HomeMy WebLinkAbout1997-04-18 - Agendas - FinalFAYETTEVI LLE
-1/41
THE CITY OF FAYETTEVILLE, ARKANSAS
TRACI PAUL, CITY CLERK
TO: Firemen's Pension Board Members
FROM: Traci Paul, City Clerk/Treasurer 19'
DATE: April 18, 1997
SUBJECT: Firemen's Pension Board Meeting
The next Firemen's Pension Board meeting is Thursday, April 24,
1997, at 11:00 a.m., in room 326 of City Hall. Attached, please
find a copy of the agenda for the upcoming meeting, the minutes
from the March 27 meeting, and the pension list for May, 1997.
Attachments
113 WEST MOUNTAIN 72701 501 575.8323
•
AGENDA
FIREMEN'S PENSION AND RELIEF BOARD
April 24, 1997
11:00 a.m.
City Hall Room 326
1. Approval of the minutes of March 27, 1997.
2. Approval of Pension List for May, 1997.
3. Investment Report, Merrill Lynch
4. Old Business
5. New Business
6. Adjournment
•
MINUTES OF A MEETING OF THE FIRE PENSION BOARD
A meeting of the Fayetteville Firemen's Pension and Relief Board
was held on Thursday, March 27, 1997, at 11:00 a.m., in room 326,
of the City Administration Building, 113 W. Mountain, Fayetteville,
Arkansas.
PRESENT: Mayor
Doss,
Traci
Fred Hanna, Pete
Ron Wood, Darrell
Paul
Reagan (arrived late), Marion
Judy, and City Clerk/Treasurer
ABSENT: Howard Boudrey
CALL TO ORDER
Mayor Hanna called the meeting to order.
MINUTES
Doss, seconded by Judy, moved to approve the minutes of the
February 27, 1997 meeting. The motion passed unanimously.
PENSION LIST
Paul stated the benefit increase is included in the pension list
for April. The DROP employees were also added to the list but it
does not change any figures.
Doss explained he reviewed the printout dated March 11, 1997, and
felt the information was correct with the exception of four of the
retired volunteer firemen. He stated the resolution says that they
will get $55 for 20 years of service. Bill Morris served 23 years
which should put him at $55 for his twenty years plus an additional
$15 for the three years served over twenty. Morris should receive
$70 instead of $65. Doyle Morrison's widow, Eliene Morrison,
should receive $80 per month because he served 25 years. Milderd
Tune and Billie Sue Tune should both receive $80 per month because
their husbands each served 25 years.
Paul stated she would check her records.
Judy, seconded by Doss, made a motion to approve the April pension
list.
DROP DISCUSSION - MARILYN CRAMER
Mayor Hanna stated Marilyn Cramer would like to discuss the DROP
Plan with the Board.
1
March 27, 1997
Marilyn Cramer explained she needed some clarification so that
everyone understands how the interest is going to be computed and
when it is going to be credited. She stated at this point we have
not credited any interest. The interest will be credited once the
actuary certifies the interest rate.
Cramer asked when the interest will be credited. She stated the
plan, as adopted, says it will be credited annually. It does not
explain when. Cramer suggested that once a year be December 31.
She stated the amount will be unknown until July or whenever we get
the certification. It would then be credited effective January 1
based on their balance from the previous year. Cramer explained
she thought the actuary would certify it by calendar year. She
stated it makes sense to do it as of December 31.
Doss stated it would be best to do it on a calendar year to
simplify things.
Doss made a motion to credit the interest on December 31.
In response to a comment from Doss, Cramer stated the interest rate
is based on a report that is due to the Pension Review Board by
March 31. The Accounting Division usually gets it out by the first
week of February. It goes to the LOPFI office and they wait until
everyone in the State has turned in the information. The actuarial
firm receives them all at the same time. June or July is as early
as it can be anticipated.
In response to a comment from Doss, Cramer stated when an employee
terminates as a DROP participant and takes his account balance he
may take it as a lump sum or as an annuity. If he chooses to take
it as an annuity, the annuity would be purchased without the
interest. The interest would be a lump sum distribution once the
amount is determined.
Cramer asked for clarification on the computation of interest for
the year of distribution of the DROP account. Cramer explained
that samples on the DROP Plan did not credit any interest for the
year of distribution. If they have interest for three months in a
year, we would not find that out until probably 18 months later.
Doss stated it seems like there should be.
Cramer explained that currently if a participating firefighter does
not stay twenty years, he can withdraw his contributions to the
pension plan without interest. A firefighter would not have any
interest at all during that time if he didn't stay the twenty
years.
2
•
•
March 27, 1997
Cramer stated that needs to be clarified. If someone retires in
March, they will already get two checks. This would be a third
check eighteen months later for the interest for three months.
Doss asked if the Board should go ahead and vote on the motion
regarding the calendar year.
Wood seconded the motion. The motion passed unanimously.
Cramer stated there needs to be an approved formula for determining
how the interest on the DROP accounts will be computed. Some plans
do it based on the account balance at the beginning of the year.
Cramer suggested taking an average balance and multiplying it by
the certified interest rate and then multiplying it by the portion
of the year that the contributions were there.
Doss stated a person should get the interest for whatever portion
of the year it is in there.
Cramer stated the draft of Board Rule #10 indicated there would be
no interest in the final year of distribution. The final draft is
silent on the issue.
Cramer stated if there is to be interest for a partial year in the
year of distribution, there should be some understanding that when
a person is no longer a participant in the DROP Plan, he will make
a choice as to whether his payment will be a lump sum distribution
or an annuity. If an annuity is selected, it will not include the
two interest amounts. Those will then later be distributed in a
lump sum distribution once the amount is determined. It should be
clear that there might possibly be two interest checks.
Doss, seconded by Wood, made a motion to that effect.
Doss stated it was probably not addressed because it is new and no
one has done it yet.
Cramer explained that the information on the final year is unknown
until a long time after the person retires.
Cramer explained she wanted verification that the formula for
computing the interest meets the Board's approval. She stated the
formula would be to take a simple average and multiply it by the
interest rate and multiply that by the full month portions of the
year that the money is in the DROP account.
The Board discussed the proposed formula and decided it was
satisfactory.
3
•
•
•
March 27, 1997
Cramer added that she understood that the DROP contributions will
be made on the last day of the month so if someone elects to
participate in the plan on the first day of the month, the first
contribution will be made on the last day of that month. We are
always working with full months anyway.
Judy made a motion to work with full months. Doss seconded the
motion. The motion passed unanimously.
Cramer stated the plan says that one half of the employer
contribution is made to the DROP account. She asked if that
contribution would change if the firefighter receives a pay
increase during the time that he is participating in the DROP. She
stated the contribution credited based on a person's salary does
not change. In the five years, a person may have a pay increase.
She asked if the amount of the employer contribution would increase
at that time.
Cramer stated in a normal instance, 120 of the firefighter's salary
is contributed by the employer which means that if he gets a pay
increase, there will be an increase in the contribution by the
employer to the pension plan. Cramer asked if the contribution to
the DROP participant's account is affected by that or not.
In response to a comment from Doss, Cramer stated she understood
that if a firefighter gets a pay increase, he will still be
contributing 6% of his new salary to the pension plan. The City
will put 12°% of that new salary into the pension plan. The 12%
goes into the pension plan and is then divided between the general
pension plan and the DROP account. When an employee gets and
increase, there will be an increased contribution by the City. The
question is whether or not at the same time there will be an
increase to the employee's DROP account.
