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Home My WebLink About2007-05-24 - Agendas - Final Firemen's Pension and Relief Fund Meeting Agenda May 24, 2007 A meeting of the Fayetteville Firemen's Pension and Relief Fund will be held at 11 :00 AM on May 24, 2007 in Room 326 of the City Administration Building 1. Approval of the Minutes: • April 26, 2007 Meeting Minutes 2. Approval of the Pension List: • June, 2007 Pension List — No Changes 3. Old Business: • Dennis Mullens retirement classification (Tabled from the April 26, 2007 meeting.) • Pension Protection Act (Tabled from the April 26, 2007 meeting.) 4. New Business: • Summary of the 2007 Legislative Session • Reschedule June Meeting 5. Longer Investments: • Equity Allocation Overage Report • Monthly Report Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes April 26,2007 Page 1 of 10 Firemen's Pension and Relief Fund Meeting Minutes April 26, 2007 A meeting of the Fayetteville Firemen's Pension and Relief Fund was held at 11 :00 AM on April 26, 2007 in Room 326 of the City Administration Building Mayor Coody called the meeting to order Present: Mayor Coody, Marion Doss, Gene Warford, Pete ea :n, Ron Wood, City Clerk Sondra Smith, City Attorney Kit Williams, Chief Johnsin, Pauli$ecker, Amber Wood, Trish Leach, Wendy Moore Accounting and Kim Cooper Monger I1*16-tments. f4 vV�t '.54St V ii.S lAl Absent: Marshall E. Mahan s i Approval of the March 29, 2007 Meeting Minutes: fSf Pete Reagan moved to approve the , : ch 29, 2007 1VIret><ng Minutes. Gene Warford seconded the motion. Upon roll call , passed passed 6 ; .:4: "arshall E. Mahan was absent :,•1::':', Approval of the Pensio'>ri'L>ist: {, ;,,y, :{ ,� P/r{:•Y Approval of the M' y,L2`(1077Pens 4 List 1 1 'i There were nggft',ages to the ens>ion 1i�fi: VVt } ` 1 tr s 2007 Pension List. Gene Warford seconded the Pete .Itea�gan moved toirnp�rove t + Iay, Xn motion"s.; on roll call tljyO,, tion ta95ed 6-0. Marshall E. Mahan was absent. rn�nfrlr ft}ars; . ?r Old Business: Dennis Mullens retire� ri'rit classification Pete Reagan: That was tabled at the last meeting. I move that we keep it on the table. Dennis Mullens wasn't able to be here he had a doctor's appointment at the VA Hospital. Gene Warford: I talked to my accountant about this and he said it is normal. The Social Security department does it all of the time. There is nothing unusual about this whatsoever. Mayor Coody: Is that right. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes April 26, 2007 Page 2 of 10 Gene Warford: He said you need to get it done and get it approved. Mayor Coody: Who is your accountant? Gene Warford: Dan Downing and Associates. Mayor Coody: I don't know them. Gene Warford: In Springdale. .rttz? h;Xti dpi}'tf.:n nM1 3 Y '4I� r rht.4 n5 Kit Williams: You said Social Security does this all the timet T 4154 Gene Warford: Yes. _ r ::h r4, �4r rt Sk Paul Becker: I don't know what Social Security,"dQes or does not do I can'rf syver to that. Jx `,,,i,Th} .� h�:•x 64t1r However we contacted the Internal Revenue ServiceziNth the,gizestion as we had =agreed to do. t�'YY1J4/3 Their response was based on a tax situation they said h%syuyou�d have to be reported as retired. Based on all the facts that I have evaluated it would o. I can't speak for Social V. Security but that is in fact what we got bai from the Internal e'renue Service. r4,4 44 C44.s C Pete Reagan: Is that in the form of a letter' 4 Paul Becker: Did we get an email9 It was a telephone convethation. X. Trish Leach: Becaue' e could gd an answer faster. Gene Warford: I trust the llisterx>aeveue Sery><ce about as far as I can throw them. You can ask ten different�4'ipeo .1e the saf eiquestlan d ; f'ten different answers. ^t.r} Joh 51 ... 4 44 F }44 �. Pete Reagan: I'11 agree< tth that Jy`ii�'J5F2r 4Y 4 .4i } K .W R4�thJa.,. Gene Wiiff Vd: Like I said my tam accountant said there shouldn't be any problem with it whatsoever. n4if we appro, d it it's still going to be up to Dennis' accountant, Dennis and the City to get this pal,,. , doi e right. ,� 1 r Jir Paul Becker: What we,were asked to do is send a 1099-R in. We were asked to change the ,.;1;.. filing status, if I unde ., d that correctly. Mayor Coody: So when you called the IRS and they said it was not kosher to do this and we were.to do it anyway I wonder how that would... Paul Becker: They said based on the fact scenario he would have to be reported on a 1099-R. Mayor Coody: Okay. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes April 26, 2007 Page 3 of 10 Pete Reagan: Dennis asked me to table this he plans on being at the next meeting with his accountant. Mayor Coody: Kit what do you have to say about all of this? Kit Williams: I always thought that his accountant should be here and try to explain to us what he's requesting and what kind of power we have to do it. I'm some what concerned. I've seen .,nnn, the rules about granting disability of course that is concerning sor�;o'orkewho is working and wants to go get disability instead of waiting until his retirement ag.Exto get i't and there are things that have to be done. The doctor has to certify it and you are s, ppsed to have a doctor. Maybe we had a doctor on the board at one point but we don't have pe anyinore•. The Police don't have it J" ; t' rt one either. That makes me a little concerned about whether w have the ,pokwer to do it or not. I guess we will hear from his accountant. : Kt t k5NI i2 t Marion Doss: Can we write a letter to the IRS .ios y ad of a phone call and get ,;a k eater back in response? I would feel a lot better about a letter on 'an�thmgr�tber than a phon• 'conservation. t k Sometimes it's a lot easier to explain things in a phone::ccnversat>on but on the` other hand it's nice when it's in black and white. ;x5 :: :•;, 1 kk t\ Kit Williams: We can certainly ask but tY`I de 't mean thatk`w :will get one from them. We kr can't force them to write back. 4 r 5r Pete Reagan: I think we would,be better offsvatmg on Dttrnili sand his accountant to see what the particulars are on 4. Sondra Smith: Ido t°oatkbecause eve may be asl&g-;0for the wrong thing since we have never really had anything specificto whtnt� requestedy torr - k' SrV4 k5t Paul Becle'ri J Socitalr$&-urity i'§",; ",thole different ball game. 1 , 1 ktii •>xr �k��' S.