corporation or utility. A typical
such issue on this date is an Ohio Bell Telephone bond issue selling just
slightly over par (100-414) at an interest rate of 6 3/4 percent. This is
a 40 year issue, but can be sold over the counter at any time liquidity is
needed. This is even more liquidity than Savings and Loan V.R.'s
I
What would such investments as above mean for the pension Fund? If all
• $200,000 was invested in such bonds at 6 3/4 $ interest, it would average
more than 1`1/2% more than is presently being receivedlfrom investments.
In dollars this would mean more than $3,500 additional annually from
investment income. We should discuss this at our regular meeting on Monday.
Gerald Fox
City Manager
0
• FIREMENS PENSION AND RELIEF FUND
INVESTMENT REPORT
June 21, 1968
Allowable investments to be made by the Board of Trustees of the fund are
limited by various state laws. Section 1 (k) of Act 509 of 1963 Acts of,
Arkansas provides as follows:
Obligations consisting of notes, bonds, or debentures which are
direct obligations of -an industrial corporation, or a corporation.
engaged primarily in the production, transportation, distribution,
or sale of electricity, gas, water, or the operation of telephone
or telegraph systems, or any combination of them. Provided, the
obligor corporation is incorporated under the laws of the United
States of America, or any state, or the District of Columbia, and
that the said obligations shall at the time of purchase, be
rated within the three highest classifications by at least two
standard rating services. Provided further, that funds of ,
the System may not be used in the purchase of common or preferred
stocks, or of other equity capital, by whatever name called, and that
no such obligations as may be owned by the System may ever be
exchanged for any stock or other equity capital.
• The major sources of revenue for the fund based on 1967 are estimated
for 1968 as fellows:
One mill property tax
State Insurance Commission
Interest
Total
$ 279500.00
10,750.00
7,500.00
::$:459750600
Cash balance in the checking account is $11,981.16 and $2,333.48 in'the
savings account.
Monthly pension cost at present is $1,622.52.
Based on the attached list of investments and no consideration to cashing
investments prior to maturity. The following amounts could be invested'
in securities that would pay a higher interest rate.
July 1968
August 1968
October 1968
December 1968
April 1969
Total
$ 709000.00
47,000.00
10,000.00
70,000.00
15;000;00
$2129000;00
Some of the cash balances!; could also be, used to increase the investment
• amount for July 1968.
0
•
0
Fireman Pension and Relief Fund
Investments at June 21, 1968
Building and Loan
VR
Harrison $
15,000.00
Benton County
102000.00
1-11-69
5,000.00
Springdale
159000.00
Peoples Federal
159000.00
Superior
159000.00
Standard Federal
159000.00
First Federal Rogers
101000.00
7-14-68
5,000.00
First Federal Fayette.'
159000.00
Fayetteville
5,000.00
4-17-69
10,000.00
First Federal -
12-31-68
Fort Smith
159000.00
Savings
United Savings $ 109000.00
First Federal L.Rock 105000:00
Total Building
and Loan $150,000.00 $ 209000.00
Certificates of Deposit
Bank of Elkins
McIlroy
First State
First National
Total Certificates
of Deposit
U. S. Government Bonds
K Series
Other Maturity
Rate
1-11-69
5
1/4
12-31-68
5
1/4 '
6=30-68
5
1/4
6-30-68
5
1/4
7-14-68
5
1/4
6-30-68
5
1/4
4-17-69
5
1/4
12-31-68
5
1/4 '
6-30-68
5
1/4
12-31-68
5
1/4
7-11-68
5
1/4
12-31-68
5
1/4
8-7-68
5
1/4
6-30-68
4
3/4
6-30-68
4
3/4
$ 10,000.00 10-12-68
101000.00 1-10-69
109000.00 i 7-5-68
10,000:00. 8-8-68
$ 409000:00
$. 2,000600 7-27-68
4 1/2
4 1/2
4-1/2
4 1/2
ANN
41.
I IN
r �h6TON COIN . � '
It CITY ,OF FAYETTEVILLE•
FAY ETTEVILLE.' AR KANSAS,
i
HUGH R. KINCAID - I f r P. O. SBOX CBO -
11 1,July 31;'1967
CITY ATTORNEY ,
Mr.' Albert Jones
City Controller
city Administration Building
.,,Fayetteville, Arkansas I
RE: Investment of Pblice Pension and Relief Fund '.
Dear Al: "
As requested, I have researched the question of the
..limitations imposed upon investment of Policemen pension and
relief funds and find the following statutes, which set out in .
detail the permissable investments;
Ark. Stats. Ann. Sec.'19-1805 (1965 Supp.) -
19-1805. Investment of fund in securities -
Deposit of securities. The said board of
trustees shall have the power to draw such
sums from its treasury to invest such sums
in the name of the board of trustees of the
Policemen's Pension and Relief Fund in
interest-bearing bonds of the United States,
Ir the State of Arkansas, or of the city in which ..
such board is located, or in Savings and Loan .
