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1998-04-08 - Agendas - Final
� a LONGER INVESTMENTS INCORPORATED ARegisleredlnveshnenlAdvisOr APP, 10 I s� FINANCE ,DfZ April 8, 1998 City of Fayetteville Police Pension Fund Attn: Ben Mayes 113 W. Mountain Fayetteville, AR 72701 Dear Ben: Please find enclosed the 1998 first quarter portfolio reports for the City of Fayetteville Police Pension Fund. These reports include a portfolio appraisal, a report of realized gains, and an income and expense report. As instructed the Northern Trust account will be billed for the management fees. We have enclosed a copy of our quarterly newsletter, The Longer View, which presents a market commentary. Also included is a reprint of an article that appeared in the year-end issue of Business Week. Thank you for the opportunity to assist with the management of the City of Fayetteville Police Pension Fund's assets. We appreciate your business. Please feel free to call if you have any questions or comments. Sincerely, Elaine M. Longer, .F. A. >� President EML/kmc / Enclosure l P0. Box 1269 Fayeltnille, Arkazas 72702 7 ` Telephone 501-443-5851 'I Toll frcc 800-827-7710 Fay: 501-443-7129 Jyf I Longer Investments, Inc. A Ptl 10 1998 PORTFOLIO APPRAISAL City of Fayetteville Police Pension Fund cw.v,,N BF7L Longer Investments, Inc. Combined Account March 31, 1998 Unit Total Market Market Pct Unit Annual Cur. Quantity Security Cost Cost Price Value Assets Income Income Yield COMMON STOCK 1 ,500 American Power 24.09 365132.50 28.69 43,031 .25 0.7 0.000 0.00 0.0 Conversion 1 ,733 Balder Electric 14.66 25,413.86 26.94 46,682.69 0.8 0.400 693.20 1 .5 2,750 Best Software Inc. 13.34 36,688.35 15.12 41,593.75 0.7 0.000 0.00 0.0 2,100 Blyth Industries Inc. - 2720 57,129.51 34.12 71,662.50 1 .2 0.000 0.00 0.0 1 ,800 Bristol Myers Squibb 89.25 1602644.60 104.31 187,762.50 3.1 1 .560 2,808.00 1 .5 4,500 California Amplifier Inc. 326 14,691 .88 3.12 14,062.50 0.2 0.000 0.00 0.0 19012 Cisco Systems Inc. 32.10 322480.67 68.37 69,195.50 1 .2 0.000 0.00 0.0 2,400 Concord EFS, Inc. 27.02 64,837.58 34.56 82,950.00 1 .4 0.000 0.00 0.0 11530 Diebold, Inc. 23.15 35,424.95 44.00 67,320.00 1 .1 0.560 856.80 1 .3 1 ,500 Dover Corp. 34.00 50,998.75 38.00 57,000.00 1 .0 0.380 570.00 1 .0 1 ,000 EMC Corporation 29. 18 29,177.50 37.81 37,812.50 0.6 0.000 0.00 0.0 500 Eli Lilly & Co. 67. 17 33,583.75 59.62 292812.50 0.5 0.800 400.00 1 .3 3,000 Emerson Electric 37.52 112,564.60 65.19 195,562.50 3.3 1 .180 3,540.00 1 .8 1 ,000 Franklin Covey Co 22.64 22,641 .25 24.31 24,312.50 0.4 0.000 0.00 0o (Formerly Franklin Quest) 1 ,300 General Electric 26.42 34,349.72 86.19 1122043.75 1 .9 1 .200 12560.00 1 .4 1 ,500 General Nutrition 19.94 29,916.90 39.75 59,625.00 1 .0 0.000 0.00 0.0 • 1 ,350 Global Marine Inc. 26.41 35,655.93 24.87 33,581 .25 0.6 0.000 0.00 0.0 1 ,500 Heartland Express 23.79 35,681 .55 27.75 41,625.00 0.7 0.000 0.00 0.0 1 ,800 Helen of Tray Limited 14.66 26,394.00 18.56 33,412.50 0.6 0.000 0.00 0.0 2,000 In Focus Systems Inc. 11 . 19 22,388.33 9.00 182000.00 0.3 0.000 0.00 0.0 2,500 Innovex Inc. 22.36 55,896.94 24.37 60,937.50 1 .0 0.140 350.00 0.6 500 Intel Corp 94.44 47,218.39 78.06 39,031 .25 0.7 0.120 60.00 0.2 600 Jacobs Engineering 26.53 15,916.76 32.37 197425.00 0.3 0.000 0.00 0.0 2,000 Leggett and Platt 31 .06 629128.00 51 .44 102,875.00 1 .7 0.600 1 ,200.00 1 .2 500 Life Technology 23.77 115882.92 38.50 19,250.00 0.3 0.200 100.00 0.5 534 Lucent Technologies 50.12 26,763.63 127.87 68,28525 1 .1 0.300 160.20 0.2 1 ,600 Miller Herman 23.68 37,884.00 33.53 53,650.00 0.9 0.290 464.00 0.9 Incorporated 2,600 Mobil Corp. 73.92 1929185.50 76.62 199,225.00 3.3 2.280 5,928.00 3.0 11500 Molex Inc 26.20 39,307.50 27.50 412250.00 0.7 0.060 90.00 0.2 11500 Mueller Industries 36.77 55,151 .82 63.31 94,968.75 1 .6 0.000 0.00 0.0 1,000 Nabors Industries 31 .10 31 ,102.25 23.75 23,750.00 0.4 0.000 0.00 0.0 500 Network Associates Inc. 51 .19 25,595. 10 66.25 33,125.00 0.6 0.000 0.00 0.0 (formerly McAfee) 1 ,200 Northern Trust Corp. 62.00 74,400.00 74.75 89,700.00 1 .5 0.840 1,068.00 1. 1 1 ,000 Omnicare, Inc. 32.35 32,355.00 39.62 39,625.00 0.7 0.080 80.00 0.2 1 ,000 Oracle Systems 18.54 18,542.50 31 .56 31 ,562.50 0.5 0.000 0.00 0.0 1 ,500 Pairgain Technologies, 18.83 28,245.00 24.00 362000.00 0.6 0.000 0.00 0.0 Inc. 1 ,350 Paychex, Inc. 34.87 47,081 .25 57.69 1775878. 12 1 .3 0.360 486.00 0.6 1 ,000 Penn Engineering and 26.60 261600.00 25.47 252468.75 0.4 0.440 440.00 1 .7 Manufacturing 21000 Pe nphonics Corp. . 9.75-. 19,500.00 12.84 25,687.50 0.4 0.000 0.00 0.0 1 ,000 Robert Half International ' 26.15 26,153.33 48.00 48,000.00 0.8 0.000 0.00 0.0 1 ,350 Saint John Knits 38.61 525126.10 47.25 63,787.50 1 . 1 0. 100 135.00 0.2 500 Schlumberger, LTD 86.58 43,290.00 75.75 37,875.00 0.6 0.750 375.00 1 .0 700 Schwab Corporation 24.07 16,849.00 38.00 26,600.00 0.4 0.160 112.00 0.4 G \ �..+w � w Y V ua ✓ Longer Investments, Inc. A R 10 1998 PORTFOLIO APPRAISAL City of Fayetteville Police Pension Fund FINANCE QED►, Longer Investments, Inc Combined Account March 31, 1998 i Uuilt Total Market Merkel Pet. Unit Annum Chir. Quantity Security Cost Cost Price Value Assets Income Income Yield 1 ,000 Snap-On, Inc. 32.77 32,770.00 45.62 45,625.00 0.8 0.840 840.00 1 .8 1 ,875 Staples, Inc. 11 .81 22,146.83 23.19 433476.56 0.7 0.000 0.00 0.0 500 Starbucks Corp. 30.19 15,094.17 45.31 222656.25 0.4 0.000 0.00 0.0 1 ,250 Superior Industry 23.95 29,935.94 33.19 41 ,484.37 0.7 0.280 350.00 0.8 International , 1 ,542 Tyco International 21 .28 32,820.63 54.62 84,231 :75 1 .4 0. 100 154.20 0.2 3,800 Tyson Foods 18.95 72,009.45 19.25 73,150.00 1 .2 0.100 380.00 0.5 1 ,000 U. S. Filter Corp. 32.45 32,455.00 35. 12 352125.00 0.6 0.000 0.00 0.0 21100 Valmont Industries 19.48 40,898.50 24.25 50,925.00 0.9 0.225 472.50 0.9 1 ,000 Viking Office Products 23.34 23,342.50 23.25 23,250.00 0.4 0.000 0.00 0.0 2,800 Walmart Stores 25.91 72,555.00 50.81 142,275.00 2.4 0.310 868.00 0.6 1 ,000 Woodhead Industries, 15.25 15,250.00 18.87 185875.00 0.3 0.360 360.00 1 .9 Ine. 1 ,700 Zero Corporation 20.71 35,211 .50 28.25 48,025.00 0.8 0. 120 204.00 0.4 2,307,460.70 3,154,104.25 52.9 25,044.90 0.8 MUTUAL FUNDS-EQUITY 3,063.182 Twiner Small Cap Fund 24.91 76,311 .46 28.32 86,749.31 1 .5 0.000 0.00 0.0 3,160.599 Vanguard Intl Equity 11 .16 35,281 .10 7.95 25,126.76 0.4 0.090 284.45 1.1 Index Pacific _ 111 ,592.56 111,876.08 1 .9 284.45 0.3 SPORATE BONDS 100,000 Sony Corporation 100.00 1003000.00 100.22 100,220.00 1 .7 6. 125 6,125.00 6. 