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HomeMy WebLinkAbout2003-12-18 - Agendas - Final• • • Firemen's Pension And Relief Fund Meeting Agenda December 18, 2003 A Special meeting of the Fayetteville Firemen's Pension and Relief Fund will be held at 10:30 a.m. on December 18, 2003 in Room 111 of the City Administration Building. 1. Approval of the Minutes: • November 20, 2003 2. Approval of the Pension List: • January 2004 Pension List Approval 3. Old Business: • Resolution to Approve a 10 Year DROP • Resolution to Approve Working After DROP • Resolution to Approve a Temporary 3% COLA • Ashland Management 4. New Business: • Dennis Ledbetter Retirement • Earvel Schader Death Certificate • The Monitor • Budget Reports • Osborn, Carreiro & Associates Report • Arkansas Fire and Police Pension Review Board — 2003 Legislative Changes 5. Investment Report: • Longer Investments • Fireman's Pension and Relief Fund Board Meeting November 20, 2003 Page 1of3 MINUTES OF A MEETING OF THE FIREMAN'S PENSION AND RELIEF FUND BOARD November 20, 2003 A meeting of the Fayetteville Firemen's Pension and Relief Fund was held at 11:00 a.m. on November 20, 2003 in Room 326 of the City Admmistration Building. Present: Danny Farrar, Pete Reagan, Robert Johnson, Marion Doss, Ronnie Wood, Marsha Farthing, and Amber Wood. The meeting was called to order by Marion Doss. Approval of the minutes: Pete Reagan motioned to approve the minutes. Danny Farrar seconded. The motion passed unanimously. Approval of the Pension List: Marion Doss: Did Sondra say whether there were any changes on the list or not? Amber Wood: She did not say, however she might possibly be here by 11:30. Pete Reagan motioned to approve the Pension List. Danny Farrar seconded. The motion passed unanimously. Investment Report: They reviewed the report given by Longer Investments. Old Business: Ashland Management: Pete Reagan: We have not heard back from Ashland on this, Kit sent them a letter. New Business: • NCPERS Legislative Alert: • • • Firemen's Pension Meeting November 20, 2003 Page 2of3 They each reviewed the email sent regarding NCPERS Legislative Alert. Budget Reports: Marion Doss: This is something sent down from Finance. Pete Reagan: Marsha prepared them all herself and does an excellent job of it. Marion Doss: If anyone has any questions about that, we're fortunate to have Marsha here to answer any questions about the Financial Report. Ronnie Wood: Thank you Marsha. Pete Reagan: Next I would like to discuss this Actuary Report from Osborn, Carreiro, & Associates, on the effects of a DROP, Act 1369 (DROP) and Act 1372 (Working After DROP) and a temporary 3%, 3 year COLA Pete Reagan motioned to adopt a resolution and get it to the City Clerk so that she can then get it going to City Council as soon as possible for benefit increases as proposed in Act 1369 and 1372. Danny Farrar seconded. The motion passed unanimously. Marion Doss: You will set the resolution up for the board to approve the 3% COLAS Pete Reagan: Yes, all we have to do is send that to the Pension Review Board and they meet on December 17`h Danny Farrar: So we have to split them up? Ronnie Wood: So we don't actually have to have the board's blessing on a 3% COLA Pete Reagan: At this point we have to send it before the City Council. Danny Farrar motioned to proceed with the temporary 3 year, 3% COLA as recommended by Osborn, Carreiro & Associates. Ron Wood Seconded. The motion passed unanimously. Pete Reagan: I motion to adjourn Amber Wood: One thing before we adjourn, the next meeting is scheduled for December the 26th which is the day after Christmas. Would you be interested in moving it to the 18th which is the Thursday prior to that week? Marion Doss: That is an excellent idea. • • • Firemen's Pension Mating November 20, 2003 Page 3 of 3 The Fire Pension and Relief Fund Board of Trustees meeting scheduled for December 26, 2003 was rescheduled for December 18, 2003. Danny Farrar: On this temporary 3 year COLA, does that go into effect in 2004 or next month? Pete Reagan: It will actually start once it's approved here. They will actually back pay because it actually has not been approved by the Pension Review Board but they will meet in December. Marion Doss: Normally when the Pension Review Board approves it they back date it. Last time we did a benefit increase it was retroactive, we asked for it and then it took six months to approve it Pete Reagan: Who made the last motion? Danny Farrar: Me. Pete Reagan: Okay, you need to make it for a full paid retirees. Danny Farrar: Personally, I'm for doing it for everybody, but if we can't, we can't. Pete Reagan: Not with the actuary the way it is. Normally we have taken care of them. Ronnie Wood: We can always look at that again three years down the road when we get another actuary and review the 3%, we can always look at that then. Danny Farrar motioned to amend his motion and include full paid retirees. Pete Reagan seconded. The motion passed unanimously. Pete Reagan motioned to adjourn. Robert Johnson seconded. The motion passed unanimously. Meeting Adjourned at 11:30 AM. • • FIREMEN'S RELIEF AND PENSION January 2004 THE FOLLOWING ARE THE OBLIGATIONS OF THE FIREMEN'S RELIEF FUND FOR THE TH OF JANUARY 2004. YOU ARE HEREBY INSTRUCTED TO ISSUE CHECKS TO THE ES, IN THE AMOUNTS SHOWN, AND FOR THE PURPOSE SO STATED. DATE OF REGULAR Year To Date MO BENEFIT REG BENEFIT FED. TAX ST. TAX EMP# RETIREMENT NAME • • 79 11/99 74 3/86 2 3/75 63 5/72 68 7/99 44 9/86 45 9/86 49 7/88 4 6/67 5 5/72 57 5/90 6 4/68 8 10/76 78 11/99 11 2/76 38 5/84 170 5/03 92 03/02 34 6/79 70 11/99 93 06/02 86 07/01 64 4/95 76 5/88 37 3/84 54 5/89 12 3/60 13 10/67 14 7/74 51 10/88 40 9/85 50 9/88 39 4/85 35 2/82 15 4/77 29 8/81 73 2/00 42 2186 16 4/64 62 10/68 48 7/88 46 .5/88 81 02/01 53 2/89 22 4/73 30 3/81 12/03 41 9/85 82 03/01 83 03/01 66 8/98 36 5/76 90 03/02 165 12102 ARMSTRONG (DILL), PAMELA 1,658.91 BAIRD, JULIA 1,649.16 BLACKARD, PAUL 100.00 BOLAIN, ANN 100.00 BONADUCE, MICHAEL 