'Associations duly established and authorized
to do business as such in this State. All
such securities shall be deposited with the
treasurer of the board of trustees of.the
II pension and relief fund, and shall be subject
to the order of. said board.
-2 -
Ark. Stats, Ann, Sec. 59-325 (1965 Su
:.., .dealing' with permissible investments in
': Arkansas Children's Colony Bonds states:
.
59-325. Firemen and policemen relief and
`,,.'•pension funds - Public funds - Investment
in bonds authorized. - Any municipality, or.,.
any board, commission or other authority
duly established by ordinance of any muni-
cipality, or the boards of trustees, re-
`,.
spectively, of the firemen's relief and
'pension fund and the policemen's.pension
„' ,:- ';• ',..• and relief fund of any such municipality, or
,,
:any county, or the board of trustees of any -•`_
.
retirement'system created by the general
,':
assembly of the state of Arkansas, may, in
<• .
its discretion, invest any of its funds in the •:
' bonds of the board issued under the provisions
of this act (59-311, 59-317 - 59-3261; and
bonds issued under the provisions of this
act shall be eligible to secure the deposit
ob public funds..
• ,- In addition to the foregoing statutes, Act 509, Section
1(k)', 1963 Acts of Arkansas, now codified as Ark. Stats, Ann.
12-2530 (k), provides for the broad range of investments set out
at length in the Attorney General's opinion of January 30, 1964.
L.
I would agree with the Attorney General's conclusion that Section
'
7 of:the Act (Ark. Stats. Ann. Sec. 12-2536) extends the authority: •:;
of the Trustees of the Pblicemen's Pension and Relief Fund to
permit the wide range of investments set forth in Section 1 (k)
'.
I''trust this more fully answers-your.inquiry 'in, this
regard.41 d
dl
sincerely yours,
Hugh.R. Kincaid,
HRK:ab
P
i
,
I
1
I
OFFICE .OF ATTORNEY GENERAL.
COPY
January. 30„ 1964
_ • qa
• t -.' ...
,
Honorable Albert J. Jones
City Treasurer -
Fayetteville, Arkansas
Dear Mr. Jonos:.
I am writing in reply to your recent letter in which you
states
will you please give me your -opinion as to whother or
not the Police Pension and Relief Fund of the City of
Fayetteville, Arkansas, might legally invest in notes, .
bonds, or debentures which are direct obligations of
industrial corporation or public utility corporation,
etc., as outlined in sub -section (k) of Section 1 of
Act 509 of 1963 Acts o; Arkansas,
In giving your opinion, would you please make some
roferenee to Section 7 of the same Act, which extends
to our Board of Trustcos the right to legally invest
the moneys of the Police Pension and Relief Fund in
obligation as sot out in Section 1.
Section 1 (k) of Act 509 of 1963 Acts of Arkansas provides as
followss
The Boards of Trustees of tho Arkansas State Employees
Retiremont System, the Ar:;ansas State Highway Employees
Retirement System, tiro Arkansas State Police Retirement
System and the Arkan.^ac State Penitentiary Employees
Retirement System shall have tho powor to invest and
ro-invest the monies in their respoctivo funds, and to
hold, purchase, sell, as..ign, transfer, and dispose of
any securities and invesianentz held in said funds, pro-'
vidod, that such investr,:onta and ro-invostmonts shall
be limited to the following:
s
I
Honorable Alvin J. Jones -2- January 30, 1964
(k) Obligations consisting of notes, bonds, or debentures which
are direct obligations of an industrial corporation, or --A,
corporation engaged primarily in the production, tran_sporta-
tion, distribution, or sale of olactricity, gas, water��
or the operation of telephone or telegraph cygte�, or any_
combination of them. Provided, that the obligor corporation..
is incorporated under the laws of the United States of
America, or any state, or the District of Columbia, and
that the said obligations shill at the time of puzch e,
be rated within the three highest classifications by at
'least two standard rating services. Provided further, that
funds of the System amy not bg tired in the purchase of common
or preferred stocks, or of other equity capital, by whatever
name called,,apd that no such obligations as may bo owned by
the System may over be exchanged for any stock or other
equity capital.
.In my opinion, the Pension and Reliof Fund for the Police, Piro-
men or Municipal Judges of the: City of Fayetteville could legally
invest in such notes, bonds or debentures as are direct obliga-
tions of industrial or public utility corporations as outlined
in the above section and sub -section under their provision..
}, The authority for Boards of Trustees of the above cited funds
to legally invest money is provided for by Section 7'09 the samo.
Act as followas
Provided further that the Board of Trustees of any public
employee Retirement :system of any Political Sub -Division of
the State of Arkansas shall from time to time as funds are
available for investm.ont purposes, invest in obligations
set out in Section 1 of this Act.
In view of the foregoing paragraphs, your question is answered
in the affirmative. If I can be of further service, please don't
hesitate to call on use
Yours very truly,
..
BRUCE BwNNSTT
Attorney General:* :
•JLPtslj
Byt JERRY L. PATTERSON
Assistant Attorney General