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HomeMy WebLinkAbout1988-01-21 Minutes• MINUTES OF A POLICE PENSION BOARD MEETING A quarterly meeting of the Fayetteville Police Pension and Relief Fund Board of Trustees was held on Thursday, January 21, 1988 at 4:00 p.m. in Room 326 of City Hall, 113 West Mountain Street, Fayetteville, Arkansas. PRESENT: Treasurer Scott Linebaugh, Secretary Eldon Roberts, members Rick Hoyt, Jr., Dr. James Mashburn, and Hollis Spencer. Also present were City Clerk Suzanne McWethy, Accounting Supervisor Zelda Parson, and Bill Conrad from A. G. Edwards and Sons ABSENT: Chairman Jim Pennington, member Mike Mitchell MI NUTES It was moved by Roberts, seconded by Mashburn, and unanimous, to approve the Minutes of the last meeting. OLD BUSINESS Bill Conrad, speaking investment. He said with 63.6% of it being A. G. EDWARDS REPORT for A. G. Edwards and Sons, reported on the Board's the current fund balance as of'-yesterdayiwas : $444,373, in cash. INVESTING ADDITIONAL FUNDS Linebaugh said at the October meeting the Board approved his transferring $200,000 to Merrill -Lynch and $200,000 to A. G. Edwards, when the time looked right (after funds became available and before December 31). He said, when the market crashed shortly after that, pension board members were contacted and it was agreed -that Linebaugh should invest the funds in T- bills, which he said has been done. He asked the Board if they wanted to give additional funds to Merrill -Lynch and A. G. Edwards when the T-bills mature. Zelda Parson distributed copies of the status of investments. It was clarified that investments would mature in May and June of 1988, but Linebaugh said they could be sold early if the Board wishes. Following discussion, it was moved by Dr. Mashburn, seconded by Roberts, and unanimous, to leave the investments in place until April, when the Board meets again. Police Pension Board Minutes of 1-21-88 Page 2 REPORT ON INVESTMENT WITH M -L Eldon Roberts reported that Merrill -Lynch had informed him yesterday the Board's investment was worth $426,000, with roughly 420 of it in cash. INVESTMENT TO MATURE Zelda Parson reported an investment would mature on January 28. She asked the Board if they wished to split that investment over a short term. She said the Fire Pension Board added Bank of Fayetteville to their bidders list, and they won one of the Fire Pension bids. Linebaugh advised the Board they couldn't ask an investment firm to purchase T-bills for them, unless a money manager is used. He said the Board was still permitted to use the banks or savings and loan associations to purchase T-bills. Following discussion, it was moved by Roberts, seconded by Spencer, and unanimous, to keep the funds at the banks and get the best rate, using the four local banks only. NEW BUSINESS Eldon Roberts introduced the problem of how to handle situations (specifically in the case of John Brown and Mark Hanna) where police officers left the department, withdrew their pension funds, and subsequently returned to be employed again by the Police Department. The question was what to do about the money which was withdrawn, and how it should be paid back. In the case of Brown, Roberts said he withdrew $1,365.56 on July 15, 1983 and was rehired. In the case of Mark Hanna, Roberts said he worked with the department for about eight years, left for about two years, and has been rehired. He said he withdrew $4,883.73 in June of 1986. Roberts said, with interest, Hanna now owes $5,604.86. Roberts said he checked with Cathyrn Hinshaw in Little Rock and she informed him there is no law but it was a policy decision to be made by the Board. Hollis Spencer pointed out the officers could not be reinstated in the pension plan until the funds are paid back. Linebaugh said the Fire Pension Board had the same problem. Zelda Parson • .• Police Pension Board Minutes of 1-21-88 Page 3 said research showed it was up to the Board what limit they want to set for the employee to pay the funds back. Linebaugh asked if the officers would be willing to pay the money back over a year's period with interest. It was pointed out that Brown had been back in the department for over two years already. Dr. Mashburn asked if they could have the option to either (1) pay back the amount owed with interest; or (2) not pay it back but start over in the pension plan as if it were "day one". Roberts said he thought they should pay it back or they should figure on not counting the time towards their retirement years. Spencer said he thought the Board should establish a time for the officers to pay back the funds. Linebaugh quoted from the State law which reads: "...in the event a former member again becomes an employee of the same police department where previously employed, such police officer shall again become a member of the system and the credited service forfeited by him shall be restored to his credit, provided he returns to the fund the amount refunded to him plus interest from the date of withdrawal to the date of repayment." He said that law applied to members of the old pension system: rHe-;said the member can decide to become a member of LOPFI but has to remain in that system. Hoyt asked what the Board should do if the officers say they aren't going to pay the money back. Spencer asked how it would be handled if one of the officers had a disability. Dr. Mashburn asked if the Board could get an opinion from the City Attorney in writing. Hoyt agreed, and suggested the City Attorney be asked to draw up a sample agreement that would include the number and amount of payments in return for service credit. Roberts said if either of the officers were injured off the job they couldn't retire and draw disability because they don't have five years service right now. Hoyt suggested a payroll deduction could be used. Linebaugh suggested the Board decided how much time should be given for the payback. Hoyt suggested setting a maximum time period but allowing early payback. Dr. Mashburn suggested the officers each pay at least $1800 per year. Following further discussion, Linebaugh calculated that over a period of 24 months, Mark Hanna would have to make monthly payments of $255.36. Police Pension Board Minutes of 1-21-88 Page 4 Spencer said, before making an agreement, the officers need to be talked to and the law should be explained to them. He said they would probably be better off borrowing the money and paying off the debt. Dr. Mashburn said he did not think the Board should be in the lending business, and agreed the officers should borrow the money. He suggested they be given a time period such as 30 or 60 days. Spencer moved that the Board give the officers an explanation, give them thirty days to pay back the amounts owed. Dr. Mashburn said he thought, if the officers refuse to pay the amounts owed, the Board should call a special meeting and, in the meantime, get an opinion from the City Attorney. Hollis Spencer said he would talk with the officers and he asked Scott to construct a letter. Rick Hoyt seconded the motion and it passed unanimously. Dr. Mashburn asked Scott to request an opinion from the City Attorney. ADJOURNMENT It was moved by Hoyt, seconded by Spencer, and unanimous, to adjourn the meeting. Meeting was adjourned at 5:00 p.m.