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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 ?y ••••10•Na Q= %-lt•t% °U BLit I. el ii 49 %.. .... • o 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 Mary Public 0 0 z 0 6 9961 segmag paeog sagtey3 paeog `1. sagoya0 aler a., es M mA na C r ❑ ° q Ta s 3 A 0 Z S o .c 0 s xe .0 y 9 y u o o 4 P O bl u " :1 r aglow paeog aaglra paeog Yrr6f g ) rl✓ SaTgO eats sa&aueq £ T3 NaetO 63IO ,o•�-H�{� +9^!' sasnseasy 6?IO 'uo!sagd . aed 00.095 pamdlje aq pinogs aq any On nal sa pauTgsaa s? mlep s?q 3e• PIIe '161, PV plea lapun uo!suad 03 papnua st lungdde Pres 2041 pug put awes 30 lloddas n! 3oold aql pue !many sham -pmwy 3uanbasgns sl? pin '1161 30 164 Say 3o sao!s?nwd aql aapun lnawa2nal ao; uonn?jdde ay pau!weaa aneq am 2eg3 A;?naa op 'puma uo!suad put ;a!pg s,uawamg a42 2o; nastily 3o paeog aq2 se 'pau&snpun aq3 'ap azjgnd hawoN 61 G IN enTAag3aLes ;o Al!' uog2u's4sam 3o A3uno0 sesuapV 3o 9203S• ;o Asp slg2 am alopq 02 moms pue pagpasgng •sggeq sno!atA um° siq Jo limn ay lou s! Al!pgeslp pies 1042 a3e3s put Azyges!p ;o aaffia(] . A2!pges!p 3o nanny pue ubndpasaa put a2ep spy 3o if no?upuoa jn?sAgd siq of se uo!uemwexa us apem ant; 3 2sanbal s!q le pue 'o2ang2 sluawpuawy auanbasgns sl? pue 1161 ;o 164 2aV 3.3 suo?slAold aql npun uo!suad 203 2un11dde ut sl oqm luamlledar ani aql 3o mum pa2menbae Aptuosaad we 1 ley Agana Aganq op 3o A3unop sesueapy 30 to aq3 m uep?sAgd Sup!anad pue panes S n Ajnp e - 1 NVIDISAHd 80 HDNraUTAa { 3o Ani 30 Ammo SVSNV)RIV dO 3.LV.LS • • • • 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 ZAL 1-142/ t Chief Notary Public 1 .•_: /agry ym.. 1.. ts�+•�s/fe /J — /11, 1 TIP 1 g 1 ,$ 11 t q H a [3 9e o 0•-• : 4.. o r rz-ton mit • 9agP1 .nom.�+L>' —'J_ /��/ aa8uuayl /oq4 aq iegl pue 1sn i taey'y Croj v'y• •ao!suad 00 09 s pamour aq p r s puTinaao n wry B14 qi pue '164 ny .pres.aapun uoituad o1 papnua s, 1ungdde plea 22g1 pug pm amen 3opoddns m ;mud aql pmr.0231agl sluam -pnamy 2uanbasgns n! pm 1116/ 3o 16b my 3o suo!slemd aq1 aapun lnamarpaa ao; aonngddt aq1 pammexa meg am segs 1.19.1a3 op 'puna uo!rnad pue ;a!!ag s,uamand aq1 10; mammy Jo paeog am et 'pauzuxapun am :a& _ orrwoas9hbva +o A!3 uot 'gagii ;0 61nnap -----917170{/}/ 10 MESS ... .... .: :. .•t.aiv-nq i a.im . .,1c ._i:. :.;u aallFem ra :..._tc=ar. ;csetpoadha:7r 0e1 -444-44-14 ss( q>jgnd fumoN 61 3o Sep ,.. , I , ,.rs badinzdad am am azo;aq 01 moms pm paqumgns hiiA IO 3ii'Ti; -sngeq snople umo Big ;o 1insn aq1 lou n A1!pges!p p!es 1eg1 mems par Mifics ir-;o amino ;101 _•-..:qa .70th 201 1sd1 . d1q!ges!p ;a sameaega put aopd!nsaa - eninaD.1 'pug; pm amp am 30 et uon!puos In sLgd aq o1 an uopenlmexa ne aptm aeeq j lsanba: aq 1e put 'mann sluampuamy manbasgns s1! pm 1161-3o 164 1111 ;0 =maenad aq1 spun uoli t d 'i6; ldtagdde de n ogmfi7Cad}nedac az!4 .: .. xq1;o r..-,g1!m palmenbe d!!enosaad we j m 1 i;{1.173 nd igaaaq op 30 61nnorj sesumpy ;o 430 -aq1 -m molsLgd 8uppsead pue pazals!Saa 6;np :71 NVIISAHa ao aoNaulAa •j o d1!n SVSNV)RIV do MLitt. 