2 73514 BOUDREY, BETTY MRS. 2,267.18 BOUDREY, HOWARD 1,911.99 BOUDREY, JACK 1,507.82 CARL, FLOYD JR 100.00 CASELMAN, ARTHUR 120.00 CATE, ROY 1,637.10 CHRISTIE ARNOLD 100.00 COUNTS, WAYNE 100.00 DILL,GARY JOHN 1,658.92 FARRAR,ALONZO 914.10 FRALEY, JOSEPH G. 1,618.08 FREEDLE, LARRY 3,492.86 GAGE,TOMMY 2,376.34 HARRIS, JAMES E. 100.00 HARRIS, MARY RUTH 100.00 JENKINS, JOHN 3,273:93 JOHNSON,ROBERT 2,812.66 JORDAN, CHARLIE 2,081.90 JUDY, JAN 1 507 82 KING, ARNOLD D. 1,393.18 KING, ARVIL 1,566.00 LANE, HOPE MRS 100.00 LAYER, MERLIN 417.50 LEE, HAROLD 100.00 LEWIS, CHARLES 1,507.82 LOGUE, PAUL D. 2,624.88 MASON, LARRY 1,492.83 MC ARTHUR, RONALD A. 1,604.92 MC CHRISTIAN, DWAYNE 100.00 MC WHORTER, CHARLES 1 221 26 MILLER, DONALD 1,193.41 MILLER,KENNETH 2,910.17 MOORE, JAMES H. 100.00 MORRIS, WILLIAM H. 115.00 MORRISON, ELIENE 125.00 MULLENS, DENNIS W. 2,005.35 OSBURN, TROY 1 738 46 PHILLIPS,LARRY 2,530.45 POAGE LARRY 2 147 56 REED, JOE 100.00 SCHADER EARVEL (DECEASED) SCHADER MADGE SCHADER TROY • SKELTON,KELLY SKELTON, KIMBERLY SKELTON, PAULINE SPRINGSTON, CARL STOUT, IMOGENE W. TATE, RALPH 0.00 300.00 0.00 350.00 0.00 0.00 0.00 475.38 0.00 300.00 0.00 0.00 287 68 0.00 0.00 0.00 0.00 0.00 0.00 • 100.00 0.00 75.00 0.00 200.00 0.00 500.00 0.00 226.00 0.00 0.00 0.00 700.00 0.00 500.00 0.00 0.00 200.00 0.00 240.00 0.00 130.00 0.00 0.00 0.00 0.00 75.00 0.00 325.00 0.00 78.16 0.00 150.00 0.00 0.00 150.00 0.00 125.00 0.00 325.00 0.00 0.00 0.00 0.00 0.00 200.00 0.00 0.00 300.00 0.00 1,268.40 1,395.58 0.00 1,114.17 0.00 1,114.17 0.00 390.00 0.00 737.78 0.00 702.65 0.00 3,356.83 0.00 57.00 125.00 125.00 70.00 300.00 NET 100.00 1,258.91 145.00 1,154.16 100.00 100.00 2,259.76 50.00 1,917.18 1,911.99 50.00 1,170.14 100.00 120.00 1,637.10 100.00 100.00 1,558.92 839.10 15.00 1,403.08 100.00 2,892.86 50.00 2,100.34 100.00 100.00 200.00 2,373.93 100.00 2,212.66 2,081.90 50.00 1,257.82 100.00 1,053.18 1,436.00 100.00 41750 100.00 25.00 1 407 82 75.00 2,224.88 1,414.67 50.00 1,404.92 100.00 1 071 26 25.00 1,043.41 75.00 2,510.17 100.00 115.00 125.00 2,005.35 38.00 1,500.46 2,530.45 100.00 1 747 56 100.00 0.00 1,268.40 1,338.58 25.00 964.17 25.00 964.17 390.00 17.00 650.78 702.65 100.00 2,956.83 DATE OF EMP# RETIREMENT NAME •26 27 71 28 88 52 3/66 3/71 1/00 7/68 01/02 9/88 DROP DATE 02/01/99 05/01/99 04/01/00 07/01/00 01/01/01 03/01/03 03/01/03 03/01/03 04/01/03 TUNE, BILLIE SUE TUNE, MILDRED MRS. WARFORD,THOMAS WATTS, DONALD WOOD,RONNIE D WRIGHT, RANDALL DROP EMPLOYEES LEDBETTER, DENNIS BACHMAN, EDDIE NAPIER,LONNIE REAGAN,PETE DOSS,MARION MAHAN, MARSHALL PIERCE, JOEY SHACKLEFORD,GLEN. O NEAL TEDDY REGULAR Year To Date MO BENEFIT REG BENEFIT FED. TAX ST. TAX 125.00 125.00 2,290.35 400.00 2,816.02 1 547 82 76,401.47 NET 0.00 125.00 0.00 125.00 0.00 300.00 1,990.35 0.00 400.00 0.00 800.00 200.00 1,816.02 0.00 200.00 25.00 1,322.82 0.00 8,289.22 1,740.00 66,372.25 NEW BENEFITS 3,455.40 2,396.34 3,219.73 3,235.68 4,920.63 3,731.29 3 337 69 3,337.69 3,771.29 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 • SECRETARY ACKNOWLEDGEMENT CHAIRMAN AND PRESIDENT STATE OF ARKANSAS ) COUNTY OF WASHINGTON) SWORN TO AND SUBSCRIBED BEFORE ME THIS DAY OF 2003. NOTARY PUBLIC MY COMMISSION EXPIRES : • 6810-9810-5335-00 YTD 846,010.87 • Fayetteville Firemen's Pension and Relief Fund City of Fayetteville Arkansas Resolution Number A Resolution to allow the Fayetteville Firemen's Pension and Relief Fund to enact the Act 1369 of 2003 instituting a 10 year DROP. Whereas; The Fayetteville Firemen's Pension and Relief Fund met on December 18th, 2003 and passed a resolution to enact Act 1369 of 2003, for it's members. And, Whereas; The Actuarial Firm of Osborn, Carreiro and Associates, have reported that these increases m benefits, would be considered actuarially sound under the rules of the Arkansas Fire and Police Pension Review Board. And, (See page 2, 1st paragraph of actuarial report dated November 20th) Whereas; Act 1369 of 2003 requires the Pension Board to pass a resolution, as well as City Council. Therefore be it resolved; That the Fayetteville Firemen's Pension and Relief Fund, City of Fayetteville Arkansas, pass this resolution, increasing the five year DROP plan to a ten year DROP plan A copy of this resolution has been forwarded to the City Clerk, Fayetteville Arkansas, and The Arkansas Fire and Police Pension Review Board office in Little Rock Arkansas. PASSED and APPROVED this 18th day of December, 2003. Approved by: 1. 3. 2. 4. 5. 6. 7. • • • Fayetteville Firemen's Pension and Relief Fund City of Fayetteville Arkansas Resolution Number A Resolution to allow the Fayetteville Firemen's Pension and Relief Fund to enact the Act 1372 of 2003 working after DROP. Whereas; The Fayetteville Firemen's Pension and Relief Fund met on December 181i, 2003 and passed a resolution to enact Act 1372 of 2003, for it's members. And, Whereas; The Actuanal Firm of Osborn, Carreiro and Associates, have reported that these increases in benefits, would be considered actuarially sound under the rules of the Arkansas Fire and Police Pension Review Board. And, (See page 2, 1 st paragraph of actuarial report dated November 201i) • Whereas; Act 1372 of 2003 requires the Pension Board to pass a resolution, as well as City Council. • Therefore be it resolved; That the Fayetteville Firemen's Pension and Relief Fund, City of Fayetteville Arkansas, pass this resolution, working after DROP. A copy of this resolution has been forwarded to the City Clerk, Fayetteville Arkansas, and The Arkansas Fire and Police Pension Review Board office in Little Rock Arkansas. PASSED and APPROVED this 18th day of December, 2003. Approved by: 1. 2. 3. 4. 5. 6. 