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HomeMy WebLinkAbout2007-02-22 - Agendas - Final Firemen's Pension and Relief Fund Meeting Agenda February 22, 2007 A meeting of the Fayetteville Firemen's Pension and Relief Fund will be held at 11 :00 AM on February 22, 2007 in Room 326 of the City Administration Building 1. Approval of the Minutes: • January 18, 2007 Meeting Minutes 2. Approval of the Pension List: • March, 2007 Pension List 3. New Business: • Election Results — Gene Warford — Informational • Current List of Board Members — Informational • NCPERS Conference Discussion • Dennis Mullens wants his classification changed to disabled. 4. Old Business: • Appointment of Pension Board representative for the Baxter International lawsuit case • Pension Protection Act 5. Longer Investments: • Equity Overage — Equity Allocation is at 52.1% • Monthly Report Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes January 18,2007 Page 1 of 18 Firemen's Pension and Relief Fund Meeting Minutes January 18, 2007 A meeting of the Fayetteville Firemen's Pension and Relief Fund was held at 11 :00 AM on January 18, 2007 in Room 326 of the City Administration Building Mayor Coody called the meeting to order Present: Mayor Coody, Marion Doss, Marshall Mahan, Pete Reagan, City Clerk Sondra Smith, City Attorney Kit Williams, Chief Johnson, Paul Becker, Amber Wood, Gene Warford, Marsha Farthing, Trish Leach, Wendy Moore Accounting, Elaine Longer, Kim Cooper, Longer Investments, Mark Martin Attorney. Absent: Ronnie Wood. Vacancy: Board Position 3 is vacant at this time. Approval of the December 28, 2006 Meeting Minutes: Pete Reagan moved to approve the December 28, 2006 Meeting Minutes. Marion Doss seconded the motion. Upon roll call the motion passed 5-0. Ronnie Wood was absent. Approval of the Pension List: Approval of the February, 2007 Pension List Mayor Coody: Was there any changes to the pension list? Sondra Smith: There are no changes to the pension list. Pete Reagan moved to approve the February, 2007 Pension List. Marion Doss seconded the motion. Upon roll call the motion passed 5-0. Ronnie Wood was absent. New Business: Elections Results Marshall Mahan: I'm appointed. Pete Reagan: He fills the position of the highest ranking at the Fire Department. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes January 18,2007 Page 2 of 18 Sondra Smith: The election is for Dennis Ledbetter's position. Mayor Coody: Oh, right. Sondra Smith: The deadline for Dennis Ledbetter's position was to have the ballots postmarked by January 16th which was Tuesday. We received some ballots yesterday. As of right now Mr. Warford is in the lead. I assume he will be appointed to the board if he is willing to serve. I called everyone to make sure they were willing to serve before I sent the elections out. Pete Reagan: Just for the record Gene Warford is in the audience with us today. Marion Doss: Who talked you into running for office? Gene Warford: Well two or three. Marion Doss: I see you looking at Pete. Was he your guy? Gene Warford: He was one of them. Sondra Smith: If we don't get anymore ballots that are postmarked by the 16th, we should know by the end of the week. We received one yesterday but it was postmarked the 13th. I just want to give it another day or two to make sure that we don't get anymore in. Mayor Coody: Congratulations Mr. Warford. Gene Warford: I hope it is. Thank you. Pension Report to the Council —Informational Sondra Smith: This is a copy of the report the Mayor gave to the City Council at the first Council meeting in January. I wanted the board to have a copy of it. Mayor Coody: Oh sure. Sondra Smith: I think you read it verbatim. Mayor Coody: Yes I did. Current Board of Trustees List —Informational A copy of the Current Board of Trustees List was given to the Board. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes January 18, 2007 Page 3 of 18 2007 Meeting Schedule —Informational A copy of the 2007 meeting schedule was given to the Board. Old Business: Mark Martin report on Baxter International Lawsuit Mayor Coody: Mr. Martin is going to report on the Baxter International lawsuit and I understand you have great news for us. Mark Martin: Unfortunately Mayor I don't but I do appreciate the opportunity to appear before you and the board today to bring you up to date on the Baxter case. When we last met we filed a co-motion to be appointed lead plaintiff in the Baxter SEC case. The Fayetteville Firemen's Pension and Relief Fund Board as well as the Alaska Labors Board joined forces and jointly petitioned the court for classification. We anticipated that would be approved, unfortunately it was not. In a decision handed down on January l Ot" by Judge Blanch Manning in Chicago, she denied the joint motion for class certification. She also noted that since no other institutional investors had applied for class lead plaintiff status during the relative period of time in her option, which was about two pages in length, she determined that the case was in essence over. We certainly disagree with the option of the judge and we would like for you to keep in mind that Judge Manning initially denied the claim on its merits for various reasons. Her decision was over turned by the Seven Circuit Court of Appeals and the status of this case was back before the judge for the sole purpose of determining class certification. So in other words that was round two. That is where we are. We just received this decision and I have sent a copy to your legal council. I believe Kit has received a copy. The long and short of it where we stand now is this, Judge in her opinion told us that there would be a status hearing on January 25, 2007. We are not sure what the purpose of the status hearing is but we will be present on your behalf presenting your side of the case. There will also be representatives from the Alaska fund present as well. Again we are not sure of the purpose of the status hearing we understood from the decision that it was simply denied and we assume the only thing left now is the issue of appeal but we will find out more after the meeting on the 251H Certainly someone from the board is welcome to attend the status hearing, it will be in Chicago. Should someone wish to do that we would cover the cost of any expenses related to that. However your attendance is not necessary we do not expect the hearing to take very long. That of course is a decision that should be up to you. In essence the judge denied the class certification for two reasons. Number one she said that the losses associated with Fayetteville Firemen's Pension and Relief Fund were too small and the losses sustained by the Alaska Pension Fund were too small. As you recall there were losses involving 600 shares of Baxter stock that this board had invested in. With regards to the Alaska fund theirs was much larger, theirs was 10,500 shares. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes January 18,2007 Page 4 of 18 Mayor Coody: What's the value of a share? Mark Martin: I believe the losses associated by Fayetteville were in the neighborhood of $13,000. Kit Williams: That's not the total value that's the amount that the shares went down during this relative period of time. Mark Martin: Of course the value and the losses associated with the Alaska Fund are in the six figures and very substantial. Certainly at this point I'm really glad that both funds joined forces because if 600 shares by itself is not enough and 10,000 shares is not enough and the two combined together is not enough our question is what would be enough? Some people disagree with that very strongly. We believe the purpose of class litigation is to make sure that small groups are protected in these types of cases, who can not afford the cost of litigation because the expense associated with litigation would far exceed what they could recover. That's really the purpose of a class action so to speak. We think we have a very strong argument in that regard. The second reason the judge denied certification was she stated that this action was lawyer driven. In other words this board and the Alaska board did not decide to take action on this until their attorney's brought the fraud to their attention, presented it with options, and then the board made a decision in that regard. We certainly disagree with that as well while certainly lawyers benefit from these matters in that there are attorney fees, since there was only two institutional investors that stepped up to the plate, had they not done so there would have been no way that this organization could have recovered their losses. Certainly I understand that this board feels a responsibility to do whatever they can to recover whatever losses they sustained as a result of corporate fraud. It's our belief that is the motivation for bringing this action. We will be arguing that before the judge as well. Those are the two reasons the judge specified that this was denied. Again we will have a status hearing on the 25th we will be present at that time representing your interest. We recommend that after that occurs that we set up a telephone conference as we did before with a representative of the board and legal council along with representatives of the Alaska board and their representatives and all legal council to make plans on how to proceed after we meet with the judge. At this point in time we see no reason that this should not be appealed. However we would like to hear what the judge has to say on the 25th before we make our final recommendations in that regard. Kit Williams: What I would like from the board, since I am going to be talking with them later on after they have this counsel with the judge to find out what exactly the next step is, I want to know what you would like to do. I disagree with one of the judge's decision where they say this is lawyer driven. It should not be lawyer driven it should be driven by this board and what your desires are. That's the position I think we have taken through out and what we need to continue to do. The lawyers brought this to our attention which I don't think is improper. I think a good lawyer is going to warn a client if there is a problem out there and then it is up to the client to decide Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes January 18, 2007 Page 5 of 18 what to do. I think that is what these lawyers did. They brought to our attention an issue of potential corporate misfeasance in this particular case. You might not be aware of this but let me explain a little bit about it. There was a period of time when a corporation, Baxter International, was promoting their stock and saying the earnings are great this is going to be what we predict our earnings to be and at the same time their directors were selling stock. They were also getting ready to buy another company by using their stock so it made it better, they could buy the company cheaper if their stock was worth more. During this period of time there was allegedly information coming to these board of directors that in fact their earnings were not going to be as advertised. Despite this information coming to them they continued to present the rosy scenario that the stock was going to be performing at this level and they had good reason to know that it would not. Finally they had to make the announcement that we are not meeting our targets which they had already had good reason to know that they were not going to meet their targets and at that point the stock took a dive. We owned 600 shares of Baxter stock during this period of time. The Alaskan company owned a whole bunch more. Our potential loss, for this failure to communicate truthfully with their shareholders and the rest of the world, was potentially $13,000. We originally asked Mr. Martin to come here because we need a representative of this board to be willing to go to hearings, be deposed if you have to be deposed, and represent this board in court. I wanted Mark to be able to explain a little bit more of what might be required of this individual. I would ask for the board to do two things. Number one is to select someone on the board to be their representative, if in fact it is not thrown out. Secondly I would ask that you make the decision whether or not you wish to continue seeking to be the class representative in this case and to instruct our attorney's if they are still willing on a contingent fee basis to file an appeal on your behalf. Those are the two decisions that this board needs to make. Your attorney's can't make it, I can't make it, it's what the board needs to determine. That's one reason we rescheduled the meeting so Mark could be here so he could answer any questions that you might have about that. I would ask you Mark to explain what would be expected out of a representative from this board. Mayor Coody: Mark on a scale from one to ten what's the likelihood of success on an appeal? Mark Martin: Eight or nine based upon what we know now. We haven't met with the judge and of course that will take place on the 25th. We don't know what else will be presented at that time but based upon what we see right now if I was placing odds I would place them very high. Mayor Coody: How can we stumble there at the first round? I mean we got basically denied. Mark Martin: Actually this was the third time the judge considered class status in this particular case. This case has been going on for two years now. The first battle was over whether there were sufficient facts to overcome certain defenses were this case could withstand summary judgment. The judge denied the case on the merits stating that there were not sufficient facts to support such case and that any defenses available would overcome such case and therefore the case should not go beyond that point and time. That was round one and that took about two years to get to that point in time and that went all the way up to the Seventh Circuit Court appeals. The circuit over turned this judge and said there was suffient facts to proceed. I now consider the Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes January 18, 2007 Page 6 of 18 issue a class certification which is the next issue to address. This case came back before Judge Manning. Mayor Coody: This was the same judge that denied it originally? Mark Martin: Yes it is the same district judge that denied it originally. So it was reversed and returned to the same judge that heard it in the first place with instructions that we