��r��xr J�,y Kit,--it -bas• The accoiifi ` t m1gl <'skdy "this is the form you need file." Let's hear from the ��n :. � 4�1{ ur, accountant'fr,5�1y4h ,e might be able:;*.O give pus the form we need to send in. Marion Doss:"'` 'Qk *s like there's surely precedence somewhere. I'm sure it's not the first time this has happened. `' Gene Warford: With:zall the asbestos cases and all that stuff. Sondra Smith: When we think about taxes and we think about the IRS. If it's the Social Security Administration we're dealing with the wrong people. That's the reason he needs to be here and his accountant to explain exactly what he's wanting. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes April 26, 2007 Page 4 of 10 Pete Reagan moved to table to the May meeting. Gene Warford seconded the motion. Upon roll call the motion passed 6-0. Marshall E. Mahan was absent. Appointment of Pension Board representative for the Baxter International lawsuit case (Tabled from the March 29, 2007 meeting.) Pete Reagan: Mr. Chairman if I could I'd like to move that we suspend the agenda and allow our general council to go on followed by our investment folks so the :,,don't have to set here through the whole meeting. Mayor Coody: That suit's me. i it i i fi 5 Kit Williams: This is related to what Mark is going to;aalk=bout this is apdated letter from Cauley Bowman and Darrin Williams on the Baxter case. Basically he says lq,. ttheir on appeal and nothing is going to happen in this case until thjeventh Circuit rules. Theyf`hre;dlready had 1 � n to go there once to reverse the trial judge and that's watthey are trying again zk.. v FvtyY::'.FSY.'�4•' .r'iY}i,4��V. The reason I wrote to Mark and asked him to be here is b'e'i✓ e I thought maybe he needed to further explain to you the need for apers'o Lrepresentative. .: '.! .K4. il"tJ:',t hi'•' .: Mark Martin: t '' Thank you Kit I appreciat�,`the op'p��tunrty to come and update you all on the status of our litigation. You have a letter frond our,co counerI DNV a' in Williams which sets forth what has occurred since th &Rhas been appealec(Mar cl where W, e at present. The short version is we filed a joint pet>honhak>ngif�s` ,a class certafiation and Lead plaintiff status back in October. That was denied in J. ....Ory by Jgdige Blanche Manning who is the District Court Judge in the northern district of Illi`iiffi 't:We a� s'ealed that, the Aeo sion came back in January denying only t54 iii 4y i - te }'� the lead plaintiff portion d tl}e,;ca�sei; drat that point in time we had filed a joint petition with the Labors Pension ffibard out o'f Alaska After i>td e Manning handed down her adverse decision denying lad`plairit> fftatus for beth our group and the Alaska group in January the Alaska group n' dropp� ut of the litigW,A whifl�416ft gust this board to pursue the litigation. Judge Manning i i 5t � �, if t onlyr�'W,, , the decision o%,the issue of lead plaintiff status and not class certification so we requested air opportunity for wificat>on from Judge Manning. You can't proceed with a class .. action witho`u�f 4�,nlead plaintifEry and so she clarified her option in March and denied not only the \'1 iii 5'il lead plaintiff ig'sue,abut the 61' ss certification issue and that decision was recently received on March 27th. Two Weeks ag,6"we appealed this case once again to the Seventh Circuit Court of Appeals on both issu 's,`th issue of lead plaintiff status and class certification. Recall that this is a case that has already been to the Seventh Circuit Court of Appeals on the facts of this case Judge Manning was reverse previously in her efforts to dismiss this case for not having significant facts. We won that time around but we now have to go back once again on the issue of class certification lead plaintiff status. We feel very optimistic, very strong about the facts of our case and law that supports it which is the good news, the bad news is it simply is going to take more time. An appeal to the Seventh Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes April 26, 2007 Page 5 of 10 Circuit Court of Appeals will take certainly months and possibly and very probably over a year. However we are moving forward with briefs and that's what it takes at this stage. I new that I needed to come here also today to address the issue of once we win. I like to talk about it in terms of "once we win" not if we lose because if we lose there is no need for a representative but we are very optimistic about this and we fell we have a very good chance of getting this reversed. Once that occurs we will need a representative of this board to offer when depositions occur again that will be months from now and possibility a year but that will occur. I knew I needed to come here today to answer any questions that you -J,1" have about what that might entail. `' i1v��'V •. ruby Kit Williams: I think the firm would cover the expenses andrstuff's ?4,the representative would not be out any expenses. I think it would probably take someiXne. Mark zss.:here to answer what 1LVr ? kind of time it might take and I think to ask that someoppi,:,walling to volunteer. 5} L tt Gene Warford: I'll be the representative. I have talked to Mark about it and 'he; ilnks he can get me up to speed on it if it ever comes to that polriti akl m st>11 on the board at that time I will ".�, 2. be the representative. 