Doss stated for simplification if should be.
Cramer stated it is easier for the Accounting Division for it not
to have. Payroll does not really work with the DROP accounts. She
explained that she and Denise Land have taken on the DROP accounts
for the time being. She stated Payroll gets the increases. If the
increase is to go to the DROP account, the Accounting Division
would appreciate written notification for administering the DROP
part of it that a pay increase has been awarded to a DROP
Participant.
Doss stated if a DROP participant receives a pay increase, the
Board needs to remember to notify Marilyn Cramer.
Doss stated the DROP participants could be permanently added to the
pension list.
4
March 27, 1997
In answer to a question from Doss, Paul stated the pension list is
distributed by the Accounting Division.
Cramer explained that the DROP participants will be listed on the
pension list from now on.,
Doss explained that Fire Chief Mickey Jackson signs off on all pay
increases. The Board could get a copy of the Personnel Action
sheet for any of the DROP participants who receive a pay increase.
Cramer explained that it was her understanding that there will be
an increase in the DROP participant's DROP account for the employer
contribution only for one half of what employer is contributing.
There will be changes to what the contributions are. The employee
part is frozen. The employer part will be half of whatever the
employer is contributing. The employee will contribute 60 of his
current salary.
INVESTMENT REPORT
Mayor Hanna explained that Richard Yada would not be present to
give an investment report.
OLD BUSINESS
Roger and Marvie Lewis
Accounting Manager Marilyn Cramer stated the minutes indicate that
the Board has agreed not to increase Roger Lewis' benefit until
there is some other •determination on it. Cramer requested
something written from the Board when the situation is resolved.
She expressed concern that the increase would fall through the
cracks.
Doss explained the situation to Cramer.
Cramer stated the copy of the divorce decree says that Marvie Lewis
will receive half. The Accounting Division planned to divide the
new amount equally between the two. After reading the minutes, the
benefit increase was not given to either Roger Lewis or Marvie
Lewis.
Ron Wood explained that Roger Lewis' attorney has been working on
the issue.
In answer to a question from Doss, Paul stated City Attorney Rose
wrote a letter that says the divorce decree is silent on whether
Marvie Lewis should get half of the increase or not. The City
Attorney suggested Mr. Lewis see an attorney but in the meantime he
recommended the City continue to divide the amount.
5
March 27, 1997
Pete Reagan arrived.
In answer to a question from Doss, Paul stated the City Attorney
recommended the City continue to pay half, whatever half is.
Cramer stated based on the Fire Pension minutes, the Accounting
Division has not done anything on any increase at all. Some
decision needs to be made and the Accounting Division needs to be
notified.
In answer to a question from Cramer regarding the status of the
situation, Reagan stated he talked to Mr. Lewis and Mr. Lewis'
attorney. They are planning on asking for an opinion from Judge
Butt's office as to whether any increase should be divided or not.
The Board decided to continue to hold any increase until a decision
is made.
In answer to a question from Doss, Paul stated the letter from City
Attorney Jerry Rose is dated February 21, 1997.
In answer to another question from Doss, Paul stated any change in
the situation will be discussed by the Board at a meeting. She
stated she would send a copy of the minutes to Cramer.
Doss explained that as soon as the situation is resolved the Board
will approve any back pay that is necessary. He added he thought
the City Attorney intended for the increase to be given and divided
in half.
Reagan stated the decree does not say that the City has to pay the
benefit. The decree says that she shall receive it.
The Board discussed that in any future situations, they will pay
the full amount to the retired firefighter and let him pay an
amount to his spouse.
After some discussion about State statutes, Mayor Hanna suggested
one of the Board members should visit with Jerry Rose about the
Board's responsibility to actually write the check.
Mayor Hanna left the meeting.
Pension Affidavits
Paul reported that Floyd Carl turned in his affidavit. She stated
all affidavits have been turned in.
6
March 27, 1997
Pension Review Board/Insurance Turnback Delay
Paul stated in response to a question from the last meeting, the
City received the police insurance turnback check on August 19,
1996.
In answer to a question from Doss, Paul stated the City received
the fire insurance turnback check 89 days after the July 11 meeting
(October 8, 1996).
There being no further business, the meeting adjourned at 11:52
a.m.
7
FIREMEN'S RELIEF AND PENSION FUND
MAY 1997
TRACIPAUL TREASURER
• THE FOLLOWING ARE THE OBLIGATIONS OF THE FIREMEN'S RELIEF FUND FOR THE
MONTH OF MAY 1997. YOU ARE HEREBY INSTRUCTED TO ISSUE CHECKS TO THE
PAYEES, IN THE AMOUNTS SHOWN, AND FOR THE PURPOSE SO STATED.