7. • Fayetteville Firemen's Pension and Relief Fund City of Fayetteville Arkansas • Resolution Number To allow the Fayetteville Firemen's Pension and Relief Fund to institute a temporary 3% COLA for all pensioners. Whereas; The Fayetteville Firemen's Pension and Relief Fund met on December 181i, 2003 and unanimously passed a resolution to institute a temporary 3% COLA for all pensioners And, Whereas; The Actuarial Firm of Osborn, Carreiro and Associates, have reported that this increases in benefits, would be considered actuarially sound under the rules of the Arkansas Fire and Police Pension Review Board. (See page 2, 2nd paragraph of actuanal report dated November 201i) Therefore be it resolved; That the Fayetteville Firemen's Pension and Relief Fund Board of Trustees, City of Fayetteville Arkansas, pass this resolution, enacting a temporary 3% COLA for three (3) years for all pensioners, and a copy of this resolution has been forwarded to the City Clerk, Fayetteville Arkansas, and The Arkansas Fire and Police Pension Review Board office in Little Rock Arkansas. PASSED and APPROVED this 18th day of December, 2003. Approved by: 1. 2. 3. 4. 5. 6. 7. Employee A Estimated payout w/5 year DROP $374,555.76 Estimated payout w/10 year DROP .$656,475.08 Employee B Estimated payout w/5 year DROP Estimated payout w/10 year DROP Employee C Estimated payout w/5 year DROP Estimated payout w/10 year DROP $209,385.40 $393,618.12 $255,279.95 $446,064.12 ** 5 year DROP is calculated at 90% of salary and assumes 6% interest. • '"" 10 year DROP assumes 75% of salary and 1.5% interest. • • • Monthly benefit Months Yearly Ext. Drop pd Gross Contr y6-10 Difference Employee A 4,920.63 12 59,047.56 5 295,237.80''1281,919.32 13,318.48 Employee B 3,235.68 12 38,828.16 5 194,140.80 184,232.72 9,908.08 Employee C 3,337.69 12 40,052.28 5 200,261.40 190,784.17 9,477.g3 • • • Employee Veteran New Hire - Step A New Hire - Trainee Hours/pay period Rate Gross 125.85 15.351 125.85 9.405 125.85 8.936 • 1,931.92 1,183.62 1,124.60 Differences in ER match: Veteran & Step A 93,26/pay pd 2,580.76/yr• Veteran & Trainee 105.88/pay pd _2,752.88/yr ER match 231.83- 132.57 125,95 • I l FAYET" I'EVILLE THE CITY Of FAYETTEVILL ARKANSA • KIT WILLIAMS, CITY ATTORNEY DAVID WHITAKER, ASST. CITY ATTORNEY DEPARTMENTAL CORRESPONDENCE LEGAL DEPARTMENT • • TO: Fire Pension Board FROM: Kit Williams, City Attorney DATE. December 11, 2003 RE: Fees owed to Ashland Management, Inc. 1 I wrote to Ashland Management, Inc. and refused to consider payment until it provided a contract evidencing their right to the fee charged. Today I received the attached letter and contract by Federal Express. As you see, the Fire Pension Board appears to have signed this contract so we are bound by its terms. In paragraph 4, the contract states: "In the event of termination, the advisory fee will be pro -rated based on the numbers of days this Agreement is m effect during the quarter." Paragraph 12 states: "The term of this .agreement ... shall continue until terminated at any time by either party upon not less than thirty (30) days prior written notice to the other party " Thus they charged not only $1,361.37 for the July 1 to August 8 period, but an additional $1,101 25 for the 30 days after notice. So it seems like their 'Final Billing" (attached) is correct. That would mean that you • owe them $2,462.62. However, I did not just rely upon their calculations, but carefully read the whole contract Their fee is based on 'an annual rate of the greater of eight -tenths of one (1) percent of the average quarterly net assets in the portfolio, of $10,000.00 ...." (emphasis added) Keep in mind that Longer Investments sent a letter to Ashland Management, Inc. that was received on August 7, 2002 This letter closed the account and instructed Ashland to transfer all funds to the Northern Trust Company. Very soon thereafter, Ashland must have transferred those funds so the assets in the portfolio would be zero. That would drastically reduce the amount of average quarterly net assets in the portfolio. Therefore, I believe Ashland has miscalculated their final bill since they computed their 30 days after notice on $1,651,872.72 of assets that were no longer in the portfolio. In addition, the calculation used for July was based upon that months' average ($1.607,591.09) rather than the quarterly average which would be about 40% of that figure (since for the last about 8 weeks of the quarter the balance would be zero) With your permission, I will write to Ashland to inform them that they need to readjust their bill. You will probably end up having to pay not on the percent of the average quarterly assets, but the $10,000.00 annual fee. You would owe slightly more than 70% of the quarterly payment of $2,500.00 ($1,750.00) by my estimation. or • • • 7 ry- • ASHLAND MANAGEMENT INCORPORATED NEW YORK TELEPHONE: (212) 400-3500 NEW YORK FACSIMILE: (212) 425-6026 December 8, 2003 Via Federal Express Kit Williams Fayetteville City Attorney The City of Fayetteville, Arkansas 113 W. Mountain, Suite 302 Fayetteville, AR 72701-6083 475 Pa venue South, 32"e (Floor, New 2'ork10016 Re: Fayetteville Fire Pension & Relief Fund Dear Attorney Williams: Pursuant to your request dated October 30, 2003, attached please find a copy of the agreement executed April 3, 1998 on behalf of the above referenced account. I apologize for the delay, but we have moved our offices and this filed was stored off site. Thank you for your attention to this matter and should you have any further questions, please do not hesitate to call. Sincerely, Kirsten Kavanaugh Office Manager /kk • enclosures INVESTMENT ADVISORY AGREEMENT between FAYETTEVILLE FIRE PENSION AND RELIEF FUND and ASHLAND MANAGEMENT INCORPORATED Ashland Management Incorporated 26 Broadway New York, NY 10004 Gentlemen: Please establish an Investment Advisory Account (the "Account") in the name of Fayetteville Fire Pension and Relief Fund (the "Client"). The account is to be governed by the following agreement (the "Agreement"): 1. Ashland Management Incorporated (the "Adviser") will give advice, based on Ashland's investment strategy, of which the Client is aware, on a continuing basis, with respect to the investment and reinvestment of all cash, securities and other property in the Account, taking into consideration the specific investment needs and objectives of the Client as the Client communicates them to the Adviser. In addition to the continuing supervision of the portfolio of the Account by the Adviser, the Client will receive the benefit of the Adviser's quarterly valuation of the Account, including a valuation of the Account at current market prices or upon such other method of valuation as the Client shall reasonably request. Representatives of the Adviser will also be made available to meet the Client periodically and to review with the Client the Account and its performance. 