are over turning your first decision, and yes there is suffient evidence to go forward. Please now address the next issue which was class certification. The original case was filed by a hand full of individual plaintiffs and at one of the early hearings before Judge Manning on the class certification issue she expressed her desire that should this case go forward and enter consideration with regards to granting class certification she would rather see instead of a handful of individuals, institutional investors. It was based upon that statement that both law firms then sought out the institutional investors that they represented. We have a monitoring agreement with the City of Fayetteville, we identified losses here and we came before the board and pointed out that there were losses involving 600 shares during relative period of time. Because there were losses here they had the right should they choose to do that to petition for lead plaintiff status. The other law firm that was also involved in the case sought out intuitional investors who they represented who also sustained losses and it just happened to be Alaska. So both law firms decided instead of competing with each other to join forces and jointly ask the judge for class certification. As it turns out Alaska and Fayetteville were the only two institutional investors in the country that requested class certification. Had they not stepped up to the plate this whole case would have been denied for lack of interest. Frankly we were surprised that having heard the judge request that we seek out the institutional investors and that is exactly what this group is and that is exactly what the Alaska pension fund is we feel very strongly that was wrong. We assume that depositions that would be taken shortly after the judge granted this class certification would be the depositions of a representative of the Fayetteville Firemen's Pension Relief Fund as well as a representative of the Alaska fund. Now that the judge ruled against us and we will now have to take this up on appeal, and that could take a substantial period of time, it's unlikely that these depositions will be taken in the very near future. I can't guarantee of course that the other side will probably want to exhaust their appeals before they start taking depositions. Kit Williams: The representative would have to be prepared to work with you to make sure they really understood all the ins and outs of the case and under go a deposition from the other side. Mark Martin: A typical deposition in this case will be basically someone from the board or whoever is chosen who can answer questions posed by attorney's regarding their position on the board, the funds that this board regulates; there will be questions about this particular stock loss. There will be a number of other questions directly related to the purchase of the Baxter shares. I would anticipate that whoever is chosen to be the representative of the board answering those questions I would assume that they would have a lot of knowledge about this particular purchase. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes January 18, 2007 Page 7 of 18 Kit Williams: Since we had our financial analyst making decisions. Mark Martin: Basically the standard answer is we hire people to handle these matters for us. We don't really get involved in reading the perspectives of a certain corporation and to determine their health and financial statements we really hire people to do that. Whenever this deposition takes place I would assume that it would be a half of day, one day at the longest. I spoke with Darrin this morning our co-council on this case, they have been doing SEC litigation for many years and he said the longest any of these depositions have taken is one day. There would be preparation time and whenever the time came we would come to whoever you chose as your representative to go over the standard questions we would expect them to ask. As with all depositions you tell the truth, you tell what you remember but if you don't remember something it is an honest answer to say I don't remember. If you don't know something it's an honest answer to say I don't know. Kit Williams: That's the only honest answer. Mark Martin: We would anticipate that whenever the deposition takes place that there will be a lot of those answers simply because this board turns investment matters over to other people. We would spend all the time necessary when the time arose to prepare whoever your representative is with regards to the history of this litigation, the functions of the board, the people that the board hires to handle these matters for them and basically the standard type questions. Kit Williams: Assuming that we would actually get into court would the representative need to be there in court with you and how long might that take? Mark Martin: Kit I can't answer at this time how long the litigation would take. We would certainly need the representative from the class representing the pension board in court. With the regards to the length of the litigation I can't give you an exact answer on that. Once we have the status hearing I can try to answer those questions. Kit Williams: Then of course the costs for the representative are going to be born by the attorney's so there will not be any out of pocket costs for the representative. Mark Martin: Exactly, we are handling this case on a contingency basis which means that if we are not successful there's no fee. Any fees of course have to be approved by judges and we've also agreed that we will advance costs including going to depositions, time off getting prepared for that, time off to go to trail and we will bear the full cost of that if we are not successful. We have already agreed that there will be no reimbursement. Kit Williams: I would recommend that we have a member that has been on the board a long time. It would be good to have someone that has been on the board maybe even during the time that the stock was owned as opposed to someone that's would be a new board member. If you have any questions for Mark please ask him. Pete Reagan: Mark what do you feel like is a time frame for the appeal process? Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes January 18, 2007 Page 8 of 18 Mark Martin: It's hard to say Pete, it could take a year. Pete Reagan: I know that we have our investment advisors here and they have a 12:00 meeting if we could deal with this at a later time in the meeting I know they would greatly appreciate that. Kit Williams: That would be fine I have that same meeting. I'm going to go ahead and go. Unless you can make a quick decision on who would be your representative and whether or not you want them to appeal. Mayor Coody: The first question is whether or not to appeal. It's going to be a big commitment for not a ton of money but if we fall out then Alaska has to fall out too don't they? Kit Williams: No but I think it would help to have both parties in. Pete Reagan: It's my intention as a trustee to move forward with this and appeal it. Kit Williams: Then why don't you make a motion? Pete Reagan moved to continue the appeal process. Marion Doss seconded the motion. Upon roll call the motion passed 5-0. Ronnie Wood was absent. Kit Williams: You've heard what Mark has said if you all don't want to immediately decide on the representative it doesn't absolutely have to be done at this meeting. Do you just want to table it to the next meeting? Thanks Mark. Mark Martin: Thanks for allowing me to be here. Pete Reagan: Thank you Kit. Appointment of Pension Board Representative for the Baxter International lawsuit case This item will be added to the next meeting's agenda. No appointment was made at this meeting. Ted O'Neal's DROP amount Sondra Smith: That is just informational so you will know how much we paid out in DROP funds. COLA — Cash Flow Report received — Can not implement a benefit increase at this time Marion Doss: We received the report back on the request for the 3% COLA. