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HomeMy WebLinkAbout1999-02-25 - Agendas - Final4 AGENDA FIREMEN'S PENSION AND RELIEF FUND • A meeting of the Fayetteville Firemen's Pension and Relief Fund will be held Thursday, February 25, 1999 at 11:00 a.m. in room 326 of the City Administration Building, 113 W. Mountain Street, Fayetteville, Arkansas. The following items will be discussed: 1. Approval of the minutes of the January 28, 1999 meeting 2. Approval of the Pension List for February 1999 3. Investment Report 4. Old Business a. Ashland Management ADV form: response to request from January 28 meeting 5. New Business 6. Other Business a. Two settlement checks, $894.51 and $298.17 b. The Monitor, a public employee retirement newsletter • • • • • • MINUTES OF A FIRE PENSION AND RELIEF FUND MEETING JANUARY 28, 1999 A meeting of the Fayetteville Fire Pension and Relief Fund was held on January 28, 1999, at 11:00 a.m. in room 326 of the Fayetteville City Administration Building at 113 West Mountain Street, Fayetteville, Arkansas. PRESENT: Mayor Hanna, Darrell Judy, Ron Wood, Bill Morns, Marion Doss, and City Clerk Heather Woodruff. ABSENT: Pete Reagan MINUTES Mr. Darrell Judy moved to approve the minutes of the last meeting. Mr. Ron Wood seconded the motion. Upon roll call the motion carried unanimously. PENSION LIST Mr. Bill Morris moved to approve the pension list. Mr. Marion Doss seconded the motion. Upon roll call the motion carried unanimously. INVESTMENT REPORT Mr. Richard Yada explained New Mexico had been down 2% over the year and had underperformed in the market. In November, the board had changed companies and gone to Merrill Lynch Private Portfolio Group. They had started slowing investing in December. They were still getting into the stock market. They were having a hard time finding a value in stock. He explained the change would probably have a negative affect because New Mexico had shown a loss in capitol gains. He hoped they would be able to recover before the next actuary. The income account was up 6% for the year. Ashland was up over 34% for the year. They had out performed the market by over 6%. He thought the income account would have a harder time this year getting a higher rate of return. Current asset allocation: 41 % Stocks, 44% Bonds, 14.5% Cash and 1% other. Their target for stocks was 47%. They were currently were they wanted their asset allocation. Mr. Curtis William explained what their economist had forecasted. They were looking for • • • continued growth in 1999. They did not see a significant slow down in economic activity as they had seen in October. They did not see any down turn in the economy at this point. However, what was going on in Latin America with Brazilian situation which would have an affect on exports in this country If their crisis spread then they would have to revise their forecast. They were not as comfortable with what they were seeing in the stock market. 1998 was the four significant up year in a roll, which had never happened before. There were some serious excesses in the market, especially in the Inter net stock which was a mania. People were buy stock at a high price in companies which had no earnings They were looking for some type of corrective phase in the first half of the year. They were going to be cautious for a while, but long term it should be a good time to invest. Currently, they were being very conservative. NEW BUSINESS DROP PLAN Mayor Hanna stated there were two applicants for the Drop Plan. Mr. Doss moved to approve Dennis Ledbetter's application for the Drop Plan. Mr. Wood seconded the motion. Upon roll call the motion carried unanimously. Mr. Wood moved to approve Ralph Tate's application for the Drop Plan. Mr. Judy seconded the motion. Upon roll call the motion carried unanimously. LETTER Mayor Hanna read a letter from Ashland Management asking if we were interested in receiving their ADV form. Mr. Yada suggested we write and request the form. DONATION Mayor Hanna noted the pension fund had received a donation from Ms. Kathryn Stout. Ms. Woodruff stated she had sent a Christmas card with a $400 check. She added she had sent Ms. Stout a thank you letter. Mayor Hanna stated she had supported both the Fire and Police department for years and had donated to them before. Meeting adjourned at 11:30 a.m. • • • MLAN Private Portfolio Group (stated 12/1/98) Income Account Ashland Asset Mgnt • 3 Mths Tsy Bills DJIA W/DIV Reinvest S&P 500 Index W/DIV Reinvest Long Term Tsy Bonds High Grade Corp Bonds CPI (dec) PPG Income Account Ashland Asset Mgmt May -96 DOW Sep -96 DOW • FAYETTEVILLE FIRE DEPT PENSION AND RELIEF FUND Portfolio performance 12/31/97 - 1/31/99 12/31/97 4,647,115 4,897,115 1,561,424 11,106,027 12/31/97 + 5.33 + 24.87 + 33.36 + 15.38 + 13.42 + 1.7 + 16.97 + 6.38 + 30.8 original Inv. $75,000 $75,000 12/31/98 4,565.099 5,339,191 2,085,712 11,990,002 12/31/98 + 5.23 + 18.12 + 28.59 + 13.78 + 10.47 + 1.55 - 2.16 + 6.01 + 34.78 12/31198 $109,600 $112,942 1/31/99 4,566,823 5,381, 939 2,154,402 12,103,164 1/31/99 + 0.36 + 2.06 + 4.21 + 0.91 + 1.23 + 0.03 + 0.8 + 3.29 1/31/99 $110,037 $115,114 10/10'd L920SLSI0S1 01 HJNA1 111dd3W ad 170:01 66552 133d • • • ASHLAND MANAGEMENT INCORPORATED NEW YORK TELEPHONE: (212) 425-2803 NEW YORK FACSIMILE: (212)425-6026 Ms. Heather Woodruff City Clerk 113 West Mountain Street Fayetteville, AR 72701 Dear Ms. Woodruff: 26 div ievag, Aleut go -4/0004 -1798 February 19, 1999 Pursuant to your request, 1 am pleased to enclose a brochure with the information contained in Part I1 of our Form ADV. • If you have any questions, please do not hesitate to call. MPH/dg Enclosure Sincerely, • Murri P. Hester , Vice President • • • • • • • ASHLAND MANAGEMENT INCORPORATED 26 Broadway, New York; NY 10004 (212) 425-2803 Information Contained in Part II of Form ADV Currently on File with the SEC. ASHLAND is a Registered Trademark of Ashland Management Incorporated. Copyright CD Ashland Management Incorporated; all rights reserved. Investment Strategy • Ashland Management Incorporated manages equity accounts, fixed income accounts, and balanced accounts on a discretionary basis for individuals, trusts, charitable foundations, corporations, and corporate and public pension and profit-sharing plans. Ashland does not provide investment supervisory services or render investment advisory services in any manner other than on a discretionary basis. Ashland is not, and does not hold itself out to be, a financial planner. At October 31, 1998, Ashland managed an aggregate of 51,378,794,000 in accounts for 936 clients, of which 749 were "wrap -fee" accounts. 