5 ' Kit Williams: I appreciate that and I woi fid,Lask that the board: >t�ake a motion to official appoint �� 5 }�5h54 5L 5 S you as the representative. .5,a , .,na, •'rs:^' Pete Reagan moved to approve the appointment ' ►e, Wa> ford as representative for the Class Action Lawsuit for t#he.,f erasion Board. Marion Do"s��,�econded the motion. Upon roll } call the motion passed,L�61 n. Mft'Nhall E. Mahan,was absent. L :i t54'R 'i l Kit Williams: Thank"`, 6t�kGene 5`�5 appreciate yo>x;being willing to do this it would take some time. The only other thing I4wantd toaddr>s that had the Police Pension meeting at 9:00 AM n 4 and I noticecras5arof the re`'port4that werii'ad; `l tii our financial advisor that we had three checks that come Rk 1ri'to theil�r rd> a s ettlerr�o Is from cases just like this where some other person had been the pla ff but had pre ailed and tli�}pei cion board received money from that. So if they have merit"''&`I$�m and we bel>e`� A- hey dof�k ase things do occasionally send money out to the people w 4 J1.u } 1r5I J. that on sgcs if manage rat or5kl$whoever of a corporation were not telling the truth or r withholding fa sor whatevd��4 hey get that was improper. I just wanted to let you know that in ",.•. fact this does woa`.,,• ;4'S,.;• Mark Martin: We ai`so : you Gene and appreciate the opportunity to be here today. Unless there are any more qu tions I will excuse myself. Mayor Coody: Are there any questions? Thanks Mark. Sondra Smith: Thank you. Mayor Coody: Thanks Mr. Warford for your help on this. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes April 26, 2007 Page 6 of 10 Pension Protection Act (Tabled from the March 29, 2007 meeting.) Pete Reagan: Motion to table. Mayor Coody: Remind me what this is again? Pete Reagan: This is the Pension Protection Act of 2007 which allows this fund to pay a portion of a retirees benefit directly to a health care provider. Mayor Coody. Oh yes. So the reason for tabling it is? Pete Reagan: I don't have the information that I requested from NSP !RS and there is a bill r r r. being generated in the 110 Congress to clarify some of these issues. r.avn4'r.. ;h Sondra Smith: Table to when Pete? May Pete Reagan: Yes, that would be fine. 5:tKl�S :t4 Pete Reagan moved to table to the 11%Iy; meeting. Gene`tiiUVarford seconded the motion. td" Upon roll call the motion passed 6-0. M :rs �11:E. Mahan was;abserit. .4:r•-�.-- yrs:;: 4:t`i=, ^?� Longer Investments 4 Yr L S t Monthly Report L 1 :. i•iM11 lj \' 4t Kim Cooper: I'm sorry t here to give the presentation but we are in the middle 511:155? �4t .454}fit S, .;44 of earning seasdn4th�s week �M e have had several companies that reported this morning. She felt it wa yhetter useko gr tim `t-t i,Pe in front of her computers watching what was going in the markeGnLan being here. I',1, 1,deliver`544 reports and if you have any questions that I can answer I 1 wily'>re dtlZem to Elaine antll het those�bnswers for you. L 4V4i'. 4 1u 4 y. 4,54�;.�'ji { 11iY Page one or'�, March 31S#:::portfolio appraisal you will see that your current allocation to domestic stockgo"ilR3,4 .8%. ttrd n Page two your forei #KK. bcation is 7.4% so your total foreign as a percent of your equity exposure is about 14%44;"Your total equities are 53.2% which is in that range of 50% to 55% that we need approval to be at. Pete Reagan moved to approve the equity overage. Ron Wood seconded the motion. Upon roll call the motion passed 6-0. Marshall E. Mahan was absent. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes April 26, 2007 Page 7 of 10 Going on down your corporate bonds are listed. Page three your current yield on corporate bonds is 6.8%. The yield on your government bonds is 5.4%. Your government agencies are listed on page three and page four. Your government agency yield is 5.4%. Your total portfolio value as of March 31st was $8,657,000 that included restricted cash that you will see in your money market balances of $95,000 and that was cash that we were holding to go out right after the first of April for your distribution. Since we've had a lot of change since March 31St we went ahead and included a report through April 20''. I'll just page over to the end of that report so you can see the bottom line. Page nine as of ApriI,2'9-, ;�,the account value was $8,789,000 after the $95,000 went out. Through Friday just ffor` the month of April your domestic stocks were up 5.2% your foreign stocks were up 3.5%iia ?:'ithe total accounts for April was 2.7%. We have had a good month so far. This doesn't mclide t 'apreciation we have seen in the market for this week. 1k ,•i�5. .S.y�,.5kttr.. rir. ttr., ' tV.1:{!ik'.^d:n.{4'c '•5'ti�'�'i.i5t�y}y: Page 10 is a summary of your realized gains and mg6ftie. Your realized gains` ear to date have been $77,825 and your net income is $56,297. .',.+_,4:rpt.' :}l:Fk�. :yth8'•`! V.J,',,'r�.S�5N.'yr r'•'NJtt.�S .rLR: k st Page 11 is a summary of your bonds the weighted avraoj Viable shows as of March 31 your average yield on the bonds that are in your account was 5.5goyAverage maturity is 5.7 years and that compares to a five year treasury wl;> bl,,,has a yield of 4.: k°yo,, So you have about the same level of maturity as a five yeartreasury ut kyo ,=have over a` ` LV point more yield than the treasury would have. The lower part of that5apageiows the distribution by maturity. Your bonds that mature in under one year and one to three yea> 5# t 35% ;of your portfolio. So you have 35% of your portfolio thatrkwill mature in 1 Ss :t an three} dears and that gives us a lot of flexibility. F -5X-N: r�.r Page 12 lists your curYre� S,Jst� ;argeholdings Genet L r'Blectric, Newmont Mining, US Bancorp, Johnson & Johnson and Goch Cola; lk: .$.:i,';+iY•'t;X':'4f,,., 5 l�k`4,yr i i r.i::,'4.S .?r v..v. rtir h i ', i 4 5 �it'I45lry�.5 . .1r Xyr�r F 14:x!:. Page 13 ��.