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes January 18, 2007 Page 9 of 18 Sondra Smith: Yes. I have included a copy of the report. This report is subject for review at the PRB meeting on March l4th but it says at this point in time no temporary COLA can be instituted. They tried to do a I% COLA for three years and the plan could not even sustain a I% COLA for three years. We talked about having a meeting with all the pensioners to let them know about the COLA once we got the cash flow report back. I think we still need to have that meeting so that they will be informed why we are not implementing a COLA. We talked about doing that one evening, what do you think? Marion Doss: How does the board feel? Do you think we need to have a meeting or an informational letter to all the pensioners? Pete Reagan: I think an informational letter will do because the actuary has been completed and it's been determined by them that we are not able to grant a 3% COLA at this time. What we instituted in the past was a three year 3% temporary. That is my thoughts on it. Marshall Mahan: I think trying to get a meeting together with everybody is almost impossible an informational letter would probably be the best. Marshall Mahan moved to send an informational letter to all the pensioners. Pete Reagan seconded the motion. Upon roll call the motion passed 4-0. Mayor Coody and Ronnie Wood were absent. Pension Protection Act — No new information vet Marion Doss: Pension Protection Act what is that in reference to. Sondra Smith: That is what Pete brought up about the insurance, about the City paying for the pensioners insurance on a pretax basis. Pete Reagan: LOPFI and PRB do not yet have anything in writing and as soon as they do I have asked David Clark for a copy. Marion Doss: Okay very good. Sondra Smith: At this point in time I don't think there is anything else we can do. Marsha Farthing: We have a form that we want you to look at. Sondra Smith: Okay. Marsha Farthing: It is a form that you would fill out so that we could pay your insurance premiums through your pension check. Trish Leach: This is just a rough draft. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes January 18, 2007 Page 10 of 18 Paul Becker: This is the authorization for deduction form, right? Marsha Farthing: Yes. Trish Leach: I actually got an email back from LOPFI and Bob Bartholomew, who is their Chief Financial Officer, said basically they are doing something .like this. They were allowing people to sign up but they are requiring the insurance company to accept electronic payments, which of course we wouldn't do because we don't do electronic payments. We were trying to get something together and Marsha and I came up with this form. Sondra Smith: I talked to Michele and she is working on what was brought up at the last meeting about attaching you as a group to our city insurance. Since we moved up the meeting nobody has really had time to do much on that. Paul Becker: We have discussed that and part of the situation is number one currently employees 55 years or older with 20 years of service at their option at the time of retirement can tap into the city's insurance. Looking at it we have no legislative authority to go beyond that. We already have the 2007 insurance contract in place and we can't go in and amend that at this point. It would change the city's over all rates by additional people coming in and we would probably have to extend that to all employees who retire who are not over 55 year of age and have 20 years in service. So because of those reasons, we felt as a staff, we agreed with Human Resources and Finance that we could not recommend that at this point and time. Marion Doss: However legally the city could do it if they so chose to is that correct? Paul Becker: That would be a legal question. We discussed it with Kit and I don't want to put words in his mouth but it would almost be in the area of a gift or something additional whether or not we would have legal authority to do that would be in question. We know we do not have specific authority at this point and time. Pete Reagan: So are you saying it would have to go before the City Council? Paul Becker: If it went before the City Council we would recommend that the City Council would not approve it. We're not prepared to take it to the City Council. Sondra Smith: Attaching to the city's insurance policy. Pete Reagan: As a sub group or a sub category group? Marsha Farthing: You can't do that. Pete Reagan: You can't do that? Paul Becker: That we cannot do. That would put it in a whole different ball game. That would be impossible. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes January 18, 2007 Page 11 of 18 Sondra Smith: I think the board would need to vote on whether or not they wanted to do this. You would also need to think about the time involved in the Accounting Department and right now no office charges the pension fund any labor. We just haven't done but it is getting more labor intensive and the more that you ask us to do the higher the possibility is that the pension fund will be charged back for labor for some of the actions that you are asking us to do that we haven't done before in the past. Pete Reagan: I fully understand that and I appreciate all the work that the staff has done in the past. This is a benefit to the retirees and I don't want to create any more work for the staff than we have to but as a benefit I think we need to pursue this and see exactly how long it is going to take. If we do need to compensate staff I would be willing to do so as a board member. I think this is a great first step in seeing what we need to do and I would like to table this to see if LOPFI comes up with any other regulations that we have over looked. The IRS has not published any regulations on this yet so we are kind of out here in the middle of the sun and moon. Sondra Smith: That was another concern that we had that there is no published regulations yet from the IRS. Until those are published I don't think the city would be to willing to do too much. Pete Reagan: Another question I would have on this is could we make it a one time $3,000 payment to an insurance company, like a health savings account that way we wouldn't have to do it every month. Marsha Farthing: If your check would cover it. Sondra Smith: There are some checks that wouldn't cover a $3,000 payment. Marsha Farthing: But we don't care. Trish Leach: That's why on the form it says that. I had thought about that, there's each month or a one time deduction as an option. Pete Reagan: Is city staff looking at sometime in the near future doing electronic transfers? Trish Leach: For accounts payable I would say no. Marsha Farthing: We do a few now but we haven't looked into doing that. Trish Leach: Wendy and I discussed it and it would be easier for us to just cut a check. Everything is a guess because we don't know how many retirees would want to participate and how many insurance companies we are talking about. We figured we would have to attach a list with it check to say what we are paying for. We are just trying to get our thoughts together on how it will work for us. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes January 18, 2007 Page 12 of 18 Pete Reagan: With that in mind, Sondra in the letter that we send out about the COLA could you mention something about this in it and that we will probably have to have a time period in the next three or four months were we would probably have to have an informational meeting. We could do both at the same time if we needed to if folks wanted to do that. I'm sure a lot of the retirees don't anything about this because it's all new and the IRS has not published any regulations on it. I think it that would be a good idea to put some information in the letter about this and that we are going to be forth coming with information on it and as soon as we do then we can call a meeting and get everyone's input on it. Sondra Smith: I think Accounting would have to estimate the time that they feel like would be involved and you would have to see what the pension fund would have to pay for maybe a part time person in Accounting to handle this. I think there will be a lot of calls back in forth and that may negate the benefit that the pensioners would see by being able to do this. If you are taking money out your plan to pay for someone to administer this it may not be worth doing it. Marion Doss: I'm not sure if we could legally take money out of the plan to pay for someone to do this. Marsha Farthing: LOPFI charges administrative fees to administer the funds. Paul Becker: 1% of total assets. So they charge a pretty good hit for administrative fees. So I don't think there would be a legality issue. Marion Doss: This plan is so old there are some things that may be different than the LOPFI plan. There are some things on this plan that are entirely different. Paul Becker: I'm not an attorney. I would talk to Kit about that question. Marion Doss: You said if you have been with the city 20 years and your age 55. Is that a state statute? Pete Reagan: Yes. Paul Becker: That's state statute and we are required to do that. Pete Reagan: If you put in twenty seven years and you are fifty you can't. Marion Doss: You can't do it. That's happened, we have a few guys on the Fire Department that have had several years of service but they retired before the age of 55. Marsha Farthing: I would feel from an equity stand point that you would have to offer that to all employees if we were going to offer that to you all. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes January 18, 2007 Page 13 of 18 Marion Doss: It is probably Fire and Police that retired before the age of 55 and not too many Fire and Police now unless it is a disability retirement if they went under LOPFI not too many of them retire early. Paul Becker: We have to consider what we are statutorily required. Once we go beyond that we are on ground where people are uncomfortable. You have to understand that would go into the rate structure determination by the insurance carrier and in fact would result in a cost to the city. Those are issues, that is why I said staff is not prepared to go forward and would not recommend that happen. Marion Doss: Since we haven't seen anything in writing we really don't know that much about it anyway. Sondra Smith: There was a packet in November or December meeting. Paul Becker: There are two separate issues. One allows you to deduct from your pension check to pay for insurance through other carriers. The other issue is requesting the city with the city insurance plan to take in additional numbers. Marion Doss: That's true. Trish Leach: In the letter that Sondra sends out I wonder if there would be a way to word it to ask everyone if they would respond if they are interested in a pretax deduction from the pension plan to pay for their insurance plan. We may not have that much interest if we are talking four or five people it's not going to be big thing for us to do. If we are talking everyone wants to do it that's a different story. Sondra Smith: The thing we also talked about if we offer it to fire pensioners we're going to have to do it for police pensioners to so that is going to be double the responsibility. I always have the Mayor send out letters since he is the chairman of the board. I'll get with him and see how he wants to draft the letter but we will put that in there about the Pension Protection Act. Pete Reagan: So we will have this on the agenda for the next meeting? Sondra Smith: I will put it back on the agenda for the next meeting. I've got to add the appointment of the pension board representative for the Baxter case and the Pension Protection Act. Marion Doss: You're going to go ahead and get the letter out regarding the COLA. Sondra Smith: I'll get with the Mayor and have him get a letter drafted. Marion Doss: I think we need to go ahead and get that out as soon as possible so people are aware of what's going on. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes January 18,2007 Page 14 of 18 Sondra Smith: The report that Elaine Longer was talking about is your quarterly report and a copy is attached to your agenda and the newsletter that she sent out is also attached. Pete Reagan: Thank you very much for that. Sondra Smith: I have one other thing I did not put on the agenda. When I'm not here Amber who is the Deputy City Clerk cannot sign your transfers because you have not authorized her to do that. The last one that needed signing the Mayor was at Municipal League and I wasn't here that day and they needed a transfer signed. Amber could have signed it if you had given her authorization. So I would ask that the board give the Deputy City Clerk authorization to sign any pension transfers. Pete Reagan: With your approval. Sondra Smith: With my approval only in my absence. They can call me and ask me. I have to assume that accounting is doing the transfer correctly. Pete Reagan: I understand. Pete Reagan moved to allow Amber Wood, Deputy City Clerk to sign pension transfers in the City Clerk's absence. Marshall Mahan seconded the motion. Upon roll call the motion passed 4-0. Mayor Coody and Ronnie Wood were absent. Sondra Smith: I will let everyone know but I assume Mr. Warford will be sitting on the board. Pete Reagan: Will you notify him and us. Sondra Smith: Yes. I will. Pete Reagan: By email. Sondra Smith: Yes. Pete Reagan: Very good. Sondra Smith: Email or we will give you a call if we can't get a hold of you. Marion Doss: Anyone from the audience have anything they want to say? Sondra Smith: Did you have any questions on the cash flow report? Marshall Mahan: For those that want to add my name for information. Marion Doss: You can give that to Sondra and she can add that. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes January 18,2007 Page 15 of 18 Marshall Mahan: Okay. Sondra Smith: If you want to get with me after the meeting. Just remember that whatever we put on here will be published. Marshall Mahan: That will be fine. Sondra Smith: I think we are using your city email address is that okay. Marshall Mahan: That's fine. Pete Reagan: Thank you all. Marion Doss: Thank you Trish. Longer Investments: Monthly Report Elaine Longer: Good Morning, Happy New Year. We will start on the first page. It is the December 31 closing of the portfolio. You will see that the domestic stocks represent about 45% of total portfolio at the end of the year. On page 2 the foreign closings are approximately 7% of portfolio so your total equity exposure is about 51%. We are over the 50% again so we need approval to be over 50% Pete Reagan moved to approve the equity overage. Marion Doss seconded the motion. Upon roll call the motion passed 5-0. Ronnie Wood was absent. That is down a little bit from where we have been at 55% but we came into the end of the year thinking that probably some of the performance that we got in December was really borrowing from the first part of the year. We are into a little bit of a stormy earning season so far. Intel has reported and they have disappointed a little bit with that Dell is down. The technology sector had started out real strong in January but now we are seeing some pulling back and some disasters like Motorola. We've got some cash in our hip pocket at this point and time about 4% of portfolio and we are waiting to see how the earnings come out and decide whether or not to scoop up some bargains. We came into the end of the year with a little bit more in cash than what you've seen in the past few quarters. On page two I'd like to point something out we do have the authority to use covered calls for hedging purposes in your portfolio as an example we had hedged BP selling the January sixty calls to bring in seven dollars in premium since then British Petroleum and all of the energy stocks have pulled back fairly dramatically in the first part of the year. So when these options expire this Friday we'll book about five dollars a share gain on the hedge to offset the decline in the stock price. Also on Dell when they reported in the fourth quarter the stock popped up we Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes January 18,2007 Page 16 of 18 thought it was over extended it did about a 10% gain in two days and so we sold the January Dell calls and we have since covered those for about two dollars a share gain. That's how we use hedging in your portfolio we don't have to necessarily let go of the position if we think it's extended but we can protect it and then roll out of the options. It is not a taxed account so there's no reason to worry about short term gains. I just thought I would point that out because you have not seen options for a while. Page five is the year ending value of $8.924 million and it's about the same at this point in time considering the fact that just over a $100,000 has gone out since the end of the year. Page six is an update through January 12th not much is different on that except that the Dell calls have been closed and we went ahead and booked that gain. Page 10 is the current portfolio of value which at $8.8 million is about the same as year end excluding the approximately $100,000 that went out as a distribution. Page 11 is a summary of the realized gains for last year. Realized gains were about $351,000 that is just the gain on the stocks and bonds that we sold. The net income is about $219,000. The overall appreciation in the account was more like $900,000. Page 12 summarizes your fixed income portfolio holdings. Last year we had a pop up in the middle of the year on the treasuries, the five, ten, thirty year bonds peeked out in late June right before the last Fed increase. We were doing a lot of rolling bonds, selling the 4% coupons we had in the portfolio and moving them into five and six percent yields. I wanted to point out to you that at the end of 2005 the income yield on your bond holdings was 4.9% by the end of 2006 we had moved that up to 5.5% all the while we were able to reduce the average maturity from eight years down to 5.3 years. So your income went up from 4.9% to 5.5% but the maturity to be able to achieve the higher income actually went down to from eight years to 5.3 years. The current five year treasury is trading at about a 4.7% yield. So we have a good yield locked in. The average coupon has moved up from 4.92% to 5.52% and we still have about 35% of the portfolio in securities that mature within three years or less. So even thought we were able to move to a much higher coupon and reduce the maturity level we still have a lot of flexibility in the portfolio to further increase the income yield if the bond yields go higher. There is a lot you can do in the bond market. It is not as fun or exciting as stocks to a lot of people but to us we love bonds because you can add a lot of value. Page 13 shows your largest stock holdings none of which exceeds 5% of equity or 2% of total portfolio so it is within line with your portfolio policy. All of them are big blue chip stocks. This has been the year were blue chips the big mega cap companies have really out performed the smaller and mid cap stocks but it is the first year in a string of about seven years that has been the case. We are coming off a six year period where small and mid cap stocks have out performed the large cap stocks. Last year was the first year we saw a turn in that. But truly the largest pocket of under evaluation, the most extreme evaluation in the US stock market right now is still the large cap stocks. You have really good dividends in that area and also good growth because they are the companies that can tap into the international markets. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes January 18,2007 Page 17 of 18 Page 14 we summarized our weightings as far as economic sector and industry weightings. We are overweight in the capital goods, financials stocks, health care, and technology. We are underweight consumer cyclical and cyclical stock. If you read our newsletter we are still concerned about the household sector how over levered they are. The fact that using the home as an automatic teller machine has probably ceased because of the rising interest rates but also because of the plateauing in the home market and the home prices. So that has provided a lot of support to consumer spending in the last five years and we feel like we are in the ninth ending, probably the bottom of the ninth as far as that goes. So we still are avoiding the consumer durables that would be companies like auto manufacturers, furniture and appliances companies. We are even weight the consumer non cyclical, that would be companies like Coca Cola, Rubber Maid and then the energy. We came into this year at about an equal weight if you consider the hedge we had on British Petroleum we are actually slightly underweight and that has been good because the energy stocks are down about 6% year-to-date. Crude