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HomeMy WebLinkAbout1986-05-13 Minutes• • MINUTES OF A POLICE PENSION BOARD MEETING A meeting of the Policemen's Pension & Relief Fund Board was held on Tuesday, May 13, 1986 at 4:00 p.m. in Room 327 of City Hall. PRESENT: Board Members: Hoyt, Linebaugh, Mashburn, Mitchell, Murphy, Roberts and Spencer; City Clerk Kennedy, Public Safety Director Coates and Police Officer Gerald Bradley CALL TO ORDER The meeting was called to order by Acting City Manager Murphy. MINUTES It was moved by Hoyt, seconded by Mashburn and passed unanimously, to approve the minutes of the April 17 meeting. NEW BUSINESS Murphy stated the purpose of the meeting was for the Board to make a decision regarding which investment firm to choose as a money manager. Linebaugh noted that Roberts and Mitchell had'not been present for the presentations and he pointed out that there had been discussion at that time regarding the actuarial report. Linebaugh said he thought there were misunderstandings made of the Merrill -Lynch report to some Board members regarding the actuarial soundness of the Fund. Linebaugh assured the Board that the pension plan is in good shape and that, according to State Auditor Cathryn Hinshaw, the plan is one of the top in the State. Linebaugh. said it was expected the plan would be able to pay all of its benefits. Linebaugh added though that he would not recommend making any risky investments. Murphy told the Board that, even though several different investment packages had been presented, ranging from more conservative to more aggressive, he thought Merrill-Lynch's recommended option was more aggressive than that which was chosen by the Fire Pension Board. Mike Mitchell said he had talked to the fire fighters and learned that they were very satisfied with their investment program. Mitchell said he had taken a survey of the police officers which shows they wish to have a more aggressive program. •Police Pension Board May 13, 1986 Page 2 • • Hollis Spencer said .he thought the retirees should have been invited to the presentations, and that this request had been made at the last Board meeting. Roberts, seconded by Hoyt, made a motion to employ Merrill -Lynch to invest $500,000 and to employ A. G.'Edwards to invest $500,000. Roberts noted that at the last meeting the Board had agreed it would invest only $1 million with a money manager. In answer_to a question form Hoyt, Linebaugh explained that the standard agreement, such as the one the Fire Pension Board entered into with RNC, states "...this arrangement for management to manage my securities portfolio may be cancelled by me at any time by delivering written notice to the management.' It is understood that I have the right to cancel within five business days after execution without obligation." Hoyt spoke in favor of the motion, commenting that, although he was for the hometown people getting the money, he pointed out that the money is not being invested locally but is invested on Wall Street, and the hometown money goes in the pocket of the man that runs the investment firm. Hoyt said he thought this would give both•investment firms a chance to see what they can do, that the Board should then reassess the matter and later decide to choose one of the firms. Roberts said he thought it would be fair to invest the money half-and-half with both firms. Murphy pointed out that Yada and Williams from Merrill -Lynch will be turning over the investments to a money manager, whereas A. G. Edwards will handle the investments themselves. Dr. Mashburn asked about guidelinesfor'the investment program. Linebaugh suggested another meeting be held during which guidelines can be discussed with the firms the Board has chosen. Linebaugh pointed out that, by choosing to have two investment firms rather than one, the Board may be paying a little bit more in management fees. The motion passed, 6-1, with Mashburn voting in the minority. Dr. Mashburn commented that if the Board had chosen to use only one investment firm, he thought the firm could earn more for the Fund. He then said that perhaps choosing two firms might mean they would both work harder. It was decided that the next meeting would be held on Tuesday, May 20 at 4:00 p.m. • • • t Police Pension Board May 13, 1986 Page 3 Eldon Roberts stated he did not think the Board could leave the remainder of its money invested in Certificates of Deposit. He suggested investments be made in Zero Coupons. Linebaugh explained the staff is only authorized to handle Certificates of Deposits and Treasury Bonds and Notes. He suggested the Board might want to consider going out on a bid basis with various investment firms and local banks to obtain the best invest- ments on the remainder of the Fund. Linebaugh said that Certificates of Deposit are also available from large national banks from which have higher earning rates. Murphy told the Board that City Manager Don Grimes would return from his sabbatical on June 1. Murphy said that he had enjoyed serving on the Board and that he had learned a lot. Murphy said he was pleased to see the way the Board has conducted itself in its handling of the Pension funds. ADJOURNMENT There being no other business, it was moved by Spencer, seconded by Roberts and passed unanimously, to adjourn the meeting. The meeting was adjourned.