3o dluno _ 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 -re; � .o -v / l 1 . /.a' -"c -gun,; Notary Public APPLICATION OF 9/ 61 !/ reit, Ma .. vp �M ,�. irgf 14.IP ";air °���� nk / amu n_ 11P 00•9-11419:7" o•ss$ a - •uo!suad s a a I jou $ pan ne aq pinogs aq 1eg1 pue un1 s< un i s q pue ' I64 uy pies sapua uo!suad 03 papuua n 7ongdde pies amp pa!; pue anew ;o '• 1 ,• ui )Dowd aqa pue 'many duan -puamy luanbasgns sl! pue '1 u t ;0 I64 uV ;o suo!s!nmd aqa sapun 7uamaauax IN uoueagdde aql paulmexa aneq an atm A;!ua3 op 'puna uoisuad pue ;anag s uamand aqa xo; saa3snwy;o pxeog arta se 'pauSisnpun ail 'am .E m W 0 0 V 9 Lt. aggnd 6waloN 61 CI IN en. -44-Ae,d;o £30 uv;SaaqugM ;O Ammo ereue>jwy;O 31011 jo Aep situ am awo;aq 03 axons pue page sgng .sugeq snop!n ono 9114 ;0 ainsax au lou e! Aupges!p Ales 1eg7 mels pue A7!1!ges!p;o anflaj .Aipges!p jo sauenga pue uouduwsar _ :pa9 par nep s!q1 ;o n uou!puco ;ensAgd siq of se uOneu!mexa en alarm aneq j uanbaw s!q 1e pue swamp sluampuamy luanbasgns su pue 1161 30 164 uV ;o suo!smosd aqa spun uoisuad so; 1urnidde ar si ogta ivaunseda0 ani aqa ;o Nita palu!enbae Apeuosud me 13vgl A;umaa Agawaq op ;o A1unop 'sesueaily ;o IND 3141 m nep!sAgd Suppamd pue pauals!Sa1 Alnp e NVIDISXHJ dO HDNaQIAS 1 Ali Jo Mune • 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 'Notary tary Public C. O 0 6 ' Q ' of6I of ;re i wiM r aae0 - __...... _ . r-12 ems' 473 • q " �e>rw' ilial uo!suad g pamoge 314 p;nogs aq aega pue asnf a Nnoy s! m!ep s a.i pue¢ ! 61? fly p!es zapun uo!suad 03 papnua s! auea!!dde plus amp pug pue aures ;o uoddns u! ;ooad aqa pue '91aaaga maw -puamy auanbasgns s1! pue '! Z6 1 P i 66 pV 3o suo!s!nozd aqa aapun luamanla] ao; aoneaa!dde aqa pau!uaeza ane; am amp A;nzaa op 'pond uo!suad pue ;a!!al/ s,uamand asp ao; saaarnay;o pzeog aqa se 'pauZasxapun aqa 'ab ollgnd AnnoN 61 Q W 0 Aa!O ;o Aauuo3 a v sabueafxy;o 23e 3. ;o Aep sup am azo;aq 03 moms .pue paq!aasgng -sa!geq snou!A amo s!q Jo *asp aqa lou s! Aalpgrsap P!ts amp aaeas pue Anngr!P io asuZaQ .Aa!Pges!p ;o saaaeaegz pue uond!aasar - - - - - • -- --- - --- - - _- . ----- - - `pug pug app sup Jo se aou!puooa ;ea!sAgd sic; 02 se uoneummexa ue apem aneq I asanbaa s!q 7e pue 'olazaga sauampuamy auanbasgns saa pur IZ6I ;o ;6y 7ay;o suoas!noad aqa zapun uo!suad ao; auea!!dde at s! oqm "ammaaedaQ nag aqa ;o ga!na. paau!enbae A!!euoszad tau ; aega Aippo s z s. Agaaaq op ;o Aaunoj'sesueapy ._. ;o 1.10 aqa m ueu!sLgd Sununezd pue pazaastZaz A!np e NIVIOIS[lid 30 aDNaaIAa ;o Aa!O ;o Aauao, 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 1 1 1 1 1 1 1 1 1 1 11, 1 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. 1 1 1 1 1 1 1 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. 1 1 1 1 1 1 1 1 1 1 1 1 1 1 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. 1 1 1 1 1 1 1 1 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. r 1 1 1 1 1 1 1 1 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. 1 1111/1 CLIENT : MANAGER: 1 1 1 1 1 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 1 1 1 1 1 1 1 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%