HomeMy WebLinkAbout2005-08-25 - Agendas - Final Firemen's Pension and Relief Fund
Meeting Agenda
August 25, 2005
A meeting of the Fayetteville Firemen's Pension and Relief Fund will be held at 11 :00 a.m.
on August 25, 2005 in Room 326 of the City Administration Building
1. Approval of the Minutes:
• July 28, 2005 Meeting Minutes
2. Approval of the Pension List:
• September 2005 Pension List
3. Old Business:
• Nichols & Campbell, P.A. - Income Tax refund for Retirees — Update
• TIF Lawsuit — Update from Kit Williams
4. New Business:
• Kim Skelton letter regarding college enrollment
• Kelly Skelton letter regarding college enrollment
5. Longer Investments:
• Report
Firemen's Pension&Relief Fund Board of Trustees
Meeting Minutes
July 28,2005
Page 1 of 5
Firemen's Pension and Relief Fund Board of Trustees
Meeting Minutes
July 28, 2005
A meeting of the Fayetteville Firemen's Pension and Relief Fund was held at 11 :00 a.m.
on July 28, 2005 in Room 326 of the City Administration Building
Marion Doss called the meeting to order
Present: Marion Doss, Danny Farrar, Dennis Ledbetter, Pete Reagan, Ronnie Wood, Sondra
Smith, Trish Leach, Accounting Department and Kit Williams, City Attorney, Elaine Longer,
Kim Cooper, Christa Ferguson and Kenneth Biesterveld, Longer Investments.
Absent: Mayor Coody
Approval of the Minutes:
Pete Reagan moved to approve the June 30, 2005 meeting minutes. Dennis Ledbetter
seconded the motion. Upon roll call the motion passed 5-0. Ronnie Wood was absent
during the vote. Mayor Coody was absent.
Approval of the Pension List:
Pete Reagan moved to approve the August, 2005 Pension List. Danny Farrar seconded the
motion. Upon roll call the motion passed 5-0. Ronnie Wood was absent during the vote.
Mayor Coody was absent.
Old Business:
Nichols & Campbell, P.A. - Income Tax refund for Retirees — Update
Patricia Leach, Accounting: We have the letters almost ready to go out. We will be sending
two different letters, one to the pensioners that are not eligible and one to the pensioners that are
eligible. The people that are eligible to participate, we are sending the information to them, for
them to approve our calculations. When they approve it and get it back to us we will then
forward the information to the Department of Finance. It will take them approximately six
weeks to process the information.
Marion Doss: I am glad you sent a letter to the ones that are not eligible so there will not be any
confusion.
Firemen's Pension&Relief Fund Board of Trustees
Meeting Minutes
July 28, 2005
Page 2 of 5
1
TIF Lawsuit — Update from Kit Williams
Kit Williams: I had a meeting with almost all of the attorneys initially to try to agree to the
stipulated facts so we could then submit briefs and decide. We have a second meeting scheduled
the first part of August and hopefully we will agree to the stipulated facts that I have presented. I
will present it to them again and tell them if there are any facts they want, to let us know, and we
will include them. If we can get everybody's agreement on the stipulated facts then we will be in
pretty good shape. There are a few questions that I will ask of the school district, to clarify what
their debt service was in relation to what the law says. Once we have that I think we will be in a
position to file legal briefs with the court and let the court decide. It is just a matter of law as to
how that money should be divided. If we get to that point then I will be happy because the
amount of attorney's fees that you will pay will be fairly small. I can't guarantee you that there
will not be a hearing, the school board's attorney has said that he wanted to have testimony. We
are trying to accommodate everybody, but I don't understand the need for it.
Dennis Ledbetter: Who represents the school?
Kit Williams: Rudy Moore. Everyone has been cooperating. I think we are all working at this
in a very cooperative way. I would like to get some final decisions on this TIF District and get
everything done properly.
Pete Reagan: The bottom line of this lawsuit is that we are asking the Arkansas Supreme Court
to determine what?
Kit Williams: How to distribute the tax increment. There is a base, but everything above the
base, the increase in tax that is questionable about who gets it. Does it go to the schools, the
Police and Fire Pension Boards or the TIF District. The law is somewhat unclear so we are
asking the Arkansas Supreme Court to tell us where to send the money.
Marion Doss: Isn't the idea of the TIF that the increase goes to the TIF.
Kit Williams: Some of it must in order to pay off the TIF funds, but this law and the
constitution is a little unclear as to what part goes and what part doesn't go. Not everything is
supposed to go. The debt service requirements of the school district are protected. There is also
a question about the 25 mils that were required by Amendment 74 to be used solely for the
operation and maintenance of the school, does that mean it can't be used for the TIF.
Marion Doss: Our contention is that we should get the increase for our pension fund.
Kit Williams: The new law stated that you all would not lose any money to the TIF. The
question will be whether that new law applies to our TIF that was established by an ordinance
before the new law.
Dennis Ledbetter: Time frame wise, what are we looking at?
Kit Williams: If all of the attorneys will agree on the stipulated facts, at the meeting coming up
next week, then I would think we could agree on a briefing schedule and submit it to the local
judge within a couple of months. Then it would take him 30 days at least to read everything and
l
Firemen's Pension&Relief Fund Board of Trustees
Meeting Minutes
July 28,2005
Page 3 of 5
to try to determine his ruling. After that it will have to be appealed to the Arkansas Supreme
Court to get the final decision on exactly how this tax is going to be distributed.