1 (Non-Callable) Rated Aa3/A 6.125 % Due 03-04-03 140,000 Wal-Mart Stores 101 .83 142,565.75 101 .84 142,581 .25 2.4 6.500 91100.00 6.4 (Non-callable) Rated AAI/AA 6.500 % Due 06-01 -03 Accrued Interest 3,492.71 0.1 242,565.75 246,293.96 4.1 15225.00 6.3 GOVERNMENT BON DS 250,000 U. S. Treasury Note 99.93 249,820.00 100.19 250,468.75 4.2 6.250 15,625.00 6.2 6.250 % Due 06-30-98 240,000 U. S. Treasury Note 99.95 2395882.00 100.28 240,675.00 4.0 6.250 15,000.00 6.2 6.250 % Due 07-31-98 200,000 U. S. Treasury Note 99.87 199,736.00 100.84 201,687.50 3.4 6.375 12,750.00 6.3 6.375 % Due 04-30-99 50,000 U. S. Treasury Note 100.06 50,030.00 100.81 50,406.25 0.8 6.375 3,187.50 6.3 6.375 % Due 05-15-99 100,000 U. S. Treasury Note 99.92 99,924.00 100.05 100,046.87 1 .7 5.625 51625.00 5.6 5.625 % Due 12-31-99 50,000 U. S. Treasury Note 99.56 49,781 .50 101 .37 50,687.50 0.8 6.250 32125.00 6.2 6.250 % Due 08.31 -00 100,000 U. S. Treasury Note 98.63 98,632.82 106.59 - 1069593.75 1 .8 8.000 8,000.00 7.5 8.000 % Due 05.15-01 100,000 U. S. Treasury Note 101 .50 101 ,500.00 102.66 1029656.25 1 .7 6.375 6,375.00 6.2 6.375 % Due 08-15-02 v 2 A i V Y w Y V Longer Investments, Inc. APR 10 1998 PORTFOLIO APPRAISAL City of Fayetteville Police Pension Fund FINOWCE DPTT Longer Investments, Inc Combined Account March 31, 1998 Unit Total Market Markel Pd Unit Annual Cur. Quantity seciulty Cost Cost Prim Value Assets Income Income Yield 155,000 U. S. Treasury Note 98.34 1522425.98 107.92 1679278.91 2.8 7.250 11 ,237.50 6.7 7.250 % Due 05-15-04 505000 U. S. Treasury Note 99.97 49,984.38 111 .72 55,859.37 0.9 7.875 31937.50 7.0 7.875 % Due 11 -15-04 50,000 U. S. Treasury Note 99.87 49,937.50 104.47 52,234.37 0.9 6.500 3,250.00 6.2 6.500 % Due 08-15-05 50,000 U. S. Treasury Note 99.97 49,984.37 104.87 522437.50 0.9 6.500 3,250.00 6.2 6.500 % Due 10-15-06 50,000 U. S. Treasury Bond 99.12 497560.53 103.03 51,515.62 0.9 6.250 3,125.00 6.1 6.250 % Due 08-15-23 25,000 IJ. !S. Treasury Bond 99.56 242890.47 106.66 26,664.06 0.4 6.500 15625.00 6.1 6.500 % Due 11-15-26 Accrued Interest 27,086.25 0.5 _ 13466,089.55 1 ,536,297.97 25.8 96,112.50 6.4 GOVERNMENT AGENCY 150,000 Federal Farm Credit Bank 100.00 150,000.00 99.97 1492953. 12 2.5 6. 190 9,285.00 6.2 (C 112-18-98 @ 100) 6.190 % Due 12-18.00 100,000 Federal Home Loan Bank 100.31 1009312.50 102.44 102,437.50 1 .7 6.690 62690.00 6.5 (Non-callable) 6.690 % Due 05-16-01 150,000 Federal Home Loan Bank 100.00 150,000.00 99.34 149,015.62 2.5 6.250 91375.00 6.3 (Call 1-21-99 @ 100) 6.250 % Due 01-21 -03 75,000 Fed Nat? Mortgage Assoc 100.00 752000.00 99.09 74,320.31 1 .2 6.090 41567.50 6.1 (C !2-11-99 @ 100) _ 6.690 % Due 02-11-03 50,000 Federal Home Loan Bank 100.00 503000.00 100.00 50,000.00 0.8 6.000 3,000.00 6.0 (Call 2-25-00 @ 100) 6.000 % Due 02.25-04 150,000 Federal Home Loan Bank 100.00 150,000.00 100.25 1509375.00 2.5 7.020 10,530.00 7.0 (Call 8-20-99 @ 100) 7.020 % Due 08-20-07 Accrued Interest 9,121.83 0.2 _ 675,312.50 685,223.40 11 .5 437447.50 6.4 CASH AND EQUIV TENTS Di'videndsAccrued 1172.00 1 ,272.00 0.0 0.000 0.00 0.0 Money Market 2299080.00 229,080.00 3.8 4.750 10,881 .30 4.7 1 230,352.00 230,352.00 3.9 10,881 .30 4.7 TOTAL PORTFOLIO 5,033,373.06 599649147.65 100.0 190,995.65 3.2 f ^� 3 r (5 Longer Investinents, Inc. APR 10 19QG -- PORTFOLIO APPRAISAL City of Fayetteville Police Pension Fund FINANCE DEM Stock Account March 31, 1998 Unit Total Market Markel Pct. Unit Annual Cor. Quantity I Security Cost Cost Price Value Assets Income Income Yield COMMON STOCK 1 ,500 American Power 24.09 36,132.50 28.69 432031 .25 1 .1 0.000 0.00 0.0 Conversion 1 ,733 Baldor Electric 14.66 25,413.86 26.94 462682.69 1 .2 0.400 693.20 1 .5 2,750 Best Software Inc. 13.34 36,688.35 15.12 41,593.75 1.0 0.000 0.00 0.0 27100 Blyth Industries Inc. 27.20 57,129.51 34.12 71 ,662.50 1 .8 0.000 0.00 0.0 1 ,800 Bristol Myers Squibb 89.25 160,644.60 104.31 1879762.50 4.7 1 .560 2,808.00 1 .5 4,500 California Amplifier Inc. 3.26 14,691 .88 3.12 14,062.50 0.4 0.000 0.00 0.0 1 ,012 Cisco Systems Inc. 32.10 32,480.67 68.37 695195.50 1 .7 0.000 0.00 0.0 2,400 Concord EFS, Inc. 27.02 649837.58 34.56 82,950.00 2. 1 0.000 0.00 0.0 1 ,530 Diebold, Inc. 23.15 35,424.95 44.00 67,320.00 1 .7 0.560 856.80 1 .3 1 ,500 DoI ver Corp. 34.00 50,998.75 38.00 572000.00 1 .4 0.380 570.00 1 .0 1 ,000 EMC Corporation 29.18 29,177.50 37.81 37,812.50 0.9 0.000 - 0.00 0.0 500 Eli Lilly & Co. 67.17 337583.75 59.62 297812.50 0.7 0.800 400.00 1 .3 3,000 Emerson Electric 37.52 112,564.60 65.19 195,562.50 4.9 1 .180 3,540.00 1 .8 1 ,000 Franklin Covey Cc 22.64 22,641 .25 24.31 24,312.50 0.6 0.000 0.00 0.0 (Formerly Franklin Quest) 1 .300 General Electric 26.42 34,349.72 86.19 112,043.75 2.8 1 .200 11560.00 1 .4 17500 GeacmlNutrition 19.94 29,916.90 39.75 59,625.00 1 .5 0.000 0.00 0.0 1 ,350 Global Marine Inc. 26.41 357655.93 - 24.87 33,581 .25 - 0.8 0.000 0.00 0.0 1 ,500 HcartlandExpress 23.79 35,681 .55 27.75 41,625.00 1 .0 0.000 0.00 - 0.0 1 ,800 Hclen of Troy Limited 14.66 26,394.00 18.56 33,412.50 0.8 0.000 0.00 0.0 2,000 In Focus Systems Inc. 11 .19 22,388.33 . 9.00 18,000.00 0.5 0.000 0.00 0.0 2,500 Inn ovex Inc. 22.36 55,896.94 24.37 60,937.50 1 .5 0. 140 350.00 0.6 500 Intel Corp 94.44 47,218.39 78.06 39,031 .25 1 .0 0. 120 60.00 0.2 600 Jacobs Engineering 26.53 15,916.76 32.37 19,425.00 0.5 0.000 0.00 0.0 2,000 Leggett and Platt 31 .06 622128.00 51 .44 102,875.00 2.6 0.600 1 ,200.00 1 .2 500 Life Technology 23.77 11 ,882.92 38.50 19,250.00 0.5 0.200 100.00 0.5 534 Lucent Technologies 50.12 26,763.63 127.87 68,285.25 1 .7 0.300 160.20 0.2 1 ,600 Miller Herman 23.68 37,884.00 33.53 53,650.00 1 .3 0.290 464.00 0.9 Incorporated 2,600 Mobil Corp. 73.92 1925185.50 76.62 199,225.00 5.0 2.280 5,928.00 3.0 11500 Molex Inc 26.20 39,307.50 27.50 41,250.00 1 .0 0.060 90.00 0.2 11500 Mueller Industries 36.77 555151 .82 63.31 94,968.75 2.4 0.000 0.00 0.0 1 ,000 Nabors Industries 31.10 312102.25 23.75 23,750.00 0.6 0.000 0.00 0.0 500 Network Associates Inc. 51 .19 253595.10 66.25 33,125.00 0.8 0.000 0.00 0.0 (foimedy McAfee) 1 ,200 Northern Trust Corp. 62.00 74,400.00 74.75 _ 892700.00 2.2 0.840 11008.00 1 .1 12000 Omnicare, no. 32.35 32,355.00 39.62 392625.00 1 .0 0.080 80.00 0.2 1 ,000 Oracle Systems 18.54 182542.50 31 .56 31 ,562.50 0.8 0.000 0.00 0.0 1 ,500 Pairgain Technologies, 18.83 28,245.00 24.00 36,000.00 0.9 0.000 0.00 0.0 Inc. 11350 Paychex, Inc. 34.87 479081 .25 57.69 77,878. 12 2.0 0.360 486.00 0.6 11000 Penn Engineering and 26.60 269600.00 25.47 25,468.75 0.6 0.440 440.00 1 .7 Manufacturing 2,000 Penphonics Corp. 9.75 19,500.00 12.84 25,687.50 0.6 0.000 0.00 0.0 1 ,000 Robert Half International 26. 15 26,153.33 48.00 482000.00 1 .2 0.000 0.00 0.0 1,350 Saint John Knits 38.61 525126. 