4 In managing equity accounts, (which may be comprised of large capitalization or middle capitalization securities), Ashland employs a fundamental approach to investing in growth -oriented securities of middle and/or large capitalization companies. Ashland invests the assets of managed accounts in common stocks, both exchange - listed and over-the-counter, of domestic and, occasionally, foreign issuers (primarily in the form of American depository receipts) which it considers to have positive earnings and above -median levels of profitability. If requested by the client, Ashland may purchase or sell options on equity securities. Clients are permitted to impose investment restrictions and guidelines which are consistent with Ashland's investment strategy and acceptable to Ashland. Such restrictions may relate to a particular security, an entire industry, or an investment rating or may require that a particular security be held and not sold. Ashland's investment strategy for equity accounts is fundamental, using both the Standard & Poor's Compustat data base and the Baseline data base. Stocks for middle capitalization accounts are selected bases which are comprised of issuers, not all of which qualify as mid -capitalization companies under Ashland's existing strategy. The ranges of capitalization of such mid -capitalization securities are intended to approximate those of the Standard & Poor's MidCap 400 Index. Both the large capitalization and middle capitalization strategies of Ashland are supplemented by research sources and services which it deems reliable. Ashland's investment decisions are based primarily upon reported financial information. Equity securities are selected on the basis of a number of financial screens and a calculation of the "rational value" of the security. The financial criteria currently employed by Ashland in its stock selection process include return on equity, reinvestment rate, and earnings momentum. Generally, the universes of securities eligible for purchase are different for Ashland's large capitalization and middle capitalization strategies, although there may be some overlap. Furthermore, the financial screens for the large capitalization strategy and those for the middle capitalization strategy may vary in certain respects. Ashland's middle capitalization strategy seeks to identify issuers with characteristics of growth and positive earnings growth which have returns on equity and reinvestment rates which are above the median levels of each such criterion in the universe of eligible securities. Middle capitalization portfolios may hold stocks of a larger number of issuers than do large capitalization portfolios. All of such factors and criteria are, of course, subject to revision for each of the strategies. Both the large capitalization and middle capitalization strategies are supplemented by research and services which Ashland deems reliable. Pending investment, or at such times as Ashland's strategy calls for reduction in, or limitation of exposure to, common stocks, funds in equity accounts may be invested in United States Treasury securities or other short- term instruments or in money market accounts. Uninvested cash balances in a client's account which are temporarily invested in money market funds of brokers or custodians may also be subject to a fee payable by the money market fund to the adviser to such fund on that portion of the client's account which is from time to time invested in the money market account. 199 • Investment decisions for all equities purchased for managed accounts are based primarily upon reported financial information. Ashland's investment strategy does not require the sale of a security according to the length of time an investment has been held. Ashland does not generally engage in short-term trading (except when sales are dictated by its strategy), short sales, margin transactions, or, unless directed by the client, the writing of options. Ashland's asset allocation strategy for equity accounts is based upon the relationship between interest rates and the values of securities. When an inverted yield curve occurs and Ashland determines that equity securities are over -valued, equity holdings may be significantly reduced or eliminated. Ashland reviews managed equity accounts on an on-going basis. In addition, the publication of adverse data concerning an issuer could prompt Ashland to review accounts holding the securities of such issuer. Reviews presently are conducted by Ashland's portfolio managers. Reviews of both equity and fixed income accounts include transactions during the month, cash balances, and compliance with the client's investment policy and with any restrictions imposed by the client. Reports are sent to clients not less than quarterly and, if requested by the client, may be furnished on a monthly basis. Reports for equity accounts consist of the security positions of the account by issuer, number of shares and costs and. recent market values, as well as cash and/or short-term investments. For fixed-income accounts, the reports include sector analysis of the account's securities and their durations, average yields and average coupon rates, and the anticipated cash flow from the securities. Reports for. balanced accounts combine the features of the reports for both equity and fixed income accounts. Ashland generally publishes a quarterly letter which provides commentaries on the market and discusses certain individual securities. Fees: Minimum Account Value Ashland receives as compensation for its services an annual fee which is a percentage