EMP# NAME
43 BAIRD, RICHARD H.
2 BLACKARD, PAUL
63 BOLAIN, ANN
44 BOUDREY, BETTY MRS.
45 BOUDREY, HOWARD
49 BOUDREY, JACK
4 CARL FLOYD JR
5 CASELMAN, ARTHUR
57 CATE, ROY
6 CHRISTIE, ARNOLD
8 COUNTS, WAYNE
61 DAVIS, BEULAH F.
10 DEARING, EMMA MRS.
11 FARRAR, ALONZO
38 FRALEY, JOSEPH G.
33 HARRIS, BILL C.
34 HARRIS, JAMES E.
64 JORDAN, CHARLIE
47 JUDY, DARRELL
37 KING, ARNOLD D.
54 KING, ARVIL
12 LANE, HOPE MRS
13 LAYER, MERLIN
14 LEE, HAROLD
51 LEWIS, CHARLES
60 LEWIS, MARVIE
55 LEWIS, ROGER
40 LOGUE, PAUL D.
50 MASON, LARRY
39 MC ARTHUR, RONALD A.
35 MC CHRISTIAN, DWAYNE
15 MC WHORTER, CHARLES
29 MILLER, DONALD
42 MOORE JAMES H.
17 MORRIS, WILKIE MRS.
16 MORRIS, WILLIAM H.
62 MORRISON, ELIENE
48 MULLENS, DENNIS W.
58 OSBURN, EDWARD
46 OSBURN, TROY
53 POAGE, LARRY
20 POLLY, GRACE A. MRS.
22 REED, JOE
30 SCHADER, EARVEL
41 SCHADER, TROY
23 SKELTON, BURL L.
24 SKELTON, LEE
56 SKELTON, ROY
36 SPRINGSTON, CARL
25 STOUT, ORVILLE
27 TUNE, MILDRED MRS.
26 TUNE, BILUE SUE
GROSS FED. TAX
1,191.06 100.00
55.00
55.00
1,641.57 180.00
1,383.66
1,088.98 287.68
55 00
75.00
1,182.35
55.00
55.00
377.50
55.00
707.84
1,171 39 100.00
55.00
55.00
1,525.81
1,088.98
1,008.97 100.00
1,131.00 130.00
55.00
417.50
55.00
1,088.98
439.16
439.17
1,902.69 175.00
1,078.16 29.35
1,159.11 100.00
55.00 30.00
886.19 50.00
863.01 125.00
55.00
55.00
65.00
70.00
1,448.31
1,646.01 160.00
1,255.55 65,81
1,556.57 200.00
55.00
55.00
923.01
1,007.92 20.00
692.50 42.50
390 00
1,626.02 126.02
609.88 50.00
590.36 50.00
70.00
70.00
ST. TAX
50.00
10.00
10.00
20.00
30.00
50.00
9 88
NET
1,091.06
55.00
55.00
1,461.57
1$83.66
751 30
55.00
75.00
1,182.35
55.00
55.00
377 50
55.00
707.84
1,061.39,
55.00
55.00
1,525.81
1,088.98
898.97
1,001.00
55.00
417.50
55.00
1,088.98
439.16
439.17
1,707.69
1,04.8.81
1,059.11
25.00
836.19
738.01
55.00
55.00
65.00
70.00
1,448.31
1,486.01
1,189.74
1,326.57
55.00
55.00
923.01
987.92
650.00
390.00
1,450.00
550.00
540 36
70.00
70.00
V
•
28 WATTS, DONALD
59 WATTS, WAYNE
52 WRIGHT, RANDALL
DROP EMPLOYEES
JOHNSON, ROBERT
MILLER, KENNETH
WARFORD, THOMAS
400.00
1,191.51
1,128.98
96.17
150.00
400.00
1,095.34
978.98
37,414.70 2,367.53 179.88 34,867.29
2,042.47
2,129.57
1,659.70
WE, THE UNDERSIGNED, DO SOLEMNLY SWEAR THAT. THE ABOVE OBLIGATIONS ARE
JUST AND CORRECT; THAT NO PART THEREOF HAS BEEN PREVIOUSLY PAID; THAT
THE PENSION PAYMENTS SO CHARGED ARE IN ACCORDANCE WITH THE ACTIONS OF
THE BOARD OF TRUSTEES OF THE FIREMEN'S RELIEF AND PENSION FUND; THAT
THE SERVICES OR SUPPLIES FURNISHED, AS THE CASE MAY BE, WERE ACTUALLY
RENDERED OR FURNISHED; AND THAT THE CHARGES MADE THEREFORE DO NOT
EXCEED THE AMOUNT ALLOWED BY LAW OR THE CUSTOMARY CHARGE FOR SIMILAR
SERVICES OR SUPPLIES.
4, (2. e
SECRETARY CHAIRMAN A D PRESIDENT
ACKNOWLEDGEMENT
• STATE OF ARKANSAS )
COUNTY OF WASHINGTON) )SS
•
SWORN TO AND SUBSCRIBED BEFORE ME THIS304ADAY OF April , 1997.
ARV P UB LIC /l
MY COMMISSION EXPIRES: 3-!- aoo
\NI
...�:. yfTy'..
:COMM. fk.0
OOTARy
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STATE OF ARKANSAS
County if Washington
City of Fayetteville
FIREMAN'S APPLICATION FOR PENSION
1
L Doyle Edwin Morrison
do solemnly swear that I was born on the 29
day of
July - 19_14._.and that I am a member of the Fayetteville
Fire Department in the capacity ofpart paid or Calh the salary of Sriot.:determint}far month My
tenure of service is as follows:
October '6,1943 t0October 6. 1968
Location Fayettavf It e, Ark,
That said service aggregates
25
years, the last five consecutive years being in the service of the
Fayetteville Fire Department. I hereby make application for retirement under the provisions of
Act 491 of 1921 and subsequent amendments thereto by the General Assembly of the State of Arkansas, my
claim for such retirement being based on the following facts:
Twenty—five years continuous service with the City of
Fayetteville Fire Department.
Names of Dependents (Wife and Children under ages of Eighteen Years):
Eliene L. Morrison (wife)
Martha Ann Morrison (daughter)
Age_
16
In making this application I hereby agree to comply with all provisions and requirements of Act 491 of 1921
and its subsequent Amendments thereto.
Subscribed and sworn to before me this
MY.mh+sion eypires Aug. 2, t966
CATIV
Signed 424 )'
a E. Morrison
day of 19 6
Diary Public
STATE OF ARKANSAS
County of
Washington ss.
City of Fayetteville
We, the undersigned, Officials of thr City of Fayettev111e Fire Department hereby certify
that the above applicant for retirement under the provisions of Act 491 of 1921 and its subsequent Amendments
thereto has served as follows: -
Fran October 6, 1943to October 6, 1968 Location City of Fayetteville, Arkansas
to Location
paid or call firemy drawing a salary of $Undetermined
and is now Member of Department with rank ofFart
per month. We further certify that Fireman Morrison D. E• is entitled to retirement from service for the fol-
lowing reasons: - ..
Longeviety with twenty—five (25) years continuous service with the City of Fayetteville
• Suburibed and sworn to
Fire Department. before
_ -- 74
day of 4.4
1gco 19_61.)
� .intA/mit
Chief
MY commission explra: Aug 2, 1969
PAGE 25
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•
•
•
•
STATE OF ARKANSAS
County of Washington
Ciiyof Fayetteville
Clarence W. Tune
:i I
November 1934', and that I
File Department in the capacity of - firem• an
FIREMAN'S APPLICATION FOR PENSION. •-- �-
as.
d• o solemnly swear that I
.4
was born on the
•
27 '
}
day of
Ai •
am a member of the City of Fayetteville
tenure of service is as follows:
st
11 March 4. 1946 to March k
f:
at the salary of S.yart-paid-rail per month My
1071 Location City of Fayetteville
County of Washington State of Arkansas
4
---
TWA said serviceaggregates 7_22 the last five consecutive years being in the service of the City of
Fayetteville. Arkansas Fire Department. -I hereby makeapplication for retirement under_the.provisions of
Act 491 of 1921 and subsequent amendments thereto by the General Assembly of the State of Arkansas, my
claim for such retirement being based on the following facts:
_,_�.Y...
25 veare continuous service - -
Names of Dependents (Wife and Children under ages of Eighteen Years) :
Mildred Tune --(wife) - 1:c -u .. „•9J8.�_,. LII; ,•.r •:n- ,ii a.,. r.i:obt S4 -t
. n ;-vAge 6
In making this application I hereby agree to comply with all provisions and requirements of Act 491 of 1921
and its subsequent Amendments thereto.
Subscribed and sworn to before me this 8th
STATE OF ARKANSAS
County of Washington
City of Fayetteville
the undersigned. Officials of the
that the above applicant for retirement under
thereto has served as follows:
,.,.March . 4, 1.946._
Signed
day of
x �X
City of Fayetteville Fire Departmenthereby certify
the provisions of Act 491 of 1921 and its subsequent Amendments
..___March 4, 1971 -- Location City of .Fayetteville, Ark.
to Location
ructero• cru _ .r+ s,ir. r : ur_ a :tsar •rtec:7iireisan,,. ^• `, ,`;: Z515.524:_-- ...-r,;;.•r;r.:: c: tr,:r •.,t- aid
and is now Member of Department with rank of anddrawinga salary,
,z •.-Ty +. *•,r:. r--. r :,.'•Clarence W. Tune
per month.' We further certify that -is entitled to retirement from service for the fol-
lowing reasons: --. --qi gvrrta• ;"rcr::i ,:t. ca. =al),
20 years regular and 5
Subscribed and sworn to before me this
:r;.... .6.7"
iL•"
8th
day of
Years lonaeviety
March
rr
s ..
41
• or .
. PAGE 27' , ; �� •".
