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HomeMy WebLinkAbout1996-04-18 Minutes• MINUTES OF A POLICE PENSION BOARD MEETING A meeting of the Police Pension Board was held on April 18, 1996 at 2:30 p.m. in room 326 of the City Administration Building, 113 West Mountain, Fayetteville, Arkansas. PRESENT: Mayor Fred Hanna, Randy Bradley, Hollis Spencer, City Clerk/Treasurer Traci Paul ABSENT: Eldon Roberts, Jerry Friend, and Dr. James Mashburn CALL TO ORDER The meeting was called to order by Mayor Hanna MINUTES Spencer moved to accept the minutes. Bradley seconded. The motion passed unanimously. OLD BUSINESS Jerry Friend - Appointed as Retired Member Mayor Hanna presented a letter written by Spencer stating he had the votes to keep Jerry Friend on as a retired board member. Spencer stated it was a unanimous vote for Friend filling that slot. Mayor Hanna asked that the letter be made part of the minutes. List of Retirees s Paul presented a rough draft of a list of retirement dates and salaries at retirement, as was requested at the special meeting in February. This should be in its final format by the next meeting. NEW BUSINESS INVESTMENT REPORTS Longer Investments Kim Cooper, Longer Investments, reviewed the reports included in the agenda packet. 46.6% of the combined portfolio is in stock. Of that, the Barrick Gold and Inco, Ltd, the Mobile, and Placer Dome are considered cash reserves as opposed to equity. The total account value is $3.913 million. Regarding the stock portfolio alone, 22% is in bonds and 12% is cash. About 35% of the stock 1 • portfolio is being held in reserves. Bond interest rates have been coming up, but Elaine Longer thinks there is a chance for a peak, and later in the year there will probably be a much better buying opportunity in bonds than in stocks. We are waiting on the sidelines now with a lot in cash reserves. Stocks and bonds are down a little bit because of the rise in interest rates, so the total portfolio is down a little. Dean Witter Mike Kirkland, Dean Witter, asked for any questions. There being none, he reviewed the reports as presented in the agenda packet. The cash account report shows $67,000 in cash; but all the CD's mature in a couple of months, $204,000. We will not be able to replace that with the way CD's are now. If we bought anything new right now, we would stagger maturities because rates are so low we would not want to tie anything up long term. Kirkland explained the activity in the bond account, the Madison account. Rates have gone up in the bond market. This has affected all the fixed-income investments. Rates have gone up and bond values have gone down. In this case it is about 1.5% in the first three and a half months of this year. The treasury note matured at the end of March and has not been put back to work yet, which is wise. They have about 23% in cash now. The $378,000 is in money market funds and the $1.2 million•is still in bonds. Regarding the TCW account, the balanced account, the stock market continues to do well. The account is up about 2% since the end of the year. In this account 64% is in stocks, 31% is in bonds, and only 5% is in cash, much as it has always been. In the three accounts at Dean Witter, the total amount as of the close yesterday was $3,728,581. Of those three accounts, 20% is in cash, including the soon to mature CD's; 31.4°% is in the stock market; and 48.6% is in the bond market. Kirkland recommended having a comfortable figure in some international management. With our markets having done so well and the international markets lagging ours, you have increased return and decreased volatility when you have a mixture of a little international. He recommended a specific manager, Lazard Freres. Essentially, it would be like hiring another manager with additional expertise and means further diversification. The fee structure would not go up • In response to a question, Kirkland stated Merrill Lynch has come out with its own Japan fund: Japan is the second largest economy in the world. They are coming out of a banking crises and for diversification it would not be unwise to have a little more exposure in ,Japan. Many global funds will have some exposure in Japan anyway. Kirkland read from the investment policy: "Investments in international securities shall be made only after securing the approval by the majority of the Board at a regularly scheduled meeting." This could be discussed more at the next meeting. In response to a comment, Kirkland stated investments would be spread all over the place and not weighted in any one country. There was general discussion regarding foreign investing. The meeting adjourned at 3:20 p.m.