of the assets in the account under management. Ashland's standard annual fees for its equity accounts are: Assets under Management Fee Amounts to $10 million Amounts in excess of $10 million up to $30 million Amounts in excess of $30 million There is generally a minimum annual fee for equity accounts. I% 3/4ofl% 1/2of1% Ashland's fees are negotiable to a certain extent based on the size of the account and services required. Therefore, there may be circumstances in which the fees are computed on a basis different from those set forth above. For fixed-income accounts, Ashland's standard annual fees are .40% for accounts invested primarily in taxable securities and .25% for accounts invested primarily in tax-exempt securities. Fees for fixed-income accounts are negotiable to a certain extent, based on the size of the account and the specific needs of the client. J99 • • Fees for balanced accounts are negotiable and are dependent to a certain extent on the respective proportions of equity and fixed-income securities in the account. Ashland's current policy is to bill fees quarterly in arrears, based on the average month-end values of an account during the quarter. Fees are prorated when an account commences or terminates during a calendar quarter. Ashland generally will not accept an equity account from anindividual with an initial value of less than $250,000 or from an institution with an initial value of less than $1,000,000. If Ashland accepts an account with a value lower than these respective minimums, a minimum annual fee may be charged. If the value of an account is reduced below such respective minimum because of withdrawals by the client, Ashland will review the status of the account and determine whether to terminate the account or impose a minimum fee. Brokerage Ashland's standard form of Investment Advisory Agreement provides that unless the client designates a broker, Ashland will select the firm or firms through which securities transactions for such client's account will be effected. The major factors used by Ashland to determine which broker is selected, in situations in which Ashland has discretion to choose the broker are: (a) quality of execution; (b) commissions charged; and (c) research and portfolio analysis services. Ashland also takes into account the size and difficulty of the specific order. Ashland serves as a sub -sub -adviser to a registered investment company. The agreement pursuant to which Ashland performs such advisory services for such investment company provides that Ashland is to direct 25% of the brokerage transactions for the investment company's portfolio to broker-dealers which will provide services to defray the costs of operating such investment company. For the execution of securities transactions for clients which grant to Ashland the unrestricted right to select the broker-dealer, Ashland pays negotiated commissions which are the same for all shares included in a trade. Ashland does not pay a higher rate of commissions because of any services provided by any broker-dealer which it has unrestricted authority to select. Clients which do not grant to Ashland the authority to select broker-dealers for their accounts may incur higher transaction costs than those clients which authorize Ashland to select broker- dealers. Trades for Ashland's clients are either executed individually (where the broker-dealer designated by the client has not been designated by any of Ashland's other clients) or "bunched" on a daily basis (where multiple clients have designated the same broker-dealer or when Ashland has the right to select the broker-dealer to execute transactions for the client's account). When trades are bunched through a particular broker-dealer, each account receives the average price for the transactions. In this manner, all clients whose trades are executed through the same broker-dealer on the same date are treated equally. The bunching of orders does not adversely affect the aggregate price at which transactions are executed. In fact, Ashland deems the "bunching" of trades as a vehicle for potentially obtaining more efficient pricing of transactions. Ashland receives research and other services or products within the parameters of Section 28(e) of the Securities Exchange Act. Ashland presently has certain arrangements whereby it directs brokerage subject to the requirements of best execution (which is a function of both price and commission) and receives various analytical services from brokers. All of the services provided by broker-dealers to Ashland pursuant to such arrangements are research services used by Ashland in the making of investment management decisions. Such services include: data bases used for securities research; performance data bases; statistical services; news and quotation services utilized for research and for voting of securities held in managed accounts; investment seminars; and transaction cost analyses. None of such services relate to general administrative or other functions of Ashland. Research services provided by broker-dealers or third -party providers for accounts for which Ashland has the authority to select broker-dealers are used to benefit all of the accounts managed by Ashland. Therefore, an account may benefit from services provided by a broker-dealer which does not execute transactions for such account. Conversely, an account may pay commissions to a broker-dealer which provides services that also benefit other accounts. 