1971
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_ FIREMAN'S APPLICATION FOR PENSION
STATE OF ARKANSAS
County of Washington
City of Fayetteville
I Jess Tune do solemnly swear that I wasbom on the 7th day of
November 19 12 and that I anya member of thr 'Fayetteville
Regular, Part -Paid
Fire Department in the capacity of r Call Firoma&t the salary of $ilndetermineri per month. My
tenure of service is as follows: .
December 4 1940 to March 7. 1966
Arkansas
Location City of Fayetteville,
That said service aggregates 25 years. the last five consecutive years being in the service of the City of
Fayetteville Fire Department. I hereby make application for retirement under the provisions of
Act 491 of 1921 and subsequent amendments thereto by the General Assembly of the State of Arkansas, my
claim for such. retirement being based on the following facts: - - -- --- --- 25 years years employment with the City of Fayetteville Fire Department
Names of Dependents (Wife and Children under ages of Eighteen Years) :
Billie Tune. Wife
Deborah Tune, Daughter
Age 41
16
In making this application I hereby agree to comply with all provisions and requirements of Act 491 of 1921
and its subsequent Amendments thereto.
Signed ,P4 la�v✓1-t' .
Subscribed and sworn to before me this 7th day of Marchrc/19 66
C �a-a-ly II J
Notary Public
My commission expires October 19, 1968.
STATE OF ARKANSAS
County of Washington as,
City of Fayetteville
We, the undersigned, Officials of thr City of Fayetteville Fire Departmenthereby certify
that the above applicant for retirement under the provisions of Act 491 of 1921 and its subsequent Amendments
thereto has served as follows: -_ .. _ ... _ . - - . _ __. _..____..__
December 4, 1940 to March 7, 1966 . Location Fayetteville Fire Department
to Location
r .Regular Part -Paid or
- ^ or. :,.x, •... .
and is now Member of Department with rank of and drawing a' salary of $ Undetermin,
Lau rtremaa
per month. We further certify that Jess Tune is entitled to retirement from service for the fol-
lowing reasons:
25 years service with the City of Fayetteville Fire Department
Subscribed and sworn to before me this 701 day of March 1911%.
My commission expires October 19, 1968.
PAGE 18
Chief
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Notary Public
APPLICATION OF
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SVSNV)RW dO 3.1V -LS
FIREMAN'S APPLICATION FOR PENSION
STATE OF ARKANSAS
County of WasbinEton
City of Fayetteville
I
E. Morris
Frhruary
do solemnly swear that I was born on the
1"<th
day of
19 18 and that I am a member of the �i.t', of Fayetteville
essa-Fart Paid. -
Fire Department in the capacity of D^ Call Fireman at the salary of $ Undetermined per month. My
tenure of service is as follows:
April 2', 1941 to April 2, 1964Location City of Fayettevilh
That said service aggregates 21 years, the last five consecutive years being in the service of the City of
Fayet t evil le Fire Department. I hereby make application for retirement under the provisions of
Act 491 of 1921 and subsequent amendments thereto by the General Assembly of the State of Arkansas, my
claim for such retirement being based on the following facts..
21"Years eni^1 }rant th the City of Fayetteville Fire Denartm-^t
Names of Dependents (Wife and Children under ages of Eighteen Years) :
Dixie E. Norris - - Age 45 years
In making this application I hereby agree to comply with all provisions and requirements of Act 491 of 1921
and its subsequent Amendments thereto. - -- -- --- -
Signed
Subscribed,and sworn to before me this Z day of
STATE OF ARKANSAS t
County of
City of
t,) )t . ThAvvlAq
196
We, the undersigned, Officials of Fire Department hereby certify
•
that the above applicant for retirement under the provisions of Act 491 of 1921 and its subsequent Amendments
thereto has served as follows:
at- .2i i / 9s/ / to %i/' .fir / 9Lf Loatioaz'2�
to Location
and is now Member of Department with rank of J4 RT t''t t O eA A b and drawing a salary of $
isG
per Intl. We further certify that 4�'fl, )2/� is entitled to retirement from service for the fol-
lowing reasons:
Subscribed and sworn to before me this day of (- 19 6
My Commission Ezpj Aug, 1. 1%j.
PAGE 15
Chief
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SVSNYNKV 30 3.LV.LS -
APR -18-1997 09:24
FAYETTEVILLE FIRE DEPT PENSION AND RELIEF FUND
PORTFOLIO PERFORMANCE 12/31/96 TO 03/31/97
NM CAPITAL MANAGEMENT
INCOME ACCOUNT
KEYSTONE ASSET MGNT
3 - MONTHS TREASURY BILLS
DJIA W/DIV REINVESTED
S R P 500 W/DIV REINVEST
LONG TERM TREASURY PONDS
HIGH GRADE CORP BONDS
CPI { jar,}
NM CAPITAL (time wtd)
INCOME ACCOUNT
KEYSTONE ASSET MGNT
12/31/96
$3,'987, 776
4, 518, 04a
1,:01, 845
12/31/95
+ 5.46
+3✓. 53
+34,94
+27. 63
+23. 54
+ 2, 67
+ 15. 68
+ 15. 61
03/31/97
S3,981, 896
4,452,065
11189,764
12/31/96
+ 5.31
+29.49
+22.98
- 1.4.1
+ 1.61
i 3.32
+ 11.37
+ 4.25
+17.91
03/31/97
+ 1. 28
+ 2.S9
+ 2.68
3.33
�. JS
+ 0.63
+ 1.07
0. 37
+ O. 76
P.01/01
TOTAL P.01
INVOICE
NM CAPITAL MANAGEMENT, INC.
6501 AMERICAS PARKWAY, SUITE 950
ALBUQUERQUE, NM 87110
April 23, 1997
Mr. Richard Yada
Merrill Lynch
425 W. Capitol, Suite 200
Little Rock, AR 72201
•
Re: City of Fayetteville Fire Pension &-Relief Fund
Account #563-96346 •
STATEMENT OF MANAGEMENT FEES:
For the period from January 01, 1997 through March 31, 1997
CITY OF FAYETTEVILLE FIRE PENSION AND RELIEF FUND
Portfolio Valuation as of 03-31-97 *. $.3,950,816..66.
_$ 3,950,816.66 @ 0.5000% per annum
Quarterly Management Fee
TOTAL DUE AND PAYABLE
S 4,938.52
$ 4,938.52
$ 4,938.52
ALL INVOICES ARE DUE UPON RECEIPT. TO INSURE PROPER CREDIT,
PLEASE INDICATE ACCOUNT NAME ON CHECK.
*Portfolio. Valuation used for -fee computation has been.reduced_.by
accruals amounting to $34,732.47.
COPY
DO NOT PAY
'FROM
THIS
INVOICE
S 4,938.52
$ 4,938.52
$ 4,938.52
ALL INVOICES ARE DUE UPON RECEIPT. TO INSURE PROPER CREDIT,
PLEASE INDICATE ACCOUNT NAME ON CHECK.
*Portfolio. Valuation used for -fee computation has been.reduced_.by
accruals amounting to $34,732.47.
1
NN Capital ff. agement, Irtc4
First Quarter 1997
Report
Prepared for
CITY OF FAYETTEVILLE FIRE PENSION AND RELIEF FUND
Please find enclosed with your quarterly report and our commentary a short
description of the stocks in your portfolio. We hope you find these brief
summaries of interest.