10 47.25 63,787.50 1 .6 0.100 135.00 0.2 500 Schlumberger, LTD 86.58 43,290.00 75.75 37,875.00 0.9 0.750 375.00 1 .0 700 Schwab Corporation 24.07 16,849.00 38.00 267600.00 0.7 0.160 112.00 0.4 Longer Investments, Inc. SPR 10 1938 PORTFOLIO APPRAISAL City of Fayetteville Police Pension Fund ElMAh'� D " Stock Account i March 31, 1998 Unit Total Market Market Pct Unit Annual Cur. Quantity Security Cost Cost Price Value Assets Income Income Yield 12000 Snap-On, Inc. 32.77 32,770.00 45.62 457625.00 1.1 0.840 840.00 1 .8 1 ,875 Staples, Inc. 11 .81 22,146.83 23.19 432476.56 1.1 0.000 0.00 0.0 500 Starbucks Corp. 30.19 15,094.17 45.31 22,656.25 0.6 0.000 0.00 0.0 1 ,250 SuperiorIndustry 23.95 29,935:94 33.19 412484.37 1 .0 0.280 350M 0.8 Intcmational 1 ,542 Tyco International 21 .28 32,820.63 54.62 842231 .75 2.1 0.100 154.20 0.2 3,800 Tyson Foods 18.95 72,009.45 19.25 73,150.00 1 .8 0.100 380.00 0.5 12000 U. I S. Filter Corp. 32.45 322455.00 35.12 35,125.00 0.9 0.000 0.00 0.0 2,100 Valmont Industries 19.48 402898.50 24.25 50,925.00 1 .3 0.225 472.50 0.9 1 ,000 Viking Office Products 23.34 2342.50 23.25 23,250.00 0.6 0.000 0.00 0.0 2,800 Welmart Stores 25.91 72,555.00 50.81 142,275.00 3.6 0.310 868.00 0.6 1 ,000 Woodhead Industries, 15.25 15,250.00 18.87 18,875.00 0.5 0.360 360.00 1 .9 Inc. 1 ,700 Zcio Corporation 20.71 35,211 .50 28.25 48,025.00 12 0.120 204.00 0.4 2,307,460.70 3,154,104.25 79. 1 25,044.90 0.8 MUTUAL FUNDS-EQUITY 3,063.182 Tumcr Small Cap Fund 24.91 76,311 .46 28.32 86,749.31 2.2 0.000 0.00 0.0 3,160.599 Vanguard Intl Equity 11 .16 35,281 . 10 7.95 25,126.76 0.6 0.090 284.45 1 .1 •. Index Pacific 111 ,592.56 111 ,876.08 2.8 284.45 0.3 CORPORATE BONDS 100,000 Sony Corporation 100.00 1002000.00 100.22 100,220.00 2.5 6. 125 63125.00 6.1 (Non-Callable) Rated Aa3/A 6. 125 % Due 03-04-03 Accrued Interest 459.37 0.0 100,000.00 100,679.37 2.5 6,125.00 6.1 GOVERNMENT BONDS 250,000 U. S. Treasury Note 99.93 249,820.00 100.19 2502468.75 6.3 6.250 159625.00 6.2 6.250 % Due 06-30-98 100,000 U. 'S. Treasury Note 99.87 992868.00 100.84 100,843.75 2.5 6.375 6,375.00 6.3 6.375 % Due 04-30-99 50,000 U. S. Treasury Note 100.06 505030.00 100.81 50,406.25 1 .3 6.375 3,187.50 63 6.375 % Due 05-15-99 Accmed Interest 7,766.67 0.2 3999718.00 409,485.42 10.3 25,187.50 6.3 CASH AND EQUIVALENTS Dividends Accrued ' 1,272.00 1 ,212.00 0.0 0.000 0.00 0.0 Money Market 211,713.09 211 ,713.09 5.3 4.750 109056.37 4.7 212,985.09 212,985.09 5.3 10,056.37 4.7 TOTAL PORTFOLIO 31131,756.35 319899130.21 100.0 66,698.23 1.7 2 Longer Investments, Inc. APR 10 1998 REALIZED GAINS AND LOSSES City of Fayetteville Police Pension Fund FINAINCE DAY , Stock Account From 01-01-98 Through 03-31-98 cost Date Quantity Securlty Masts Proceeds Cain Or Loss 1 01-02-98 0 Cisco Systema Inc. 16.05 27.43 11.38 01-13-98 700 Fluor Corp. 25,511.50 26,569.36 1,057.86 01-20-98 1,000 EMC Corporation 29,177.50 292019.02 -158.48 01-20-98 1,350 Hanna, M. A. 29,299.62 309569.72 17270. 10 01.26-98 300 Network Associates Inc. 15,357.06 16,093.66 736.60 (formerly McAfee) 01-26-98 800 NoMem Trust Corp. 49,600.00 52,039.26 2,439.26 01-29-98 700 Alternative Resources 12,930.75 139580.65 649.90 02-03-98 300 Snap-On, Inc. 9,831.00 11,799.60 1,968.60 02-09-98 500 Nabors Industries 15,551.12 10,959.63 4,591.49 0241-98 1,300 Applied Materials 43,188.75 452808.12 2,619.37 02-26-98 1,000 Franklin Covey Co (Formerly 22,641.25 249347.28 1,706.03 Franklin Quest) 03-09-98 1,000 Dover Corp. 33,999. 17 39,143.69 5,144.52 03-09-98 500 Hewlett Packard Co. 31,779.02 30,196.49 -1,582.53 03-09-98 400 Jacobs Engineering 1 10,61 L 18 11,949.60 . 038.42 03-09-98 500 Woodhead Industries, Inc. 7,625.00 99464.68 1,839.68 03-09-98 100,000 U. S. Treasury Note 99,905.00 100,031.25 126.25 5.625 % Due 11-30-99 03-12-98 500 Dover Corp. 16,999.58 18,459.38 1,459.80 03-20-98 1,500 Aquapen Spring Water 19,837.50 12,873.31 -61964.19 03-27-98 900 3 Com Corporation 32,307.75 32,271.75 -36.00 03-27-98 500 Hewlett Packard Co. 31,779.02 31,415.20 -363.82 03-30-98 1,000 C-Cube Microsysters 20,017.50 18,456.88 -1,560.62 03.30-98 400 Eli Lilly & Co. 26,867.00 239149.22 -3,717.78 03-30-98 3,063.000 Turner Small Cap Fund 76,306.92 85,876.52 9,569.60 i TOTAL GAINS 31,937.37 TOTAL. LOSSES -18,974.92 1 TOTAL CAIN/LOSS 12,962.45 661,139.25 6749101.70 120962.45 NO CAPITAL GAINS DISTRIBUTIONS i ' a r y '• ax y V V .y 0 Longer Investments, Inc. lfptc INCOME AND EXPENSES City of Fayetteville Police Pension Fund Stock Account i From 01-01-98 Through 03-31-98 Security Amount COMMON STOCK Baldor Electric 03-06-98 173.30 Diebold, Inc. 03-04-98 214.20 Dover Corp. 02-25-98 285.00 Emerson Electric 02- 18-98 885.00 General Electric 03-05-98 390.00 Hewlett Packard Co. • 03-23-98 70.00 Intel Corp 01 -28-98 15.00 Innovex Inc. 02-09-98 87.50 Leggett and Platt 02-25-98 300.00 Life Technology 03-18-98 25.00 Lucent Technologies 01 -28-98 40.05 Miller Herman Incorporated 02-25-98 58.00 Mobil Corp. 02-05-98 1 ,482.00 I Molex Inc 03-27-98 22.50 Northern Trust Corp. 03-06-98 252.00 1 Longer Investments, Inc. OR 10 f°98 INCOME AND EXPENSES FINANCE D Ta City ofFayetteville Police Pension Fund. Stock Account From 01-01-98 Through 03-31-98 Security _ Amount Omnicare, Inc. 02-18-98 20.00 Paychex, Inc. 01-29-98 121 .50 Penn Engineering and Manufacturing 03-12-98 110.00 Schwab Corporation 02-11 -98 28.00 Saint John Knits 01 - 12-98 33.75 03-27-98 33.75 67.50 iSchlumberger, LTD 02-19-98 93.75 Snap-On, Inc. 02-12-98 210.00 Superior Industry International 01 -08-98 87.50 Tyson Foods 02-25-98 95.00 Woodhead Industries, Inc. 01 -29-98 135.00 Walmart Stores 03-18-98 217.00 Zero Corporation 02-04-98 51 .00 Total COMMON STOCK 51535.80 MUTUAL FUNDS-EQUITY Vanguard Intl Equity Index Pacific rt 03-27-98 189.64 2 4J .c N m d Y m Longer Investments, Inc. APR 10 19918 INCOME AND EXPENSES FINANCE DF7 , City of Fayetteville Police Pension Fund Stock Account From 01-01-98 Through 03-31-98 Security Amount CORPORATEBONDS Sony Corporation (Non-Callable) 6. 125% Due 03-04-03 Rated Aa3/A 03-06-98 -119. 10 GOVERNMENT BONDS U. S. Treasury Note 5.625% Due 11 -30-99 03-09-98 1 ,545.33 CASH AND EQUIVALENTS Money Market 01 -31 -98 395.05 03-02-98 64. 