HomeMy WebLinkAbout1984-02-13 MinutesA MEETING OF THE FIRE PENSION RELIEF BOARD
A meeting of the Fire Pension Relief Board was held at 4:30 P.M. on
Monday, February 13, 1984 in the City Manager's Office at Interim
City Hall, Fayetteville, Arkansas.
PRESENT: Treasurer Scott Linebaugh, Fire Chief Logue, Firemen
Dill, Judy and Springston; City Clerk Kennedy
ABSENT: Chairman Don Grimes, Fireman Boudrey
CALL TO ORDER
In the absence of the Chairman, Treasurer Scott Linebaugh called the
meeting to order.
MINUTES
With no corrections or additions to the Minutes of the January 10,
1984 meeting, they were approved as submitted.
PENSION LIST
There being no changes to the Pension List for February, 1984, Fireman
Judy, seconded by Springston, made a motion to approve the Pension
List. The motion passed, 4-0.
OLD BUSINESS
Investments
Treasurer Scott Linebaugh reported on his research into interest rates
at Little Rock banks. He stated he had made inquiries at Union National,
Worthen, First National and Commercial National on a $200,000 C.D.,
with the following results:
L.R. Banks City (non -Fire Pension)
Highest Investments
Term Interest Rate Interest Rate
30 day 9.375% 9.425%
60 day 9.50% 9.47% (62 day)
90 day 9.50% 9.36%
180 day 9.60% 9.52% (182 day)
1 year 9.70%
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February 13, 1984
Page Two
Linebaugh reported on quotes he received from the local banks on a
one-year C.D., compared with the highest interest rate of 9.70% being
quoted by a Little Rock bank.
Bank Interest Rate
Mcllroy 9.75%
First National 9.60%
Northwest National 10.0%
Linebaugh reported on long-term rates being offered at a local bank,
noting that the rates should fluctuate between now and the next election.
He also pointed out two problems that control interest rates: first,
as federal deficits keep getting larger, a larger percent of the market
is taken; and second, the balance of trade deficits keep growing.
Linebaugh remarked, with cuts in government spending, there would
be more money in the market to be used.
Term Interest Rate
1 year
2 year
3 year
10.30%
10.90%
11.20%
Linebaugh noted investments available in Taxas through purchasing
a C.D. with a savings and loan association. He quoted rates being
offered from the Texas market:
Association
Interest Rate Term
Mainland 10.75% 182 days
Ft. Stockton 10.38% 181 days
Commerce 10.5% 181 days
Linebaugh reported the best rate in Arkansas for six-month C.D. was
received from a savings and loan association in Harrison, of 10.0%
for 180 days.
GANA, Treasury Notes, Treasury Bills
Linebaugh reported the best current rate on a Treasury Bill is at
9.80% for one year, stating there would be "no real gains that way".
Linebaugh quoted the following rates for Treasury Notes:
Term Interest Rate
3 years 10.95%
5 years 11.45%
10 years 11.75%
Fire Pension Relief Board
February 13, 1984
Page Three
Linebaugh reported the average term on a GNMA (mortgage on home) is
15 years; he stated that, on 12% coupons, the yield is principal and
interest, with payments around 12.28%, and with a life of about 12
or 12.5 years.
Savings and Loan Associations
Linebaugh referred to the memo distributed from Lou Ann Westerfield
regarding the suitability of local savings & loan associations for
City investments. He stated, as pointed out in the memo, that both
Superior Federal and First Federal of Arkansas are strong enough associ-
ations to be considered in placing pension fund investments.
Savings Account
Linebaugh reported the Pension Fund will have accumulated more than
$100,000 in savings by the end of this month or first of next month,
at which time a decision should be made as to how to invest these
funds.
After some discussion regarding whether to obtain bids on this investment
from the three local banks and the three local savings and loan associ-
ations, Fireman Dill, seconded by Judy, made a motion that bids be
requested from the three local savings and loan associations only.
The motion passed, 4-0.
Linebaugh noted that, in April, a decision should be made whether
to go "long-term" (2 years or more) or stay with 180 days or one year.
He answered a question as to whether a long term certificate can be
obtained with a minimum deposit of $100,000 or whether it required
$500,000, by stating that $100,000 is necessary to get the needed
rate.
NEW BUSINESS
Request for Raise in Retirement Benefits
Fireman Springston stated that he and others have been discussing
the possibility of asking for a raise in the retirement benefits,
as there are still some retirees receiving somewhat low pension benefits.
Springston reported it was the general concensus of those he spoke
with to propose a flat rate for full -pay retirees, of a smaller amount
than that which was requested last year. Springston suggested a figure
of no more than $50.00 per month for 13 full -paid retirees, which
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February 13, 1984
Page Four
would be an amount of $650 per month for all 13 eligible beneficiaries.
Treasurer Linebaugh asked what is being recommended as an increase
for the part-time retirees. Springston stated it was the general
feeling of the few he spoke with that they wished to put an effort
only towards the full -paid retirees.
Fireman Springston, seconded by Dill, made a motion to request an
increase as described. Springston remarked that there was some fear
that asking for an increase for the part -paid retirees might jeopardize
the chances of receiving approval for the full amount being requested.
Linebaugh suggested an alternative request be submitted in case the
full request is not approved, stating that this would prevent having
to submit a separate request later. There was some discussion about
the necessity of submitting an alternative request and Linebaugh stated
he would check into whether this would be necessary.
Cash Contribution
Treasurer Linebaugh reported a contribution of $33 had been received
for the Pension Fund from James Moore.
ADJOURNMENT
With no further business before the Board, the meeting adjourned at
5:00 P.M.
b NALD L. GRIMES, CHAIRMAN