Hanson PLC has recently completed a complicated reorganization. Oh February
23, 1997 Hanson PLC spun off its coal mining and U.K. electrical generating
business into a new company named The Energy Group PLC. This is a U.K.
based company with operations in the U S., U.K. and Europe, and trades on the
New York Stock Exchange under the symbol TEG. Shareholders received one
(1) share of TEG for every eight (8) shares of Hanson owned. Part of the onginal
cost of Hanson was transferred from Hanson to The Energy Group. You will be
paid cash for any fractional shares you received. The new Hanson is now
composed of building aggregates and material handling businesses, and
continues to trade under the symbol HAN. Subsequent to the spin-off of The
Energy Group, Hanson had a reverse split, so shareholders that owned eight (8)
shares now own one (1). This was done to boost the price of Hanson and does
not affect your ownership position of Hanson. You will be paid cash for any
fractional shares you receive.
As always, in the event that your financial circumstances or objectives have
recently changed, please contact your financial consultant or NM Capital directly.
We appreciate your continued confidence in NM Capital Management and look
forward to many more years of service.
FAYETTPP--NTSC
t
1
NM Capital Management, Inc.
Quarterly Investment Comment
First Quarter 1997
FIRST QUARTER 1997 REVIEW
Signs of a strong economy caused the
Federal Reserve to tighten monetary
policy on March 25, by adjusting the Fed
funds rate target upward by 1/4% to
5 1/2%. This move appears small, but it is
symbolic and the first announced upward
move since early 1995. It is also the first of
what is anticipated to be a number of
tightening actions by the Fed to slow the
economy and, therefore, prevent
accelerating inflation.
The stock market enjoyed a continued
advance through the first two months of the
quarter, with the S&P 500 up as much as
10% by early March. As interest rates rose
in March, stocks began to weaken and with
the Fed action late in the month, the market
dropped further. During the correction many
technology, healthcare, bank, and energy
stocks (the hot sectors in 1996) retreated
sharply from recent highs. The S&P 500
finished the quarter with a return of only
2.7%. In contrast, the Wilshire 4500, which
excludes 500 of the largest companies and,
therefore, reflects medium and smaller cap
stocks, was down 4.2% for the quarter.
Bond prices began to suffer in mid
February, as stronger than expected
economic data began to concern investors
about inflation and a possible Fed funds
hike. From mid-February to the end of
March, interest rates rose dramatically. The
five year Treasury yield rose from a low of
6.0% to 6.8%, and the 30 -year Treasury
yield rose from a low of 6.5% to 7.1%. The
rise in rates resulted in slightly negative
returns for bonds for the quarter.
ECONOMIC AND INVESTMENT
OUTLOOK
After six years of economic growth,
investors are concerned that the
economy is currently too strong and will
lead to increased inflation with rising
interest rates that will eventually lead to
a recession. The recent Fed decision
crystallized this underlying fear. The last
time the Fed began a series of rate
increases (in February 1994), it wound up
raising them seven times over the next year,
doubling the federal funds rate from 3% to
6%. During that period, the yield on the
30 -year bond climbed as much as 1.5%.
Few investors today expect interest rates to
climb as much as they did in 1994. The
consensus economic forecast is
continued modest growth through 1997.
As for stocks, after very strong returns in
1995 and 1996 (37% and 23% respectively),
considerably more modest returns are
expected this year. In our Year -End
Comment we indicated that the stock
market was fully priced, already discounting
much of the favorable economic
environment, and vulnerable to increased
volatility and/or a possible correction. What
we have experienced in the last three
months is no surprise and is consistent
with our outlook. We will probably have
more of the same as the year progresses;
continued volatility and modest full year
returns. At some point we expect a
broadening in market leadership favoring
value -oriented stocks and medium-sized
and smaller -sized companies.
Our outlook for bonds is cautious and
continues to be defensive. With the risk
that the Fed will push short-term interest
rates higher, it is too early to
aggressively lengthen maturities,
however, further rate increases may
provide the opportunity to do so.
EQUITY FOCUS COMMENT
"Many shall be restored that now are fallen
and many shall fall that now are in honor."
Horace - Ars Poetica
4
1
1
History's great investment minds have often
balanced their engagement with current
market conditions with a solid grounding in
the enduring wisdom of antiquity. In
addition to being one of the most successful
and influential investment thinkers of our
time, Benjamin Graham was also an
accomplished classical scholar. This quote
from Horace was one of his very favorites,
and he used it as the introduction to his own
classic treatise on investing, "Security
Analysis", first published in 1934. Perhaps it
is from this combining of the very ancient
with ,the very new that enables the
successful investor to gain the requisite
perspective. This insight will see him
through the inevitable periods of time in
which he is going to be very much out of
step with the prevailing and often far more
speculative trends. This is the perspective
not born of stubborn arrogance but of a
patient understanding that all of the affairs
of men, of which the investment markets are
but one example, are somehow cyclical.
Things are different this time are five of
the most dangerous words in any language,
especially to the long term accumulation of
investment wealth.
Over the years, NMCM has benefited
considerably from a willingness to go
against the crowd and invest in selected
cyclical stocks when few wanted them. At
the bottom of cycles, cyclicals often have no
earnings or certainly substantially lower
earnings than they earn at cyclical peaks.
This makes them unattractive to individuals
who equate consistency, whether of
earnings or cash flow, with safety and an
associated guarantee of above average
investment returns. In fact, some "value
investors" may ignore depressed cyclicals.
Their preliminary statistical screens
automatically exclude stocks with depressed
earnings or patterns of above-average
earnings volatility.
NMCM's investment in the shares of the
extremely cyclical cement company,
Lafarge (LAF), in July of 1991 would never
have taken place if NMCM had required
either a consistent pattern of profitability or a
low Price Earnings ratio (P/E). LAF lost
money in both '91 and '92 and finally
reported a profit of $.10 in '93, thus resulting
in a mid -'93 P/E of 160 times earnings. The
return on equity had declined steadily from
almost 14% in 1988 to nothing in '91 and
'92. By any conventional measure, LAF was
a TERRIBLE stock. Cement was hardly the
stuff of biotech or cybertech or any other
story worthy of an early morning investment
call or fashionable cocktail party small talk.
Those of us whose pulses race at far more
subtle frequencies found the shares
irresistible. Purchased at a beginning
price of $15, held and/or added to
through a precipitous decline to $10, and
finally sold following a subsequent
recovery to $26 in early '94, LAF returned
a price gain of more than 70% over 2.5
years versus an equivalent gain of 20%
by the S&P. Downside risk was always
protected by the inherent asset value of
cement plants in both the U.S. and Canada.
Cement was boring precisely because it was
so old and banal, but it was necessary to the
fundamental infrastructure of modern
commerce. Cement was long-lived but
ultimately had to be replaced. Even the most
modern high tech plants had to be built out
of it. Because demand for Lafarge
Cement was perennial and its peak and
trough returns far more consistent than
its periodic earnings reports implied, its
cycle would almost inevitably turn.
When it did, investors would again notice it
and step forth to buy the now attractive $20
stock selling at only 10 times projected
earnings. This enthusiasm would run the
stock to the mid $20s, hit NMCM's long-
established sell target and allow NM to sell
LAF and turn the profits back into new,
undervalued investment opportunities.