Longer Investments Report:
Elaine Longer, Longer Investments: Page 1 of your report is the June 30, 2005 update. A lot
has happened since June 30''. Page 6 is an update through Friday of last week. We did get the
approval at the last board meeting to be able to go beyond the 50% equity exposure to a limit of
55%. We did that because we were pretty close to the 50% and I anticipated that if the market
did move up fairly strongly that we would go over the 50%. We are there, we are about 54%.
We need your approval of any overage. We are still under the 55% maximum.
Pete Reagan moved to approve the overage in Equity. Sondra Smith seconded the motion.
Upon roll call the motion passed 6-0. Mayor Coody was absent.
Elaine Longer: The stock market has really performed better since the end of June, mostly
because the earnings reports for the second quarter are coming in a little bit better than expected.
The Fed's has raised interest rates again in June to the 3.75% level, but it is not having an impact
on the economy at this point. The economy is still growing at about a 3.50% growth rate,
inflation appears to be moderate. The ten year treasury is at 4.25% so that we don't have a lot of
attractive alternatives to owning stocks at this point in time. That is why the stock market has
been able to move higher. We are at about 10,650, which year-to-date now, that is up about 1%
or 2%. We have been all over the place this year, in March we hit 10,900 backed off to 10,000
just recently as June, now we are back up to 10,650. At least we are back into a positive territory
year-to-date. When we wrote the June newsletter we were still negative year-to-date. Month-to-
date in July the stock market is up about 3.7%, so that is a really big move in the last three
weeks.
Page 10 shows that your overall market value is $9.5 million. The income yield, which is just
what you receive in terms of dividends and interest income, is 3.4%.
On page 11 the realized gains year-to-date is about $147,000 and net income, which is dividends
and interest, net of your expenses is about $120,000.
On page 12 we have your bond portfolio information. There are a lot of numbers on this page
but the most important ones are the average yield to maturity on your bonds which is close to
5%. You have a weighted average maturity on the bond portfolio of just 7.4 years. That
compares to, in the treasury market, currently your yield on the 10 year treasury is 4.25%, so you
have a much higher income yield with a shorter maturity than what is currently available out
there. The most important part of the bond portfolio right now is that about 26% or 27% of the
total portfolio is within a three year maturity. As interest rates continue to go higher, which we
don't think the Fed's are completely finished with this rate increase cycle, we have plenty of
flexibility in the short maturities to be able to take advantage of those higher rates. We don't
have to hold a bond until maturity, it is not like a CD, so if we get an opportunity to move and
get higher income and lock in longer maturities, we will be pulling from this, one to three year
maturity range, to be able to do that. We consider that 26% to be cash equivalent.
Firemen's Pension&Relief Fund Board of Trustees
Meeting Minutes
July 28,2005
Page 4 of 5
On page 13 are your largest holdings. Most of them are 4% or less on percentage of equity
portfolio, but even your largest holding is only 2% of the total portfolio. So, it is still very well
diversified in high quality stocks.
On page 14 we have the industry and sector ratings that we review each time. We have made a
few changes. We are still over weighted on the capital goods side of the economy. We are about
15% of equity exposure in the capital goods area versus 8.50% on the S&P. The reason is that
the corporate sector is very strong in terms of balance sheet and cash flow and they are spending
more on capital equipment. We are very much more favorably disposed to the capital side and
the corporate side of the economy than the over leveraged consumer side.
Page 15 you will see that we are under weight on the consumer with about 10% versus 17.9%.
In energy we are still over weight at about 12.9% versus 8%. We have trimmed some of the
energy stocks out of the portfolio; at one point in time I think we were as high as 16% to 17%.
We retained the high dividend paying energy stocks and we sold the ones that have a lower
dividend yield. So, we still have the high quality energy stocks in there with the good dividends.
One change, that is the largest sector change that we've made this year, is that we are now about
equal weight in the financial sector. It has been interesting, the banks have really trailed the
market year-to-date and they trailed last year because they are sensitive to a rising interest rate
environment. There is a lot of value in the banking sector and in fact the average dividend yield
on the banks that you own is 3.8%. I don't think the sector will really take off until we get to the
end of the interest rate increase cycle. We may have one more increase in August; we may have
two before year end. As soon as you see light at the end of that tunnel, then the financial stocks
can perform better and that is certainly where the value is because you have high dividends and
they have trailed the performance of the overall market year-to-date. We have been taking
advantage of declines in that area to really increase our holdings. So we are equal weight
financial at this point in time. We are slightly over weight in technology at 19.5% versus about
15% on the S&P 500. The earnings have come through very good in the technology stocks,
there hasn't been one of our companies that has disappointed this quarter and the outlook that is
being expressed by corporate management is also very favorable. So, we like the technology
sector as well.
Page 19 has the contributions and distributions from inception to date. The contributions have
been about $477,000; the distributions have been about $2.5 million.
Page 20 has your performance report. The one for June 30, 2005 shows your stocks down about
4%, bonds were up about 2.7%; your real estate investment trust was up about 7.5%. So you are
still down by about 0.9%. As of yesterday you are up about a half of one percent. The stocks
have really come back and that has helped to move the whole portfolio into the black, year-to-
date. Since inception, your stocks have done about 8.3%, and bonds have done about 4.7%.
Your total return is about 61/o compound annual inception to date. The indices by comparison
are listed below. The S&P is up about 9%, the DOW with compounded dividend is up about
7.8% and the Salomon Brother Treasury Index is up about 4.4%. So, net of your expenses,
which we net out of your performance numbers you are still out performing the indices by
comparison.