2)99 Ashland reviews on an on-going basis the commission rates paid to the broker-dealers which it selects to effect transactions and the quality of the execution services performed by such broker-dealers. Management The members of Ashland's Investment Committee are: Charles C. Hickox, Chairman of the Board; Parry v. S. Jones, President; Terence J. McLaughlin, Managing Director; Robert J. Flynn, Vice President; and Nicholas P. Jones, Vice President. Charles C. Hickox (b. 1936), a graduate of Columbia University, has been Chairman, Secretary and a Director of Ashland since 1980. Parry v. S. Jones (b. 1936), a graduate of Brown University, has been President, Treasurer and a Director of Ashland since 1975. - Terence J. McLaughlin (b. 1958), a graduate of St. John's University, has been employed by Ashland since 1984, has been a Vice President of Ashland since 1989, and was named a Managing Director in 1992. Robert J. Flynn (b. 1946), a graduate of Northeastern University, has been a Vice President of Ashland since November 1991. From June 1989 to November 1991, he was a Vice President of Smith Barney, Upham, Harris & Co.; from May 1988 to June 1989, he was a Vice President with Dean Witter, Incorporated; and from July 1986 to February 1988, he was employed by NHP Real Estate Securities. Nicholas P. Jones (b. 1959), a graduate of University of Pennsylvania, Wharton School, has been employed by Ashland since 1986: He was elected a Vice President in 1991 and was appointed a Portfolio Manager in 1996. Ashland has not adopted formal requirements of education or business experience for those persons involved in determining or giving investment advice to clients.. However, all present members of Ashland's Investment Committee have had extensive experience in the securities industry. • Security Transactions Charles C. Hickox, Chairman of the Board, and Parry v.S. Jones, President, are also clients of Ashland, - and, therefore, securities purchased or sold for other clients may also be purchased or sold for their accounts. Ashland has in effect: (i) policies and procedures to prevent misuse of non-public information; (ii) supervisory and record-keeping procedures; and (iii) a code of ethics under the Investment Company Act of 1940. All officers and employees of Ashland are required to submit securities transactions for prior approval by Ashland's Compliance Officer and to arrange for the delivery to the Compliance Officer of monthly statements for their accounts. In the event that an officer or employee of Ashland desires to purchase or sell a security being purchased or sold for the account of a client, the officer or employee will be required to delay execution of his or her personal transaction until 48 hours after execution of the client's transaction has been completed. • incentive Compensation Ashland has an incentive compensation arrangement for certain marketing employees who are not executive officers of the company. Pursuant to such arrangement, such employees receive, during the period an account is managed by Ashland, decreasing percentages of the fees received by Ashland from the accounts which such employees solicited for Ashland. Such employees are also eligible to participate, through awards from an incentive "pool", in fees from "wrap -fee" accounts managed by'Ashland.` These arrangements are structuredto comply with the provisions of Rule 206(4)-3 under the Investment Advisers Act. 2199 • • • • Ashland has an arrangement with a financial planning/investment advisory firm which, while not entailing the payment of' a referral fee, provides for the management by Ashland of accounts for clients of such other firm at advisory fees which vary from Ashland's standard fees. This arrangement is also structured to comply with the provisions of Rule 206(4)-3. • 2/99 • i • • • • 4 • i • LOWEY DANNENBERG BEMPORAD & SELINGER, P.C. • RICHARD B. DANNENBERG STEPHEN LOWLY RICHARD BCMPORAO NEIL 1. SCLINOCR DAVID C. HARRISON SHCRRIC BROWN WILLIAM J. BAN WILLIAM R. WEINSTEIN STACEY C. BLAUSTCIN JCANNC D'CSPOSITO THOMAS M. SKELTON MICHELLE RAGO VINCENT BRIOANTI THE GATEWAY • ONE NORTH LEXINGTON AVENUE WHITE PLAINS. NEW YORK 10601-1714 TELEPHONE: (914) 997-0500 • TELECOPIER: (914) 997-0035 C.HAM CRN • I OTTP://www.LPu.co- February 12, 1999 JILL ROSCLL RICHARD W. COHCN COUNSEL Re: John B. Winston v. Mezzanine Investments, L.P., et al., Index No. 28657/91, Supreme Court, New York County (Louise Gruner Gans, J.) Dear Class Member(s): Pursuant to an Order of the Honorable Louise Gruner Gans, Justice of the New York State Supreme Court, New York County, we are pleased to enclose your pro rata distribution check in settlement of the above -captioned action. • Sincere YI Stephen Lowey William R. Weinstei LOWEY DANNENBERG BE➢PORAD & SELINGER, P.0 Attorneys for Plaintiff and the Class • Dear Class Member Cs): • Febrilly 12, 1999 0943/ The enclosed distribution check represents your proportionate share of the John B. Winston v. Mezzanine Investments, L.P., et al., Settlement Fund (the "FUND"). •TAXATION OF DISTRIBUTIONS OF THE FUND: As a result of the Fund paying the tax on the net investment income, 4.4953 of your distribution represents net investment income which previously was subjected to tax at the Fund level but still may be taxable to you. The remaining 95.5053 of your distribution has not been taxed previously, and your taxpaying and reporting obligations for this portion are separate and apart from your taxpaying and reporting obligations for the net investment income earned by the Fund. PLEASE CONSULT YOUR TAX ADVISOR CONCERNING THE TAX TREATMENT OF THIS DISTRIBUTION. IMPORTANT: Please retain this document for your tax files since you will not receive any additional information concerning your distribution. _ All inquiries regarding this distribution should be directed to the Administrator at 1-800-766-3330. Administrator. JOHNCB i' WIN$TO e $T 'AL ScT1I f c/o,DAVID "/ ... ;CHASE MANHATTAN BANK DELAWARE'. N v ; .MEZZANINE INVESTMENTS, L ,/_t .1201 MARKET STREET /• MENT •FUND•••••••• WILMINGTON, DE 19801.4 DN & `CO LLP, 'ADMINISTRATOR / ' l' y' 415;MADISON.AVENUE• -.NY,,•NY 10017 ;'i / CHECK NO •1 ,t t. S. ,. r f'.1,1 +/ 1 ,r ri r•j, 6226/311,, r / ,, 43. /? 4' , t . f'�r 0 1,'� ,fi t it Y�l f',..�j } `,•:J: 1,.�: Ni -t }• f , , l• tV l +r. n, I d.JV , r it I .} .'1 1 NIt �j,1 Record No 'I ' 8362' f 3 1'f +' •�/ ' ftr rf .5 1'tDATE -431 .THE F ORDER •F,., PEN `& RELIEFrFUND y • 303 `w ,CENTERx)LQ> '�f ` itcli>Z ,..; } f FAYETTEVILLE ✓1 AR 72701'/,YZ/i'f..t Yr��' ( i?nl,� v{vq�1'� Ct f5)/l3 l`t�t Y, 1,r,� /.1vC.2 `�+61rrrff }ckfi /(./ :<1cn4; f/),hr^C� �_. P7 I • •) / Eight Hundred y t iy I l t r) AYETTEVILLE FIRE � � °� ' ' %▪ 'f' Y f' / r f � y 1 ✓` / /, /1 „1 U vU t f7 ,t 'r\1D7 1,1 •((i: 'r/£ t t1 4L)n r ft ys✓ t✓ t i l /1 v� , 9 ' 1/ •? t) ) t I 5,1 t1.5.:42 1 t i •1 t r ! r f,\� r`. t, 1 _ � i t ' C 1 k • 1 t f ▪ )^') iA 02 Nxnet Four Dollars and 51 Cents ✓12 1'999`1 r' .