�our TA, VS., 4We1g�it s right now you are overweight in capital goods, consumer �s non-cyclical, cyclicalaicex�ergy X; ' e1<'underweight in consumer cyclical and the reason for V y5 4f f 5 t45,;i5X. 5.jh� I14 ;" , that,ri's phare still eoncernekR:about WOR" ing market, there's still weakness there. The mortgage equity exfir4�>:ons have sloyi ` `fid down considerably and that's what has been popping up q y a54kL ' consumer sling. So we � k%'t want to get real aggressive on the consumer cyclical side. We are also undervefght in helfh care. We are even weighted in financial stocks the banks, ,.. Ik.. insurance and in techralogy ` ..`14tw��.4ti`1y Page 14 is a report of,your contributions and withdrawals since inception. So far year to date you haven't had any contributions to the account and your year to date distributions have been 305,000. Page 15 is a summary of your performance since inception. Your 2007 performance (through 3/31) your equities were down 0.4% your equity mutual funds which are your foreign stocks were up 2.2%. Your bonds were up 1.4% and total account through March 31St was up about 0.5%. Your annualized return through the 1St quarter stocks up 9.6%, bonds 3.8% and your total Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes April 26,2007 Page 8 of 10 account performance since inception on an annualized basis has been 6.6%. Which compares to the 6% that's used in your actuary reports so we are exceeding that return. The equity performance of about flat or down just slightly compares with the index returns through March 31St, some up some down but basically flat for those two. Through April 20th just to give you an idea of what your year to date returns have been. The S&P through April 20th was up 4.42%. Your stocks are up 4.8% for your domestic stocks. Foreign stocks are up 5.8% and your total account year to date through April 20th is up 3.1%. The lower section of the report shows your beginning value, deposits, withdrawals, and investment return since inception which has been Q Q F.^. $2,818,000• We have a copy of your investment policy. The policy that `yoix4jst signed didn't have any changes on it. It was just to reflect the new members of youf; board boy we have all the current signatures on it. Behind the policy are detailed reports of ycurrealized gls,;and income. 4, The stock market has gone through 13,000 as of yesterday and that was kin ofaa number that everyone was watching for. Elaine said that that,.�1s�a very good number beca> se no't only did the DOW break through 13,000 but also the Dow Uttity.Inde=x.,rand the TransportYT'rldex and the NASDAQ over the counter index hit a six and a half yeas. � `high.jSo it is very broad based it's not just the DOW Industrials that are hitting new highs. The: yance has been confirmed by both the technical which is the price of the Adt,ks{ but also funda & tals which is the earnings. The earnings that have been reported this earml g4,;gdbon have been vWj.,,.good much better than most companies had predicted and the analysis "ad e ` etedIt has good news that we have seen the last couple of weeks. We might seethe market`ta1�O)a it`"of a breather from this 13,000 level but Elaine still thinks,-.that-stocks are mote, attractive than bonds here. Elaine thinks there ! y will be some slowing in 1fi"e`§ocoWdhalf in the economy probably to a 2% rate. We just wanted to reiterate that theeags pictures very good. '''::;t j Mayor Coody: Any question ? fTl�akuyqu very much for a very good report. r r t � y Kim Coo +er: Yolxre;ve welegzne It's fun to deliver those. ? S,,iq tR12w1 'r jr4j:T5IN". t Quarterly'� port Fiy.`l.'hyY.t4k 1.11 Informational NCPERS 2007 Conference and Educational Opportunities Kit Williams: Is the election coming up for this board to? Sondra Smith: Yes. Kit Williams: How many positions are open? Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes April 26, 2007 Page 9 of 10 Sondra Smith: There are two positions open, Ronnie Wood and Gene Warford. Kit Williams: Do they need to do anything in particular? Sondra Smith: No, this board has me send out nomination letters I get the nominations back and then we send out for elections. Pete Reagan: Our next meeting is scheduled for May 31St is that cor q,a:t?t Sondra Smith: Yes, May 31St. ;!'ty'c''4 `it,K ::;x ;:; ;•;, Gene Warford: Can we get the election done that quick?.,.-.,,.. il. •.kKS � Sondra Smith: Yes. Pete Reagan: I'm scheduled to be in Alabama the :1 <:.:..".Does,;Myone have a problem with me not being here or move the meeting date. j Kit Williams: Statutorily don't we have to,.have a meeting rnklVay? Isn't that what the statue says? XX 4% Pete Reagan: The statue says they have to be ;electect"alta tie,•May,•lmeeting. vX- l•p: r Kit Williams: That is the last' >.p May. Marion Doss: We neer Io-;the havNK e time to get those;4etters out and get the nominations back in v, and then get the ballots out}k Vag pxob k1 }meed ever it of that time. j 5 d v^ r,4 hrJKn � Kit Willims: Pete voe fou sar] you wanted to have it earlier than that? `fir 1}`' Petet�`' 64yW If we had}fi`,;,an the 'Abb" ith Thursday which would be the 24th if no one has a problem w V that. That wot give , s a full month. That would give us four full weeks from today. Will thatr,push you SoriYll`a? t r :,1. KyK.rl Sondra Smith- I` ever the board would like. ''r'1, Kit Williams: Will yqu ihave time to get the election done without any problem? Sondra Smith: Yes. I don't know if we can do the meeting on that date. I'll check the calendar. We can do it, I won't be here but someone else can run the meeting, I`m scheduled off at that time. Mayor Coody: I don't know what my calendar looks like. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes April 26, 2007 Page 10 of 10 Gene Warford: What is the holiday coming up? Kit Williams: Memorial Day but that is the Monday before the 3lst Gene Warford: I will be gone too. I have a trip scheduled. Pete Reagan: So the 24th will be ok with you? Gene Warford: The 24th will be fine with me. gkui2' ',•:\, �J.