HomeMy WebLinkAbout1988-10-27 MinutesMINUTES OF A MEETING
OF THE FIRE PENSION & RELIEF FUND BOARD OF TRUSTEES
A regular meeting of the Fayetteville Fire Pension & Relief Fund Board of
Trustees was held on Thursday, October 27, 1988 at 1:30 p.m. in Room 313 of City
Hall at 113 West Mountain Street.
PRESENT: Ex -Officio Treasurer Scott Linebaugh, Secretary Suzanne McWethy,
Fire Chief Mickey Jackson, Firemen Pete Reagan and John Dill.
Others present were Zelda Parson, City Accounting Supervisor and
Curtis Williams and Richard Yada of Merrill Lynch.
ABSENT: Chairman Jim Pennington, Fireman Mike Bonaduce, Retiree Carl
Springston
CALL TO ORDER
In the absence of the Chairman, the meeting was called to order by Scott
Linebaugh.
PENSION LIST
The pension list for the month of November was considered. Chief Jackson said he
thought "Yogi" Wright and Jack Boudrey's pension benefit amounts may need to be
increased. Zelda Parson said she was not aware of any errors but suggested these
amounts be checked.
It was moved by Dill, seconded by Reagan, and unanimous, to approve the pension
list with any necessary changes being made to Wright's or Boudrey's pension
benefit.
OTHER BUSINESS
Linebaugh said Chairman Pennington asked to have a "scattergram" or comparison of
RNC to the other money manager firms. Linebaugh said Pennington had asked for
this for the October 4 meeting and RNC didn't bring it, and that Pennington would
like to renew his request.
Linebaugh said he and Pennington wanted to bring up the matter of the investment
policy for discussion. Reagan suggested going over the investment policy at the
end of the meeting, noting particularly that there were some portions of the
policy he didn't understand.
Fire Pension Minutes
October 27, 1988
Page 2
NEW BUSINESS
MERRILL LYNCH REPORT
Yada reported on the Equity Account managed by RNC. He said the portfolio value
was $511,315 on a total investment of $507,000.
Yada said the statement sent out by Merrill Lynch on the ML -Lee investment shows
the current price to be at $1,000, market value $100,000.
Linebaugh asked if the investment could be sold at $100,000 today. Williams said
that it could, commenting that the seller sets the asking price for the units.
He said there were people selling their units at $1,000 per unit. He said
trading is only done twice per year. He said buyers and sellers "put in orders
at a price" and Merrill Lynch matches buyers and sellers. Williams said if the
Pension Board wanted to sell its investment, Merrill Lynch would recommend
putting in an order to sell at a price higher than $1,000 per unit. He said the
investment was performing better than expected.
Linebaugh said when his staff received information from the Fayetteville Merrill
Lynch office that the investment was currently worth $900 per unit, that was
based on the last highest trade that had been made. Linebaugh said he wanted to
go on record that, in his opinion and in the City Attorney's opinion, the
investment was illegal and the Board should get out of the investment.
In answer to a question from Chief Jackson, Williams said you can put in an order
to sell the investment at any time, but the actual transfers can only take effect
in January or July. Williams said the limited partnership status of this
investment is controlled by federal regulations, and if there is a publicly
maintained market, you lose that status. He said the market for selling the
investment therefore is "informal." He said Merrill Lynch does not solicit
orders to sell the investment but, when they receive orders, they provide a way
for buyers and sellers to get together.
Yada said, since May 20, the Board has received $3,130 from the $100,000
investment. He said there would be another distribution at the end of November.
He said the projected rate for the first year was 7-8%. He said total return is
projected now at 20-25%. Williams said they disagreed it was an illegal
investment and thought it was a good one. Yada said the reason for the
investment was to be a bolster for the Equity Account in case something happened
to the Equity Account.
Yada, reporting on the Income Account, said the portfolio value was $1,960,828,
with the original value being $1,647,000. He said this account was up $213,000.
Yada said he should have RNC's quarterly report for the next meeting.
Fire Pension Minutes
October 27, 1988
Page 3
INVESTMENT POLICY
With three members being absent, Reagan moved to table consideration of the
investment policy until the next meeting. The motion was seconded by Dill and
passed unanimously.
MEETING DATE RE -SET
Because of the upcoming Thanksgiving holiday, it was agreed to reset the November
meeting to November 17.
ADJOURN
The meeting was adjourned at about 2:20 p.m.