Your net investment return has been about $1.67 million. Between the contributions that have
been made and the investment return, if you will notice your beginning and your ending is about
the same even though we have had $2.5 million go out of the portfolio. We are hanging in there.
Firemen's Pension&Relief Fund Board of Trustees
Meeting Minutes
July 28,2005
Page 5 of 5
Pete Reagan: Where do you think the projects will be at year end for this fund?
Elaine Longer: I really think that the relative valuation of stock versus bonds had really moved,
even more so to the stock side from the first quarter. When we wrote the newsletter in the first
quarter, the earnings estimates for the S&P 500 were about 72.50 for this year and the ten year
treasury was about a 4.56%. By the time we wrote the second quarter newsletter, the S&P
earnings estimate had come up to 73.50 and the ten year treasury was down under 4%. So, you
had rising valuation, rising earnings estimates on the S&P 500 and a decline in the alternative
investment return, which is the ten year treasury, so there again the relative valuation in stocks
versus bonds was more heavily weighted on the stock side. I still feel that way. We are not
having any trouble moving new cash into the market. We've been able to move new cash in to
stocks that meet our valuation criteria still pretty smoothly. I am still pretty optimistic about it. I
do think we still have a better buying opportunity on the bond side out there before the end of the
year so we are little bit conservative on our bond allocation.
Dennis Ledbetter: What effect will the housing market have on this?
Elaine Longer: We are not very exposed to the housing market. We don't own any of the
housing stocks. Our play on the housing sector is the Sherwin Williams and MASCO, which
both of those companies play on construction and home remodeling. Those two stocks still meet
our valuation criteria, so we are very comfortable with them and they have reported good
earnings. On the housing bubble, I really think that would affect more of the consumer spending
and we are very underweighted in consumer. I do think if you get into a point where the 10 year
treasury yield goes towards 5% then you will start to see some impact on that housing area. But
we are not there yet. We are still at 4.25% and the 30 year mortgage keys off the ten year
treasury, so we are not at a point yet where there is a lot of pressure on all those new types of
mortgages. I think we have to get to the point where the ten year is closer to 5% before you start
to see some cracks in the foundation there.
Meeting Adjourned at 11:40 AM.
FIREMEN'S RELIEF AND PENSION
September 2005
THE FOLLOWING ARE THE OBLIGATIONS OF THE FIREMEN'S RELIEF FUND FOR THE
TH OF AUGUST. YOU ARE HEREBY INSTRUCTED TO ISSUE CHECKS TO THE
Pr,fEES, IN THE AMOUNTS SHOWN, AND FOR THE PURPOSE SO STATED.
DATE OF Regular Mo Year To Date
EMP# RETIREMENT NAME Benefit Reg Benefit Fed Tax St Tax Net
79 11/99 ARMSTRONG (DILL), PAMELA 1,759.94 15,839.46 300.00 100.00 1,359.94
177 4/04 BACHMAN, EDDIE 2,542.28 22,880.52 479.27 119.82 1,943.19
74 3/86 BAIRD, JULIA 1,749.59 15,746.31 350.00 145.00 1,254.59
2 3/75 BLACKARD, PAUL 106.09 954.81 106.09
63 5/72 BOLAIN, ANN 106.09 954.81 106.09
68 7/99 BONADUCE, MICHAEL 2,901.71 26,115.39 475.38 2,426.33
44 9/86 BOUDREY, BETTY MRS. 2,405.26 21,647.34 300.00 50.00 2,055.26
45 9/86 BOUDREY, HOWARD 2,028.43 18,255.87 2,028.43
49 7/88 BOUDREY, JACK 1,599.64 14,396.76 . 287.68 50.00 1,261.96
4 6/67 CARL, FLOYD JR, (Deceased 2/28/05) 0.00 212.18
5 5/72 CASELMAN, ARTHUR 127.31 1,145.79 127.31
57 5/90 CATE, ROY 1,736.80 15,631.20 1,736.80
6 4/68 CHRISTIE, ARNOLD 106.09 954.81 106.09
8 10/76 COUNTS, WAYNE 106.09 954.81 106.09
77 11/99 DILL,GARY JOHN 1,759.95 15,839.55 100.00 1,659.95