10 03-31 -98 304.32 763.47 EXPENSE ACCOUNTS Accounting Fee 01 -20-98 450.00 Automated Cash Mgmt. 01 -31 -98 11 .41 03-02-98 1 .88 03-31-98 8.97 22.26 Total EXPENSE ACCOUNTS 472.26 AFTER FEE PERFORMANCE EXPENSE ACCOUNTS Management Fee 01 -20-98 71990.35 Northern Trust Fee 03-31 -98 665.42 3 V .. J APR 10 1998 Longer Investments, Inc. FINANCE ®EPlo INCOME AND EXPENSES City ofFayetteville Police Pension Fund Stock Account From 01-01-98 Through 03-31-98 Security Amount I Total AFTER FEE PERFORMANCE EXPENSE ACCOUNTS 8,655.77 NET INCOME -1,212.89 i j 4 APR 10 1 559 Longer Investments, Inc. FRANCE DPS . PORTFOLIO APPRAISAL City of Fayetteville Police Pension Fund Bond Account March 31, 1998 Unit Total Market Minket Pct. Unit Annual Cur. Quantity Security Cost Coal Price Value Assets Income Income Yield CORPORATE BONDS 140,000 Wal-Mart Stores 101 .83 142,565.75 101 .84 142,581 .25 7.2 6.500 9,100.00 6.4 (Non-callable) Rated AAI/AA 6.500 % Due 06-01-03 Accrued Interest 3,033.33 0.2 142,565.75 145,614.58 7.4 91100.00 6.4 GOVERNMENT BON DS 240,000 U. IS. Treasury Note 99.95 2399882.00 100.28 240,675.00 12.2 6.250 15,000.00 6.2 6.250 % Due 07-31-98 1009000 UiS. Treasury Note 99.87 99,868.00 100.84 100,843.75 5. 1 6.375 6,375.00 6.3 6.375 % Due 04-30-99 100,000 U. ,S. Treasury Note 99.92 99,924.00 100.05 100,046.87 5.1 5.625 5,625.00 5.6 5.625 % Due 12-31-99 50,000 U. IS. Treasury Nate 99.56 49,781 .50 101 .37 50,687.50 2.6 6.250 3,125.00 6.2 6.250 % Due 08-31-00 100,000 U. IS. Treasury Note 98.63 98,632.82 106.59 106,593.75 5.4 8.000 8,000.00 7.5 • 8.000 % Due 05.15-01 1002000 U. IS. Treasury Note 101 .50 101 ,500.00 102.66 102,656.25 5.2 6.375 67375.00 6.2 6.375 % Due 08-15-02 155,000 U.IS. Treasury Note 98.34 1525425.98 107.92 167,278.91 8.5 7.250 11 ,237.50 6.7 7.250 % Due 05-15-04 507000 U.IS. Treasury Note 99.97 49,984.38 111 .72 55,859.37 2.8 7.875 31937.50 7.0 7.875 % Due 11 -15-04 50,000 U.iS. Treasury Note 99.87 493937.50 104.47 52,234.37 2.6 6.500 35250.00 6.2 6.500 % Due 08-15-05 50,000 U.'.S. Treasury Note 99.97 49,984.37 104.87 525437.50 2.7 6.500 3,250.00 6.2 6.500 % Due 10-15-06 50,000 U.IS. Treasury Bond 99. 12 49,560.53 103.03 512515.62 2.6 6.250 3,125.00 6. 1 6.250 °/ Due 08-15-23 25,000 U.IS. Treasury Bond 99.56 24,890.47 106.66 26,664.06 1 .4 6.500 1 ,625.00 6.1 6.500 % Due 11-15-26 Accrued Interest 19,319.58 1 .0 1 ,066,371 .55 17126,812.55 57. 1 70,925.00 6.4 GOVERNMENT AGENCY 150,000 Fc&ral Farm Credit Bank 100.00 150,000.00 99.97 149,953.12 7.6 6. 190 9,285.00 6.2 (C 12-18-98 @ 100) 6.190 % Due 12.18-00 100,000 Fc6ral Home Loan Bank 100.31 100312.50 102.44 102,437.50 5.2 6.690 6,690.00 6.5 (Non-callable) 6.690 % Due 05-16-01 150,000 Federal Home Loan Bank 100.00 150000.00 99.34 1495015.62 7.5 6.250 9,375.00 6.3 (Call 1-21-99 @ 100) 6.250 % Due 01-21-03 75,000 Fed Nat'l Mortgage Assoc 100.00 75,000.00 199.09 74,320.31 3.8 6.090 4,567.50 6.1 (G2-11-99 @ 100) 6.090 % Due 02-11 -03 1 i I , 4 APR 10 1998" • Longer Investments, Inc. FINANCE DEPT PORTFOLIO APPRAISAL City of Fayetteville Police Pension Fund Bond Account March 31, 1998 Unit Total Market Market Pct. Unit Annual Cur. Quantity Security Cost Cost Pdce Value Assets Income Income Yield 50,000 Federal Home Loan Bank 100.00 - 505000.00 100.00 507000.00 2.5 6.000 3,000.00 6.0 (Call 2-25.00 Qa 100) 6.000 % Due 02-25-04 150,000 Federal Home Loan Bank 100.00 150,000.00 100.25 150,375.00 7.6 7.020 10,530.00 7.0 (Call 8-20-99 Q 100) 7.020 % Due 08.20-07 Aecrued Interest 92121 .83 0.5 675,312.50 685,223.40 34.7 43,447.50 6.4 CASH AND EQUIVALENTS Money Market 17,366.91 17,366.91 0.9 4.750 824.93 4.7 17,366.91 175366.91 0.9 824.93 4.7 TOTAL PORTFOLIO 11901,616.71 1,9759017.44 100.0 124,297.43 6.4 2 r r 0 Longer Investments, Inc. REALIZED GAINS AND LOSSES ApZ 10 �o�y City of Fayetteville Police Pension Fund Bond Account FINAKE DSI, From 01-01-98 Through 03-31-98 cost Date Quantity Security Basis Proceeds Gain Or Loss 1 01-15-98 55,000 Pepsice (Non-callable) Rated 54,618.30 55,000.00 381.70 Al/A 6.123 % Due 01-I3-98 TOTAL GAINS 381.70 TOTAL. LOSSES 0.00 TOTAL GAIN/LOSS 381.70 54961830 559000.00 381.70 NO CAPITAL GAINS DISTRIBUTIONS I 1 0 i 1, i F i i 6 er ® i Longer Investments, Inc. F 10 1998 INCOME AND EXPENSES City of Fayetteville Police Pension Fund flI�A1'CE (} d. Bond Account From 01-01-98 Through 03-31-98 Security Amount CORPORATE BONDS Pepsico (Non-callable) Rated Al/A 6. 125% Due01 - 15-98 01 -15-98 12684.38 GOVERNMENTBONDS U. S. Treasury Bond 6.250% Due 08- 15-23 j 02-15-98 1 ,562.50 U. S. Treasury Note 6.375% Due 08-15-02 02- 15-98 3,187.50 ! U. S. Treasury Note 6.500% Due 08-15-05 02-15-98 1 ,625.00 U. S. Treasury Note 6.250% Due 08-31 -00 ® 02-28-98 d 12562.50 U. S. Treasury Note 6.250% Due 07-31 -98 01 -31 -98 71500.00 Total GOVERNMENT BONDS 15,437.50 GOVERNMENTAGENCY Federal Home Loan Bank (Call 7.020% Due 08-20-07 8-20-99 @ 100) 02-20-98 5,265.00 CASH AND EQUIVALENTS Money Market 01 -31 -98 839.51 03-02-98 428.99 03-31 -98 26.46 1 ,294.96 EXPENSE ACCOUNTS Automated Cash Mgmt. 01 -31 -98 24.26 03-02-98 i 12.55 1 i Longer Investments, Inc. APR 10 lo93 INCOME AND EXPENSES City of Fayetteville Police Pension Fund HINAkICE BPI, Bond Account From 01-01-98 Through 03-31-98 Security Amount 03-31 -98 0.78 37.59 Bond Premium Expense 02-28-98 367. 18 02-28-98 353.53 720.71 Total EXPENSE ACCOUNTS 758.30 AFTER FEE PERFORMANCE EXPENSE ACCOUNTS Management Fee 01 -20-98 41297.66 Northern Trust Fee • 03-31 -98 407.83 Total AFTER FEE PERFORMANCE EXPENSE ACCOUNTS 4,705.49 NET INCOME 18,218.05 i 2 reprinted from 1998 Special Double Issue Business)Week_ December 29, 1997 / January 5, 1998 A Publication of the McGraw-Hill Companies There's Only One Way to Ride An Aging Bull : Car`e�f, It APR 1 '14098 This years watchword - with the global economy slowing - is prudence r3eCE USF , It has almost become a ritual. Each rates. But the danger is that when valuations arc has logged 13.29b average annual rF"n e December, Wall IStreet forecasters predict that high, so are expectations, so there's no tolerance growth. During the same period, return on storks will make only modest gains in the year for disappointments, especially with high-profile equity soared from the long-term average of to come. ]lien, as the year unfolds, stocks market-leading stocks. 12%:fo 1346 to greater than 20%, and indeed for zoom as profits Isoar and interest rales sink. For Just take a look at Oracle Corp. When the 1997, Perry estimates that return on equity will the past three years, the Standard & Poor's database software giant reported quarterly hit a record 25.5%. 500-stock index has logged a 29% average profits 41 short of analyst's forecasts, investors He doesn't argue that returns on equity annual gain. dumped the stock merciless]y, taking it down have to drop back to average, but only that the This December is no exception. Forecasters an: 29% in a single day. Among Oracles extraordinary rate of profitability of the last again looking forgains of 5% to 64'a This time, explanations for its slipup: deteriorating sales three years is unsustainable - and that next however, the mavens may be on target. It comes in Asia. And global banker J.P. Morgan & Co. years earnings reports may contain some nasty down to This: A slowing economy, both here and also blamed turmoil in Axial in delivering its surprises. "You're already seeing serious _ especially abroad. could derail the earnings disappointing earnings on Dec 10. competitive pressures" he says. 