oil is down another $1.50 today. It is amazing because we are down to about $51 to $52 a barrel off a high of about $80 and down about 13% year to date. So energy has really taken a hit. This partially is a function of the markets that we are in at this point in time. I have talked before about the hedge funds and what a huge percentage of the trading on US markets that the hedge funds now represent. It is over 50%. So corrections that use to take weeks and months take days because when they move they move in mass. The good thing is the corrections that use to drag on and take so long it doesn't take nearly as long. The bad side is it does add volatility to the market. Page 15 is a copy of your distributions, contributions, and account inception to date which goes back to August 2002. The net contributions have been about $622,000 and net distributions have been about $4.5 million. That is a difference of about $3.8 million. Page 16 is a summary of your performance. If you look at 2006 your equity return was about 17.3% and that compares to 13.6% on the S&P cash basis and 15.8% with compounding of dividends, 19% on the DOW with compounded dividends. So it's an out performance of the S&P 500. Your international equity funds were also up to close to 17% and that's coming off the heels of a 21% gain the prior year so the international stocks did real well in your portfolio. Fixed income was 3.1% and that compares to about a 3.1% on the Salomon Brothers Treasury Index. Your total return for the year with cash bonds and stocks included was 10.4%. That brings your compound annual return up to 6.9% from inception. You can see that this is how the stock market works we had a negative year in 2002 which was the third negative year in a row and that was historic. Then we came out of that correction to a big year in 2003 of 29% followed by an average return, a flat return and then another good return year. That's the thing about the stock market, your returns typically come in a fairly short compressed time frame because the market sells off or corrects and gets to a point of under evaluation and then takes off again. But the average annual return has been about 10.3% on the stock component verses 3.7% on fixed income and 21% on REITs. Definitely the stock part of the portfolio has been carrying the performance. In the newsletter we said that we came into 2006 saying that we anticipated stocks would out perform bonds because in 2005 you had a period where earning were up 20% but the stock Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes January 18,2007 Page 18 of 18 market was flat. Because the market was dealing with rising energy costs, rising interest rates all year and so you had moved the stock market to a point of evaluation of about 15 times earnings which relative to a ten year treasury at 4 1/2 % made stocks an under valued equity class verses the alternative which is the fixed income. We had a big year up 17.3% but in that year earnings advanced by about 18% so even though stocks had a good year earnings still out paced what the markets did. So that as we end 2006 we're looking at evaluation on stocks and it is about where is was when we started 2006 and we are looking at a ten year treasury that's not much different than where we were when we entered 2006. On a relative valuation, stocks versus ten year treasury stocks are still relatively more attractive than the fixed income side of the portfolio. So although we have pulled back a little bit we have about 4% sitting in cash looking for a better buying opportunity that where we came into this year we are not negatively looking at the equity side as far as performance goes. I still think stocks will out perform this year and the value is certainly on the stock side relative to a ten year treasury. As all things sort out at this point in time it looks like another good year conservatively speaking for stocks. Mayor Coody: Thanks for a good job. Glad to have you on board. Do you need me for anything before I have to get out of here? Alright thanks. Elaine Longer: Thank you, Happy New Year. Pete Reagan: Thank you Elaine, Happy New Year to you all. Ouarterly Report A copy of the Longer Investments Quarterly report was given to the board. Meeting Adjourned at 12:05 PM FIREMEN'S RELIEF AND PENSION Mar 2007 3 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 5,438.22 R 177 4/04 BACHMAN, EDDIE 2,618.55 7,855.65 S 74 3/86 BAIRD, JULIA 1,802.08 5,406.24 V 63 5/72 BOLAIN,ANN 109.27 327.81 R 68 7/99 BONADUCE, MICHAEL 2,988.76 8,966.28 S 44 9/86 BOUDREY, BETTY MRS. 2,477.42 7,432.26 R 45 9/86 BOUDREY, HOWARD 2,089.28 6,267.84 R 49 7/88 BOUDREY, JACK 1,647.63 4,942.89 V 5 5172 CASELMAN,ARTHUR 131.13 393.39 R 57 5/90 CATE, ROY 1,788.90 5,366.70 V 6 4/68 CHRISTIE,ARNOLD 109.27 327.81 V 8 10/76 COUNTS, WAYNE 109.27 327.81 R 77 11/99 DILL,GARY JOHN 1,812.75 5,438.25 188 12/05 DOSS, MARION H 5,376.91 16,130.73 R 11 2176 FARRAR,ALONZO 998.86 2,996.58 R 192 4/06 FARRAR, DANNY 4,155.36 12,466.08 R 38 5/84 FRALEY, JOSEPH G. 1,768.12 5,304.36 R 170 5/03 FREEDLE, LARRY 3,816.75 11,450.25 R 92 03/02 GAGE,TOMMY 2,596.69 7,790.07 V 34 6179 HARRIS, JAMES E. 109.27 327.81 V 70 11/99 HARRIS, MARY RUTH 109.27 327.81 Q 182 10/04 JENKINS, EILEEN 1,788.75 5,366.25 R 93 06/02 JENKINS, JOHN 1,788.76 5,366.28 R 86 07/01 JOHNSON,ROBERT 3,073.47 9,220.41 R 64 4/95 JORDAN, CHARLIE 2,274.95 6,824.85 S 76 5/88 JUDY, JAN 1,647.63 4,942.89 R 37 3/84 KING,ARNOLD D. 1,522.37 4,567.11 R 54 5/89 KING, ARVIL 1,711.21 5,133.63 V 12 3/60 LANE, HOPE MRS 109.27 327.81 R 13 10/67 LAYER, MERLIN 456.22 1,368.66 R 173 12/03 LEDBETTER, DENNIS 3,775.80 11,327.40 V 181 10/04 LEE, VIOLA LOUISE 109.27 327.81 R 51 10/88 LEWIS, CHARLES 1,647.63 4,942.89 R 40 9/85 LOGUE, PAUL D. 2,868.28 8,604.84 R 50 9/88 MASON, LARRY 1,631.25 4,893.75 R 39 4/85 MC ARTHUR, RONALD A. 1,753.74 5,261.22 V 35 2/82 MC CHRISTIAN, DWAYNE 109.27 327.81 R 15 4/77 MC WHORTER, CHARLES 1,334.51 4,003.53 R 29 8/81 MILLER, DONALD 1,304.07 3,912.21 R 73 2/00 MILLER,KENNETH 3,180.02 9,540.06 V 42 2/86 MOORE, JAMES H. 109.27 327.81 V 176 4/04 MORRIS, DIXIE E. 125.66 376.98 R 48 7/88 MULLENS, DENNIS W. 2,191.30 6,573.90 R 184 3/05 NAPIER, LONNIE 3,518.28 10,554.84 R 196 01/02 ONEAL,TEDDY 4,120.99 12,362.97 R 46 5/88 OSBURN, TROY 1,899.66 5,698.98 R 81 02/01 PHILLIPS,LARRY 2,765.09 8,295.27 R 53 2/89 POAGE, LARRY 2,346.70 7,040.10 R 186 06/05 REAGAN, PETE 3,535.71 10,607.13 V 22 4/73 REED, JOE 109.27 327.81 S 172 12/03 SCHADER, MADGE 1,386.01 4,158.03 R 41 9/85 SCHADER,TROY 1,524.99 4,574.97 R 190 04/06 SHACKELFORD, GLEN 3,647.18 10,941.54 S 83 03/01 SKELTON, KIMBERLY 2,434.98 7,304.94 R 36 5176 SPRINGSTON, CARL 806.19 2,418.57 S 90 03/02 STOUT, IMOGENE W. 767.80 2,303.40 R 165 12/02 TATE, RALPH 3,668.10 11,004.30 V 65 3/66 TUNE, BILLIE SUE 136.59 409.77 R 71 1/00 WARFORD,THOMAS 2,502.72 7,508.16 R 28 7/68 WATTS, DONALD 437.09 1,311.27 R 88 01/02 WOOD,RONNIE D 3,077.15 9,231.45 R 52 9/88 WRIGHT, RANDALL 1,691.34 5,074.02 113,316.82 339,950.46 DATE OF Regular Mo Year To Date EMP#RETIREMENT NAME Benefd Reg Benefit 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 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 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 : Firemen's Pension And Relief Fund Board Of Trustees Chairman Position 3/Retired Mayor Dan Coody Gene Warford 113 W. Mountain 4169 E. Oakmont Dr. Fayetteville, AR 72701 Fayetteville, AR 72701-7772 575-8330 — Work 442-7080 — Home Replaced Fred Hanna 957-3400 — Cell 0l/01/01-Indef. Replaced Dennis Ledbetter dcoody@ci.fayetteville.ar.us 1/16/07-05/31/07 Unexpired Term tot@warford.com Secretary City Clerk Sondra Smith Position 4/Retired 113 W. Mountain Ron Wood Fayetteville, AR 72701 17315 Lake Sequoyah Road 442-7838 — Home Fayetteville, AR 72701 575-8323 — Work 442-5925 — Home Replaced Heather Woodruff 444-1699 — Work 02/03/03-Indef. 