11 2/76 FARRAR,ALONZO 969.77 8,727.93 969.77
38 5/84 FRALEY, JOSEPH G. 1,716.62 15,449.58 200.00 15.00 1,501.62
170 5/03 FREEDLE, LARRY 3,705.58 33,350.22 500.00 100.00 3,105.58
92 03/02 GAGE,TOMMY 2,521.06 22,689.54 226.00 50.00 2,245.06
34 6/79 HARRIS, JAMES E. 106.09 954.81 106.09
70 11/99 HARRIS, MARY RUTH 106.09 954.81 106.09
182 10/04 JENKINS, EILEEN 1,736.65 15,629.85 350.00 100.00 1,286.65
93 06/02 JENKINS, JOHN 1,736.66 15,629.94 350.00 100.00 1,286.66
86 07/01 JOHNSON,ROBERT 2,983.95 26,855.55 500.00 100.00 2,383.95
64 4/95 JORDAN, CHARLIE 2,208.69 19,878.21 2,208.69
76 5/88 JUDY, JAN 1,599.64 14,396.76 200.00 50.00 1,349.64
37 3/84 KING, ARNOLD D. 1,478.03 13,302.27 300.00 47.00 1,131.03
54 5/89 KING, ARVIL 1,661.37 14,952.33 130.00 50.00 1,481.37
12 3/60 LANE, HOPE MRS 106.09 954.81 106.09
13 10/67 LAYER, MERLIN 442.93 3,986.37 442.93
173 12/03 LEDBETTER, DENNIS 3,665.83 32,992.47 650.00 200.00 2,815.83
181 10/04 LEE, VIOLA LOUISE 106.09 954.81 106.09
51 10/88 LEWIS, CHARLES 1,599.64 14,396.76 75.00 25.00 1,499.64
40 9/85 LOGUE, PAUL D. 2,784.74 25,062.66 325.00 75.00 2,384.74
50 9/88 MASON, LARRY 1,583.74 14,253.66 137.61 25.00 1,421.13
39 4/85 MC ARTHUR, RONALD A. 1,702.66 15,323.94 150.00 50.00 1,502.66
35 2/82 MC CHRISTIAN, DWAYNE 106.09 954.81 106.09
15 4/77 MC WHORTER, CHARLES 1,295.64 11,660.76 150.00 1,145.64
29 8/81 MILLER, DONALD 1,266.09 11,394.81 125.00 25.00 1,116.09
73 2/00 MILLER,KENNETH 3,087.40 27,786.60 325.00 75.00 2,687.40
42 2/86 MOORE, JAMES H. 106.09 954.81 106.09
176 4/04 MORRIS, DIXIE E. 122.00 1,098.00 122.00
62 10/68 MORRISON, ELIENE 132.61 1,193.49 132.61
48 7/88 MULLENS, DENNIS W. 2,127.48 19,147.32 2,127.48
184 3/05 NAPIER, LONNIE 3,415.81 20,494.86 110.00 88.00 3,217.81
46 5/88 OSBURN, TROY 1,844.33 16,598.97 200.00 38.00 1,606.33
81 02/01 PHILLIPS,LARRY 2,684.55 24,160.95 2,684.55
53 2/89 POAGE, LARRY 2,278.35 20,505.15 300.00 100.00 1,878.35
186 06/05 REAGAN, PETE 3,432.73 10,298.19 3,432.73
22 4/73 REED, JOE 106.09 954.81 106.09
172 12/03 SCHADER, MADGE 1,345.64 12,110.76 1,345.64
41 9/85 SCHADER, TROY 1,480.57 13,325.13 57.00 1,423.57
83 03/01 SKELTON, KIMBERLY 1,182.03 10,638.27 125.00 25.00 1,032.03
66 8/98 SKELTON, PAULINE 413.75 3,723.75 413.75
82 03/01 SKELTON,KELLY 1,182.03 10,638.27 125.00 25.00 1,032.03
36 5/76 SPRINGSTON, CARL 782.71 7,044.39 70.00 17.00 695.71
DATE OF Regular Mo Year To Date
EMP# RETIREMENT NAME Benefit Reg Benefit Fed Tax St Tax Net
90 03/02 STOUT, IMOGENE W. 745.44 6,708.96 745.44
165 12/02 TATE, RALPH 3,561.26 32,051.34 300.00 100.00 3,161.26
65 3/66 TUNE, BILLIE SUE 132.61 1,193.49 132.61
27 3/71 TUNE, MILDRED MRS. 132.61 1,193.49 132.61
71 1/00 WARFORD,THOMAS 2,429.83 21,868.47 300.00 2,129.83
28 7/68 WATTS, DONALD 424.36 3,819.24 424.36
88 01/02 WOOD,RONNIE D 2,987.52 26,887.68 800.00 200.00 1,987.52
52 9/88 WRIGHT, RANDALL 1,642.08 14,778.72 200.00 25.00 1,417.08
94,004.89 815,412.38 '-§" .9*'42,169.82 82,262.13
DROP DATE DROP EMPLOYEES NEW BENEFITS
01/01/01 DOSS,MARION 5,220.30
03/01/03 MAHAN, MARSHALL 3,958.53
03/01/03 PIERCE, JOEY 3,540.95
03/01/03 SHACKLEFORD, GLEN 3,540.95
04/01/03 O'NEAL, TEDDY 4,000.96
05/01/04 FARRAR, DANNY 4,034.33
WE, THE UNDERSIGNED, DO SOLEMNLY SWEAR THAT THE ABOVE OBLIGATIONS ARE
JUST AND CORRECT; THAT NO PART THEREOF HAS BEEN PREVIOUSLY PAID; THAT
THE PENSION PAYMENTS SO CHARGED ARE IN ACCORDANCE WITH THE ACTIONS OF
THE BOARD OF TRUSTEES OF THE FIREMEN'S RELIEF AND PENSION FUND; THAT
THE SERVICES OR SUPPLIES FURNISHED, AS THE CASE MAY BE, WERE ACTUALLY
RENDERED OR FURNISHED; AND THAT THE CHARGES MADE THEREFORE DO NOT
EXCEED THE AMOUNT ALLOWED BY LAW OR THE CUSTOMARY CHARGE FOR SIMILAR
SERVICES OR SUPPLIES
'i
SECRETARY CHAIRMAN AND PRESIDENT
ACKNOWLEDGEMENT
STATE OF ARKANSAS )
COUNTY OF WASHINGTON)
SWORN TO AND SUBSCRIBED BEFORE ME THIS DAY OF 2005.