'There's express and slow the. thundering bull market. Indeed, the troubles in Asia - with the overcapacity worldwide in many industries Of course, ther 's a lot more to this once- Tiger nations shuttering financial institutions, such as autos and semiconductors, so you in-a-lifetime bull market than just earnings. scuttling capital investment. and laying off caul raise prices, yet a tight labor market keeps 111e upward move in stock prices comes from workers - could be one of the critical factors pushing wages up' Rising productivity has a on decline in inflation and interest weighing on U.S. stocks in 1998. True, trade helped keep margins up, he says, but will it be rates; a In Ive restruc oring of Corporate with Asia isn't all that significant and neither enough in the face of slowing revenue growth? - - . America that allows it to operate leaner; U.S. gross-domestic -product' growth should be Willi Iess of a rising tide in 1998, tech nology-drivich productivity gains; and the terribly impaired by a slowdown on that stie investors are going to have to work border publics almost insatiable appetite for equities. of the globe Edward M. Kerschner, investment for their gains. Stock selection is None of that has changed, and if anything, the strategist for PaineWebber Inc, estimates that paramount. Elaine Al. Longer of Longer recent cut in capital gains taxes makes stocks 404b to 459b of the revenues for U.S. Investments Inc., which manages aborad even more attractive. multinationals - the sort of global stocks that $100 million in Fareileville, Ark., saes "BEYOND HISTORY" dominate the S&P 5 - come from abroad, half sine's looking to invest its companies with Still, prudentce should be the investors from Europe, and the rest split between Latin revenme gro.vlh rather than just profit watchword. It's time to review, holdings and America and Asia. 'Even if Asia doesn't do grosvtln because 'yon can no longer mad perhaps take some money off the table. And well, 90% of the revenue stream is still ou margin expansion to create double-digit there is a lot of Imonev-on that table. Even after producing, says Kerschner profit grou9h." She's finding most of the a scary 554-point drop on Oct 27, the Dow Still, many economists arc arguing that the new opportunities among sruall and rnid- _ tones industrials have still amassed nearly 1500 Asian woes will slow U.S. GDP revenue growth cap stocks. points, and now stand at 7922, up 22.9% in 1998, and hvill also put downward pressure on Most pros agree that stocks are cheaper (through Dec. 15). The S&P 500 - which prices and drive the 29b inflation rate even lower. once you get away from the S&P 500 but millions of investors access through index CONTAGIOUS FLU? prefer to stick with flit tried and true. "Smaller funds - has made even larger gains, 30.1%. If this is indeed the case, earnings estimates stocks perform better when economic growth Mid-cap and small-cap stocks, are up 25.6% may be too high. Analysts have not fully is accelerating," says Richard Bernstein, director and 19.996, respectively. adjusted for the Asian flu. Charles L. Mill, of quantitative research at merrill Lynch & History offers investors little guidance now. research director for First Call Corp., says Coo. Bernstein's advice: Stick with high-quality The U.S. stock market has never produced industry analysts are forecasting 14.39 companies in such sectors as drugs, household three years in alrow of 209b-plus gains. The earnings growth in 1998 for the companies in products, and retailing. most comparablc three-year periods, 1943 the S&P 500 - don from just 14.8% before Analysts are also starting to put utilities on through 1945, and 1963 through 1965, pale by the Asian crisis hit. Hill says those revisions their buy lists for the first time in years. 'IbWrc. comparison. "We're beyond history:" says only reflect yearend tinkering rather than any great in a falling rate environment," says market analyst Laszlo Birinyi of Birinyi actual rethinking of next years profit outlook. Berstein, 'and theres almost no exposure to Associates Inc. 'I1There am no road maps for It's unlikely that growth can slow without Asia' And for much the same reasons, they're what happens next' damaging some high-profile income statements. recommending real estate investment trusts. Investors do have some tools to judge their But even without the Asia factor, the 1998 Making money in 1998 will be tougher positions on the investment map-valuation earnings picture looks a little suspect to some. than in die last three ),ears, but that doesn't yardsticks such T1s price-earnings ratios and li. Bradlee Perry, retired chairman of and now mean you shouldn't try. The bull market isn't prim-to-book ratios. These measures are consultant to investment manager David L over. It's just slowing clown, stretched about las far as they ever were. So far, Babson & Co., notes that over the last three By Jrffrq- M. Lndrrnmn in Nov York. the valuations have been justified because of the years, the S&P 400 (the S&P 500 less the strong earnings growth and the falling interest finance, transportation, and utility companies) I I TIYL APR i 0 i3048 ' o COMMENTS AND IL OV1 UTLOOKS FROM LONGER �NPVrEhS1TMENTSiINCORPORATED March 31 , 1998 The First Quarter generally appreciates during inflationary periods, are unimpressive. That leads the investor to financial The performance of various market indices for the assets largely composed of stocks, bonds, and cash. first quarter of 1998 is reviewed below: Returns available in the bond market of approximately ®l i 5.5% in five- and 10-year taxable Treasury notes are Index 1st Quarter not attracting much investor attention. By default, the DJIA (cash basis) 11.3% stock market is the magnet for investment dollars, S&P 500 (cash basis) 13.5% because it offers the prospect of returns higher than Russell 2000 (small-cap index) 10.0% those available in cash and bonds. NASDAQ (over-the-counter index) 16.9% Lipper Index of Growth Corporate share repurchase programs and Mutual Funds 12.4% merger and acquisition activity have reduced the Lipper Small-Cap Index 10.7% overall supply of stock. Although the new-issue Dow Jones World Stock Index 13.4% calendar has recently become more active, it is not Salomon Bros. Treas. Bond Index 1.5% bringing enough new stock to market to offset the Dow Jones Utility Index 4.7% reduction caused by corporate activity. The