HomeMy WebLinkAbout1990-04-26 Minutes•
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MINUTES OF A MEETING OF THE FIRE BOARD
A meeting of the Fayetteville City Fire Board was held on Thursday,
April 26, 1990 at 130 p.m. in Room 326 of City Hall.
PRESENT: Fire Chief Mickey Jackson, Scott Linebaugh, Firemen
Pete Reagan, Mike Bonaduce, and Secretary Sherry
Thomas, and Gib Weisbecher of Merrill Lynch.
ABSENT: John Dill
CALL TO ORDER
The meeting was called to order by Scott
MINUTES
Motion was made by Reagan,
of the last meeting. The
PENSION LIST
Linebaugh.
seconded by Dill, to approve the minutes
motion passed unanimously.
It was noted the list was unchanged from the previous month and
Reagan, seconded by Dill made a motion to approve the pension list.
The motion passed unanimously.
SKELTON RETIREMENT
Linebaugh stated that
matter. A transcript
Skelton's attorney had
MAY ELECTIONS
there had been no action on the Skelton
of the last meeting was provided but Mr.
not responded yet.
There was discussion about procedure for balloting for the May
election. Chief Jackson suggested sending letters stating that
persons interested in running for an office or nominating someone
else for a position should send back a letter stating such.
INVESTMENTS
Gib Wiesbecher gave a recap regarding the stock market changes,
noting a decline the last several weeks. At the same time, he
noted that interest rates have begun to rise. He pointed out that
when interest rates go up, so does pressure on the equity markets.
This accounts for an approximate 100 point decline just over the
last 10 days. Wiesbecher stated he felt it was wise to be very
cautious with investments at this time. He stated that the balanced
account with capital showed an approximate 39% investment with
government bonds, with another 14% being in cash equivalents,
bringing the entire portfolio up to 53% in either government bonds
or cash. Common stock represents approximately 47% of the
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April 26, 1990
portfolio with a total portfolio of $2,075,000. He also stated
that this portfolio has a very good long range plan that includes
government bonds and high quality common stocks.
In the Roxbury account, the cash side is approximately 43 1/2% "out
of the market". He pointed out the main themes in the portfolio;
pollution control, foods and consumer products telecommunications
and cellular sectors, and he discussed the merits of the companies
invested in relation to today's market trends.
Wiesbecher related that the income account is one month short of
becoming complete for the CD portfolio, with 46% being represented
by money market (cash). He stated that, due to the rising interest
rates in the bond market, they would be seeking to commit to some
longer term treasury and higher quality corporate bonds in the near
future. Wiesbecher also explained "Quarterly Treasury Refunding",
which is pay-off of maturing debt on securities and auction of
government securities. This consists of a 30 year bond, a 10 year
bond and a 3 year note and occurs every three months with the next
auction this May. He stated that every time the refunding takes
place, interest rates tend to rise just prior to the auction in an
attempt to attract foreign investors, particularly the Japanese.
Wiesbecher was asked if Oxidental Petroleum had a "stop -gap" or if
it should be sold, due to it's continued decline. He said
Oxidental had enough underlying assets to warrant holding on to it
at this time, with a 9 or 9 1/2% dividend yield to cushion the
stock from any further decline.
An overview of the investment policy (Pension Fund) was presented
with 25% representing stocks, which have a range of 25-50% with a
35% target. Government bonds are represented by 19%, having a
range of 15-75% and a 40% target.
Noting that the account would decrease soon due to the quarterly
treasury refunding, cash (CD's and money markets) are represented
by 53%, with a 15% target. "Other" (ML Lee) has a target range of
10%, currently represented by 1.96% When asked what other
investments Merrill Lynch recommended, Wiesbecher described an
investment called the "Europe Fund", which represents a fund to be
managed by S.G. Warberg, one of the largest and most respected
management companies in England. Merrill Lynch feels that with
trade barriers coming down and more and more economies striving to
become "Free Market", Europe will be one of the best places to
allocate investment dollars. It will be traded as a "closed end"
fund on the New York Stock Exchange, with an annual minimum
dividend of 7%. Merrill Lynch recommended a 4,000 share or $60,000
commitment to the Europe Fund, which would raise representation of
the "Other" category to approximately 3% and reduce cash. Risk
management of currency fluctuation was also discussed. Since the
offering period was to end on this day, Merrill Lynch was needing
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April 26, 1990
a decision of the Board. It was also added that no commission
would be paid for purchases during the offering period but that
after today, a commission would be charged for future purchases.
When asked for comments concerning the decision, Linebaugh stated
that he had not had time to review the information, and since the
risk factor was great, he would suggest not committing at this
time.
It was discussed that this would fit with the Pension Fund
Investment Policy. Reagan stated he felt the purpose of the
"Other" category was for investments of this nature. Dill felt
since it was not a large sum of money, this would serve as a good
source of diversification.
Reagan, seconded by Dill, made a motion to invest $60,000 in the
"Europe Fund" as recommended by Merrill Lynch.
It was asked if there was any minimum or maximum time limit
regarding holding or selling the Fund. Mr. Wiesbecher stated that
although it was to be viewed as a long term investment, there were
no time limits on holding or selling.
The motion passed with Linebaugh voting in the minority.
RAISE FOR RETIREES
Springston opened discussion on raises for retirees in the amounts
of $10.00 per month for volunteers and $50.00 per month for full
paid retirees.
It was stated that the retirees would stand a better chance of
getting a raise years from now if no raises were approved now. It
was also pointed out that starting salaries now are quite different
than for someone who started with the department 10 or 15 years
ago. The feeling was that eventually the fund would be gone, and
future retirees will have nothing to draw from.
Jackson, seconded by Reagan, made a motion to study the scenario of
an increase of $10 for volunteers and $50 for paid employees and
it's impact on the fund and future earnings and report back to the
Board at a future meeting.
The motion passed unanimously.
ADJOURNMENT
The meeting was adjourned at 2:48 p.m.