NOTARY PUBLIC
MY COMMISSION EXPIRES :
YTD
6810-9810-5335-00 721,407.49
6810-9810-5335-06
YTD Column 721,407.49
Difference 0.00
August 8, 2005
Ms. Kim Skelton
807 W. Bowen
Fayetteville, AR 72703
Dear Kim,
State law allows children of deceased pensioners to continue to receive pension benefits until they
reach the age of nineteen or graduate from high school, which ever comes first. The law also allows
them to continue to receive benefits if they are a full time student enrolled in an institution of higher
learning after completing high school. The benefits will continue as long as they are enrolled as a
full time student until they reach the age of twenty-three or get married. You must provide Proof of
Enrollment each semester.
3
Please provide Proof of Enrollment from an institution of higher learning by the beginning of each
semester which clearly states the following information:
1. Number of hours you are enrolled.
2. Number of hours the institution considers full-time.
3. The length of the term.
Please keep in mind that you will be required to submit verification each semester. If we do not
receive the necessary enrollment information by the beginning of each semester of school, your
pension benefits could cease. Please forward the documents to the City Clerk's office at the above
address before August 31, 2005.
If you have any questions, please feel free to call the City Clerk's office at 575-8323.
Sincerely,
Sondra Smith
City Clerk
August 8, 2005
Ms. Kelly Skelton
P.O. Box 8044
Fayetteville, AR 72703
Dear Kelly,
State law allows children of deceased pensioners to continue to receive pension benefits until they
reach the age of nineteen or graduate from high school, which ever comes first. The law also allows
them to continue to receive benefits if they are a full time student enrolled in an institution of higher
learning after completing high school. The benefits will continue as long as they are enrolled as a
full time student until they reach the age of twenty-three or get married. You must provide Proof of
Enrollment each semester.
Please provide Proof of Enrollment from an institution of higher learning by the beginning of each
semester which clearly states the following information:
1. Number of hours you are enrolled.
2. Number of hours the institution considers full-time.
3. The length of the term.
Please keep in mind that you will be required to submit verification each semester. If we do not
receive the necessary enrollment information by the beginning of each semester of school, your
pension benefits could cease. Please forward the documents to the City Clerk's office at the above
address before August 31, 2005.
If you have any questions, please feel free to call the City Clerk's office at 575-8323.
Sincerely,
Sondra Smith
City Clerk
City of Fayetteville
Fire Pension and Relief Fund U/A Dated 6/18/86
July 31, 2005 Equity Allocation: 54.5%
Equity Range Per Policy: 25% to 50% (+/-5% with monthly approval)
Longer Investments Inc. requests authorization for the variance of less than 5%, as
required in the investment policy dated February 24, 2005.
Longer Investments Inc.
PORTFOLIO APPRAISAL
Fayetteville Fire Pension and Relief Fund U/A DTD 6-18-86
July 31, 2005
Unit Total Market Pct. Unit Annual Cur.
Quantity Security Cost Cost Price Value Assets Income Income Yield
COMMON STOCK
1,450 Anadarko Petroleum 59.37 86,081.15 88.35 128,107.50 1.3 0.720 1,044.00 1.2
Corp.
6,000 Applied Materials hic. 16.94 101,633.70 18.48 110,880.00 1.2 0.120 720.00 0.7
2,000 B.P. Amoco PLC A.D.S. 39.64 79,285.00 65.88 131,760.00 1.4 1.870 3,740.00 4.7
3,325 Bank of America Corp. 44.50 147,952.23 43.60 144,970.00 1.5 2.000 6,650.00 4.5
2,750 Barclays PLC 39.80 109,462.93 39.51 108,652.50 1.1 1.798 4,944.50 4.5
3,350 Bell South 27.14 90,919.00 27.60 92,460.00 1.0 1.160 3,886.00 4.3
2,250 Biomet, Inc. 35.63 80,170.88 38.13 85,792.50 0.9 0.200 450.00 0.6
2,750 Caterpillar Inc. 46.46 127,756.70 53.91 148,252.50 1.6 1.000 2,750.00 2.2
3,000 Chevron Corp. 42.73 128,176.26 58.01 174,030.00 1.8 1.800 5,400.00 4.2
6,000 Cisco Systems Inc. 19.58 117,509.70 19.15 114,900.00 1.2 0.000 0.00 0.0
3,500 Citigroup 41.09 143,827.09 43.50 152,250.00 1.6 1.760 6,160.00 4.3
1,750 Clorox Co. 58.62 102,587.70 55.85 97,737.50 1.0 1.120 1,960.00 1.9
2,500 Danaher Corp. 53.34 133,355.66 55.45 138,625.00 1.5 0.060 150.00 0.1
1,750 Deere&Co. 70.78 123,860.48 73.53 128,677.50 1.4 1.240 2,170.00 1.8
2,000 Dell Computer 28.52 57,038.00 40.47 80,940.00 0.9 0.000 0.00 0.0
Corporation
2,000 Devon Energy Corp. 25.04 50,079.74 56.09 112,180.00 1.2 0.300 600.00 1.2
4,500 Dollar General Corp. 20.42 91,890.00 20.32 91,440.00 1.0 0.180 810.00 0.9
3,000 Ecolab Inc. 28.57 85,702.26 33.58 100,740.00 1.1 0.350 1,050.00 1.2
2,000 Emerson Electric 48.02 96,050.00 65.80 131,600.00 1.4 1.660 3,320.00 3.5
2,525 Estee Lauder 37.78 95,406.12 39.14 98,828.50 1.0 0.400 1,010.00 1.1
1,500 ExxonMobil 27.65 41,475.76 58.75 88,125.00 0.9 1.160 1,740.00 4.2
5,750 General Electric 24.34 139,982.00 34.50 198,375.00 2.1 0.880 5,060.00 3.6
1,500 Goldman Sachs Group 100.03 150,050.13 107.48 161,220.00 1.7 1.000 1,500.00 1.0
Inc.
