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HomeMy WebLinkAbout1989-11-17 Minutes• • 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. • • 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. • 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.