2. The Account shall consist of such cash, securities and other property, listed on the attached Schedule A, which has been or will be delivered to the following: (1) a custody account, in the case of a bank or trust company or (2) a brokerage account, in the case of a member firm of the New York Stock Exchange Inc.: It is understood that the Adviser will have trading authorization during the term of the retention hereunder. The Client may add or withdraw cash and/or securities from the Account from time to time, upon giving the Adviser five (5) days notice as to such changes. 9/96 • • • • i 3. The Adviser is hereby granted complete, unlimited and unrestricted authority by the Client with respect to the investment of the Account. Such authority shall include, without limitation, the authority, at the Client's expense: (i) to invest and reinvest the assets in the Account at such time and in such manner as the Adviser in the complete and unlimited exercise of its discretion shall determine or elect; (ii) to purchase and sell securities and/or other investments including option contracts in the Client's name, for the Client's account at the Client's sole risk; (iii) to arrange for the delivery of and payment for any such investments, including securities, bought and sold for the Client's Account; and (iv) in effecting any such investments, reinvestments, purchases and sales, and unless the Client designates in writing a particular firm or firms, to use and obtain the assistance and services of such brokers, dealers, investment bankers, underwriters and other firms, enterprises and services as the Adviser in the complete and unlimited exercise of the Adviser's discretion shall designate or select. The Client hereby grants to and confirms that the Adviser has the authority to act as the Client's attorney under a power of attorney for the purposes of effecting or accomplishing in the name of and on behalf of the Client any of the foregoing matters or any matters which are the subject matter of this Agreement. °� / e. shall receive as compensation for its services a fee at an annual rate of the greater G one (1) percent f the average quarterly net assets in the portfolio, or $10,000, payable quarterly in arrears. ie initial fee shall be pro -rated to the last day of March, June, September or December which shall occur after the retention is commenced. In the event of termination, the advisory fee will be pro -rated based on the number of days this Agreement is in effect during the quarter. Unless otherwise directed by the Client in writing, the Adviser is authorized to charge the amount of the quarterly fee payment by a deduction from the Account and to send to the Client a statement indicating the amount of the fee charged. • 5. The Adviser shall use its best efforts in the performance of the investment advisory services. All recommendations and instructions made by the Advisor, will be based upon information from sources which it believes to be reliable, but whose accuracy is not and cannot be guaranteed. Such information may or may not have been independently verified by the Adviser. The Adviser shall not be liable for any loss arising from any action, omission, information or recommendation in connection with the Client's investments or this Agreement unless such loss is caused by gross negligence, willful misconduct or violation of law on the part of the Adviser. • 6. The Adviser will keep in strict confidence all information about the financial affairs of the Account. The Client agrees to use the Adviser's information and advice only in connection with the operation of the Account which the Adviser is managing. 7. The Client agrees and understands that unless the Client designates a brokerage firm through which securities transactions for the Account of the Client will be effected as contemplated by the • 9/96 immediately succeeding paragraph, the Adviser has the right to select the broker to execute orders to buy and sell securities for the Account, and that the Adviser shall use its best efforts to select a brokerage firm whose commission charges are reasonable in relation to the value of the brokerage and other services as the Adviser determines in good faith. The Client has designated /tI&C/2ILL LfXd,4 as the brokerage firm through which securities transaction for the Account will be effected. The Client agrees that the negotiation of the brokerage commissions and other fees to such brokerage firm shall be the sole responsibility of the Client and that the Adviser shall have no liability or obligation with respect to such brokerage firm or to commissions or fees payable to such firm. The Client further agrees and understands that any such commission charges, whether to a brokerage firm designated by the Client or selected by the Adviser, shall be in addition to any advisory fee it pays to the Adviser, and shall not be used to offset any such advisory fee. 8. The Adviser represents that it is registered as an Investment Adviser under the Investment Advisers Act of 1940. 