result is a liquidity-driven advance in share prices, with In prior newsletters, we have discussed the factors too many dollars chasing stocks. that led to the advance in stock prices over the past several years. They are strong liquidity, low interest Valuation and Earnings rates, moderate valuation, and strong earnings growth. A review of the current status of those factors At year-end, we rated stock market valuation follows. neutral. The P/E multiple on the S&P 500 expanded from 13.5 times earnings in December 1994 to 21 .3 Liquidity and Interest Rates times earnings by December 1997. During the first quarter of 1998, the market advanced an additional Liquidity remains strong. In February of 1998 13.5% (as measured by the S&P 500), unaccompanied alone, $19.6 billion flowed into equity mutual funds. by earnings growth. As a result, the P/E multiple at the Foreigners are investing heavily in the United States end of the first quarter reached a record high: 23 times because the dollar is the strongest of the major inter- estimated 1998 earnings. We would now have to say national currencies. the valuation of the market — in particular, the valuation of the blue chip stocks — is high and war- Interest rates continued to hold at the low levels rants a more cautious approach. we saw in the fourth quarter, with the yield curve flat out to 30 years and interest rates less than 6% across In the fourth quarter of 1997, corporate profits the maturity spectrum. At the auction conducted in posted their steepest decline in nearly four years, even February, the 10-year Treasury note was priced to yield as the economy continued to grow at a healthy pace. 556% and carried a coupon interest rate of only 5.5%. Aftertax profits fell 2.3% after growing 4.2% in 1997's third quarter. In December, Wall Street estimates of In the investment world in which we operate ' first-quarter earnings growth averaged 10%. Those today, there are surplus dollars looking for investment earnings expectations have been reduced significantly, opportunities, from both domestic and foreign sources. as a number of companies preannounced lower than Investors who want to own U.S. dollar-denominated expected earnings results for the first quarter. Corpo- assets face the choice of investing in real assets (pre- rate earnings have been negatively affected by a strong cious metals, real estate, commodities, etc.) or financial dollar (resulting in foreign currency exchange losses assets (stocks and bonds). With inflation at a near- and price competition from imports), the Asian crisis record low of 2.0%/ returns on real assets, whose valued (resulting in decreased demand for U.S.-produced 1 C;OJN69ER iINVESTMENTS IN•CORP;OR•ATED gorisi ods), nglcost pressures from 'the ltight lU`S. 11abor avaluation rcontractionbtoughtabout lhiinstngiinterest market„andlsloWing (productivitylgams: icurrent rates. `The year 'sa Aramatic,sector rotation with ven • estimates fonfirst=quarterrprofiu;are `flatito little movement in'thebroad .averages. Comersel?. 'this plus a%. Estimates for .the year now stand at 3% .to M year's expected 'consolidation phase could be marked b> versus a consensus view of,I2pi 14%:as iecendy as 'Weak earnings ,growth, offset :by.rising valuations as .a sNoverriber. 'The [reality rd the ,Asian `.flii” rand 'strong result 'of low 'interest rates. Theaai abler are (different, dollar(andllheirlimpactonpmacg'insaircbecomingmore kbut [the fresultcouldpwell [be isimilar `= ,drarrtaiic ;sci appari rotation imithi n 'li a corteat rof,an overall :market docked m a :consol'ida'tion ;stage. Ou[look In a market environment such as the one we L We cit year with;a return target of 8%o to :envision for the 'next few ;quarters a isprudent to 12%n ;inthe stock Smarket. givenrour=pectationsrofla raise (soinecashIto lbe+able [to 'take advantagciinffbu}ang $"7ofto %o ;gain [in U:S. icoryoratereamingsrandfstock opportunitiesas(theyoccur. ?Howevei, is[ncerwerdolnot market06vitylthatwould ;moreclosi track eamings ianticipatea :major;assctrallocation isla out :6feiities :gcowih. Th-at return target was :achieved in the first -into bonds, an aggressive move`to aigtiten up isnot quarter. 'Now that the target price has been achieved, called for.at "this time: do we raise the larger? .At ibis ame, we w111 not . Il is Istih 'our iopinion that the second -tier ThIsyear'lsladvancelhasbeendue io;fur'ther [stocks [that !offer ifaster growth rates andmoreneason- valuauon expansionnna�companiedlby e��en themodest !ablevaluationsithansthe ;largereompaniesstill represent (earnings growth;we;en%?is oned forthe ;dear. The :good value. :These stocks could•ven• well be the .targeted return Tor [he year still seems ieasonable, .given Beneficiaries of'a rotational correction in the blue chip the current level ed interest rates. However, it stocks. Theories we continue to emphasize are those diffculttolbuild a ircpdk=solidrease for further advance- stocks that displayiabovc=average sales growifh, rising merit without (thelaccompanimenuof earnings growth. ;operating ;profil margins; istronglcapital [strictures, rand market ishan lom'inarice: pWe eipecl to see [the tmarkef define ilhe supper �limi)s Ofa+tradirtg range in the Dow Jones Industrial Average S4aff:Addi[ion"s 8900 to 9200 vicinity. : The blue .chip averages would:be expected to enter a protracted .(til to fouryuarter) We are pleased to `Welcome an Addition to :our eonsolida'iionfstage lmaikedbyrotational [corrections staffth'is 'quarter. 'Theresa Eli 'formerlywith within [the ;market: Intens( [rates �atrcurrent levels lare NalionsBanklN:A. 'inFayetteville Ark,, lhasj'oinedthe notappeating enoughitofforce a ma�orasset :allocation L:ongerInvestrftents team as:assistani ;portfolio ,man- Ishifl from equifres :to bonds. Rather; investors arc likely .:ager. Theresa bnngs '15 years of wst experience to :our lo :entertain switching from one sectorfo another. For ;firm.' having served as assistant vice .president :and instance; they might move from energy and technology :employee benefits administrator and As trust investment ,to pharmaceuticals and food; Lor ;fromM%ecapfstocks 'to ro'ffceriduring 'her ,lenurewith [the ibark 'Theresa?s ssmal l cap stocks. extensive iknowledge .and ;expenence ,make Ther fa ;valuaBle addition fo ;ourrstaff. 