{h7ySn• . .h\5�_itiL�:ShA. Kit Williams: That's before Memorial Day. 5 k Mayor Coody: Okay, I'll be here. : :. (' R• • ` tTt St Sondra Smith: I will be here to. It is the week before that I will Gene Warford: Do we need a motion on that? E'Y'ai.'tiF F�ti•'.. Kit Williams: Yes, to change the meeting date. 'h':` ,•':S Fit i'$:. Gene Warford made a motion to change teJvmeeting date to day 247 2007. Pete Reagan seconded the motion. Upon roll call the m6thgjf'1 passed 6 0: `v`Marshall E. Mahan was absent. n1' :::..5.:..., i:..k• l�F�y j} -.i4J�t4��}r. SL _, 4 Meeting Adjourned at?>1 :35 Ate , : J � h r S'trJJ JJ5V , } `15'j 5d5f 5h\ik 4 \ 4 51�45.h •t:4 4 e .,,,FS,n• "•h.' t '4 tit:'X.i- 145 4th 15;}, LJk 5d41 �'S f J,an<.• ,•„ r o-w L nrr hd ¢ .,k'k�F\ Jyi C5J'f 5tLL• .'S��45k"n VIXIM h•1 fit.}y 2yh L"5}hr° 1F {.vi 4 5-' •5�.�:JJJ��fit' t5 d W 5}„y' �NJ FIREMEN'S RELIEF AND PENSION June 2007 6 THE FOLLOWING ARE THE OBLIGATIONS OF THE FIREMEN'S RELIEF FUND FOR THE MONTH LISTED ABOVE YOU ARE HEREBY INSTRUCTED TO ISSUE CHECKS TO THE PAYEES, IN THE AMOUNTS SHOWN , AND FOR THE PURPOSE SO STATED. DATE OF Regular Mo Year To Date EMP#RETIREMENT NAME Benefit Reg Benefit Q 79 11/99 ARMSTRONG (DILL), PAMELA 1,812.74 10,876.44 R 177 4/04 BACHMAN, EDDIE 2,618.55 15,711.30 S 74 3/86 BAIRD, JULIA 1,802.08 10,812.48 V 63 5/72 BOLAIN,ANN 109.27 655.62 R 68 7/99 BONADUCE, MICHAEL 2,988.76 17,932.56 S 44 9/86 BOUDREY, BETTY MRS. 2,477.42 14,864.52 R 45 9/86 BOUDREY, HOWARD 2,089.28 12,535.68 R 49 7/88 BOUDREY, JACK 1,647.63 9,885.78 V 5 5/72 CASELMAN,ARTHUR 131.13 786.78 R 57 5/90 CATE, ROY 1,788.90 10,733.40 V 6 4/68 CHRISTIE,ARNOLD 109.27 655.62 V 8 10!76 COUNTS, WAYNE 109.27 655.62 R 77 11/99 DILL,GARY JOHN 1,812.75 10,876.50 188 12/05 DOSS, MARION H 5,376.91 32,261.46 R 11 2/76 FARRAR,ALONZO 998.86 5,993.16 R 192 4/06 FARRAR, DANNY 4,155.36 24,932.16 R 38 5/84 FRALEY, JOSEPH G. 1,768.12 10,608.72 R 170 5/03 FREEDLE, LARRY 3,816.75 22,900.50 R 92 03/02 GAGE,TOMMY 2,596.69 15,580.14 V 34 6/79 HARRIS, JAMES E. 109.27 655.62 V 70 11/99 HARRIS, MARY RUTH 109.27 655.62 Q 182 10/04 JENKINS, EILEEN 1,788.75 10,732.50 R 93 06/02 JENKINS, JOHN 1,788.76 10,732.56 R 86 07/01 JOHNSON,ROBERT 3,073.47 18,440.82 R 64 4/95 JORDAN, CHARLIE 2,274.95 13,649.70 S 76 5/88 JUDY, JAN 1,647.63 9,885.78 R 37 3/84 KING, ARNOLD D. 1,522.37 9,134.22 R 54 5/89 KING,ARVIL 1,711.21 10,267.26 V 12 3/60 LANE, HOPE MRS 109.27 655.62 R 13 10/67 LAYER, MERLIN 456.22 2,737.32 R 173 12/03 LEDBETTER, DENNIS 3,775.80 22,654.80 V 181 10/04 LEE,VIOLA LOUISE 109.27 655.62 R 51 10/88 LEWIS, CHARLES 1,647.63 9,885.78 R 40 9/85 LOGUE, PAUL D. 2,868.28 17,209.68 R 50 9/88 MASON, LARRY 1,631.25 9,787.50 R 39 4/85 MC ARTHUR, RONALD A. 1,753.74 10,522.44 V 35 2/82 MC CHRISTIAN, DWAYNE 109.27 655.62 R 15 4/77 MC WHORTER, CHARLES 1,334.51 8,007.06 R 29 8/81 MILLER, DONALD 1,304.07 7,824.42 R 73 2100 MILLER,KENNETH 3,180.02 19,080.12 V 42 2/86 MOORE, JAMES H. 109.27 655.62 V 176 4/04 MORRIS, DIXIE E. 125.66 753.96 R 48 7/88 MULLENS, DENNIS W. 2,191.30 13,147.80 R 184 3/05 NAPIER, LONNIE 3,518.28 21,109.68 R 196 01/02 ONEAL, TEDDY 4,120.99 24,725.94 R 46 5/88 OSBURN, TROY 1,899.66 11,397.96 R 81 02/01 PHILLIPS,LARRY 2,765.09 16,590.54 R 53 2/89 POAGE, LARRY 2,346.70 14,080.20. R 186 06/05 REAGAN, PETE 3,535.71 21,214.26 V 22 4/73 REED, JOE 109.27 655.62 S 172 12/03 SCHADER, MADGE 1,386.01 8,316.06 R 41 9/85 SCHADER, TROY 1,524.99 9,149.94 R 190 04/06 SHACKELFORD, GLEN 3,647.18 21,883.08 S 83 03/01 SKELTON, KIMBERLY 2,434.98 14,609.88 R 36 5/76 SPRINGSTON, CARL 806.19 4,837.14 S 90 03/02 STOUT, IMOGENE W. 767.80 4,606.80 R 165 12/02 TATE, RALPH 3,668.10 22,008.60 V 65 3/66 TUNE, BILLIE SUE 136.59 819.54 R 71 1/00 WARFORD,THOMAS 2,502.72 15,016.32 R 28 7/68 WATTS, DONALD 437.09 2,622.54 R 88 01/02 WOOD,RONNIE D 3,077.15 18,462.90 R 52 9/88 WRIGHT, RANDALL 1,691.34 10,148.04 113,316.82 679,900.92 DROP DATE DROP EMPLOYEES NEW BENEFITS 03/01/03 MAHAN, MARSHALL 4,077.28 03/01/03 PIERCE, JOEY 3,647.18 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 2007 WM DATE OF Regular Mo Year To Date EMP#RETIREMENT NAME Benefit Reg Benefit 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 SECRETARY CHAIRMAN AND PRESIDENT ACKNOWLEDGEMENT STATE OF ARKANSAS ) COUNTY OF WASHINGTON) SWORN TO AND SUBSCRIBED BEFORE ME THIS DAY OF 2006. NOTARY PUBLIC MY COMMISSION EXPIRES : 5!7/2007 C:\Documents and SettingMssmiM.000\Local Settings\Temp\XPgrpwise\June 2007 WM a RECEIVED IVED MAY 2 , 2W? CITY OF FAYETTEVILLE ARKANSAS FIRE & POLIC B(tAMEWSOFFICE .PRB MAY 2 2007 620 W. 3rd, Suite 200 To: Local Pension Fund Board of Trustees CITY OF FAYETT' IL:L ck, Arkansas.72201-2212 MAYOR'S OFFICE Telephone: (501) 682-1745 From: Arkansas Fire and Police Pension Review Board (PRB) Toll-Free: (866) 859-1745 Fax: (501) 682-1751 Re: Summary of the 2007 Legislative Session email: info@lopfi-prb.com website: www.lopfi-prb.com Date: May 18, 2007 Following is a brief summary of the Acts from the 2007 Legislative Session that apply to the Local (Closed) Fire and Police Pension Funds. Unless a specific date is included at the end of a summary, the effective date for the Act will be July 31, 2007. If you would like to read the full text of a particular Act, you may access this information via the General Assembly's web site at hLtp://www.arkleg.state.ar.us/ Act 608 (House Bill 1095, Harris) Continued Millage for Consolidated Plans Act 608 amends the language of current law to clarify that a dedicated millage passed by a municipality can be used for fire and police pension contributions after consolidation of the Closed Plan with LOPFI. That is, it allows the use of dedicated millage to pay the consolidated LOPFI employer contribution rate. Act 609 (House Bill 1097, Harris) Premium Tax Allocation Changes Under previous law, a significant portion of the funding of the Closed Fire and Police Plans and of LOPFI comes from insurance premium tax. Act 609 made several changes to the premium tax allocation formula. These changes are: 1. There will be a mandatory em foyer contribution for volunteers in LOPFI. Currently some employers pay nothing (since their entire cost is covered by the Premium tax allocation). Act 609 requires a basic payment from each volunteer employer (beginning at $3 per volunteer member, per month). 