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HomeMy WebLinkAbout1995-04-20 Minutesi • MINUTES OF A POLICE PENSION BOARD MEETING A meeting of the Police Pension Board was held on April 20, 1995, at 2:30 p.m. in room 326 of the City Administration Building, 113 West Mountain, Fayetteville, Arkansas. NO PRESENT: Mayor Fred Hanna, Eldon Roberts, Hollis Spencer, City Clerk/Treasurer Traci Paul, and Administrative Services Director Ben Mayes. ABSENT: Dr. James Mashburn and Jerry Friend CALL TO ORDER The meeting was called to order by Mayor Hanna. MAYES - COST BASIS SUMMARY Mayes distributed and reviewed a cost basis summary. In answer to a question from Witter is holding 51% of the holding 49%. The City holds Mayor Hanna, Mayes stated Dean assets and Longer Investments is $20,000 for pension payments. Roberts pointed out that the Board had voted in the past to keep enough money in the City held investments to make pension payments for three months. The amount being paid each month is approximately $31,000. Mayes explained that a portion of money in the Dean Witter account is available if it is needed. In answer to a question from the Board, Mayes stated the City has paid out almost $96,000 in pension expenses in the last two months. Revenues have only been $33,000. In response to comments made by Roberts, Mayes stated all the income comes to the Board from July to October. It is not unusual to have a loss during the first of the year. NEW BUSINESS LONGER INVESTMENT REPORT Kim Cooper, Longer Investments, distributed and reviewed portfolio appraisals and other documents dated March 31, 1995. Cooper stated portfolio for yield. as of March 31, the current annual income on the the combined account was $172,645. That is a 5.2% Hollis Spencer arrived. April 20, 1995 Although the portfolio was down last year because of the rising interest rates, there was an increase in income. Referring to the stock account, Cooper stated about 34% of the portfolio is in treasuries. They can be used for purchasing power. Cooper briefly reviewed a listing of stock accounts by industry. Cooper explained that the yield is up on the bond portfolio. Cooper stated since account inception, the average annual return in stocks is 9.7% and the fixed income is 8.3%. The total account in 7.8%. That is -all net of any fees and expenses on the account. For 1995, the account is up 4.3% in the first quarter. In the first three months of this year, almost everything that was lost last year has been retraced. • In comparing the portfolio structure in equities to the S & P, it shows to be conservative. The income in the portfolio is up to $172,645 annually which is a 5.2% yield. The weighted average maturity is a little over five years. Yield to maturity is 7.26% and the duration is 3.5%. Twenty percent of the stock portfolio will mature in less than three years and 60% of the bond portfolio will mature in less than three years. There is lots of purchasing power there. DEAN WITTER INVESTMENT REPORT Mike Kirkland, Dean Witter, distributed various reports. Kirkland stated that TCW had gotten rid of all the Latin American stocks which brought the account down last year. Currently the portfolio is about 60% equities and 40% bonds. In reviewing the Madison first quarter report, Kirkland stated the total return year-to-date is up 4.45%. Rates probably will not come down substantially. Inflation is not out of control and the economy is slowing down. That should help stabilize some things overall. On Madison, the value was $1,483,222 on December 31, 1993. On December 31, 1994, the value was $1,473,404. Currently, the value is up almost 5% year-to-date. Kirkland pointed out that TCW is dealing with more familiar names. • April 20, 1995 Kirkland stated there is about $24,700 in the cash account. Some CD's will be maturing in June, some in September and some in December. Next year, $214,000 will be maturing. The value of the cash account is approximately $272,000. In response to comments from Roberts regarding the amount of money paid to pensioners each month, Kirkland stated some of the CD's could be sold. BOARD APPOINTMENTS Mayor Hanna announced that Randy Bradley has been appointed to a two year term on the Police Pension Board ending in May of 1997. Bradley replaced Clint Hutchens. Hollis Spencer has been re- elected to another term. In answer to a question from Mayor Hanna, Roberts explained that his term would be ending in May. The active employees at. the Police Department will hold an election. MINUTES Roberts stated that at the January 19 meeting the Board discussed the issue of Jerry Surles and Clint Hutchens being eligible for additional benefits. Spencer made a motion that the Board accept the written opinions of Jerry Rose and ask the City Clerk to forward the opinions to the involved parties. The motion did not have a second and a vote was not taken. Spencer restated his motion from the January 19 meeting. Roberts seconded the motion. The motion passed unanimously. Roberts, seconded by Spencer, made a motion to approve the minutes of the January 19, 1995 meeting. The motion passed unanimously. PENSION AFFIDAVITS Paul stated that pension affidavits had been mailed to the retirees. All affidavits have been returned to the City Clerk's Office. MASHBURN TERM TO EXPIRE Paul stated that Dr. Mashburn's term will expire in May. Roberts stated the Board members will vote on the filling the position. In the past, the opening was advertised in the newspaper. • • • April 20, 1995 Discussion ensued regarding whether or not the position had to be advertised. Paul offered to check with Jerry Rose for clarification. ADJOURNMENT The meeting adjourned at 3:20 p.m.