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HomeMy WebLinkAbout2012-04-26 MinutesBoard Members Mayor Jordan Chairman Sondra E. Smith Secretary Marion Doss Position 1/Retired Pete Reagan Position 2/Retired Dennis Mullen Position 3/Retired Ronnie Wood Position 4/Retired Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes April 26, 2012 Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes April 26, 2012 Page l of 7 A meeting of the Fayetteville Firemen's Pension and Relief Fund Board of Trustees was held at 3:00 p.m. on April 26, 2012 in Room 326 of the City Administration Building. Mayor Jordan called the meeting to order. Present: Marion Doss, Pete Reagan, Ronnie Wood, Mayor Jordan, Kit Williams, Sondra Smith, Lisa Branson, Paul Becker, Trish Leach, Kerry Bradley, Glenn Atkins, Garrison Financial, Audience and Press. Absent: Dennis Mullens Approval of the Minutes: November 30, 2011, December 8, 2011, December 14, 2011, January 5, 2012 special meeting minutes, and January 26, 2012, meeting minutes. Pete Reagan moved to approve the November 30, 2011, December 8, 2011, December 14, 2011, January 5, 2012 special meeting minutes, and January 26, 2012, meeting minutes. Ronnie Wood seconded the motion. Upon roll call the motion passed 5-0. Dennis Mullens was absent. Pension List Changes: None Approval of the Pension Lists: Approval of the May, June and July 2012 Pension Lists. Pete Reagan moved to approve the pension lists. Marion Doss seconded the motion. Upon roll call the motion passed 5-0. Dennis Mullens was absent. New Business: Revenue and Expense report 113 West Mountain 72701 (479) 575-8323 TDD (Telecommunications Device for the Deaf) (479) 521-1316 Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes April 26, 2012 Page 2 of 7 Paul Becker: One thing I want to point out, if you look at 2011 after the adjustment, you still pulled $70,000 out of the fund. Last year was a pretty good year and the fund is still declining even after a good year. Projected Insolvent Status - Letter to PRB dated January 31, 2012 regarding projected insolvent status. Sondra Smith: That is the letter we worked on at the January meeting. The Mayor sent it to PRB. The response from PRB is also in the packet. Projected Insolvent Status - Response letter from PRB dated February 6, 2012 regarding projected insolvent status follow up. Sondra Smith: That is their response to the letter that we sent. Mayor Jordan: Any comments on that? Marion Doss: Their letter told us nothing new and wasn't especially helpful or anything. Pete Reagan: We basically already knew it before we asked the question. They're not going to tell you anything unless you pay them. Paul Becker: To know for sure you have to have the actuaries for LOPFI do a study. Pete Reagan: Right, Gabriel Roeder Smith is the actuary for LOPFI. To consolidate with them you better use them. Marion Doss: I still think we should pursue consolidation but it doesn't look like there is any way it is going to happen. Pete Reagan: If you can come up with a way to do it. Marion Doss: That's why we ask them. Sondra Smith: I don't think the City Council is going to go for that until you reduce benefits. They have been pretty clear on that. We've tried to reduce benefits twice and the vote failed. The Mayor doesn't like for us to vote on that without a full board here and it's hard to get a full board here. Pete Reagan: We also have two AG's opinion that says there is no legal way to do it. Sondra Smith: But there is nothing in the state code that says you can't do it either. There's nothing in there that says you can and there is nothing in there that says you can't. 113 West Mountain 72701 (479) 575-8323 TDD (Telecommunications Device for the Deaf) (479) 521-1316 Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes April 26, 2012 Page 3 of 7 Pete Reagan: The AG's opinion is weighted. Sondra Smith: Our City Attorney feels differently. You know how different attorney's think. Pete Reagan: That is the reason the courts are full. 2012 Elections: Marion Doss and Pete Reagan are up for election. Do we need to call a special meeting to open the ballots and count the votes? Sondra Smith: We sent the nomination letters out. We will be sending the ballots out. You all set that process in place to where the ballots have to be opened at one of our meetings. I don't know if you want to wait until July and open them or if you want to have a special meeting at the end of May. A discussion followed regarding setting up a special meeting date. Marion Doss: We should probably have a special meeting in May to count them just to make sure. Mayor Jordan: So we are going to have a special meeting in May, right? Is everybody good with that? Pete Reagan: Do we have to have a meeting to count ballots? Sondra Smith: That's the process that you all set in place. You wanted the ballots sealed and not opened and you wanted them opened at a meeting. If you want to change that process then you wouldn't have to have a special meeting. The discussion continued on possible meeting dates. Pete Reagan: I