2. The LOPFI employer volunteer cost, in excess of the mandatory employer contribution will be 100% covered by premium tax allocation. 3. For the paid groups in LOPFI, there will be a mandatory employer contribution. This amount will begin at 1% of pay in 2008, go to 2% in 2009, and 3% thereafter. 4. The cost of any benefit enhancements, whether legislated or the result of local option, will NOT be funded via premium tax monies. 5. Deleted a provision in law that, in very limited circumstances, would have permitted the use of premium tax for purposes other than funding retirement costs. 6. This Act was effective March 28, 2007. Local Pension Fund Board of Trustees May 18, 2007 Page 2 of 3 Act 1056 (House Bill 1099, Harris) Consolidate Smallest Plans Act 1056 requires Closed Fire and Police Plans with less than five members (active or retired) declared inactive by the employer group and consolidate administration with LOPFI. The number of members does not include surviving spouses. In addition, actuarially sound Closed Plans will have a cost of living adjustment built into their benefit formula upon consolidation. Act 611 (House Bill 1172, Greenberg) Police ODRO change Board vote Act 611 makes the following changes to the Closed Police Plans (it does not change the Closed Fire Plans): 1. Allows surviving spouses to vote during the election of local board members. It also allows the Board to fill a vacancy for the remainder of a term. 2. Clarifies how distributions will occur when there is a surviving spouse and a QDRO recipient of a deceased police officer. 3. Allows payment of a death benefit (formerly funeral expense) to a police officer's estate if there is no surviving spouse. (Also, see Act 1571). Act 614 (House Bill 1277, Harris) Retroactive Benefit Increase allowed for Widows Under previous law, a Closed Fire Plan may increase benefits, provided they are actuarial sound. A Closed Fire Plan may restore the benefit of a surviving spouse who remarried, in the case of a firefighter who died in the line of duty. Act 614 allows such a restoration to include any benefit increases given between the time the spouse's benefits were stopped and the time they were restored. Actuarial soundness was not part of this Act, so a local board may implement this provision even if the fund has moved to an actuarial unsound position. This Act was effective March 28, 2007. Act 218 (house Bill 1484, Maloch) State Taxes on Pension Benefits Act 218 allows the State of Arkansas to have the same provision found under the Pension Protection Act at the federal level. Arkansas will allow eligible retired public safety officers the option of having qualified health insurance premiums (up to $3,000 per year) deducted from their retirement benefit on a pre-tax basis. Act 1571 (Senate Bill 1449 T. Smith) Police Death Benefit Under previous law, local Police Plans may pay a death benefit of at least $100, but not more than $4,000. Act 1571 allows a death benefit to be increased uniformly to no more than $6,500 at the discretion of the local board of trustees. (Also, see Act 611). Local Pension Fund Board of Trustees May 18, 2007 Page 3 of 3 Act 1572 (Senate Bill 155, T. Smith) Police Reemployment after DROP Allows local police plan members who have retired after participating in the Deferred Retirement Option Plan ("DROP") to return to law enforcement. The retired member can return to work with a different employer group from the one retired from as long as there was a break in service of at least thirty (30) days. The retired member would continue receipt of his/her retirement benefit from the local police pension fund. Act849 (Senate Bill 1569 T. Smith) Increase Future Supplement Previous law created a "Future Supplement Fund" for Closed Fire and Police Plans to provide a form of cost-of-living-adjustment. In 2006, the Future Supplement Fund paid $1,201.20 to each retired police participant, $518.40 to each retired full-paid fire participant, and $103.68 to each retired volunteer fire participant. Each year 90% of the monies in the Future Supplement Fund were distributed to the eligible participants. The remaining 10% was accumulating with the goal of developing a permanent cost-of-living fund. Act 849 will distribute 100010 of the Fund each year, which includes the amounts currently held for future use. This Act was effective April 3, 2007. Act 851_ (Senate Bill 158, J. Jeffress) Minimum Investment Standards Act 851 makes the following changes to the authority of the Arkansas Fire and Police Pension Review Board (PRB): 1. Set a minimum asset management standard so that if a Closed Fire or Police Fund (a) is meeting regularly; (b) is actuarially sound; and (c) is earning interest at least as great as a one year Treasury note, then they meet the standard. 2. If the Closed Fire or Police Fund does not meet the minimum asset management standard, they would be required to develop a written investment policy and hire professional investment management. 3. If a Closed Fire or Police Fund does not meet the additional requirements in item 2, then they must develop a plan of action in conjunction with the PRB to find ways to meet these standards. 