9. The Client understands that differing investment objectives, tax and other factors affect the desirability and timing of particular transactions, and the Clients of the Adviser, as well as the Adviser itself, its officers and employees and members of their families and affiliates, may hold and have transactions in securities which are purchased or sold for the Account or with respect to which investment advice is given hereunder. The Client consents to such transactions, if not in violation of applicable law, provided that the investment advice hereunder is at all times given in good faith. The Client has been furnished information regarding the Adviser's strategy of investing and represents that he or she understands and is aware of the Adviser's method of operation of such strategy. However, nothing contained herein shall require the Adviser to adhere to any strategy if, in good faith, it determines that a change is warranted. 10. As required under the Investment Advisers Act of 1940, it is understood that the Adviser will not make any assignment of this Agreement without the Client's consent. However, the Client hereby consents to transactions in the shares of Ashland Management Incorporated between the two founding principals of the Adviser, Charles C. Hickox and Parry v. S. Jones. 11. The Client has set forth on Schedule B of this Agreement: (a) any specific investment objectives or any funding requirements of the Client which are applicable to this Agreement, (b) any restrictions imposed by law or by any constituent document of the Client on the types of investments which may be made by or for the Account of the Client. 9/96 _3_ • • • 12. The term of this Agreement shall commence on the date hereof and shall continue until terminated at any time by either party upon not less than thirty (30) days prior written notice to the other party. 13. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. 14. If any provision of this Agreement is found to be illegal or void, all other provisions to this Agreement will remain in full force and effect. Nothing contained in this Agreement shall in any way constitute a waiver or limitation of any rights which either the Client or the Adviser may have under any applicable federal or state securities laws or regulations. {rAY�Tf£t1 cLE_ ; z�. (Print Name)'r�zNS«ia 4 K£L f. F Fttnii) Address Agreed to: Ashland Management Incorporated Very truly yours, • 9/96 ASHLAND MANAGEMENT INCORPORATED . CLIENT STATEMENT FINAL BILLING Account'. Fayetteville Fire Pension and Relief Fund Account #56305G88 Investment Advisory Fee: Asset value at July 31, 2002 $ 1,607,591.09 (July 1, 2002 to July 31, 2002) Fee: (.0080 x 1,607,591.09 x 1/12) $ 1,071.73 Asset value at August 8, 2002 $ 1,651,872/2 (August 1, 2002 to August 8, 2002) Fee: (.0080 x 1,651,872.72 x 8/365) $ 289.69 Advisory agreement terminates 30 days with written notice dated August 8, 2002. Pro -rated fees through September 7, 2002. (.0080 x 1,651,872.72 x 1/12) Total Due: $ 1,101 25 $ 2,962.62 • • • • State of Arkansas County of Washington I, t4 -0v 5 FIREMEN'S PENSION & RELIEF FUND AFFIDAVIT )ss: ) ILtdi>€-Live , do solemnly swear that: I am a former firefighter for the City of Fayetteville, Arkansas, Fire Department. I am the spouse/former spouse/widow of a former firefighter for the City of Fayetteville, Arkansas, Fire Department, and that I have not remarried since becoming eligible for benefits. I am an eligible dependent of a former firefighter for the City of Fayetteville, Arkansas, Fire Department and submit the attached school affidavit as verification of my school attendance. 2. I presently receive benefits from the Fayetteville Firemen's Pension and Relief Fund and I am eligible to continue receiving the pension fund benefits as governed under state law. 3. My personal information is as follows: Address: /&O `t", ,C%Mr. £Lw( /9694te% Frtem /ny7en kgr; 3,9.671 rr30 Telephone: _(q7'/) A67 -5a 7 Social Security No.: '/ 30 - rl i - .244 Birth date: 74C-51 PLEASE LIST ALL BENEFICIARIES BELOW: (complete only if you are the retiree) NAME SOCIAL SECURITY No. BIRTH DATE RELATIONSMP (Lim/xi-4 Lee/Ga 930-37-,2605 3-/1--4 z wire- hedhest 4/31-15---5/76 i0-620-1.3 Sari. le 4,,,,/_•day of th • 2 Oct an d 0) is s� $ '�G . CO AFFIANT (signature) Parent/Guardian Signature me, a Notary Public, this AIL day of CRIBED AND SWORN TO before fission Expires: (This affidavit is required annually by the Firemen's Pension and Relief Fund Board of Trustees and must be properly executed and returned to the Fayetteville City Clerk, 113 West Mountain, Fayetteville, Arkansas, 72701 by January 31n of each year.) Notary Public (Revised 11/03) ARKANSAS DEPARTMENT OF HEALTH DWlsloe 01 VIM Records CERTIFICATE OF DEATH F • oy Etc.(, Male le . . Decenher 9. 9009 I. SOCNL XCUII.iY INMPEP MACE -Last Bann -L ..WEN 11 f Allys- dv 6 -DATE RBNrn - EMs k Dar alai' '- - -' K,FFhw SR> •. ••• ._. OA the GaN* d es✓il9Gn ander invest/9MS1, HMV rynan. da eA maned M ae lone int PIA Mble -L 37. DATE SIGNED (SN+l Om real; .. '. 429-46-5446 IyeMsl 75 ..1NYia6l.. pry[.. ; JW.', IbN[1-MM I ._.IMalY. Meg_ July 19 19, 1928 Fo'er FbeNII COVIWf tiazel Valley Aikansas E HAS DESCENT A(N M U S la PACS OF DEATH Ow ay MC , " nIED FORCES' - - - ref N a re. .No NOSgTµ _ 11 agates IAERpAaMex ,-.DDA OTHER `. NMaPg HPM .'.MUNv TOwr lSia[h7 - 9L FACILITY NAME -10 nolLASEIRton. gveNttl aid number) Washington Regional Medical Center _ 5c. CITY, TOWN. OR LOCATION OF DEATH _Fay tev111e. N. coth ot'DEATS '; Washington '10 MARITAL STATUS _WNa II. S.AN.YM LASE + • Neel Harped. Moored. Ill wik. gw maiden rumel - , DVEed(sp«'m, ' Married.... Madge Watson. 12a. DECEDENT'S JSWLGCCIRATIOO. I I210R00 OF A.S.NESSI,0S1N1 (Give hind at waft clone awing most Of working h, • *,n; Dorwt,ae nb�Mreman City _Security. Guard Hospital - 1L Ie SOEN'.i — S'AWF -Arkansas NM INIv W Washington Ik all /DAN OR ,DIgw U Fayetteville2035 AH I]) STREET O MAIDEN Erstan Street - ' kis-•xSgEPi-1 1.wNTs'Savoy 11 DO CODE. ,s-*SQCEOEHT Cr MMW*C Dsllfi1.+--1 5 RACE - AnewMan.. ,, C.na1 M✓ 1E DECEIXNIS EQCATo. 'S.FIs M[ b N.O rc - (Strep ontA es- 0'W, Ca' .N (Ns N MY yes -' 72701 SpecAh. ernMut. Wee,[. X. M V' .. Re 1=[e't1. er - 'I. - white ETomereardSenvNry 012) '- 8 Cag. Its n 5. l v. FAWERsHAME.(FnL Mt*, Arl John Henry Schader 1e ✓OTO/S NM[F &Wa M S✓vna, 1Fry , - - Flov Thomas - • - - _ -_.. - . 