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HomeMy WebLinkAbout1982-06-02 MinutesMINUTES OF A FIREMEN'S PENSION AND RELIEF BOARD MEETING A meeting of the.Firemen's Pension and Relief Board was held on Wednesday, June 2, 1982, at 4:30 p.m. in the City Manager's Office, City Administration Building, Fayetteville, Arkansas. PRESENT: Chief Paul Logue, City Manager Don Grimes, Firemen Johnson, Boudry, and Dill, Treasure Scott Linebaugh, and Secretary Sherry Rowe. ABSENT: Fireman Springston CALL TO ORDER City Manager Grimes called the meeting to order. MINUTES The minutes of the May 5, 1982, meeting were approved as submitted. PENSION LIST There was no change in the pension list, Motion was made and seconded to approve the list as submitted. The motion passed unanimously. OLD BUSINESS Treasurer Linebaugh reported that the Fire Pension members were requesting retirees 1-5 on the attached letter to get an increase to $250 per month and for retirees 6-12 to be increased as indicated on the letter. The attached letter is to be submitted to the State Auditor requesting an actuarial study to determine if the fund would be sound to allow for the benefit increases. Motion was made and seconded to submit the letter and request the study. Retirees 1-5 should be considered as the priority, and increases for 6-12 should be considered on a secondary basis. The motion passed. unanimously. Motion was made and seconded for the secretary to send a letter to each retiree requesting an increase and a copy of the letter that is sent to the State Auditor's Office, Investments. Three investments came due in May: (1) May 10 - $100,000 was awarded to First Federal Savings & Loan at 14.55% for 182 days; (2) May 10 - $250,395 was awarded to Northwest National Bank for 182 days at 13.07%; and (3) May 24 - $157,000 was awarded to McIlroy Bank and Trust at 13.0% for 6 months. There are no investments due in June. Motion was made and seconded to approve the investments. Upon roll call the motion passed unanimously. Mr. Linebaugh stated that Northwest National has as many city funds as possible at the present time for the amount of collateral backing they have to cover the investments. They have refrained from bidding during the past week. Mr. Linebaugh stated there were differences in interpretation of the law dealing with the amount of insurance coverage of the pension funds. A legal opinion is pending regarding the differences in how much the fund can invest in an institution and be insured by the FDIC. Due to this difference of interpretation, Northwest National did not have the proper collateral to back up the securities they purchased. Mr. Linebaugh demanded Northwest National back up the securities with banker's acceptances until they could get proper collateral. NEW BUSINESS Ralph Tate and Larry Freedle are no longer on the Pension Board. The new members are Jack Boudry and Gary Springston. Motion was made and seconded to approve the two new members. The motion passed unanimously. Capital Notes. Mr. Linebaugh stated Mcllroy Bank was requesting thatthe Fire Pension invest in capital notes. The City cannot invest in these funds, but.. the fire pension fund could. Tha bank capital notes pay an interest rate of 1% higher than the U.S. Treasury Bills, and the notes are in $1,000 denominations. The pension investments have been averaging higher than this rate in the past. Mr. Linebaugh noted that Mcllroy Bank capital notes for the first quarter of 1982 paid 13.86%, and for the months of April and May, they paid 13.61%. The City of Fayetteville during this same time had averaged 13.25% and 13.63%, respectively. Mr. Linebaugh pointed out that Mcllroy Bank capital notes would average approximately the same to a little lower over the long run in comparison to what the pension fund is currently earning. Mr. Linebaugh pointed out the following important points to take into consideration: (1) Mcllroy Bank is requesting pension fund support with the belief that the banks and local community have helped the pension funds and that the pension support in these capital notes would help the bank and local community thrive; (2) the capital notes do not follow our current policy in that they are unsecured and uninsured; and (3) that if the pension fund were to purchase Mcllroy Bank's capital notes, theiother local institutions would request similar participation in their capital notes. Motion was made and seconded to table this issue to the next meeting to allow for further study of the aspects of investing in capital notes. The motion passed unanimously. Savings and Loans. Mr. Linebaugh reported that the last three investments awarded to First Federal Savings and Loan were earning higher interest than the banks: (1) November 9, 1981 - 14.25% and banks were paying 12.75% (2) February 8, 1982 - 15.35% and banks were paying 14.85% (3) May 10, 1982 — 14.55% and banks were paying 13.07% The pension board ruling to limit investments in savings and loans to $100,000 keeps the fund from investing additional funds in savings and loans. Mr. Linebaugh stated he brought this to the attention of the board for their information; The pension fund rule was adopted at the time when savings and loans were having financial difficulty, and some of them are still experiencing some difficulty. It was generally decided to recondiser the pension fund investment policy. It was felt that a feasible plan could be worked out that would keep the pension funds financially secure. ADJOURNMENT There being no further discussion, the meeting adjourned at 4:58 p.m. erry Secretary o ald L. G hC airman� FIRE DEPARTMENT FAYETTEVILLE. ARKANSAS 72701 State Auditor's Office Attn. Cathyrn Hinshaw Dear Ms. Hinshaw, We, the members of the Fayetteville Frye Department Pension actuarial study for the following proposed increases in retirees CURRENT PROPOSED AMOUNT OF This NAME SALARY 1) Lee Skelton $190 2) Everett Cole $175 3) Merlin Iayer $217 4) Donald Watts $200 5) 041Ray Davis; $177 SALARY $250 $250 $250 $250 $250 INCREASE $60 $75 $33 $50 $73 May 26, 1982 Board, request an benefits: would only bring these men up to mimimum of what a retirees widow is now -drawing. 6) Charles McWhorter $685 7) Orville Stout $39$.36 S) Alonzo Farrar $507.84 9) Don Miller $663.01 10) Carl Springston$409.88 11) Earvil Schader $715.78 12) Burl.Skelton $492.50 $745.00 $60 $450.36 $60 $567.84 $6o $723.01 $60 $469.88 $60. $775.78 $60 $552.50 $60 Of prime consideration is the bringing up of ret&rees No. 1-5, to the two hundred -fifty dollar ($250) minimum) We would prefer to bring all of the above stated men up to the proposed salaries. If this is not feasible at this time please consider the effects of raising the first five men. However, if the fund is sound enough for only a partial raise for 6-12 please advise us of this also. Very sincerely yours, Fayetteville Fire Dept. Pension Board