%)144,1.1 C.! is : ;'+ lif0.1 ••••5 ,v t 5 ' •,». ' .f •/(n 4 • _ CASH .`%P ROM P T L VO I YC)AMOUNT' $4** +.7894 51X) 51?) / ✓( Vf �i I/ l •\-• .. ya i`I r l l t f,. i fvN;^I?f 3SSUE DATE» C..r,!1•.; r 1.11'4 i' t; ^'AVtHORI WSIGNATIIRE. Dtl'80 DAY: AFTER: 11.00943411' 1:0311002671: 6301490904 50911' DUPLICATE COPY OF CHECK *** JOHN B. WINSTON v. MEZZANINE INVESTMENTS, JOHN B. WINSTON v. MEZZANINE INVESTMENTS, L.P., ET AL., SETTLEMENT FUND c/o DAVID BERDON & CO. LLP, ADMINISTRATOR .415 MADISON AVENUE NY, NY 10017 Record No. 8362 PAY TO THE ORDER OF • Eight Hundred Ninety Four Dollars and 51 Cents FAYETTEVILLE FIRE PEN & RELIEF FUND 303 W. CENTER FAYETTEVILLE, AR 72701 *** Printed on 02/08/1999 L.P., ET AL., CHECK NO. 9434 DATE 02/12/1999 * * * Bank: CHASE MANHATTAN BANK DELAWARE 6301490904 509 MMILISOtt tiffMRN COMMM OIMOMO.Wf OVEM. PRMIFOw U.S.A. t • AMOUNT $********894.51 09434 ^Dear'Giara Member(s): Febr 2, 1999 U3l"1 The enclosed distribution check represents your proportionate share of the John B. Winston v. Mezzanine Investments, L.P., et al., Settlement Fund (the "FUND"). TAXATION OF DISTRIBUTIONS OF THE FUND: As a result of. the Fund paying the tax on the net investment ncome, 4.4951 of your distribution represents net investment income which previously was subjected to tax at the -Fund level but still may be taxable to you. The remaining 95.5051 of your distribution has not been taxed previously, and your taxpaying and reporting obligations for this portion are separate and apart from your taxpaying and reporting obligations for the net investment income earned by the Fund. PLrASE CONSULT YOUR TAX ADVISOR CONCERNING THE TAX TREATMENT OF THIS DISTRIBUTION. IMPORTANT: Please retain this document for your tax files since you will not receive any additional information concerning your distribution. All inquiries regarding this distribution should be directed to the Administrator at 1-800-766-3330. Administrator. JOHN ;B WINSTON v MEZZANINE INVESTMENTS ;. `?ET.;AL ,'SETTLEMENT`''FUNDr) 541::N,0kW 1711 Y} HASE MANHATTAN BANK DELAWARE ' t 1 F Y•./120PMARKET STREET / 4 A. i%,c > : i WILMINGTON; DE 19801 % ; 471)409111;1 • l5 MAOI SON'AV£NU£ `NY, NY 10017 • y• •62 26 3I 4 I ;; CHECK.NO f ; f f} , fl ' •) ' \ lY .1{7t} ( :1 ) - , + t - ) 1t 1 ) 1 v _''tel tt)})(l{} .. .)>.) '>.•' 1 1 1 .fi):}i (14;•)I4)••••)") • • •:f 44 j • Record No i! . t l . J (I I , , t ) i - ' ) •) : )•• •fr )Iwo Hundrod) Ninety BSglitf.Dolla,rs andr 17 • 1 172 ,--• • `` 1 - • 02 Cents It D97Al2) [�. L)1 I.f,7 AMOUNT rl ATE ! � tytl )1t! )()" )AiTf PEN''& RELIEF,?FUND^ 1 1 4�� fy i1 ) 7 j.:11/Y1 t 7 1 f) c 1 1} ) {'} { i O t } n } 1 11 �,�t �it 6} (( IL,N. Ir303'.W (CENTERi`2 C,w,rf Ytii,3 t �f �e Itlill}lf. }i}t';)r3 ,(f� "Y 1 )�• �� � jkiTf l,;• •i lY. FAYETTEVILiE rAR7 72701 I) vi >,.�)r ` ' i f'! �l yt [ ) i r ) •- ) l t. N C` ^7 1:4 v) t) 0Y I Y C 7 t4 v,'.. ' <. r 1 :r • `<, 'j'. 1t .^ 1v '!.y,.% r �:/! t.•;' ,C • CASI PROMPTLY;:NOTD-)180 5gY 1�eISSUE DATEi7 "�1\ ill \Y .• l ; t r qq-"';',?"(2.7:,y t ':) ‘;4 t Pf i i !) f� ) i d 1 t �'v.Cl �r y.j (y% ,'1 , ( 1/ t ( l �7 �• v ( (' Any,, =—i. t i•.\Ctl 10009 L Ong 1:0 3 L L00 26 71: 6301.490904 50911' DUPLICATE COPY OF CHECK *** JOHN B. WINSTON v. MEZZANINE INVESTMENTS, L.P., ET AL., JOHN B. WINSTON v. MEZZANINE INVESTMENTS, L.P., ET AL., SETTLEMENT FUND c/o DAVID BERDON & CO. LLP, ADMINISTRATOR 415 MADISON AVENUE NY, NY 10017 Record No. 8361 PAY TO THE ORDER OF • PRODUCT1MS Two Hundred Ninety Eight FAYETTEVILLE FIRE PEN & RELIEF FUND 303 W. CENTER FAYETTEVILLE AR 72701 Bank: * USE WITH COM,MOK tlM YO.O-W[ ENVELOPE. Dollars and 17 Cents CHECK NO. 9117 DATE AMOUNT 02/12/1999 8********298.17 *** Printed on 02/08/1999 *** CHASE MANHATTAN BANK DELAWARE 6301490904 509 PWNrEIDNUN.N. C 0911R REPRESENTING RETIREMENT INTERESTS MILLION PUBLIC WORKERS NATIONAL CONFERENCE ON PUBLIC R� TRACKING GOVERNMENT LEGISLATION REGULATIONS FEBRUARY NCPERS 1999 Legislative Conference By Harold A. Schaitberger Giving an insightful and witty "View From Washington," New York Daily News Washington Bureau Chief Tom DeFrank kicked off the 1999 Legislative Conference. One of Washington's most respected President -watchers, DeFrank shared innumerable tales, trivia and statistics from six different presidencies. Comparing the current Clinton crisis to the Watergate scandal, DeFrank noted that the cover-up element has been a "terminal condition" [lithe Clinton White House. DeFrank made no solid forecast on what the outcome of the impeachment will be, but he did warn the audience that we "can't be sure we know what will happen." Even now, Washington could surprise us. The 1999 Conference was a huge success. Nearly 200 participants from 35 states gathered in Washington for discussions on several issues that will affect public pension plans in the coming year,- and to challenge Congressional and Administration officials on these issues. After hearing from Mr. DeFrank, the audience received an overview and forecast on the 106th Congress from two viewpoints. Rep. Steny-Hoyer (D -MD) gave the,Member's perspective;' and Ridge Multop, Senior Economic Advisor to House Minority Leader Richard Gephardt (D -MO), presented the staff outlook. . Multop stated that a top priority for this Congress is to make Social Security and Medicare sound, stating that it was not necessary to dismantle on privatize either system, and that Rep. • Gephardt would not support making any changes to the currentsystem-that would harm publicemployees. (Please. refer to the recent "Federal Alert" for more information on Rep. Gephardt's position on Social Security.) Taking the podium after Multop, Rep. Hoyer said he was "encouraged" by those comments. Noting that the 105th Congress was the least productive since 1981, Hoyer also said it remains to be seen what this Congress, under _—NCP.ERS O_iasad.ditionaLlsire _Bxiefs..and._LegislaYive i Binders left over from the 1999 Legislative