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HomeMy WebLinkAbout1993-01-28 Minutes• MINUTES OF A MEETING OF THE POLICE PENSION BOARD A meeting of the Fayetteville Police Pension and Relief Fund Board of Trustees was held on Thursday, January 28, 1993, at 2:30 p.m. in Room 326 of the City Administration Building, 113 W. Mountain, Fayetteville, Arkansas. PRESENT: Eldon Roberts and Jerry Friend; Retiree Hollis Spencer; Dr. James Mashburn; Mayor Fred Hanna; City Clerk Sherry Thomas; City Treasurer Glyndon Bunton; and Administrative Services Director Ben Mayes. ABSENT: Rick Hoyt CALL TO ORDER The meeting was called to order by Mayor Hanna. MINUTES Dr. Mashburn, seconded by Roberts, made a motion to approve the minutes from the January 15, 1993 special meeting and the October 29, 1992 regular meeting. The motion passed unanimously. OLD BUSINESS TOMMY HARTWICK City Clerk Thomas reported Tommy Hartwick has not picked up his pension check from her office. Roberts stated a letter was hand delivered to Hartwick advising him of the Board's decision regarding his retirement and telling him his pension contribution check was available in the City Clerk's office. Dr. Mashburn asked how long Hartwick had to appeal the decision of the Pension Board. Roberts stated according to City Attorney Jerry Rose, Hartwick has 30 days. CAPTAIN FOSTER RETIREMENT Roberts stated he agreed with Jerry Rose about asking for an attorney general opinion regarding the request made by Billie Don Foster. Roberts, seconded by Mashburn, made a motion to request an attorney general opinion regarding counting unused or lost sick leave toward the time of service for retirement purposes. Spencer asked if Foster had been paid for his unused sick leave. • Roberts stated he had received payment for 90 days, the number of days`the City allows. The balance -6f his sick days had been lost. • Mayor Hanna stated he felt it was a good idea to request an attorney general opinion. He feels sick leave is something to be used in an emergency and is not something an employee is "entitled" to if it is not used for illness. Dr. Mashburn stated federal government employees can accrue up to a certain number of days, and the balance is lost. NEW BUSINESS DEAN.WITTER INVESTMENT REPORT Mike Kirkland gave an overview of the Acorn and Madison accounts stating Acorn has a balance of .$1,489,142, and Madison has a balance of $1,399,447. There is $360,893 in CD's and cash for a total investment portfolio of $3,249,482. Acorn earned 11.89% annualized interest for 1992. Madison's rate of return was 9.8%. Roberts asked how much the Pension Board had decided should be kept in cash and equivalents. Friend stated he felt there was too much in cash, and some of it needs to be invested. Mayes statedlhe thought the Board voted to maintain the equivalent of 3 month's pension benefits on hand which is about $100,000. • Kirkland stated he felt both money managers were waiting until after the election to determine where to best invest the cash they had on hand. • Roberts asked what the current money market rate is. Kirkland stated around 2.8%. Friend asked how long Madison would keep the $517,000 cash on hand before investing. Kirkland stated he would contact both Acorn and Madison and find out why theyi are holding so much cash. Roberts asked Kirkland to call Ben Mayes and let him know what he finds out. LONGER INVESTMENTS REPORT Elaine Longer stated the combined portfolio was invested 56% in equities, 35% in bonds, and 9% in cash with a combined total of $2,568,000. In the cash account, there is about $67,000 in a money market and $225,000 in treasuries. The stock account in about 80% invested in common stocks with 20% in 2 and 10 year notes and cash reserves. They have reduced the fund's exposure to the drug stocks because of the concern about pricing controls from the Clinton administration. R January 28, 1993 Friend asked about technology stocks such as IBM. Longer stated she is leaning toward more capital goods oriented stocks rather than cyclical type stocks. The portfolio now has 44% exposure to industrial goods. The bond account has two U.S. Treasury notes earning 4.621% and 6.00%. Cash reserves in the bond account are about to zero. For 1992, the portfolio was down 1%, but for 1991 it was up about 40%. The bond account was up 7.1% for 1992. The total return was about 1%. On the historic report, the annualized return since inception on all accounts is 10.72%. Realized gains are $75,303.49. Glyndon Bunton asked if the portfolio contained any Arkansas based stocks. Longer stated both Tyson and Wal Mart are in the portfolio. ACTUARY STUDY Ben Mayes stated the Pension Board had discussed ordering a special actuary report to determine if the fund was sound in order to declare pension benefit increases. He stated the legislative • session is currently in progress, and they are discussing changing the way in which pension funds are valued. Based on this, he asked if the Pension Board wanted to proceed with the actuary study or wait until the legislature decides on the valuation question. If they change the method of valuation from cost to market, the Pension Fund would probably be actuarially sound now without having to incur the expense of an additional report. Dr. Mashburn stated he would like to postpone the actuary report until the legislative session is complete. He made a motion to this effect. Roberts seconded the motion. The motion passed unanimously. Friend expressed his concern about money in the cash accounts which interest. However, he suggested from Mike Kirkland about why they in the cash accounts. • Acorn and Madison having so much are earning such low rates of the Board wait until they hear are keeping such large balances Mayes pointed out that the annual between Acorn, Madison, and Longer. some reason or strategy for their po returns were about the same Therefore, they probably have sition. Mayor Hanna stated he would like to see a report that basically states how much money was in the account at the beginning of the year, the earnings for the year, the withdrawals and deposits, the expenses, and the bottom line value for year end. • • January 28, 1993 Mayes stated Longer Investments was a more active trader in the stock market than either Madison or Acorn. Mayes stated he felt Elaine Longer was doing a good job. According to the actuary report, the fund needs to be at $5,125,000 by year end on the way toward becoming actuarially sound. The fund is around $6 million. Dr. Mashburn stated he appreciates Longer's professional reports. Spencer stated he understands where Kirkland says the account is, but he is not sure how he got there as he is with Longer's reports. Friend, seconded by Roberts made a motion to pull the excess cash from the Madison and Acorn accounts and give it to Elaine Longer to invest. The motion passed unanimously. Roberts asked if Thomas would locate how much the Board had voted to maintain in the cash balance so the Board would know exactly how much should be transferred. ADJOURNMENT The meeting adjourned at 4:03 p.m.