thought I asked this board to hold elections for positions. The letter that Sondra sent out dated April 16th says in the third paragraph "you need to nominate two people." I've had several retirees call and ask me why they have to nominate two. Why can't I just nominate one? I told them to let me see what we can do to make it simpler. I would like to move that we hold elections for positions. Sondra Smith: We were doing that and we had problems. We had problems with some of the retirees nominating the same person for position one and for position two. It really was a mess. The board voted not to do positions therefore we left the positions off. We can go back to that but its going to be confusing to people again. You might not have been at that meeting where they decided not to do the positions anymore. The nomination process has always been a problem. Pete Reagan: I get phone calls from people that thought we were actually voting. 113 West Mountain 72701 (479) 575-8323 TDD (Telecommunications Device for the Deaf) (479) 521-1316 Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes April 26, 2012 Page 4 of 7 Sondra Smith: Then they don't turn the ballots back in because they think they have already voted. We've talked about that before because the Police Pension does not do nominations and it works great. We don't have any problems at all. We send out ballots, they send them back and the ones with the most votes get elected. Ronnie Wood: Other words do it just like we are doing ours except instead of nominations you send ballots. Sondra Smith: We send a ballot out with a list of eligible pensioners and they pick the two or three people that they want. They list them and we count the votes on the ballots when they come in. I think this board wants to do the nominations. It is very confusing and we get a lot of questions because they think they have already voted. A discussion continued on the election process. Ronnie Wood: If we change it again I think we are going to cause more confusion. Pete Reagan: Ok, let's leave it like it is. Marion Doss: It looks pretty simple now. If you get a bunch of names in, the two people with the most votes are the ones that get the nomination and then people vote for those people. Sondra Smith: The ones that are nominated I call to make sure they are willing to serve and then we put everyone that is nominated and willing to serve on the ballot. Pete Reagan: By doing that you can actually vote for your opponent. I'm up for reelection and if I vote for me and whoever is running against me and they get it that means I cast one of my votes for them. I don't think that is right. Sondra Smith: If we get five nominees and they are all willing to serve we put five names on the ballot. We don't just put the ones with the most nominations. We've never done that. Marion Doss: I thought you did the two with the highest votes. Sondra Smith: No, when the ballots come in the two with the highest votes win the actual election. Everyone goes on the ballot that is willing to serve. I may get ten people nominated but there may be only five of those ten that want to serve. I call each one of them that is nominated to make sure they are willing to serve. I don't want someone elected that doesn't want to serve. Pete Reagan: You will send us that information of those that are nominated by email. Sondra Smith: Yes, we can send it out to you. 113 West Mountain 72701 (479) 575-8323 TDD (Telecommunications Device for the Deaf) (479) 521-1316 Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes April 26, 2012 Page 5 of 7 It doesn't matter to me I just think it's confusing when we keep changing the process. That's the reason we took the positions off because it was very confusing to people. If it were me I would do away with the nomination process but I know you all like that process. Pete Reagan: That's the American way. You've got to have the nomination process as far as I'm concerned. Sondra Smith: We never get calls on the Policemen's Pension, its only the Firemen's Pension that is confused. Garrison Financial: 1 st Quarter reports Kerry Bradley: Thanks for having us. This is our first official meeting since we got everything transferred and everything in. We've made a few transitions on the account. Everything was transferred January 31st and everything came in on the 31st. There were notes of the activity in the portfolio. The previous manager had about $564,000 in an index fund so we liquidated that. We allocated that to some other mutual funds to get you some more exposure and some small cap and mid cap areas we thought you were light in. The stocks that you had, very large cap blue chip nice dividend paying names, we've held on to for now and may continue to do that for the foreseeable future. A note on the fixed income side the AT&T preferred stock was called so that was not an actual sale from us but AT&T called it back to the company. We got that cash and we redeployed those funds into some fixed income mutual funds since we are under law to only use mutual funds. The portfolio is worth $4.748 as of yesterday. Today the market was up so hopefully we gained a little bit more today. The performance in the account since we got it, this is kind of an odd time period, we can't give you from end of the year because it was in transition, the portfolio is about 2.5%. I believe when it transferred over into the account we were about $4.8 million. We've pulled out about $182,000 and we are down about $50,000. We are down about $50,000 in market value, net we gained about $100,000 over the quarter. Equities had a really strong first quarter this year up about 12%; we've given a little bit of that back in April. Bonds were relatively flat. The bond market was fairly volatile rising and then falling and rising again. We're about flat from where we were at the end of the year. The second page of the report you will see the asset allocation that we set for the portfolio was 60% equity and 40% fixed and we gave the portfolio a 2% variance for market movement. You can see we are a little bit over weighted in equity and little bit under weighted in fixed income. When we spoke to you before, with interest rates where they are, and equities evaluations were they are we are very comfortable with that. Again your portfolio I would suggest it is not as risky on the equities side as the over all market with it being in a lot of those blue chip dividend yielding names. Even some of the mutual funds we bought have very nice yields to throw up as much income as can for you guys. Hopefully build the portfolio to keep the value up to last as long as possible. 113 West Mountain 72701 (479) 575-8323 TDD (Telecommunications Device for the Deaf) (479) 521-1316 Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes April 26, 2012 Page 6 of 7 Paul Becker: You still have $3 million in equities? Kerry Bradley: Yes, and that's about 63.1% of the portfolio. Paul Becker: You said you were comfortable those were blue chips. Kerry Bradley: Yes and since it fell below $5 million this is obviously what Longer had purchased and these are names that we follow so we have held on to those as well. Pete Reagan: The AT&T that you sold was a bond? Kerry Bradley: It was a preferred stock and it was called back. The company called it back so we didn't have any choice. Pete Reagan: So we made money on it. Kerry Bradley: I don't know exactly but I suspect it was probably about a wash. I don't have a realized gain and loss report. Paul Becker: According to this it was up about $4,000. Kerry Bradley: What are you looking at? Paul Becker: Page one. Kerry Bradley: The AT&T that was called away back in February will not show up on the current appraisal as of April 25tn Paul Becker: The total investment was $125. Kerry Bradley: $125 is what we got back from AT&T. From the best of my reconciliation it may have been purchased under par, 24 something is in my head but I don't know exactly. We have another distribution we've set it up as a money link transaction to move the funds over every month. That has gone off without a hitch and we've gotten those monthly transfers down with no problem. That all worked very smoothly. I was a little leery of the first one but that all went well and we have another one coming up next week. Pete Reagan: Good. Kerry Bradley: On the cash management side of the portfolio, I know last year it didn't look like there was a distribution in June or in August. Pete Reagan: That would probably be because of insurance turnback. 113 West Mountain 72701 (479) 575-8323 TDD (Telecommunications Device for the Deaf) (479) 521-1316 Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes April 26, 2012 Page 7 of 7 Kerry Bradley: I didn't know if some revenue was coming in. It looked like last June and last August there were no withdrawals out of the portfolio at Longer. Trish Leach: That's because as Pete said we get money from the State. Kerry Watkins: I was wondering if perhaps that was going to happen again in June and August. We have about $167,000 in cash and I think the distribution this month is $115,000 so again we are going to have to raise some funds. The equity market is up so we can easily raise some funds just for cash management purposes. It will give us a little more leeway if we don't have a big withdrawal coming in June. Trish Leach: I will look at it and see what I can tell you. Unfortunately for us we don't know when we will receive the money from the State. It varies slightly ever year. Kerry Watkins: We will probably raise a little with the markets being up with that being the case because I suspect in June the distribution will happen again. Other than that everything I think is going as planned. Again thank you for allowing us to help you and allowing us to be here. We are right down the road if you ever need us. Pete Reagan: Thank you. Mayor Jordan: Thank you all. Informational: 2012 Meeting Schedule Pete Reagan: We have the special meeting in May. Sondra Smith: May 30th at 3:00 p.m. Meeting adjourned at 3:25 p.m. 113 West Mountain 72701 (479) 575-8323 TDD (Telecommunications Device for the Deaf) (479) 521-1316