Conference. Anyone interested in obtaining this material should call the Washington Office at 202-429-2230. the leadership of the new Speaker, Dennis Hastert, will focus on. He listed several possible issues, including education, child care, welfare, trade, the environment, crime and, of course, how to fund Social Security. Emphasizing the need to focus on maintaining pay and benefits for public employees, Rep. Hoyer encouraged the attendees to be well -versed on not only the specific problems for public employees in the Social Security debate, but also the larger issue. Newly -elected Sen. George Voinovich (R -OH), discussed the inherent dangers of mandatory coverage for public employees. Sen. Voinovich has been one of the most outspoken advocates against mandatory coverage and warned attendees that many lawmakers are still looking into such a provision. "Thus far the President has not included us in his reform for Social Security. I think that's good news. I think we need to make sure it's not included in any reform package that he'll be talking about," stated Sen. Voinovich. Including state and local employees in the System would put "an undue burden" on the successful state and local plans. As always, the federal budget is of utmost concern to pension officials. Thomas Kahn, Minority Staff Director and Chief Counsel to the House Budget Committee gave an overview of the 1999 federal budget. (Details on the 2000 budget are outlined on page three.) During the afternoon session, the audience heard about pension portability from James Delaplane, Vice President of Retirement Policy for the Association of Private Pension and Welfare Plans (APPWP) and Rep. Ben Cardin (D -MD). Delaplane, who helped draft the Retirement Account Portability (RAP) Act while he was pension aide to Rep. Earl Pomeroy, reviewed the importance of pension portability. Delaplane revealed that there is increasing Congressional support for portability initiatives, because "it's an issue that Congress can easily understand."In addition, Delaplane predicted that the Administration would include a "big chunk" of the RAP Act in its 2000 budget. Rep. Cardin agreed that portability is gaining support in Congress. His comments revolved around the legislation he introduced in 1998 with Rep. Portman (H.R. 3788) which focused on the portability issue. Cardin stated that he and Portman will likely reintroduce the bill that will contain minor adjustments. Rep. Cardin received an enthusiastic round ofapplause when he displayed his support for excluding the mandatory coverage provision from Social Security proposals. Mort Kievan, Senior Policy Advisor of the Pension and Welfare Benefits Administration of the U.S. Department of Labor gave a diverse forecast of issues facing the PWBA, such as Y2K readiness and the debate between DB vs. DC plans. Kievan also predicted that the Administration's budget would include pension provisions, as well as last year's start-up tax credit geared toward small businesses that establish retirement plans known as Secure Money Annuity or Retirement Trust. • • (Cont ued on Page 4) NATIONAL CONFERENCE ON 'PUBLIC EMPLOYEE RETIREMENT SYSTEMS 1620 EYE STREET, N.W. • SUITE 220 • WASHINGTiON,'D.C. 20006 • 202-429-2230 T News from ;State Capitols (On 'January .7; legislation'was pre -filed in [Honda ;that Would create an optional 2'etirement (program !for remployees(of[the(statea.: :856, which originated Willa [the Cnntftee en LosM.S.-rental OX&ersig'lii,ipr idesTth"a't State [employees Tmay.participate$in the optional tree( nein en't tiprograrn An Teo cof ipancegpahng lin (the IEI'onda IReh remen:t ¢Sysstem.'Th'is (bill 'as rcwsrenll)ylbeing remiewlby riheicSenatt (ln, teim(Cornniittee or.,Go3t rnmental IQi versighi and irroductiwi qy: :On January0,'Rep. Manning•(R) of Georgia rintroduced La'bill f(H.,244) (relating to Ltheinmestrnerit and relnvestlnent fof thealocal refiremen't systems' .assets: T71ids legislation would (change ithepercentage (of fa -sets the Iretirem2iit (fund rcould dina.est in (egu)•tiescun&cr (ceftain(dircumstaiice5 The rBi1ft was:sent itoi%he113cru'se Comniittee ren 'Retirement. At [the tend cof Deceniher,(a rNew'York cappella to (count welled (that (the Cite of fS'.henectady `a'rolaleid AgreementsWith fh 4itslpolicecan d ffirerfighlers tp:li Oohs when :•ia4Ch gad (the healfh Ihenefitsrof ;retired police officer 'and ;firefighters. Since 19,6y„ '[the Pratrolmen';s Ileneyol en t ,Associa ti oil rand [The City Ti refi gh:ters' Union (ent ered (contrac is 'tiMlb(fife(CCicof SObefiertta4 [t ha* efts to •.n,expense;Ifhetcit�u .ggb Ihl!provide thospitalization :and ;ma jor. Hi?dial `insurance with coverage :equivalent to the„ plan presently In :eller-Ill-or (ea Cli [member (of departmentiand Ibis•familv;,and forcretired ,rncnlbers(and ,fdteirlfiantilies" Inj'99,0,Thealth insurance coyerageWas x iang.ecito[aplan that pregMired increased ,parthc',ipaht reo pat mefits cSeparatekd ass lade( Ort rsurts were iIfilealbyThe .n,hreel fit€figiitersrand [police cofficers fleging dtItat ithe-city[breaehed f<he[cel9ecltwelbargairiing 1agregmeia.ts[by nallteiing [thelterms[o'f[fhe:hlsurance[gnde.r �wh'xh•171epnenibersrof ithe(class Iliad ibeen (cot erect; ,maintaining'thatwhen a membenof the crass retired, the Cooveragerto which rthefindn ideal M entitled rreniained (fixedMmihnneand icouldnotbe(changeaf The(courtruled ( binIla aaorhoflittle lfiref gkterslandjp6fieLeraficersiin(that ',lemony sretrree;ts(ant•rtled ToThe..sameorreg:uia alent •covcrage•,'d:iir;ing lits refir.ernent;as :the,coterage in :e.'ffect at the Mime he feticed," Legislation was introduced Lin 4Vegt'Uirginia[that W.ogicl ,perm r t iretfr'in g [public (employees [to [apply [La ,[percentage[Of [their[annuatihand[alcklleome to?insurance [Coverage. IH 207,2;1introduced by (Rep [Kelley (D.); would also tallow [the I] eave il o be ra pJplred (tow and (sera ice [credits. Ott {is ogrrenflydin[theIl ouse�Comrrirtteeon!Religions tord WefiretnSt. Alf.Otent'..lowliit:wassettled Wirth 'the help of ;the 'State •;of•Wi§tdiitin;Inyestriient Boardt laye_rpension=fund manager, In 159.6;ihe Investment