1ga. INFO/WARTS NAME (Type'aini .. • - Mo4x_Schssler 19b. MAIMING ADDRESS Rand ISUM nd umb out Number ON St R. lw COMM 2035 Er s ar_S_tuet,-Feys1J<evllle Arkansas 72701 - .TE nP OISPOSITICN (M 411. Dail. rear) . 21k_ RACE or dL0511 pm /Nue M seed•), [nlnala{ an 700 LOCATION- Cat 0, Taw Slat/ axr PPM Sunset Cemetery ' Near WinslowArkansas 2'b LCENSE MIE03ER I22a NAK MC ADDRESS OF FU'IERAL H' E 21a. LK£YSEM _I Moore's,Chapel, P.O. Box Y - Fayetteville, Arkansas .72702 -. 18 e,MCho Hated Tlµ¢SwS as sox or:aFoiYav" i Aumaiw/a '.. MMEDIATE CAUSE ' IFnm aseaau cadte yer dealt SlW b,eany lm DPdew¢ any, leadmi 1a ternedrale w Erre. cause Ener UWESFIND CAUSE IOxaa ✓mut N brant atm •resumm2 n aaMi [AST DUE TO ion AS A CON OUENCE OFI II Tr WO S Cort Fr° MAE 10100 A4 A CONSEQUENCE 00 pos4-6 turd -live- E 1d.A T4 WATER ,Of DEATH X4 .�, n AIL'E' TI le MSC'![ WSW JMLIY CCM/RAID ,3i MACE Q MIIP tram. R 1500vr) ,.. or..4nDe. ,Y.e arta IMIe a Eve R,u' 1I. N+^[. aR skeet coon, ole . CH' eve kaki 13. -T1ME OF•DFITH , 1004.S1',AM Y DATE y ;D DEAD 12-1. 103 EMs k Dar alai' '- - -' 25- s-cASFRFFEnRED TO ME• 11CIIAMINER'CORONE D,.✓Ha _ 1O - MEDICAL EXAMMER' re COISQERO*"' STWa Or OA the GaN* d es✓il9Gn ander invest/9MS1, HMV rynan. da eA maned M ae lone int PIA Mble - - -. 37. DATE SIGNED (SN+l Om real; dire N a d tss,I awl weans rANd. 30, C€RtIFYING PHYSICIAN!' ' " To the heti W jF_mw�Metye death maned a'. me any. are, arN'dxe, aM ate to mw "' 5.'REGISTEnEDNNTSE M_Sspre uyl )lea( L�]^"��;. 'need. / ' Siren net ' gin 4 ]9. DATE SIGNED Writ. QY./rata ti(`Y(03 IN. -RAN Ik wO M9MTRSSQPEP3MYMO.GOry TED CA x'Ppken', Wood 3264- N. North �.DISlAbile:"' , i'R 15T0-CERnfYTRAT'THt ]EO -Dunn rryO Pant; ••• Hills Blvd. Fayetteville Arkansas_ 72703 LOP'? UI- IND 'aY1177t0Ei h%2► :i""" ABOVE Ts A I FR.ItJaiULUHHtL•I E 1 't ;A,.) Mdip fArA.� Fe'l3''"� IS. It lU ) rra A'REPRODUCTION OF THIS DOCUMENT RENDERS R'VOID AND INVALID. DO NOT ACCEPT UNLESS't EMBOSSED SEAL OF THE ARKANSAS. DEPARTMENT OF HEALTH IS PRESENT. IT IS ILLEGALJO ALTER OR COUNTERTEIT THIS DOCUMENT Social Security Bill Causes Concerns HR 743, as proposed by the Senate Finance Committee, has caused great concern among public pension organizations. As repotted by NCPERS in the October, 2003 Monitor, the bill opens the door to mandatory Social Security coverage and potentially causes pension plans administrative nightmares. NCPERS sent a letter to the Chairman of the Senate Finance Committee, Sen. Grassley (R -IA) and ranking Democrat, Seri. Baucus (D -MT), spelling out our concerns about HR 743. A similar letter was scnt to the Chairman (Rep. Shaw, R- FL) and ranking Democrat (Rep. Matui, D -CA) of the House Social Security Subcommittee. In the letter, NCPERS stated, "The National Conference on Public Employee Retirement Systems (NCPERS) . is writing to urge your reconsideration of two provisions of HR 743, The Social Security Program Protection Act of 2003, as passed by the Senate Finance Committee. NCPERS is opposed to the inclusion of Section 416 of the Senate version of HR 743. This provision would extend to all states the authority to operate a divided retirement system for Social Security coverage. Under this system, a referendum could 'be held whereby existing employees may individually choose whether they want Social Security coverage, provided that all' newly hired employees are required to participate in Social Security. Under current law, 21 states are allowed to operate a divided retirement system. The House version of HR 743 extends this authority only to the state of Kentucky, which has repeatedly requested the option to operate a divided retirement system. Stales and localities have routinely expressed opposition to mandatory Social Security coverage and. are concemed That the extension of this authority to all states could have a destabilizing effect on state and local pension systems. We urge you to remove the language from the Senate version of the bill and allow the House language to prevail in conference so that the state of Kentucky can move forward with its efforts to harmonize Ls retirement systems. Additionally, Section 210 of the Senate version of HR 743 is extremely problematic and raises substantial concerns for State and local governments, their retirement systems and millions of retirees. This provision .would require State and local government pension paying entities to indicate on a modified form 1099-R whether a retiree's pension is based in whole or in part on earnings not covered by Social Security. This federal payroll tax -related data is not pertinent to -state or local retirement benefits and is not currently collected by these pension systems. Such reporting would likely do too little, too late to assist the Social Security Administration in better estimating potential . offsets to Social Security benefits of governmental employees and would only exacerbate the current problem of the Social Security Administration providing inaccurate benefit statements to employees and informing retirees after -the -fact that they arc subject to such offsets. We, therefore, strongly urge the removal of Section 210 from the legislation." A special NCPERS Legislative Alert was posted on our website (www.NCPERS ore) and emailed to all remembers. NCPERS members were asked to contact their Senators immediately and ask them to stop consideration of NR 743 by the Senate until these provisions can be reconsidered. As we go to press, consideration of HR 743 by the full Senate has been delayed because of the objections from two Senators, Sens. Voinovich (OH) and Hutchison (TX). However, it is important to continue contacting your Senators to ensure they understand our concems about this legislation. NCPERS Launches New Website NCPERS has launched a new, improved website for public pension trustees, administrators, state and local officials, and investment advisors. Our easy to navigate new desigois-greatly expanded and provides more information. The address