5,425 Intel Corp. 18.85 102,243.27 27.14 147,234.50 1.5 0.320 1,736.00 1.7
3,000 Johnson&Johnson 52.08 156,250.18 63.96 191,880.00 2.0 1.320 3,960.00 2.5
1,100 Kennametal, hic. 46.12 50,733.10 47.53 52,283.00 0.5 0.760 836.00 1.6
4,000 Knight Transportation 24.37 97,483.20 23.65 94,600.00 1.0 0.080 320.00 0.3
hic.
3,000 Masco Corp. 32.16 96,469.20 33.91 101,730.00 1.1 0.520 1,560.00 1.6
2,375 Medicis Pharmaceutical 29.32 69,624.30 33.92 80,560.00 0.8 0.120 285.00 0.4
Corp.
3,750 Microsoft Corp. 26.15 98,056.03 25.61 96,037.50 1.0 0.320 1,200.00 1.2
9,750 Oracle Systems 13.62 132,749.50 13.57 132,307.50 1.4 0.000 0.00 0.0
5,250 Pfizer 26.98 141,666.28 26.50 139,125.00 1.5 0.760 3,990.00 2.8
1,725 Regional Bank Holders 134.32 231,702.00 136.88 236,118.00 2.5 4.172 7,196.86 3.1
Trust
2,700 Robert Half International 27.50 74,253.09 33.89 91,503.00 1.0 0.280 756.00 1.0
3,500 Sherwin Williams Co. 47.04 164,655.90 47.61 166,635.00 1.8 0.820 2,870.00 1.7
2,100 Sigma-Aldrich 57.67 121,103.22 64.16 134,736.00 1.4 0.760 1,596.00 1.3
8,150 The Technology Sel Sec 20.71 168,793.17 21.05 171,557.50 1.8 0.000 0.00 0.0
SPDR Fund
3,650 US Bancorp 30.42 111,020.08 30.06 109,719.00 1.2 1.200 4,380.00 3.9
3,350 Walmart Stores 52.94 177,336.61 49.35 165,322.50 1.7 0.600 2,010.00 1.1
1,575 Wells Fargo&Company 61.76 97,272.00 61.34 96,610.50 1.0 1.920 3,024.00 3.1
4,471,663.62 5,028,502.50 52.9 90,834.36 2.1
REAL ESTATE INVESTMENT TRUSTS
1,500 Pan Pacific Retail 33.68 50,514.25 69.51 104,265.00 1.1 2.360 3,540.00 7.0
50,514.25 104,265.00 1.1 3,540.00 7.0
1
LONGER INVESTMENTS INCORPORATED
R Registered Investment Advisor
Longer Investments Inc.
PORTFOLIO APPRAISAL
Fayetteville Fire Pension and Relief Fund U/A DTD 6-18-86
July 31, 2005
Unit Total Market Pct. Unit Annual Cur.
Quantity Security Cost Cost Price Value Assets Income Income Yield
PREFERRED DEBT SECURITIES
2,000 G.E. Preferred 6.10% 25.00 50,000.00 25.83 51,660.00 0.5 1.525 3,050.00 6.1 -
AAA/AAA(C 11-15-07)
5,000 G.E. Preferred 6.625% 26.01 130,030.00 26.20 131,000.00 1.4 1.656 8,281.25 6.4
AAA/AAA(C 6-28-07)
3,000 Roch G&E 6.65% 26.30 78,893.10 26.90 80,700.00 0.8 1.662 4,987.50 6.3
AAA/AAA(C 6-20-07)
AMBAC
258,923.10 263,360.00 2.8 16,318.75 6.3
MUTUAL FUNDS-EQUITY
15,000.0000 iShares MSCI Japan 9.85 147,750.00 10.25 153,750.00 1.6 0.043 645.00 0.4
Index Fund
147,750.00 153,750.00 1.6 645.00 0.4
CORPORATE BONDS
15,000 Gillette Company Notes 99.78 14,967.00 100.32 15,047.88 0.2 5.750 862.50 5.8
Aa3/AA- (NC)
5.750% Due 10-15-05
75,000 Wal-Mart Stores Inc. 98.44 73,831.00 100.46 75,345.98 0.8 5.875 4,406.25 6.0
AA2/AA(NC)
5.875% Due 10-15-05
50,000 Boeing Capital Crp 100.00 50,000.00 100.55 50,273.15 0.5 6.040 3,020.00 6.0
ANA (NC)
6.040% Due 11-15-05
50,000 NationsBank Corp. 99.79 49,894.00 104.43 52,216.45 0.5 6.375 3,187.50 6.4
Subordinated Notes
AA3/A+ (NC)
6.375% Due 02-15-08
65,000 J.P. Morgan Chase 102.60 66,687.00 106.15 68,995.10 0.7 6.700 4,355.00 6.5
Bank AA3/A+ (NC)
6.700% Due 08-15-08
50,000 Bankers Trust NY Corp 99.26 49,630.00 104.11 52,052.65 0.5 6.000 3,000.00 6.0
Subordinated Notes
A2/A(NC)
6.000% Due 10-15-08
25,000 First Union Corp. 93.78 23,446.00 104.82 26,204.52 0.3 6.000 1,500.00 6.4
Subordinated
Debentures Al/A(NC)
6.000% Due 10-30-08
25,000 Pepsico Incorporated 97.49 24,373.00 104.05 26,013.52 0.3 5.700 1,425.00 5.8
Medium Term Note
Al/A+ (NC)
5.700% Due 11-01-08
50,000 Hershey Foods Corp. 97.63 48,816.00 113.37 56,684.35 0.6 6.950 3,475.00 7.1
Notes Al/A+ (NC)
6.950% Due 08-15-12
50,000 Paribas New York 96.03 48,014.00 112.37 56,186.65 0.6 6.950 3,475.00 7.2
Branch Subordinated
Notes AA3/AA-(NC)
6.950% Due 07-22-13
60,000 Aetna Inc. Debentures 87.48 52,487.00 111.43 66,860.52 0.7 6.750 4,050.00 7.7
AA3/A+ (NC)
6.750% Due 09-15-13
2
LONGER INVESTMENTS INCORPORATED
A Registered Investment Advisor
Longer Investments Inc.
