HomeMy WebLinkAbout1989-11-17 Minutes•
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MINUTES OF A MEETING OF THE POLICE PENSION BOARD OF TRUSTEES
A special meeting of the Fayetteville Police Pension and Relief
Fund Board of Trustees was held on Friday, November 17, 1989, at
9:10 a.m. in Room 111 of City Hall, 113 West Mountain Street,
Fayetteville, Arkansas.
PRESENT: Chairman James Pennington, Treasurer Scott
Linebaugh, Secretary Eldon Roberts, members Rick
Hoyt, Jr., and Jerry Friend; others present were
City Clerk Sherry Thomas and Mike Kirkland of
Shearson -Lehman Hutton.
ABSENT: Dr. James Mashburn and Hollis Spencer
CALL TO ORDER
The meeting was called to order by the Chairman.
INVESTMENTS
Linebaugh stated that the Board has reviewed the three money
managers presented by Shearson -Lehman. They had decided to review
further the Madison group to see if they were able to customize
their investment plan to meet the Board's investment requirements.
The major difference between the three money managers is that
Madison invests in corporate bonds, and the other two stay strictly
in treasury bonds. Linebaugh stated that the Board had met at the
Shearson Lehman office and had a conference call with Madison Money
Managers. The City Attorney has reviewed the Madison Investment
Management Services Agreement, and he had no problem with the
agreement. It was agreed to add to the investment policy that the
investment manager will conduct a meeting with the Pension Review
Board at least yearly in person to review the status of the
account. Linebaugh outlined the areas the City Attorney had
highlighted as important for the Board to review. He also
outlined the Investment Policy of the Police Pension Board in
regard to the Madison Investment Advisors (a copy is attached to
the minutes).
It was decided to invest $500,000 plus its earnings of the initial
$1 million in corporate bonds. Linebaugh stated if the growth is
much above the $500,000 level, the Board should review the manager
and conditions and reevaluate the amount to be invested in
corporates.
Pennington suggested an additional guideline stating if more than
$1 million is invested in this account, then the investment policy
shouldbe reviewed to determine its adequacy.
4.
411 Linebaugh stated the main points to the investment policy was that
the Board was giving guidelines that all investments should be
rated "A" or better, only $500,000 of the initial $1 million was
to be invested in corporates, and giving the money manager a guide
for what the Board is expecting to achieve regarding earnings.
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Kirkland stated that Shearson had decided to make the total fee on
the Madison investment .8 percent (.5 for Madison and .3 for
Shearson). By charging this amount, the overall fee for all the
Police Pension investments is right at 1% which was the initial
goal. He stated the fee may be paid quarterly in advance. This
amount might be pulled from the account; therefore, he recommended
investing a little over the $1 million to cover the fees.
After the Board approves and signs the Investment guide, the
Madison Money Managers will have to do so as well.
Hoyt, seconded by Roberts, made a motion to approve the Investment
Management Services Agreement with Madison Investment Advisors,
Inc. The motion passed unanimously.
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Hoyt, seconded by Roberts, made a motion to approve the Investment
Policy between the City of Fayetteville Police Pension fund and
Madison Investment Advisors, Inc., as amended. The motion passed
unanimously.
Kirkland recommended an additional $3,000 be invested to cover the
fees. Hoyt, seconded by Friend, made a motion to invest
$1,003,000. The motion passed unanimously.
OTHER BUSINESS
Friend asked about the possibility of moving the pension fund
checking account that the monthly retirement checks are paid out
of to a Shearson account which would draw more interest. Roberts
stated the Board was not interested in this if it would cause
problems, but earning more interest on the approximately $65,000
balance would be attractive.
Pennington asked if individual checks could be written on the
Shearson account. Kirkland stated there was total flexibility with
the account, and any amount of checks could be written. The City
could either write one check per month and deposit in the current
account for distribution, or they could order new computer checks
with the Shearson account.
Pennington suggested that the possibility be explored and determine
if it is feasible. Everyone agreed with this suggestions.
ADJOURNMENT
There being no further discussion, the meeting adjourned at 9:38
a.m.