remains the same: www.NCPERS org The website is a great place to check the status of over 250 bills before Congress that impact pension funds. Get NATIONAL CONFERENCE ON PUBLIC EMPLOYEE RETIREMENT SYSTEMS information on NCPERS issues and arguments to make to your representatives. Health care issues are featured as well as legal issues, member benefits and the latest information about our conferences. A comprehensive pension resource center will be added, allowing you to search for articles, publications, websites and specialized pension resources available in one location. Access to this pension resource center will be limited to NCPERS members - using your email address.. We urge you to visit the new website. Also, please provide NCPERS with your email address so we can send you legislative updates and ALERTS. Events happen so fast in the Nation's Capitol that the NCPERS .website and email alert are the best ways to convey this information in a timely fashion. If we don't have your email address, please send it to info@NCPERS.org.. Medicare Prescription Drug Bill Stalled . Speaker of the House Dennis Hastert and Senate Majority Leader Bill Frist (TN) will meet on Nov. 12 to try to move the stalled Medicare Prescription Dmg•Bill that has been in conference since July. While both chambers moved swiftly to pass the bill earlier this summer, the legislation has languished in conference due to partisan and bi- caramel politics. Congressional staffs have been instructed to prepare a draft bill that would include all the agreements thus far. However, the document will have lots of "blanks" where conferees have yet to find consensus. • Topping the long list of unresolved issues is a conservative -House backed proposal that places traditional Medicare in direct competition with private health plans. This. provision, known as "premium support" would make the fee- for-service Medicare (Parts A & B) compete on price with private health insurance. Conservative House Members have said that premium support is necessary to keep the price tag of this bill within $400 billion. They have threatened to withhold their support ,of HR 1 if premium support is not included in the final bill. Senate Democrats have drawn a line in the sand saying the Medicare Prescription Drug Bill is DOA if it comes to the Senate with the premium • support provision: The Senate Democrats are united. in opposition to premium support because they fear it would privatize Medicare and undermine one of the most popular and successful federal programs. A panel of the National Academy of Social Insurance agrees with the Senate Democrats, warning in its recent report, The Role of Private Health Plans in Medicare" that pitting Medicare against private plans could result in - premiums ' increasing to the point that traditional Medicare would become too expensive for most beneficiaries. Another high profile issue conferees must decide is whether to allow the re- importation of drugs from foreign countries. 2004 Pension Plan Limitations Announced The Internal Revenue Service announced the pension plans limitations. for 2004. Some limitations were affected by the cost -of -living adjustment, while others • • increased because of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). • • Elective deferrals •to a deferred compensation plan [403(6), 457, or 401(k)] increase to $13,000; • Catch-up provisions (those 50 'and above) for the above deferred compensation plans increase to $3,000; • Contributions to. an IRA remain at $3,000; • Catch-up contributions' (those age 50 and above) to an IRA remain it $500; . , • Contributions to a SIMPLE IRA increase to $9,000 and catch-up contributions (those .50 and above) increase to $1,500; - • Defined benefit dollar limits increase to $165,000; • Defined contribution plan contribution limits increase to $41,000; • • Annual qualified plan compensation limits increase to $205,000. Social Security Increases The Social Security Administration announced increases in Social Security based on the cost -of -living increases. The annual COLA for retirees will be 2.1 percent, payable beginning on January 1, 2004 The taxable wage base for Social' Security will increase to $87,900 in 2004, up from 587,000 in 2003. This increase is the 6.20 percent paid into the Old Age .Survivors and Disability. The.Medicare portion, 1.45 percent, applies to all earnings. Seniors covered by Medicare will also face higher rates in 2004. These increases will affect premiums and deductibles. Premiums for physician services will jump 13.5 percent to $66.60 per month in 2004; deductibles for hospital inpatient services will rise 4.3 percent to 5876. , Health care premiums for seniors are estimated to increase by 12 percent for 2004. Buying Drugs in Canada Could -Save Millions ., Illinois Governor Rod Blagojevich plans to save the state of Illinois over 591 million by importing drugs from Canada for state government workers and retirees. Gov. Blagojevich is taking on NCPERS, The Voice for Public Pensions November 2003 the Bush Administration and the Food and Drug Administration that opposes importation of drugs and is responsible for enforcing regulations that currently prohibit importatipn of drugs from other countries. The argument by Illinois is that the state can save millions of dollars by purchasing these drugs from Canada -- the exact same drugs that sell for much higher prices in the United States. Maine Senator Olympia Snow (R) stated that if Congress. does not allow seniors to import drugs from Canada, "it is missing an .opportunity to allow the American people to have access to lower cost prescription drugs." The House of Representatives voted in July to allow the importation of drugs from 25 industrialized nations. The vote, 243-186, sent a message to the members working on the Medicare prescription bill that they wanted this provision included in the final Medicare bill, which is stalled at this time. Other states; such as lowa and Minnesota, are