'd1'e (hope1hat [sherwill This :isfsimilar�.totheractivih- linifht+market in have'thc :opportpnitytovisitwiihyouovertheteli :1994 ''In '1994., we Mw strong earnings growth battling ;phone or to meet ;you in person soon. LONGER :IN 'V .ESTMENTS INCORPORATED .5ffS9('F, illmr%i4erhi!1 ;hm5grt [Ihv 'hnrriL,„7r1c lP^.,ti {1Fw 11'[11111'[ lrlanr;:r;gL-!Ri4 ilillnirr,rr �Pm f:afilititil I'll IJ 11111 rib rn 'f IRS n Il�t rerr,� Plirrl Jt4.' Irti. ,11 n .I!] fr ,ran rJM14uaa rgil •:dunl .nrry' 4nlih irt '�nr Mlrr;PLrrirrq•= _ ; rrrlil4ilalRlaregrennil . tir1 'Sill 'h.vnolon .ma➢;r:im+ r . u , �l..naunrn 111, .a: 9J ,iuhic;ru. lat ,,. lktirtill �Lr Jr 11 1s+Y,li n,a a.:-r. .il ofiP'(l ail[ il� 'y' 7i; �, : il . lir' °,Ii i,:Jl � ? =2.L i .A lip i0 - T1121 Cl I'R:J � L;je[.I'1 fax l+ IL ? 4,4;iP7 i, p t a 3 ,Q March 31, 1998 AP� ��4 City of Fayetteville Police Pension Fund Longer Investments, Inc Combined Account 113 W. Mountain Fayetteville, AR 72701 Longer Investments, Inc. STATEMENT OF MANAGEMENT FEES For The Period Ending March 31 , 1998 Portfolio Valuation as of 03-31 -98 $ 51924,446.86 3,000,000 @ 1 .000% per annum I 70500.00 2,924,447 @0.750% perannum 5,483.34 Quarterly Management Fee $ 12,983.34 ® TOTAL DUE AND PAYABLE $ 12,983.34 i I I� i r` i i i i I 0 'i° 9G March 31, 1998 APR 1 FINANCE DEP` , City of Fayetteville Police Pension Fund Attn: Ben Mayes 113 W. Mountain Fayetteville, AR 72701 t Longer Investments, Incorporated STATEMENT OF RECORDKEEPING FEES For the Period Ending March 31 , 1998 I Reporting fee ® December, January, February 10 hours @ $45 $450.00 TOTAL DUE AND PAYABLE $450.00 I i f i POLICE PENSION FUND APRIL 1998 P. v EMP# NAME GROSS FED. TAX ST. TAX NET 154 ALLEN , CHARLES 11238.63 1 ,238.63 152 ARNOLD, WILLADEAN 838.00 838.00 130 BAYLES, DON 760.73 760.73 107 BLACK, JOE P 539.44 539.44 120 BOWEN, J R 350.00 10.00 340.00 147 BRADLEY, GERALD 2,345.47 300.00 45.47 2,000.00 139 BRADLEY, RANDALL 1 ,388.45 1 ,388.45 101 BROOKS, BILL 728.22 728.22 151 COLE, RUSTON 1 ,469. 19 100.00 100.00 11269. 19 109 COOPER, ADRIAN 350.00 350.00 111 DAY, LUCILLE 350.00 350.00 108 DENNIS, WARREN 666.51 666.51 125 FLOWERS, HAROLD 413.39 413.39 140 FOSTER, BILLIE D. 1 ,563.71 150.00 50.00 1 ,363.71 148 FRIEND, JERRY 1 ,510.85 300.00 50.00 1 , 160.85 145 HANNA, MARK 1 ,311 .73 120.00 35.00 1 , 156.73 124 HASKINS, RONALD 374.85 374.85 146 HUTCHENS, BERNICE 874.85 130.00 744.85 143 JOHNSON , CHARLES 11176.74 36.70 11140.04 103 JOHNSON , WENDELL 375.30 375.30 118 JONES, BOB 1 ,581 .67 1 ,581 .67 144 KILGORE, DONALD 980.73 19.72 961 .01 129 LAWSON , FORREST 751 .38 50.00 701 .38 150 LITTLE, PATSY R 350.00 350.00 153 LORCH, DONNA G 350.00 350.00 • 128 MCCAWLEY, LARRY 812. 19 70.00 742. 19 116 MCCHRISTIAN, MARIE 350.00 350.00 126 MCWHORTER, KAREN 485.02 485.02 136 MITCHELL, MICHAEL 1 , 104.75 150.00 954.75 141 MUELLER, ROSEMARY 989. 10 989. 10 112 MURPHY, JAKE 350.00 350.00 137 PERDUE, LARRY 1 , 113.09 100.00 1 ,013.09 132 PHILLIPS, HOMER GENE 843.00 300.00 543.00 105 PRESTON , GEORGE DAVID 767.43 67.43 700.00 135 RICKMAN, LOREN 11069. 19 169.00 20.00 880. 19 104 RIGGINS, RAYMOND C 806.67 100.00 706.67 _ 115 RITCHIE, LIZZIE 350.00 350.00 122 SKELTON , FRANK 398.70 398.70 123 SPENCER, HOLLIS 659.25 50.00 609.25 121 STOUT, WAYNE 415.25 - 415.25 133 SURLES , JERRY 11304. 17 138.00 1 , 166. 17 142 TAYLOR, DENNIS 989. 10 60.00 15.00 914. 10 106 UPTON , FRANKLIN 506.58 10.00 . 496.58 110 WATTS, BEULAH 350.00 350.00 149 WILLIAMS , JOYCE 1 ,217.07 217.07 1 ,000.00 134 WITT, DON 846.72 64.00 782.72 127 WOOD, PAUL J 757.62 757.62 ------------------------- $39, 124.74 $2,655.50 $371 .89 $36,097.35 POLICE PENSION FUND APRIL 1998 • EMP# NAME GROSS FED. TAX ST. TAX NET 154 ALLEN, CHARLES 11238.63 11238.63 152 ARNOLD, WILLADEAN 838.00 838.00 130 BAYLES, DON 760.73 760.73 107 BLACK, JOE P 539.44 539.44 120 BOWEN , J R 350.00 10.00 340.00 147 BRADLEY, GERALD 2,345.47 300.00 45.47 2,000.00 139 BRADLEY, RANDALL 11388.45 1 ,388.45 101 BROOKS, BILL 728.22 1 728.22 151 COLE, RUSTON 1 ,469. 19 100.00 100.00 11269. 19 109 COOPER, ADRIAN 350.00 350.00 111 DAY, LUCILLE 350.00 350.00 108 DENNIS, WARREN 666.51 666.51 125 FLOWERS, HAROLD 413.39 413.39 140 FOSTER, BILLIE 0. 1 ,563.71 150.00 50.00 11363.71 148 FRIEND, JERRY 11510.85 300.00 50.00 11160.85 145 HANNA, MARK 11311 .73 120.00 35.00 11156.73 124 HASKINS, RONALD 374.85 374.85 146 HUTCHENS, BERNICE 874.85 130.00 744.85 143 JOHNSON , CHARLES 1 , 176.74 36.70 1 , 140.04 103 JOHNSON , WENDELL 375.30 375.30 118 JONES, BOB 1 ,581 .67 1 ,581 .67 144 KILGORE, DONALD 980.73 19.72 961 .01 129 LAWSON , FORREST 1751 .38 50.00 701 .38 150 LITTLE, PATSY R 350.00 350.00 153 LORCH , DONNA G 350.00 350.00 • 128 MCCAWLEY, LARRY 812. 19 70.00 742. 19 116 MCCHRISTIAN, MARIE 350.00 350.00 126 MCWHORTER, KAREN 485.02 485.02 136 MITCHELL, MICHAEL 1 , 104.75 150.00 954.75 141 MUELLER, ROSEMARY 989. 10 989.10 112 MURPHY, JAKE 350.00 350.00 137 PERDUE, LARRY 1 , 113.09 100.00 1 ,013.09 132 PHILLIPS , HOMER GENE 843.00 300.00 543.00 105 PRESTON , GEORGE DAVID 767.43 67.43 700.00 135 RICKMAN, LOREN 11069.19 169.00 120.00 880. 19 104 RIGGINS, RAYMOND C 806.67 100.00 706.67 115 RITCHIE, LIZZIE 350.00 350.00 122 SKELTON, FRANK 398.70 398.70 123 SPENCER, HOLLIS 659.25 50.00 609.25 121 STOUT, WAYNE 415.25 415.25 133 SURLES, JERRY 1 ,304. 17 138.00 1 , 166. 17 142 TAYLOR, DENNIS 989. 10 60.00 15.00 914. 10 106 UPTON , FRANKLIN 506.58 10.00 496.58 110 WATTS, BEULAH 350.00 350.00 149 WILLIAMS, JOYCE 1 ,217.07 217.07 1 ,000.00 134 WITT, DON 846.72 64.00 782.72 127 WOOD, PAUL J 757.62 757.62 ---------------------------- $39, 124.74 $2,655.50 $371 .89 $36,097.35 POLICEMEN'S PENSION AND RELIEF BOARD AGENDA The Police Pension board meeting will be held Thursday, April 16, 1998, at 1 :00 p.m., in Room 326 of City Hall. 1. APPROVAL OF MINUTES: Approval of the minutes of the January 15, 1998 meeting. 2. OLD BUSINESS: A. Confirmation letter from Arkansas Fire and Police Pension Review Board. 3. INVESTMENT REPORTS: A. Report from Longer Investments Incorporated B. Madison 1997 Year End Report C. NWQ Investment Management Company agreement. • D. Portfolio Review, NWQ Investment Management E. Portfolio Review, Flippin Bruce & Porter, Inc. 4, NEW BUSINESS 5. ADJOURNMENT l ARKANSAS FIRE & POLICE PENSION REVIEW BOARD P.O. DRAWER 34164 - LITTLE ROCK, ARKANSAS 72203 TELEPHONE (501 ) 682- 1745 FAX: (501 ) 682. 