4. Give the PRB rule making authority to implement this minimum asset management standard. Should you have questions about a .particular Act, please feel free to contact either Denise Reed or David Clark. Thank you. (5/16/2007) Sondra Smith - June Meeting Page 1 From: Sondra Smith To: Firemen's Board Only Date: 5/4/2007 5:04 PM Subject: June Meeting Attachments: Sondra Smithi.vcf CC: Leach, Patricia; Moore, Wendy We are trying to move or reschedule meetings during the last week of June and the first week of July due to elevator repairs. I am sure most if not all of the Firemen's Pension Board members are able to walk the three flights of stairs to the third floor but form time to time we have other pensioners that attend the meetings that may not be able to walk the stairs. Room 111 is not available on June 28th therefore we can not have the meeting on the first floor. We would like to move the June 28, 2007 meeting to June 21, 2007 at 11:00 AM if possible. Will June 21, 2007 at 11:00 AM work? Thanks! Sondra E. Smith, CMC City Clerk/Treasurer City of Fayetteville 113 West Mountain Fayetteville, AR 72701 (479) 575-8323 (479) 718-7695 (Fax) ssmith@ci.fayetteville.ar.us City of Fayetteville Fire Pension and Relief Fund U/A Dated 6/18/86 April 30, 2007 Equity Allocation: 56% Equity Range Per Policy: 25% to 50% (+/-5% with monthly approval) Longer Investments Inc. requests authorization for the variance, as required in the investment policy dated February 24, 2005. LONGER INVESTMENTS INCORPORATED A Registered Investment Advisor Longer Investments Inc. PORTFOLIO APPRAISAL Fayetteville Fire Pension and Relief Fund U/A DTD 6-18-86 April 30, 2007 Unit Total Market Pct. Unit Annual Cur. Quantity Security Cost Cost Price Value Assets Income Income Yield Common Stock 3,500 AT&T 26.14 91,490.00 38.72 135,520.00 1.5 1.420 4,970.00 5.4 1,875 American Express Co. 58.46 109,617.94 60.67 113,756.25 1.3 0.600 1,125.00 1.0 1,600 American International 67.73 108,374.15 69.91 111,856.00 1.3 0.660 1,056.00 1.0 Group Inc. 4,750 Applied Materials Inc. 16.08 76,402.33 19.22 91,295.00 1.0 0.240 1,140.00 1.5 1,750 Avon Products Inc. 34.75 60,812.50 39.80 69,650.00 0.8 0.740 1,295.00 2.1 1,000 B.P. Amoco PLC A.D.S. 39.62 39,625.00 67.32 67,320.00 0.8 2.480 2,480.00 6.3 2,570 Bank of America Corp. 46.98 120,743.23 50.90 130,813.00 1.5 2.240 5,756.80 4.8 2,700 Barclays PLC 39.80 107,472.69 58.04 156,708.00 1.8 2.810 7,587.00 7.1 3,250 Bristol Myers Squibb 26.42 85,868.75 28.86 93,795.00 1.1 1.120 3,640.00 4.2 2,000 Cameco Corp. 39.35 78,693.80 46.62 93,240.00 1.1 0.140 280.00 0.4 1,750 Chevron Corp. 36.34 63,596.05 77.79 136,132.50 1.5 2.320 4,060.00 6.4 2,750 Citigroup 39.33 108,149.59 53.62 147,455.00 1.7 2.160 5,940.00 5.5 2,950 Coca-Cola 41.85 123,445.69 52.19 153,960.50 1.8 1.360 4,012.00 3.3 2,000 Computer Sciences 53.36 106,717.00 55.54 111,080.00 1.3 0.000 0.00 0.0 Corp. 1,335 Devon Energy Corp. 66.34 88,561.63 72.87 97,281.45 1.1 0.560 747.60 0.8 3,260 Disney Company 25.57 83,349.00 34.98 114,034.80 1.3 0.310 1,010.60 1.2 2,680 Emerson Electric 23.98 64,279.80 46.99 125,933.20 1.4 1.050 2,814.00 4.4 1,475 ExxonMobil 34.89 51,457.58 79.38 117,085.50 1.3 1.400 2,065.00 4.0 5,500 General Electric 26.59 146,257.35 36.86 202,730.00 2.3 1.120 6,160.00 4.2 1,500 Hain Celestial Group, 19.49 29,231.55 30.03 45,045.00 0.5 0.000 0.00 0.0 Inc. 2,000 Health Care Select 32.98 65,962.13 36.11 72,220.00 0.8 0.497 994.96 1.5 Sector SPDR Fund 1,900 Ingersoll-Rand 41.13 78,149.66 44.65 84,835.00 1.0 0.720 1,368.00 1.8 5,025 Intel Corp. 18.36 92,242.67 21.50 108,037.50 1.2 0.450 2,261.25 2.5 2,350 J.B. Hunt 22.17 52,092.22 27.06 63,591.00 0.7 0.360 846.00 1.6 1,350 Johnson &Johnson 59.12 79,818.08 64.22 86,697.00 1.0 1.660 2,241.00 2.8 2,000 Kraft Foods hie. 32.56 65,119.80 33.47 66,940.00 0.8 1.000 2,000.00 3.1 2,650 Newell Rubbermaid Inc. 25.06 66,409.08 30.67 81,275.50 0.9 0.840 2,226.00 3.4 1,250 Norfolk Southern 52.18 65,219.00 53.25 66,562.50 0.8 0.880 1,100.00 1.7 1,885 Northern Trust Corp. 57.34 108,090.96 62.95 118,660.75 1.4 1.000 1,885.00 1.7 4,650 Oracle Corp. 17.06 79,307.23 18.80 87,420.00 1.0 0.000 0.00 0.0 1,050 Parker Hannifin Corp. 82.56 86,683.87 92.14 96,747.00 1.1 0.920 966.00 1.1 2,750 Patterson-UTI Energy 23.37 64,267.50 24.39 67,072.50 0.8 0.320 880.00 1.4 Inc. 3,400 Powershares Dynamic 18.96 64,457.88 19.04 64,736.00 0.7 0.000 0.00 0.0 Semiconductors 5,300 Powershares Water 17.56 93,060.25 19.46 103,138.00 1.2 0.094 499.90 0.5 Resource 2,250 St. Jude Medical 37.98 85,444.20 42.79 96,277.50 1.1 0.000 0.00 0.0 2,500 Teva Pharmaceuticals 38.45 96,133.70 38.31 95,775.00 1.1 0.380 950.00 1.0 3,665 Texas Instruments 30.07 110,195.05 34.37 125,966.05 1.4 0.320 1,172.80 1.1 2,500 The Technology Select 24.68 61,700.00 24.42 61,050.00 0.7 0.174 435.30 0.7 Sec SPDR Fund 4,875 Time-Warner, hie. 17.85 87,022.44 20.63 100,571.25 1.1 0.220 1,072.50 1.2 3,250 US Bancorp 31.63 102,785.68 34.35 111,637.50 1.3 1.600 5,200.00 5.1 2,250 Walmart Stores 46.72 105,108.90 47.92 107,820.00 1.2 0.880 1,980.00 1.9 1,875 Whole Foods Market, 45.81 85,902.75 46.79 87,731.25 1.0 0.720 1,350.00 1.6 Inc. 3,539,318.68 4,269,452.50 48.6 85,567.71 2.7 1 LONGER INVESTMENTS INCORPORATED A Registered Inveshnent Advisor Longer Investments Inc. PORTFOLIO APPRAISAL Fayetteville Fire Pension and Relief Fund U/A DTD 6-18-86 April 30, 2007 Unit Total Market Pct. Unit Annual Cur. Quantity Security Cost Cost Price Value Assets Income Income Yield Preferred Debt Securities 5,375 G.E. Preferred 6.625% 25.60 137,585.24 25.20 135,450.00 1.5 1.656 8,902.34 6.5 AAA/AAA (C 6-28-07) 137,585.24 135,450.00 1.5 8,902.34 6.5 Mutual Funds-Equity 20,000.0000 iShares MSCI Japan 10.69 213,850.00 14.28 285,600.00 3.3 0.099 1,989.18 0.9 Index Fund 1,500.0000 iShares MSCI Taiwan 12.54 18,803.55 13.81 20,715.00 0.2 0.302 452.45 2.4 Index Fund 3,000.0000 iShares S&P Europe 82.03 246,094.10 114.90 344,700.00 3.9 2.083 6,248.48 2.5 350 Index 478,747.65 651,015.00 7.4 8,690.11 1.8 Calls -10 B.P. Amoco PLC May 9.55 -9,547.30 7.80 -7,800.00 -0.1 60 Calls -9,547.30 -7,800.00 -0.1 Corporate Bonds 50,000 NationsBank Corp. 99.79 49,894.00 100.61 50,302.80 0.6 6.375 3,187.50 6.4 Subordinated