PORTFOLIO APPRAISAL
Fayetteville Fire Pension and Relief Fund U/A DTD 6-18-86
July 31, 2005
Unit Total Market Pct. Unit Annual Cur.
Quantity Security Cost Cost Price Value Assets Income Income Yield
75,000 Merrill Lynch&Co. 99.26 74,442.00 111.88 83,913.07 0.9 6.500 4,875.00 6.5
hic. Global Bonds
AA3/A+ (NC)
6.500% Due 07-15-18
50,000 National City Corp. 96.65 48,326.00 114.77 57,386.40 0.6 6.875 3,437.50 7.1
Sub. Notes A2/A-(NC)
6.875% Due 05-15-19
50,000 IBM Corp. Debentures 100.01 50,004.00 120.10 60,048.70 0.6 7.000 3,500.00 7.0
Al/A+ (Subject to make
whole call)
7.000% Due 10-30-25
50,000 Dell Computer Corp. 95.46 47,731.00 122.53 61,264.75 0.6 7.100 3,550.00 7.4
Debentures A2/A
(Subject to make whole
call)
7.100% Due 04-15-28
Accrued Interest 13,866.63 0.1
722,648.00 822,360.32 8.6 48,118.75 6.7
GOVERNMENT BONDS
200,000 U. S. Treasury Note 100.08 200,162.53 99.56 199,125.00 2.1 4.000 8,000.00 4.0
4.000% Due 06-15-09
50,000 U. S. Treasury Bond 100.01 50,004.00 113.66 56,828.12 0.6 5.500 2,750.00 5.5
5.500% Due 08-15-28
50,000 U. S. Treasury Bond 98.95 49,474.00 110.16 55,078.12 0.6 5.250 2,625.00 5.3
5.250% Due 11-15-28
300,000 U. S. Treasury Bond 98.03 294,097.66 110.31 330,937.50 3.5 5.250 15,750.00 5.4
5.250% Due 02-15-29
Accrued Interest 10,038.14 0.1
593,738.19 652,006.89 6.9 29,125.00 4.9
GOVERNMENT AGENCY
100,000 Federal Farm Credit 100.00 100,000.00 98.91 98,906.25 1.0 3.580 3,580.00 3.6
Bank(C 6-15-05, 1X)
3.580% Due 06-15-07
250,000 Fed Nat'l Mortgage 100.00 250,000.00 100.00 250,000.00 2.6 4.150 10,375.00 4.1
Assoc (C 7-13-06 @
100, IX)
4.150% Due 07-13-07
75,000 Federal Home Loan 100.00 75,000.00 98.94 74,203.12 0.8 4.010 3,007.50 4.0
Bank(C 5-24-06, 1X)
4.010% Due 08-24-07
100,000 Federal Home Loan 100.00 100,000.00 97.53 97,531.25 1.0 3.000 3,000.00 3.0
Bank(C 09-07-05, 1X)
3.000% Due 09-07-07
185,000 Federal Home Loan 100.00 185,000.00 99.09 183,323.44 1.9 4.000 7,400.00 4.0
Bank(C 6-28-06 @
100, IX)
4.000% Due 09-28-07
100,000 Federal Farm Credit 100.00 100,000.00 97.22 97,218.75 1.0 3.020 3,020.00 3.0
Bank(C 1X 03/24/05)
3.020% Due 12-24-07
3
LONGER INVESTMENTS INCORPORATED
A Registered Investment Advisor
Longer Investments Inc.
PORTFOLIO APPRAISAL
Fayetteville Fire Pension and Relief Fund U/A DTD 6-18-86
July 31, 2005
Unit Total Market Pct. Unit Annual Cur.