466-2817 — Cell ssmith@ci.fayetteville.ar.us 444-2700 — Pager 07/27/95-04/30/03 Position 1/Retired 05/01/03-05/31/05 Marion Doss 06/01/05-05/31/07 1125 Cato Springs Road rwood@co.washington.ar.us Fayetteville, AR 72701 521-8988 — Home Position 51 Replaced Danny Farrar Marshall Mahan 05/31/91-Indef. (Highest Ranking Member) 122 Holland Drive 01/01/06-05/31/06 (Retired Member) Farmington, AR 72730 06/01/06-05/31/08 267-2509 — Home Mhdoss42@aol.com 718-7622 — Work 601-3700 — Cell Position 2/Retired Replaced Ted O'Neal Pete Reagan 12/14/06-Indef. (Highest Ranking Member) P. O. Box 1922 mmahan ,ci.fayetteville.ar.us Fayetteville, AR 72702 521-7542 — Home 841-0320 — Cell Replaced Darrell Judy 05/11/93-04/30/02 05/01/02-05/31/04 06/01/04-05/31/06 06/01/06-05/31/08 apfffaynaol.com 23 (2/21/2007) Sondra Smith - FFD Pension Fund Page 1 From: <Apffprez@aol.com> To: <ssmith@ci.fayetteville.ar.us> Date: 2/21/2007 10:47 AM Subject: FFD Pension Fund CC: <tot@warford.com>, <rwood@co.washington.ar.us>, <mmahan@ci.fayetteville.... Sondra Smith, City Clerk City of Fayetteville Please excuse me from the February 22nd meeting of Fayetteville Firemens Pension and Relief Fund. I am out of town on business and will not be able to return in time for the meeting I would ask that my name be submitted as a delegate to the annual conference of NCPERS. Thanks Peter T Reagan Trustee Fayetteville Firemen's Pension & Relief Fund (2112/2007) City Clerk - Register Now for the NCPERS Annual Conference & Exhibition! Page 1 From: NCPERS Info <info@ncpers.org> To: Sondra Smith <city_clerk@ci.fayettev7le.ar.us> Date: 2/12/2007 8:31 AM Subject: Register Now for the NCPERS Annual Conference & Exhibition! The National Conference on Public Employee Retirement Systems Invites You to Attend its 2007 Annual Conference and Exhibition May 18-24, 2007 At the Hilton Hawaiian Village, Honolulu, Hawaii The Voice For Public Pensions Click here to see NCPERS article: hftp://www.ncpers.org/artman/publish2/article-231 .asp Additional information is available at www.NCPERS.org or call 877-202-5706. NCPERS 2007 Annual Conference and Exhibition FEB 019 2007 Hilton Hawaiian Village, Honolulu, HawaiiTy € � Pre Conference May 18-19* Main Conference May 20_24, 2007 Sondra Smith Certification of Delegates Form Fayetteville Fire Fighters Pension & Relief 113 West Mountain Street, Membership ID: 23510 Fayetteville, AR 72701 Date: 01/30/2007 "This form must be received no later than April 27, 2007, to qualify your organization for all voting procedures at the conference. No exceptions will be made for late filings" Your organization is entitled to send: An unlimited number of attendees to the Conference 2 can be voting delegates and 2 can be alternates 0 00 NCPERS Official Voting Rules Official delegates to the Annual Meeting are required to file their credentials with the Secretary of the Conference no later than 15 days prior to the Annual Meeting. This document shall serve as proper notice in accordance with the bylaws Article 3, Section 2. 1. Only delegates or their assigned alternates are eligible to vote on matters before.the Conference. Alternate delegates are authorized to vote only if the registered delegate is unable to attend the Conference. No person shall be a delegate for more than one member group or organization. 2. All registration fees and membership dues must be paid in full prior td the conference. Delegates may not participate in the National Committee Election on Monday, May 21, 2007, if fees.are not paid in full: 3. Complete and return this certification no later than April„27, 2007 ,KEEP A GOPY'FOR YOUR FILES. 4. Once the list of delegates has been filed with the Secretary}any changes must be received in writing no later than May 4, 2007. 5. The authorized names submitted will be selected in numerical.order from the official delegate list until your voting entitlement is exhausted. Other persons listed WILL NOT have a vote unless the persons listed previously are not registered at the Annual Meeting. Official Delegates Alternate Delegates 1. 1 2. 2. Authorized Signature Title (Signature and title of person with authority to certify delegates and alternates delegated for the above organization) FOR CREDENTIALS COMMITTEE USE ONLY- DO NOT WRITE IN THIS SPACE Above affiliated organization is entitled to delegates and a like number of alternates. Tina Fazendine, NCPERS, Secretary Date Mail To: NCPERS, 444 N. Capitol St., NW, Suite 221 , Washington, DC 20001 3 �t \ � F I t S Ow, .. QQ yV `.' J r cv %wow Ll now "Llt� zr f1 , r o All F } \5 f S r \ ✓t ': � ct ® a c ��� � l F �',�a s1#■tom\..,yy+aft, � t,l�1L i ��\\` ' ti�5",Q7�; f t • R T 4 " i t i t f v � r � Flu �•pV ���•le� eA\\ z n _ _ �r 1 �p�rr• ' s i V 0 �0�`�L C� �t r .......... } F V 1 �5 �lO�'h��n• N--/ __ M. 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E r ca m_ co C. p m o m_ m. ccs m. m. o 0 0 0 0' (Q O O CA O O L O O O o O O O M _ T o (� co O M OO O m 0 0 N O p � I TI I I n00Rm � ca Wm E E E E E v 2 E n E E E E E E m m n E x ca cc R m m m T co o m_ M. �, m ccs m w o 0 O m- 4 s ° .t.a a 0 O -0 o 0 0 R O O o 0 CQ O O O O M o 0 e.s N R M M M co O = 'p M N O O M M O O o r CV M � E* i CD CSC) 1` Cp T = C CO C+M Co C CO CO r� 00cts RE r r r T n Fm LL. cn rI R. y� � RF DEPARTMENT OF VETERANS AFFAIRS ° " Medical Center �A� 2 20�� 1100 North College Avenue Fayetteville AR 72703 CITY OFFAYETTEVILLE CITY CLERK'S-OFFICE January 24 , 2007 In Reply Refer To: To Whom it may concern, In my professional opinion, Mr. Dennis Mullens has chronic Obstructive Pulmonary Disease. As a result of his 20 years of service as a full time firefighter. He has a diminished lung capacity from the inhalant exposure. Thank you Clinton Schmidt (2/6/2007) Sondra Smith - Dennis Mullens information Page 1 From: Patricia Leach To: Smith, Sondra Date: 2/6/2007 3:44 PM Subject: Dennis Mullens information Attachments: Dennis Mullens resignation letter.pdf; Publication 525 Pension.pdf CC: Farthing, Marsha 1 have attached a copy of Dennis Mullen's resignation letter. He does not mention a disability and I can find no mention of a disability in his file. I have also attached a portion of IRS publication 525 which addresses the reporting of disability pension funds and explains that after the pensioner has reached minimum retirement age, or in our case, years of service, the pension payments are taxable as pension income. I have also forwarded the email from Bob Bartholmey, CFO at LOPFI concerning the reclass of regular pension to disability. Hopefully all of these documents combined will make it easier for the Board to make an informed decision. Trish