HomeMy WebLinkAbout1986-05-13 Minutes•
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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.
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May 13, 1986
Page 2
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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.
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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.