Quantity Security Cost Cost Price Value Assets Income Income Yield
75,000 Federal Home Loan 100.00 75,000.00 97.12 72,843.75 0.8 3.300 2,475.00 3.3
Bank(C 1-17-06, 1X)
3.300% Due 01-17-08
250,000 Federal Farm Credit 100.00 250,000.00 96.28 240,703.12 2.5 3.080 7,700.00 3.1
Bank(C I X 04-15-05)
3.080% Due 10-15-08
225,000 Federal Farm Credit 100.00 225,000.00 98.62 221,906.25 2.3 4.000 9,000.00 4.0
Bank (C 8-29-05,
continuously thereafter)
4.000% Due 12-29-08
125,000 Federal Farm Credit 100.00 125,000.00 99.91 124,882.81 1.3 4.350 5,437.50 4.3
Bank(NC)
4.350% Due 06-01-09
225,000 Federal Home Loan 100.00 225,000.00 97.72 219,867.19 2.3 4.000 9,000.00 4.0
Bank(C 8-29-05,
continuously thereafter)
4.000% Due 04-01-10
200,000 Federal Home Loan 100.00 200,000.00 98.25 196,500.00 2.1 4.200 8,400.00 4.2
Bank(C 8-29-05,
continuously thereafter)
4.200% Due 05-20-10
50,000 Tennessee Valley 98.95 49,474.00 105.36 52,679.65 0.6 5.625 2,812.50 5.7
Authority(NC)
5.625% Due 01-18-11
150,000 Federal Farm Credit 100.00 150,000.00 97.50 146,250.00 1.5 4.150 6,225.00 4.1
Bank (Call 04-07-06,
continuously thereafter)
4.150% Due 04-07-11
55,556 Federal Home Loan 100.00 55,555.56 99.31 55,173.62 0.6 5.080 2,822.22 5.1
Bank(C 8-29-05,
continuously thereafter)
5.080% Due 10-03-12
75,000 Federal Home Loan 100.00 75,000.00 100.16 75,117.19 0.8 5.375 4,031.25 5.4
Bank(C 11-7-05, cc)
5.375% Due 11-07-13
125,000 Federal Farm Credit 100.00 125,000.00 98.56 123,203.12 1.3 5.300 6,625.00 5.3
Bank(C 6-22-07 @
100,continuously
thereafter)
5.300% Due 06-22-15
Accrued Interest 17,862.24 0.2
2,365,029.56 2,348,171.76 24.7 94,910.97 4.0
GNMA
19,957.90 GNMA 5.0%Pool# 99.75 19,908.59 97.75 19,509.45 0.2 5.000 997.89 5.0
GNR 2003-40 AE
5.000% Due 05-20-33
Accrued Interest 83.16 0.0
19,908.59 19,592.60 0.2 997.89 5.0
CASH AND EQUIVALENTS
Dividends Accrued 5,340.04 5,340.04 0.1 0.000 0.00 0.0
Money Market 19,211.60 19,211.60 0.2 2.590 497.58 2.6
24,551.64 24,551.64 0.3 497.58 2.0
4
LONGER INVESTMENTS INCORPORATED
A Registered Investment Advisor
Longer Investments Inc.
PORTFOLIO APPRAISAL
Fayetteville Fire Pension and Relief Fund U/A DTD 6-18-86
July 31, 2005
Unit Total Market Pct. Unit Annual Cur.
Quantity Security Cost Cost Price Value Assets Income Income Yield
CERTIFICATE OF DEPOSIT
50,000 MBNA America Bank 100.00 50,000.00 100.76 50,382.10 0.5 6.550 3,275.00 6.5
Newark, DE A3/NR
(NC)FDIC-Insured
6.550% Due 12-20-05
40,000 Capital One Bank FSB 100.00 40,000.00 100.87 40,347.80 0.4 4.900 1,960.00 4.9
Falls Church, VA
BAAI/NR(NC)
FDIC-Insured
4.900% Due 02-20-07
Accrued Interest 1,249.54 0.0
90,000.00 91,979.45 1.0 5,235.00 5.8
WARRANTS
144 Lucent Warrants (Expire 1.59 228.96 0.73 105.12 0.0 0.000 0.00 0.0
12/10/2007)
228.96 105.12 0.0 0.00 0.0
TOTAL PORTFOLIO 81744,955.92 9,508,645.29 100.0 290,223.31 3.3
5
LONGER INVESTMENTS INCORPORATED
A Registered Investment Advisor
Longer Investments Inc.
CONTRIBUTIONS/WITHDRAWALS
City of Fayetteville Fire Pension and Relief Fund
08-15-02 To 07-31-05
CONTRIBUTIONS
09-10-03 Money Market $350,000.00
08-04-04 Money Market $127,000.00
$477,000.00
WITHDRAWALS
10-09-02 Money Market $40,000.00
12-12-02 Money Market $9,000.00
12-18-02 Money Market $1501000.00
01-08-03 Money Market $73,000.00
02-15-03 Money Market $51,000.00
03-04-03 Money Market $66,000.00
04-01-03 Money Market $60,000.00
05-01-03 Money Market $66,000.00
06-03-03 Money Market $245,000.00
07-01-03 Money Market $30,000.00
08-01-03 Money Market $65,000.00
10-01-03 Money Market $75,000.00
11-03-03 Money Market $20,000.00
01-06-04 Money Market $24,000.00
01-22-04 Money Market $216,000.00
02-09-04 Money Market $76,000.00
03-01-04 Money Market $66,000.00
04-01-04 Money Market $75,000.00
05-03-04 Money Market $601000.00
05-19-04 Money Market $88,000.00
06-02-04 Money Market $80,000.00
07-01-04 Money Market $70,000.00
07-29-04 Money Market $15,000.00
08-11-04 Money Market $15,000.00
09-08-04 Money Market $80,000.00
10-04-04 Money Market $60,000.00
12-08-04 Money Market $10,000.00
01-03-05 Money Market $65,000.00
02-01-05 Money Market $742000.00
03-01-05 Money Market $80,000.00
04-01-05 Money Market $90,000.00
04-14-05 Money Market $217,000.00
05-01-05 Money Market $55,000.00
06-09-05 Money Market $35,000.00
07-06-05 Money Market $280,000.00
$2,781,000.00
6
LONGER INVESTMENTS INCORPORATED
A Registered Investment Advisor