Notes AA2/AA- (NC) 6.375% Due 02-15-08 65,000 J.P. Morgan Chase 102.60 66,687.00 101.24 65,805.02 0.7 6.700 4,355.00 6.5 Bank AAI/AA- (NC) 6.700% Due 08-15-08 50,000 Bankers Trust NY Corp 99.26 49,630.00 101.11 50,556.30 0.6 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 23,446.00 101.25 25,312.05 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 24,373.00 100.80 25,199.87 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 48,816.00 108.13 54,063.65 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 48,014.00 109.68 54,840.75 0.6 6.950 3,475.00 7.2 Branch Subordinated Notes WR/AA-(NC) 6.950% Due 07-22-13 75,000 Merrill Lynch&Co. 99.26 74,442.00 108.00 81,003.44 0.9 6.500 4,875.00 6.5 Inc. Global Bonds AA3/AA-(NC) 6.500% Due 07-15-18 50,000 National City Corp. 96.65 48,326.00 111.30 55,649.75 0.6 6.875 3,437.50 7.1 Sub. Notes A2/A-(NC) 6.875% Due 05-15-19 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 April 30, 2007 Unit Total Market Pct. Unit Annual Cur. Quantity Security Cost Cost Price Value Assets Income Income Yield 50,000 IBM Corp. Debentures 100.01 50,004.00 114.61 57,307.30 0.7 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 47,731.00 107.65 53,823.80 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 7,220.14 0.1 531,363.00 581,084.88 6.6 35,780.00 6.8 Government Bonds 50,000 U. S. Treasury Bond 100.01 50,004.00 108.03 54,015.62 0.6 5.500 2,750.00 5.5 5.500% Due 08-15-28 50,000 U. S. Treasury Bond 98.95 49,474.00 104.84 52,421.87 0.6 5.250 2,625.00 5.3 5.250% Due 11-15-28 Accrued Interest 1,765.88 0.0 99,478.00 108,203.38 1.2 5,375.00 5.4 Government Agency 110,000 Federal Home Loan 100.00 110,000.00 100.03 110,034.37 1.3 5.280 5,808.00 5.3 Bank(C 9-19-07 @ 100, IX) 5.280% Due 09-19-08 100,000 Fed Nat'l Mortgage 100.00 100,000.00 99.94 99,937.50 1.1 5.125 5,125.00 5.1 Assoc (C 10-3-07 @ 100, ix) 5.125% Due 10-03-08 100,000 Federal Home Loan 100.00 100,000.00 99.87 99,875.00 1.1 5.100 5,100.00 5.1 Bank(C 12-26-07 @ 100, 1X) 5.100% Due 12-26-08 200,000 Federal Home Loan 100.00 200,000.00 99.78 199,562.50 2.3 5.100 10,200.00 5.1 Bank(C 5-20-08 @ 100, ix) 5.100% Due 11-20-09 525,000 Federal Home Loan 100.00 525,000.00 100.06 525,328.12 6.0 5.520 28,980.00 5.5 Bank(C 8-24-07 @ 100, 1X) 5.520% Due 02-24-10 50,000 Tennessee Valley 98.95 49,474.00 102.75 51,375.25 0.6 5.625 2,812.50 5.7 Authority(NC) 5.625% Due 01-18-11 350,000 Federal Home Loan 100.00 350,000.00 100.31 351,093.75 4.0 5.250 18,375.00 5.2 Bank (C 2-9-09 @ 100, 1X) 5.250% Due 02-09-11 65,000 Federal Home Loan 100.00 65,000.00 100.00 65,000.00 0.7 5.020 3,263.00 5.0 Bank (C 4-13-09 @ 100, 1X) 5.020% Due 04-13-11 3 LONGER INVESTMENTS INCORPORATED A Registered I7vestmei7t Advisor Longer Investments Inc. PORTFOLIO APPRAISAL Fayetteville Fire Pension and Relief Fund U/A DTD 6-18-86 April 30, 2007 Unit Total Market Pct. Unit Annual Cur. Quantity Security Cost Cost Price Value Assets Income Income Yield 125,000 Federal Home Loan 100.00 125,000.00 100.75 125,937.50 1.4 5.500 6,875.00 5.5 Bank (C 2-18-09 @ 100, 1X) 5.500% Due 08-18-11 200,000 Fed Nat'l Mortgage 100.00 200,000.00 100.12 200,250.00 2.3 5.400 10,800.00 5.4 Assoc (C 9-15-08 @ 100, ix) 5.400% Due 09-15-11 70,000 Federal Home Loan 100.00 70,000.00 99.62 69,737.50 0.8 5.300 3,710.00 5.3 Bank(C 12-28-07 @ 100, quarterly) 5.300% Due 12-28-11 100,000 Federal Home Loan 100.00 100,000.00 99.44 99,437.50 1.1 5.020 5,020.00 5.0 Bank (C 12-12-08 @ 100, IX) 5.020% Due 06-12-12 55,556 Federal Home Loan 100.00 55,555.56 99.03 55,017.37 0.6 5.080 2,822.22 5.1 Bank (C 5-29-07, continuously thereafter) 5.080% Due 10-03-12 250,000 Federal Home Loan 100.00 250,000.00 98.84 247,109.37 2.8 5.000 12,500.00 5.0 Bank (C 10-5-07 @ 100, continuously thereafter) 5.000% Due 10-05-12 100,000 Federal Home Loan 100.00 100,000.00 99.91 99,906.25 1.1 5.250 5,250.00 5.2 Bank(C 11-14-08 @ 100, ix) 5.250% Due 11-14-12 75,000 Federal Home Loan 100.00 75,000.00 99.31 74,484.37 0.8 5.375 4,031.25 5.4 Bank(C 5-29-07, continuously thereafter) 5.375% Due 11-07-13 125,000 Federal Farm Credit 100.00 125,000.00 98.75 123,437.50 1.4 5.300 6,625.00 5.3 Bank (C 6-22-07 @ 100, continuously thereafter) 5.300% Due 06-22-15 100,000 Federal Home Loan 100.00 100,000.00 100.97 100,965.30 1.1 6.000 6,000.00 6.0 Mortgage Corp. (C 4-28-09 @ 100, quarterly) 6.000% Due 04-28-16 210,000 Fed Nat'l Mortgage 100.00 210,000.00 100.62 211,312.50 2.4 6.000 12,600.00 6.0 Assoc (C 10-24-08 @ 100, quarterly) 6.000% Due 10-24-16 Accrued Interest 31,677.47 0.4 2,910,029.56 2,941,479.14 33.5 155,896.97 5.4 Cash and Equivalents Dividends Accrued 2,778.75 2,778.75 0.0 0.000 0.00 0.0 Money Market 4,849.98 4,849.98 0.1 4.565 221.40 4.6 Restricted Cash 100,000.00 100,000.00 1.1 4.565 4,565.00 4.6 107,628.73 107,628.73 1.2 4,786.40 4.4 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 April 30, 2007 Unit Total Market Pct. Unit Annual Cur. Quantity Security Cost Cost Price Value Assets Income Income Yield TOTAL PORTFOLIO 7,794,603.56 8,786,513.64 100.0 304,998.53 3.9 5 LONGER INVESTMENTS INCORPORATED A Registered Investment Advisor Longer Investments Inc. CASH CONTRIBUTIONS/WITHDRAWALS City of Fayetteville Fire Pension and Relief Fund 08-15-02 to 04-30-07 CONTRIBUTIONS 2002 Total Additional transfers from Merrill Lynch $147,498.38 09-10-03 Money Market $350,000.00 08-04-04 Money Market $127,000.00 09-01-05 Money Market $145,000.00 08-17-06 Money Market $408.95 (Bristol-Myers Squibb litigation settlement) $769,907.33 WITHDRAWALS 2002 Total Money Market $199,000.00 2003 Total Money Market $751,000.00 2004 Total Money Market $935,000.00 2005 Total Money Market $1,106,000.00 2006 Total Money Market $13536,000.00 2007 1-04-07 Money Market $117,000.00 2-01-07 Money Market $80,000.00 3-05-07 Money Market $108,000.00 4-01-07 Money Market $955000.00 $4,927,000.00 6 LONGER INVESTMENTS INCORPORATED A Registered Invesfinent Advisor