Board lostmorethan [$t110 million mvestinganCllStariCorpor�a`tion,a rdistribuloriof Wireless [Phone 'equ pinenl, wlien ithe,s'tock plunged ,and lost close Ito 1807nrof its ,Maine li n siz eonihs.: The (fund !filed t'acdassac.tion suit Onteliebassof secuiif estrood: Several months ago CellStarrsettled the suit •byAgreeing 'to pay 151:4;5 zillion; Ibu't rein sed to [admit or deny liability: The !settlement [come -Ls (dl(oSe t:o r409r [of ?the :estimated os'se"s. Sen;:Cook :(D) if ',below -are introduced legislation fthatrwould Change the/fiscal Vea r 1(99;9 ient,p'loryerdpension trate, ,The.Ibill, 7.0I ich tw,aS lintrOdcuced (on january'26 'moved ii;ery rquiel6ly%Ipassi n g [th:e tSenato[that•dav where It •mt)yecl or to the sHou-se Appfopriations CommitteeJ;On Jaituaryl28, it 'passed ahe iI'louse.:J,'CPERS will keep :.,pp [appraised rot this[hil] s (status: [COIUta4O [[is one Cu f 0heffirsl states [to Iii,trod;uced $legislation relahnnglte mand&aloe [S 6i Security(coy:erage: (SJR. (6,imtri)d u ted Ibfy Sen.'Webedo ((R+) avbu I d kexcludo jpolicero`ff.i rstand £firefighters (from ied:epal jlegrslation 4mindahngparbcipatYonlb,y Ipubhcrempil y tes LinObe ifedei[Ziastsecunt progr$� arnn)Januany26 �thislbill . ral ^alas Sento the Howse o f I erhasang passed Elie Senate. According to statistics releas merit's Census Bureau, mem ernment employee retireme ed by the Commerce Depart- bership in state and local gov- nt systems reached an all-time high in 1997. The tables, w net, show that there were m hich are available on the Inter - ore than 15 million people in these retirement plans. The revenues, expenditures and and local government retire be viewed at www.census.g report also summarizes the investment holdings of state ment systems. The tables can ov/govs/www/index.html, or, for more information, call H enry Wulf at 301-457-1486. t. 2 • Federal Develo pfinents • Social Security Legislation — On January 6, Rep Ed Royce (R -CA) introduced legislation aimed at replacing "IOUs" in the Social Security Trust Fund with real assets. According to Royce, the total amount of IOUs is close to $757 billion. The Social Security Strengthening and Protection Act (H.R. 160) would use 90 percent of the current budget surplus to repay the Trust Fund by purchasing Treasury bonds. Royce is among an increasing number of lawmakers calling for a more honest federal budget accounting system. As of January 8, the bill had only eight cosponsors. State of the Union Address — President Clinton delivered his State of the Union address on Tuesday, January 19, to lawmakers, families and guests A key point in the speech was Clinton's plan to rescue Social Security by having the government invest billions of dollars in the stock market. This plan met with substantial opposition. "I will oppose government -managed investment in the private sector," stated Rep. Bill Archer (R -TX). Alan Greenspan also expressed his dislike of the plan, stating, "I do not believe it is politically feasible to insulate such huge funds." Clinton also proposed keeping $2 trillion of the budget surplus on hand as "extra cash" in the Social Security system. In addition, Clinton suggested that another 11 percent of the surplus go toward new government -subsidized 401(k) -style retirement accounts for most American workers. Lawmakers Begin Social Security Reform Compromise — NCPERS has learned that House Republicans are willing to set aside much of the surplus to save Social Security. "We would be willing to reserve 62 percent of the surplus until Social Security -has been saved," stated Rep. Archer • (R -TX). GOP leaders-still-dislike=President-Clinton s-pioposal•to=have-the:government-invest=some of -the -Social Security, ,-: money in the stock market/but their consent -to saving a portion of the surplus is a step in the right direction. Tax -Free Withdrawals from 401(k) Plans — On January 15, Sen. Roth (R -DE) announced he plans to introduce a bill that would allow tax-free withdrawals from 401(k) and 403(b) plans within a new type of tax code. This legislation is modeled after the Roth IRA and would allow individuals to contribute after-tax money to a 401(k) or 403(b) plan and withdraw the money tax-free upon retirement. Employees would be allowedto contribute up to the maximum amount determined under the respective 401(k) or 403(b) plan, rather than the $2,000 limit imposed under Roth IRAs. Sen. Roth, who is Chairman of the Senate Finance Committee, said his proposal seeks to encourage increased retirement savings. "If we can increase savings, we can not only help individuals with their retirement and alleviate some of the pressure on Social Security, but we can help keep our economy groin ing;' he stated. Budget Negotiations — President Clinton sent his budget to Congress on February 1, and in true partisan fashion, the parties began battling over tax and budget policy. Republicans would like to see an across-the-board 10 percent cut in the personal tax rate. Clinton, on the other hand, believes a 10 percent income tax cut would "waste a once-in-a-lifetime opportunity" to shore up Social Security and Medicare. The $1.77 trillion spending plan includes a $1,000 tax credit to help people handle long-term health care costs, and a $250 credit for stay-at-home parents, caring for infants below the age of 1. Clinton also calls for increasing taxes and fees by $82 billion over the next five years. To save Social Security, Clinton proposes spending 62 percent of government surpluses over the next 15 years ($2.76 trillion) to help bolster the System's cash reserves. PBGC Encourages Defined Benefit Plans — On January 22, the Pension Benefit Guaranty Corporation (PBGC) announced that "employers need incentives, flexibility, and simplified tax code rules so they can offer defined benefit plans." David Strauss, executive Director of the PBGC went on to say, "a defined benefit plan is the only private retirement vehicle that reliably provides predictable, secure benefits for life." Daschle Introduces Pension Legislation —Senate Minority Leader Thomas Daschle (D -SD) introduced a bill that would provide