Other cyclical stocks in which NMCM has
invested over the years have included AAR
Corp., Overseas Shipholding Group,
Savannah Foods, and Parker Drilling. A
recent addition, Wellman, again reflects
investor's typical reaction to the downside of
a cyclical and volatile earnings pattern. The
fastest growing packaging material in the
world is plastic. The fastest growing plastic
is PET (polyethylene terephthalate). As a
major producer of both recycled PET fiber
and PET resin, Wellman is strategically
positioned to capitalize on this dynamic
growth. As a preferred provider of PET
resins for such major brand name
customers as Coca-Cola and an innovative
1
developer of high -margin specialty products
such as EcoSpun (first textile -grade fiber
made from 100% post -consumer recycled
PET), we believe the underlying earnings
growth potential remains sound. As
Wellman's cyclical earnings recover, we
expect that investors will be attracted to the
stock, thereby providing current share-
holders of this world class company (at the
current price of less than book value and
5 times earnings power) an outstanding
opportunity for an above average invest-
ment return.
FIXED INCOME COMMENT
Inflation Protection and the Bond Market
The U.S. Treasury has begun the issuance
of Inflation Indexed Bonds to protect
investors' purchasing power. We have been
asked if these are good investments.
Several concepts need to be considered to
answer this.
Here's how they work. A normal 10 -year
Treasury pays a coupon every six months
and the par, or face value, at maturity. With
the new Treasury Inflation Indexed
Bonds, the Treasury pays a real rate of
interest and adjusts the value of the
bond every six months by the amount of
increase or decrease in the Consumer
Price Index (CPI). For example: If the CPI
goes up by 2% in six months, then the par
value of the bond would increase by 2% or
to a value of $1020. The interest rate would
then apply to the new $1020 value. At
maturity the investor will receive the original
par value of $1000 plus the cumulative
increase in the CPI adjustments.
The best way to analyze these new bonds is
to compare them to the traditional non-
indexed bond.
Do these bonds provide a higher inflation
adjusted return compared to non -indexed
bonds? Theoretically, the inflation protection
will reduce risk and require a lower return.
Without adequate historical data, there is no
answer. Only with higher than expected
inflation should these securities be of a
benefit and out perform non -indexed
bonds. In a lower than expected
inflationary environment, non -indexed
Treasuries should actually out -perform
the indexed bonds. If general inflation
expectations are correct, then the indexed
bonds should produce a lower return due to
their lower risk.
Secondly, is current income required? Only
the real interest rate is paid out on the
indexed bonds. The inflationary adjustment
is capitalized and received at maturity. Also,
the inflationary adjustment is taxable in
the year the adjustment takes place. This
could be a large problem during periods of
high inflation. With annual double-digit
inflation of 10%, a $1000 bond would be
adjusted to $1100, of which $100 plus the
coupon is taxable. Tax liability could
increase beyond the cash-flow provided by
the bonds.
Last, the bonds are indexed to the CPI. If
investor's spending patterns are different
than the CPI, his/her purchasing power may
not be perfectly protected. Furthermore, the
CPI has recently come under fire as
overstating inflation. If the CPI is
adjusted downward these bonds could
be adversely affected.
Due to the issues above, we are not
currently using these bonds in the fixed
income portion of portfolios. We may
consider them in the future, depending upon
each client's goals and objectives and our
expectations about future market conditions.
NMCM PERSONNEL
Since many of our clients do not have the
chance to visit Albuquerque and meet our
staff we decided to add this brief section to
our Quarterly Comment to periodically
highlight our personnel. Our latest addition
to our investment staff is Arne Espe. Arne
joined NMCM last fall as a Senior Equity
Analyst researching primarily larger cap
value stocks. Arne is a Chartered Financial
Analyst and was previously a common stock
analyst with Prudential Securities and
Metropolitan Life in New York City. Arne
has an MBA from University of Oregon and
grew up in Anchorage, Alaska.
1
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NM Capital M ement, Inc.
STOCK HOLDINGS
Below is a brief description of the companies held in client portfolios. Our portfolios generally hold between
25 and 35 stocks. Your portfolio may not hold all of the stocks described, as stock selection is dependent
upon each client's objectives and constraints, the current market price, our expectation for future returns
and overall asset allocation. Some of our stocks are not household names but you may recognize these
companies' brand names. We hope this document will be useful in your understanding of the stocks you
own.
ACX Technologies (ACX)
Spun off from Adolph Coors in 1992, ACX manufactures consumer and industrial packaging products, technical
ceramics for industrial markets, and flat rolled aluminum products. Packaging includes beer wraps, cereal boxes,
and soap containers. Ceramics are used in industrial and electronics (insulators) applications. Coors is a major
customer for ACX's aluminum segment and packaging, and they account for 27% of consolidated sales. (ACX also
owns smaller technology-based developmental businesses.)
Alexander and Baldwin (ALEX)
Operates three major businesses. Matson Navigation is a containerized ocean shipper principally between Hawaii
and the U.S. The company also manages and develops property with the bulk of its operations on the Hawaiian
islands of Maui and Kauai. C&H sugar is the largest sugarcane refiner in the Westem U.S.
American Greetings (AGREA)
Amencan Greetings Corporation is the largest publicly owned designer and manufacturer of seasonal greeting cards
(65% of '95 sales). AGREA also manufactures other social expression products including gift wrappings, gift bags,
paper party goods (19% of '95 sales), stationary (3% of '95 sales), giftware items, candles, picture frames, calendars,
non-prescription reading glasses, and hair accessory products (13% of '95 sales). The Company's products are sold
in retail outlets worldwide.
Antec Corp. (ANTC)
Since 1969, Antec Corporation has been a leading developer and supplier of optical transmission, construction,
rebuild and maintenance equipment for the cable television industry. The company is one of the leading suppliers of
fiber optic products to the cable market, and also supplies the cable system operators with almost all of the products
required in cable television. Antec's performance has been dependent on cable television spending. However,
through recent acquisitions and expansions, Antec is becoming a supplier to the Regional Bells. Antec has recently
been name "a primary optics vendor", for Tele -Communication, Inc. Antec also inserts the commercials into cable
television broadcast.
Archer Daniels Midland (ADM)
ADM procures, transports, stores, processes and merchandises agricultural products. The company. processes
oilseeds, corn and wheat and merchandises and stores grain, shells peanuts, mills rice and produces masa flour.
Archer also produces consumer food products, including natural vitamins like vitamin E, malt products, bio -products
and refines raw cane sugar worldwide, It describes itself in TV commercials as "the supermarket for the world".
Arvin Industries, Inc. (ARV)
Arvin Industries, Inc. is an original equipment and replacement parts supplier to the automotive market. Arvin is a
leading worldwide manufacturer of exhaust systems, suspension systems, and brake and front end parts. Arvin also
supplies research, development and testing services to the Government and industrial customers in areas of
aerodynamics and automobile crash testing. Brand names include Gabriel shock absorbers, MacPherson struts, and
Schrader tire valves
Brown Group, Inc. (BG)
Brown Group, Inc. is the largest domestic footwear distributor and is also one of the largest retailers of footwear in the
U.S. Famous Footwear is the nations largest retailer of "branded" footwear. Wholesaling of brands such as
Naturalizer, Life Stride, Connie, Dr. Scholl's, and Buster Brown, are also a significant source of revenue.