looking at similar plans to import drugs to save on their spiraling medical costs. NCPERS Health Care Task Force Meets NCPERS Task Force on Health Care Benefits will convene its second meeting on November 13-16 in Washington, DC. Since the Task Force last met, our nation's health care system has worsened. The number of uninsured Americans has increased from 41 million to • 43.6 • million. We're coming out ohird straight year of double digiti s in health care costs. And t ranee premiums, co -pays, and deductibles are eating up more of retirees' pensions. At this year's meeting, the Task Fora will consider the benefits of joinini health care coalitions to further NCPER. goal of maintaining affordable health can for retirees, options for pre -funding health care, the, role of collective bargaining in health care, and proposal: for an NCPERS health care bill to b. introduced in the next session o Congress. New Task Force recommendations wil be issued in December. NATIONAL CONFERENCE ON PUBLIC EMPLOYEE RETIREMENT SYSTEMS November 20 . State Pensions Take Action on Troubled Mutual Funds Citing lack of confidence, major public sector pension funds have terminated business with . certainmutual funds accused of illegal practices.' Massachusetts, Pennsylvania, Texas, ' Rhode Island, Nevada, and Vermont slate. retirement systems, and New York and Vemtont Teachers' pension plans have either fired Putnam Investments or suspended business with the firm.' CalPERS and pension funds in.Florida, Connecticut, Washington, and Oregon are • evaluating the situation and may also • pulled their money. In related developments, the Colorado Public Employees' Retirement Association has voted to remove the Denver-based Janus Fund, • citing allegations of improper. trading at the mutual fund. In Wisconsin, the state has hired a law firm to conduct an independent audit-of:the- states'college-- savings .plan managed by Strong Financial Corporation. Richard Strong, founder of Strong Financial, is accused of improper trading. Wisconsin Wisconsin is joining the growing ranks of states exploring whether to import drugs from Canada. State officials met with representatives of Canadian pharmacies about importing. prescription drugs, even though the practice is illegal. Drugs are up to 50% cheaper in Canada than in the , US because of government price controls. Wisconsin spends approximately $730 million annually on prescription drugs. • - Oregon Jim Voytko, the state's PERS Director, resigned on October., 30. Citing differences with the Public Employees Retirement . System's new five -person board, Voytko quit the state pension fund that be lead for 3'f. years. He was put off • by the much more hands on approach of the board. Voytko had been a veteran money manager when he became executive director in March ' 2000. However, coming in at the top of stock market bubble meant a long ride down for Voytko and PERS aslhe fund faced a $16 billion long-term shortfall in 2003. Ohio Milliman USA, one of the largest actuarial consulting firms in the United States •has -k recommend - to :the -Ohio Retirement Study Council that benefits should be trimmed and eligibility requirements tightened to improve the financial outlook for the State Teachers Retirement Systems, Ohio Police and Fire Pension Fund, and the School Employees Retirement ` Systems. Specifically, Milliman -recommended rolling back several benefit improvements made.in recent years, such as an automatic 3% COLA adjustment for. retirees, and requiring public employees to work longer for full pension benefits. The firm also recommended that the pension funds also redirect money they currently spend to subsidize retirees' health care insurance back to the retirement funds. Milliman made these recommendations to the agency that reviews legislations affecting Ohio pension systems after concluding that these funds had unfunded liabilities beyond the industry standard. • Ohio's public pension funds would face forced' investments with "home grown firms" if pending legislation. is. enacted. HB 227, a bill designed to increase oversight of Ohio's five pension systems, would also require that: • • 50% of the money invested externally must be placed with a firm that has its headquarters in Ohio or has at least three offices employing 15 or more people in the state. • 70% of stock or bond trades would need to be made with firms that are either ' based in Ohio or have officers in the state. • Another 10% above the above designations must be placed with minority firms that also meet the foregoing Ohio -centric criteria. Currently, just four of the top 100 US • money managers are headquartered in Ohio, while only fifteen or so of the top 100 money management fines would meet the criteria of having three separate offices in Ohio employing a total of fifteen persons. Neil Toth, Director of Investments for the $56 billion. Ohio Public Employees Retirement System, testified before the Banking, Pensions and Securities Committee that limiting the choice of managers "would potentially have very serious impacts on returns and asset -management fees." Preliminary estimates on the •cost to Ohio pension plans. to comply with the investment provisions of HB 227 could exceed 5150 million a year. 1 NCPERS, The Voice for Public Pensions November 2003 Jack Germond Rocks! Jack Gennond, syndicated columnist and well-known political commentator, will keynote the 2004 NCPERS Legislative Conference on February 9-11. Jack Germond will give you a unique perspective on today's political climate. Germond has wri several informative and amusing books on the peculiarities of national politics. He is also a political analyst for CNN and Washington correspondent for the Baltimore Evening Sun. He will share his years of political reporting and observations about Capitol Hill and the White House and what he sees happening in 2004 that will impact you. NCPERS, The Voice for Public Pensions November 2003 • d �s. 5888;rul dm -1 : 4444 01101