pension reform, lessen the tax penalty for marriage, and bar any changes to the Senate pay-as-you-go rule until •Congress saves Social Security. S. 8, which was introduced on January 19, would allow couples filing Joint tax returns to deduct an amount equal to 20 percent of the income of the lower earning spouse. The bill also allows workers who do not have pension coverage to build their own retirement savings through direct contributions to an individual retirement account. Lawmakers are hoping that 1999 will be a year of action with regards to Social Security reform and retirement pol- icy issues. Realizing that there is more than a Social Secu- rity problem, but a retirement security problem, Rep. Nancy Johnson (R -CT) stated, "Addressing one without the other would leave half the problem unresolved. If Con- gress fails to reform the private pension system, then we would have done less than half, the job." 3 'f6Centmhetifitotn Pagr a!) 4Ctarnit nith the Assocrate Dtlput,t'lGtiief Ccif Staffforitheltetnronim ` Smttteeon T,axation,haddressed tupeomrng ttancSsuestn The 1106th / LiOongresc Sfietcoteredipensionsimplificahon andLSnctal Sectarity,mohngrha t lthere,aieaint ,ett issuesDnd nu!olearanswers.'Shetalse told 'attend eestlhat.fhe:HOuse .\1lays and Means :Cdnamiltee`•is'lookifig "fornLVaysto irnpiity •the ccffi1ex:pension rules in.the:fax .cod reminded the attendees tint Co igressis much mote'informed on prti ie secii r:plans:fhan goyetrmVnt plans and ;She :encomia ged thegrouF itis redu?ale 'their represenahsee:anditheirtstaffs ;An [what (the iprdblemgiafie t+h' the id fferences:are nipoitant, Robert;Plaze '4ss7:ciate,IJireehor;ot the Itnyeshnenl Pulanagem'en'tIDi:3,i41(ltl of the Surunifies12h'i IERchaagelorami's's:AD) Yevefi ed (thatffhe 'SEC may 1prcpnse(ext&riding'Tay StoIPI ay' Lnile1pWilrc,inftI t-ptiing(Statingit1)51lthefQiimmisston}hasidetee nitmasthery 'ih33teStie(auth'onh'[to'j:pastefans;idea forvegulationiTlaze.rcommentedkhat 1lray hen'i1Ty(canlbe,a:pis ff force on [the iditmone), managers an put ]icfpension Iplans 'Pay(tolplaky to-re-ate"s Ifhe fimpressi on Vaal caontraets Ifotlprc esSiarial(t le?ytare •aN3;arded ten li]ieibA; isnifipolifica!I ,i n'(]uence!Tthetlthat IpDfessrona I'competence: Thtsibrings•.disc-xeditien;iheibuSitessrandiprofessionatswe..ho,are .pa rttdipatuig,tn(the 1pmaottce,area` •remarked;Blaze: The day .was wripped up bj' Fred Nesbitt, Legislative and P.oItheal'Director iif:the Interna I) anal Msociahon of,Fere Fighters Sa i:iiq that so far "the Social Security debate'has'.beena L§t; of talk and noaction, ,faesbrtt revealed [a crudal; -slue Social LSeeunty:reform is the most :discussed issue:n ahe apishtical(scene'todavrAnd ,theip1ttieal,prisess-bot Thelegi<_latrse Iprocesg-'ts the[driving [force beh'itrel t. {Coliterenee iatfendees were [taken Rio tthe Ih!apandi ready laved nesd a,yirnonnti7,g f(lanuary r27) Ito iaMend Itliefir�.'t- reY,er['ongressional [breakfa"st. ni(here[the lke,ynoteispeaCker avis}Rep.)M ark F.Dlev Ii FL)Rep. $ holey cgatte gtery 1postfand(dandId;rem a iks,regardmgbnana issues Lfaeing Kiiongress fan'd lth'e iAdintinistratinn. iRea`ti2in'glthe;chi ] lenges America ns ,a re :CU rrentlty (facing, IRep.4Fnley [stated , hatiCongress w.ill,mnst ilikefi• iconsiderithe;Sncwal Securay fissuetthe;Budgetfsuriplus;fthelDefense[budget'and Iheal;h,related lis_ues IRep Foleic'Was %very(focused ton iIPre(te-thng:Stateland ilitea: Ipenstun.plans;Istahng, rst,andfforemias`t [plum (mustftiefgiiaran.'teeingre,;eriliefriiker:a (secu ie ifnil rernedt,"' 'i1 p.SF.oley:also entoucag ed 1paehei.paiitstcxgetirtilugdiinithellegislatia;eypritMessi iVo prepare attendi4;s for their Congressibn5! mi:c,tirigs :that dat, Alan ;MacLeod,:Ckiief of•Staff hir Rep: Tisa Ktnd ,(D -13;V•1) offered some ;id vice on;how tD visit With botli•membersLan dstaff. llhts meeting was pur roost successfuliLcgislat: yelZumfereneean,theihislort; ;pf:NCC'1ERS;:and:ourCsuccess is[du e'to 'a:ctimbina't7onfnffthe high;caliberispeakerc,;fthehsssues'we [face.,,and, ihrioSift ithipOrtaMb, our itiftLifirtwiS [And cattendeesuehoaeeugnizeThal ibe(face ,alAu berrof2Aitiaal [challengestth'ts aeear From phe,repords Lwelhaste;ceceii•ed/from your;Corgr.essiona]••yisiis,Fit ,'is,apparentltha coo rsmemtiers iunderstanel[the rope rtanco i6f Iparteipatinglin the (legtsla time: process; fascechoed Lail to( Lou nspea kers:1] :encourage the 'memhersh ip!toicoei tinu8 rd-oi ng iso. And tas alwa,ua,G+ie de.Pl$itf itnyeur (commen.'tg;arid ifeedbaekton tate fecniferene. INCURS 1620lEy.e StcMANAL;. 51iite.',22O SiA.(ash'ingtc n,10, C.'20(Jll6 1.404°3 Wa.,yette.Ji Ile filo ¶igtilos iftenii n n :& :Relief AITN:CnycCleck 1 13 `W ;tit odntain $tree"t iFayeltcyille r,�AR y7;27,011 [Rfi'eSORTED f,1911 [LASS [MIL (U.S IPOSSi9G E PAID 11N48)F'!INGTON. SDC •IPerrtiltLNo t8972 "':The 49 iiHiflir MD ih r':7,s puh1dledhir )hi Nacional Ccnfe eti€.nn Pi+NIi -. Ebtp!oyee Refirrincnt 3i stctnr 1 �atrrt 1 j?i�hlv"ched pr T7triMnrnth!yJy1i?iiFhtr inn;y:bP,-Ppraii,crdwith prior[,cit:fi.np7wk?ionfrcrn;NCRERS.: 4: 4 • PAYETTEVILLE • • • THE CITY OF FAYETTEVILLE, ARKANSAS • February 2, 1999 Murri P. Hester Ashland Management 26 Broadway New York, NY 1004-1793 Dear Mr. Hester: • In response to your letter dated January 13, 1999, I am requesting a copy of your Form ADV. Please forward a copy to my attention at the address listed below. Heather Woodruff City Clerk 113 West Mountain Street Fayetteville, AR 72701 Sincerely, Heather Woodruff City Clerk 113 WEST MOUNTAIN 72701 501-521-7700 FAX 501-575-8257 • • • • • ASHLAND MANAGEMENT INCORPORATED NEW YORK TELEPHONE: (212) 425-2803 NEW YORK FACSIMILE: (212)425-6026 Ms. Heather Woodruff City of Fayetteville City Clerk Fayetteville Fire Pension and Relief Fun Fayetteville, AR 72701 Dear Ms. Woodruff: 26 giroaa }Vat,- r"0.4 /0004 -/79S January 13, 1999 • According to Rule 204-3 of the Investment Advisers Act of 1940, we are required to offer our clients Part 11 of our Form ADV. • r MPH/kk If you would like a copy for your files, please send a written request on your letterhead or stationery. Sincerely, • Murri P. Heste ,` Vice President