Burlington Industries (BUR)
BUR is a leading developer, manufacturer, and marketer of fabrics and textiles through two principal segments:
Apparel Products (61% of '95 sales), comprised of the Denim, Klopman Fabrics Knitted Fabrics Madison Yam, and
Menswear businesses; and Interior Furnishing Products (39% of '95 sales), comprised of the Bacova Guild, House,
House Area Rugs, and Lees Carpets businesses. BUR is one of the largest and most diversified textile companies in
the U.S.
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Calqon Carbon (CCC)
Calgon Carbon Corporation manufactures and markets activated carbons and related services and systems and is
the leading company in this field. The company's activated carbons are used to purify products in the manufacturing
process and to control air and water pollutants. Calgon markets its products and services in the United States,
Europe and Canada with foreign sales being 40% of total.
Castle & Cooke (CCS)
Castle & Cooke develops residential and commercial real estate in Hawaii, Bakersfield, CA and Sierra Vista AZ
Also owns and operates two resorts on the near wholly owned island of Lanai in Hawaii. The company also
participates in commercial development throughout the U.S. CCS was spun out of Dale Foods at the end of 1995.
Coors (Adolph) (ACCOB)
Coors is America's third largest brewing company anchored by the worlds largest single brewery operation in Golden,
Colorado. Coors was founded in 1873, and targets the "premium" malt beverage segment with 22 different products
such as Original Coors, Coors Light, Zima and Killian's Red. Coors has focused on their brewing and distribution
business since 1992, and as a result has spun off to shareholders ACX Technologies.
Cross (A.T.) Company (ATXA)
Founded in 1846 (oldest pen maker in U.S.), ATXA manufactures and markets fine writing instruments (ballpoint,
fountain, and roller -ball pens, mechanical pencils, and desk sets). Product lines include the Townsend series of wider
girth writing instruments ($50-$300) and the Solo series ($12-$32). The Company also markets and distributes Fendi
brand leather luggage/goods and fashion accessories through its Manetti-Farrow subsidiary. Foreign sales account
for about 40% of total revenues.
Crown Vantage, Inc. (CVAN)
Spun -off from James River (JR), Crown Vantage produces paper products such as groundwood and un -coated
freesheet (copier, printer paper, etc.). CVAN was spun off from JR due to restructuring at JR and JR's desire to focus
on consumer paper products.
Darden Restaurants (DRI)
DRI, formerly a wholly owned subsidiary of General Mills, is the worlds largest publicly -traded casual dining company,
with over 1200 restaurants in 49 states. DRI operates three chains; Red Lobster (Seafood: - 715 stores, average
check $13.50), The Olive Garden (Italian food; - 480 stores, average check $10.50), and Bahama Breeze (New
concept).
Delta Woodside Industries (DLW)
DLW, operates two main segments: textiles and apparel. The Textile Fabrics division (66% of sales) produces
woven and knitted fabrics for apparel and home furnishing manufacturers (Levi, Dockers, Sears, JCPenney, etc.).
The Apparel division (29% of sales) makes casualwear under the "Duck Head" and "Delta Apparel" names as well as
sells apparel to screen printers and private label accounts (JCPenney, etc.). DLW also operates a Fitness division
(5% of sales) which manufactures and sells fitness equipment through Nautilus Intl.
Destec Energy (ENG)
One of the largest independent power producers and marketers in the US. They are a cogenerator, producing
electricity and steam from natural gas. They also do coal gasification. ENG operates 17 plants in 5 states, principally
CA and TX and have 11 plants under construction including plants overseas. ENG is vertically integrated. They
design facilities, own coal, oil and gas and market to industrial companies and utilities. Dow Chemical owns 80% of
the outstanding shares. The Company recently announced that it agreed to be acquired by NGC for $21.65 per
share.
Energy Group PLC (TEG)
Owns the largest private producer of coal in the world, Peabody Coal. Is the fourth largest electricity generator in
Great Britain. Also markets electricity and natural gas in England and Wales. The company was spun out of Hanson
in February 1997.
Gibson Greetings, Inc. (GIBG)
GIBG is the 3rd largest U.S. producer of greeting cards and the largest U.S. producer of gift wrap and related
products (ribbons and bows, boxes and bags, party goods and holiday decorations). These products aredistributed
throughout the U.S. (over 50,000 retail outlets), Mexico and Europe. GIBG holds about 40 trademarks and has
exclusive rights to well-known proprietary characters (Disney, Warner Brothers, etc.) under various license
agreements. GIBG also owns about 180 "Paper Factory' stores.
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Glatfelter (P.H.) Company (GLT)
Founded in 1864, GLT manufactures printing and writing paper (70% of '94 sales), and tobacco and other specialty
papers (30% of '94 sales). GLT has about 20% share of the overall book publishing market. Printing paper is
produced at three plants located in PA, WI and NC; the Ecusta division produces specialty papers for the tobacco
industry. GLT also manages about 109,000 abres of woodlands in DE, PA, MD and VA.
Great Atlantic & Pacific Tea (GAP)
GAP operates over 1100 food stores principally in the Eastern US and Ontario Canada. It is the 5th largest in North
Amenca It operates its stores under the names A&P Supermarkets, Sav-A-Center, Super Fresh, Kohls, Dominion,
Food Emporium, Waldbaums, Farmer Jack and Miracle Food Mart. A German firm, Tengleman, own 53% of the
shares.
Hanson PLC ADR (HAN)
Hanson PLC operates in several different businesses. It produces aggregates (crushed rock, sand and gravel),
asphalt and ready mix concrete. It also is a leader in the design and manufacture of mobile and truck mounted
cranes. It also is a major manufacturer of bricks. It operates principally in the U.S. and in the U.K. but also has a
significant European presence. The company has spun off a number of operating units over the past 2 years.
Imperial Tobacco (IMTBY)
Impenal Tobacco Group PLC manufactures a wide range of tobacco products including cigarettes, cigars, pipe
tobacco and snuff for the UK and 30 other countries. The company does almost no business in the U.S. It was spun
off from Hanson in October of 1996.
James River Corp. (JR)
James River Corporation of Virginia is a leading marketer and manufacturer of consumer products, food and
consumer packaging, and communications papers. Products include Northern Bathroom Tissue, Brawny Paper
Towels Vanity Fair and Dixie Foodservice Products, and other consumer and business brands. JR has also
increased the number of recycled products to meet the demands of consumers. In 1995 JR spun off assets to
shareholders in the form of Crown Vantage (CVAN). The assets that now comprise CVAN represented a portion of
JR's Communication and Consumer Packaging segments.
Millenium Chemical (MCH)
Millenium owns and operates three main units. Quantum Chemical Corp. produces polyethylene and special
polymers the key end markets for these products are paints, coatings and fibers. SCM chemicals produces titanium
dioxide that is used to impart' whiteness" to a variety of consumer and industrial products including paints and paper.
Glidco Inc. produces fragrances and flavor chemicals for products ranging from detergent to perfumes. These are
marketed internationally. The company was spun off from Hanson in October 1996.
Morrison Fresh Cooking (MFC)
Morrison Fresh Cooking, a recent spin-off of Morrison Restaurants, operates approximately 144 traditional -style
cafeterias, seven small cafeterias and 26 quick service restaurants.
Mornson Health Care (MHI)
Morrison Health Care, a recent spin-off of Morrison Restaurants, provides food and nutrition services to hospitals and
other health care facilities. MHI has approximately 278 accounts, which range in size from 100 -bed specialty
hospitals to facilities with more than 2000 beds.