1751 April 2 , 1998 Fayetteville Police Pension Board of Trustees C/O Ms . Jane Heth _ -- Office - of— the -- City Clerk - - - - - - --_ City of Fayetteville 113 West Mountain Fayetteville , AR 72701 Dear Board of Trustees : I wanted to confirm that this office has received your resolution requesting a benefit increase . In point of fact , it was received February 18 . As you are aware , 1998 is an actuarial valuation year , and your financial report was referred to the actuaries February 24 , in order to perform a standard , biennial • actuarial valuation . Assuming the Fayetteville Police Pension Fund tests as actuarially sound for 12 / 31 / 97 , we will bill you for the benefit increase request . If the pension fund does not test as sound , you will be notified of it . Please feel free to call with questions . Respectfully , Cathyrn E . Hinshaw Executive Director 4 i FAYETTEVI LLE • THE CITY OF FAYETTEVILLE, ARKANSAS February 9 , 1997 Arkansas Fire & Police Pension Review Board P . O . Drawer 34164 Little Rock , AR 72203 Dear PRE : The City of Fayetteville Policemen ' s Pension Board approved a resolution to increase benefits for current and future retired members of the Fayetteville Police Pension Fund at their January 15 , 1998 , meeting . Enclosed is a copy of the resolution and a list of members who are already receiving over 50 % of their final salary . . Please call me at ( 501 ) 575 - 8323 if you have any questions . Sincerely , Jane Heth Deputy City Clerk enclosures 113 WEST MOUNTAIN 72701 501 -521 -7700 FAX 501 .575-8257 • A RESOLUTION TO INCREASE BENEFITS 061LICE PENSION FUNDS It is hereby resolved by the Board of Trustees of the City of Fayetteville Police Pension and Relief Fund to increase benefits, pursuant to Act 217 of 1979, as amended, to present and future retirants. The Board of Trustees further proposes that actuarial services be secured through the Office of the Arkansas Fire and Police Pension Review Board. The Board hereby agrees to pay such charges and fees as are required by the Pension Review Board to cover the cost of such actuarial services. 1 . Whereas, the City of Fayetteville Pension Board of Trustees met on January 15, 1998, and adopted a resolution to increase benefits to present and future retirants as follows: Increase benefits for current retired members and the future retired members of the Fayetteville Police Pension fund to 60 % of their original salary at the time of their retirement, excluding all members who are already receiving mandated increases which puts them over the 60 % of salary mark. If the fund is determined not to be able to withstand a 60 % of salary • increase, the Board requests a 55 % of salary increase, excluding all 1 members who are already receiving mandated increases which puts them over the 55 % of salary mark. Both proposals are without any spousal benefits . 2. Whereas, pursuant to Act 44 of 1983, the Fayetteville Police Pension Fund is required to pay surviving spouses of deceased police officers, respectively, an amount equal to the monthly pension benefit being received by the retired police officers at the time of their deaths; regardless of whether a spouse is currently receiving a benefit or will receive it in the future; provided, it shall not be less than $350/month. 3. Whereas, the benefits to the dependant children of deceased police officers if the child is under eighteen (18) years of age and not yet completed high school, or under 23 if enrolled in an institution of higher learning, shall be $ 125 a month, pursuant to state law; 4. Whereas, members qualifying for duty-disability after December 31 , 1986 shall receive a nummum 65% of final pay; or the benefit paid normal retirants, whichever is greater, non- duty disability applicants receive the benefit paid for normal retirement service. No member shall be retired for disability due to natural causes unless he has served at least five (5) years. PASSED, AND APPROVED this 15th day of January 1998. i� .` Chairman / '6>� Member Treasurer jla r� Member Member Member Morgan Keegan & Company, Inc. Osted Circle, Suite 5 rs, Arkansas 72756 501/936-7774 WATS 8001758-4008 Members New York Stock Exchange, Inc. April 16, 1998 Dear Hollis: Thank you for the opportunity to continue to oversee your funds at Morgan Keegan and I am glad that all of your accounts are doing so well with this market. This is to inform you of two positive changes in our Preferred Manager program: C • Morgan Keegan has retained the services of Evaluation Associates, Inc. (EAI) who will monitor and provide on-going performance analysis on all our managers. We had been handling those functions internally, but with the growth of our manager program, we decided to hire a professional firm externally. EAI has been providing these services to clients for over 20 years. • • With the growth of our Preferred Manager program, Morgan Keegan has added several new managers; one of them is Madison Investment Advisors. I had a good visit with Mike Schlageter, one of the principals at Madison, at our money managers conference in Destin, Florida in March. We met with him originally at the Shearson office back in 1989. I would like very much for you to consider once again transferring the Madison fixed-income account from Dean Witter to Morgan Keegan, not just for the reasons I have mentioned before, but to bring them back under the due diligence monitoring that I intended from day one. Thank you for your consideration, and as always, please call if I can do anything for you. Sincerely, Mike Kirkland, CFP Assistant Branch Manager MK:ls P.S. The full color quarterly report will be mailed to you from Memphis tomorrow morning. • 4 & n■3■a a 3 = - © ƒ } » ! 7 CD CD \ CDP 0 ( / k \ / ITI \ EL V; � CL co | � § c \ / ( ƒ ( § � CD / - Q 0 n ! c0 Wo 2 ; 0 2 _ » a CD cn D m R , 4 � 4@ ) ƒ I I r ^ E■■ z ( { ( \ � J � a - CD U)2 . D B . £ 04% ` \ ) CD c City of Fayetteville Composite Fund:IQ: Page 2 Report Period: t . 12/31/93 to 03/31/98 tx Fiscal Year Ends: December' r Time and Dollar Weighted Returns for Selected Fiscal Periods Latest Fiscal Yr Latest Latest Latest From Quarter to Date 1 Year 3 Years 5 Years 12/31 /93 Total Fund Time Weighted ; rts 476, X4.76 ,2228 - 1370 ! N/A,, ) 9.65 ollar Weighted 4 76 '4.76v X22 32 14: 19 ' N/A - 10.53: Balanced Index 7.44 7.44 26.40 17.26 N/A 13.00 Consumer Prices 0.57 0.57 1 .39 2.33 2.47 2.54 Equity Time;Weighted 5; 8 13 t< 8.56 45 28 � #A 27 36 N/A '%i 7:68! Dollar Weighiedi� _ -8.56 z . X8`56 + ,. >'44 17 ffi <= 28:35 N/A' 19:78 S&P 500 Compos 13.95 13.95 47.87 32.71 22.33 25. 19 Fixed Income Time:Welghted{ 1 16 1 .16 a 7 83 _ - 6.47 N/A 493 ' DollarWeighted • 1 16 Lji.l -16 we ,0_ 193 6.49 N/A'� 5--23 LB Gvt/Corp 1 .52 1 .52 12.39 9.20 6.96 6.74 • Cash & Equiv Time Weighted 0'98 0.98 3 78i 4.34 N/Ai. 4.5 Dollar Weighted= 0 97 0.97: 3 60__ 3:98 N/A� 4;06 SB T-Bill 1 Mo 1 .17 1 .17 4.85 5.06 4.47 4.75 • Fund data is on a settlement date basis and income is included in the fund returns on an accrual basis 04/16/98 Fund returns are net of management fees Returns for longer than one year are annualized All returns Include reinvestment of income Balanced Index: Month by month average asset mix allocations. Report period average asset mix allocation detailed below. 12/31/93 . 03/31/98 34% S&P 500 Campos, 59% LB Gvt/Corp, 7% SB T•Bill 1 Mo