Outboard Marine Corp. (OM)
Outboard Marine is the world's largest manufacturer of outboard motors (Johnson and Evinrude), the world's second
largest maker of stern drives (Cobra) and the second largest U.S. producer of recreational boats (Chris-Craft boats).
Primary competitor is Brunswick. OMC began shipping engines equipped with its new FICHT*" fuel injection
systems, which are more fuel efficient, environmentally friendly (lower emissions), and reliable (fewer parts and easy
to maintain).
Overseas Shipholdinq Group. (OSG)
Overseas Shipholding Group, Inc. and its subsidiaries own and operate oceangoing bulk cargo vessels. The
Company owns tankers, dry cargo and other bulk vessels. At the end of 1995, 61 ships were in the fleet. Overseas
Shipholding charters its ships to commercial shippers, the United States, and other governments' agencies to
transport bulk products such as oil and grain under time and voyage charters The company also operates Celebrity
Cruise Lines which owns and operates 4 cruise ships. The company has 6 cargo ships and 2 cruise ships on order.
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Parker Dnllinq Co. (PKD)
Founded in 1934, PKD is a land drilling contractor in the oil and gas industry, specializing in ultra -deep and remote
location dnlling, and in the design, building and marketing of innovative drilling rigs. PKD also provides drilling
1 engineering and project management services. The Company services oil companies, gas companies, governments
and industrial users. Drilling operations are conducted on a worldwide basis (South America 50% of revenue; Asia-
Pacific 30% of revenue; U.S. 15% of revenue; etc.). PKD also owns Mallard Bay Drilling (operator of 40 drilling and
workover barges) and Quail Tools (provider of premium rental tools used in difficult well drilling).
Ruby Tuesday, Inc. (RI)
Ruby Tuesday, Inc., a recent spin-off of Morrison Restaurants, operates approximately 367 specialty restaurants,
consisting of 302 "Ruby Tuesday's," 48 "Mozzarella's Cafes," and 17 "T a's" restaurants. Closest comparable
competitors are "Applebee's° and Blinker's "Chili's." The March '96 split from Morrison has left Ruby Tuesdays more
focused on it's core business, casual dinning.
Russ Berrie & Co., Inc. (RUS)
RUS designs and markets a wide variety of impulse gifts to retail stores in the U.S. and abroad. The core business,
established in 1963, sells over 10,000 products in more than 90,000 retail outlets primarily in the U.S., Canada and
Europe. The rest of the world is covered through a network of independent distributors. Products include candles,
ceramic items, picture frames, greeting cards, stuffed animals (Troll dolls), stationery items, National Football and
Major League Baseball merchandise, etc. All products are manufactured for the company by independent
contractors.
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Savannah Foods & Industries (SFI)
Savannah Foods is one of the nation's largest refiners of cane and beet sugar. Marketing products under the
following brand names; Dixie Crystals, Evercane, Savannah Gold, Colonial Sugars, with sugar substitute brands of
Sweet Thing and Sweet Thing II. Savannah has won the Keebler "Sugar Supplier of the Year" four years in a row.
Savannah has a long history of being the low cost operator.
Stolt Neilsen S.A. (STLBY, STLTF)
A Norwegian company and one of the worlds leading providers of transportation services for bulk liquid chemicals,
edible oils, acids and other specialty liquids. The company also owns 70% of Stolt -Comex a large subsea service
contractor for the oil and gas industry. This business involves in part the construction of facilities that transports oil
and gas from the sea floor to the surface. Stolt also operates a sea farming business principally raising salmon.
Trizec -Hahn Corp. (TZH)
Trizec Hahn Corp. is the new name given to our previous holding of Horsham Corporation. TZH is a Canadian
based Real Estate development company with interests in 70 office buildings and regional shopping centers totaling
50 million square feet. As was the case with it's predecessor, TZH retains a 16% interest in Barrick Gold Corp.
(ABX - an intemational gold mining operation), and a 46% ownership in Clark USA, Inc. (a refiner and marketer of
petroleum products in Central US). TZH ranks as the second largest real estate company in North America behind
Simon Debartolo Group, Inc.
Wellman Inc. (WLM)
Wellman manufactures and sells high quality polyester textile fibers, recycled polyester fibers and polyethylene
terephthalate (PET) resins. The major uses for the fiber is in apparel (Fortrel polyester is the brand name), home
furnishings, fiberfill and carpet The PET resins are primarily used to produce soft drink bottles and other food and
beverage packaging. The company also has a process of recycling nylon which is used to make automotive parts.
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CLIENT :
MANAGER:
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NM CAPITAL MANAGEMENT, INC. Page 1
FAYETTPP - CITY OF FAYETTEVILLE FIRE PENSION AND RELIEF FUND
NTSC
REPORTING PERIOD: 01/01/97 TO 03/31/97
CASH AND EQUIVALENTS
EQUITIES
GOV'T/CORP BONDS
ACCRUED INCOME
PORTFOLIO COMPOSITION
MARKET % OF
VALUE TOTAL
$45,070.98
2,563,332.72
1,342,412.96
34,732.47
1.1
64.3
33.7
0.9
STATEMENT OF CHANGES
PORTFOLIO MARKET VALUE AT 01/01/97:
DEPOSITS
WITHDRAWALS
INCOME EARNED
CAPITAL APPRECIATION
$3,989,400.10
0.00
(4,960.94)
38,894.99
(37,785.02)
TOTAL $3,985,549.13 100.0 PORTFOLIO MARKET VALUE AT 03/31/97: $3,985,549.13
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THE FOLLOWING RETURNS ARE SHOWN GROSS OF MANAGEMENT FEES:
TOTAL PORTFOLIO
CASH AND EQUIVALENTS
EQUITIES
GOV'T/CORP BONDS
COMPARATIVE INDICES
BALANCED INDEX - I (60/35/5)
US T BILLS
S&P500 TOTAL RETURN
GOVT/CORP INTERMEDIATE BOND
CONSUMER PRICE INDEX
CUMULATIVE ANNUALIZED
01/01/97 TO 03/31/97 YEAR-TO-DATE PAST TWELVE MONTHS SINCE INCEPTION SINCE INCEPTION
0.0%
1.2%
-0.4%
0.7%
1.7%
1.3%
2.7%
-0.1%
0.9%
0.0%
1.2%
-0.4%
0.7%
1.7%
1.3%
2.7%
-0.1%
0.9%
6.5%
4.5%
6.9%
5.2%
13.5%
5.5%
19.8%
4.8%
2.8%
INVESTMENT EARNINGS (APPRECIATION + INCOME) SINCE INCEPTION DATE 01/18/90: $2,519,715.40
41.3%
141.4%
79.5%
128.7%
46.0%
174.7%
71.5%
26.9%
11.2%
NOTE: THE COMPARATIVE INDICES SHOW RETURNS FOR THE ENTIRE INDICATED PERIODS. THESE MAY NOT BE DIRECTLY COMPARABLE TO
YOUR RETURNS FOR SEPARATE SEGMENTS OF THE PORTFOLIO (CASH, EQUITIES, ETC) IF YOU DID NOT OWN THE SEGMENT FOR
THE ENTIRE INDICATED PERIOD. THESE SEGMENT RETURNS ARE SUPPLEMENTAL INFORMATION TO THE TOTAL PORTFOLIO RETURN.
4.9%
13.0%
8.5%
12.2%
5.4%
15.1%
7.8%
3.4%