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HomeMy WebLinkAbout2007-04-26 - Agendas - Final Firemen's Pension and Relief Fund Meeting Agenda April 26, 2007 A meeting of the Fayetteville Firemen's Pension and Relief Fund will be held at 11:00 AM on April 26, 2007 in Room 326 of the City Administration Building 1. Approval of the Minutes: • March 29, 2007 Meeting Minutes 2. Approval of the Pension List: • May, 2007 Pension List —No Changes 3. Old Business: • Dennis Mullens retirement classification • Appointment of Pension Board representative for the Baxter International lawsuit case (Tabled from the March 29, 2007 meeting.) • Pension Protection Act (Tabled from the March 29, 2007 meeting.) 4. Longer Investments: • Monthly Report • Quarterly Report 5. Informational: • NCPERS 2007 Conferences and Educational Opportunities Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes March 29, 2007 Page I of 12 Firemen's Pension and Relief Fund Meeting Minutes March 29, 2007 A meeting of the Fayetteville Firemen's Pension and Relief Fund was held at 11 :00 AM on March 29, 2007 in Room 326 of the City Administration Building Marion Doss called the meeting to order Present: Marion Doss, Pete Reagan, Ron Wood, City Clerk Sondra Smith, City Attorney Kit Williams, Chief Johnson, Paul Becker, Amber Wood, and Trish Leach, Accounting. Absent: Mayor Coody, Marshall E. Mahan and Gene Warford F Approval of the February 22, 2007 Meeting Minutes,: � p Ron Wood moved to approve the February 22, 2007 Meeting Minutes. Marion Doss seconded the motion. Upon roll call the motion passedd 0 Mayor Coody; Marshall E. Mahan and Gene Warford were absent" v��� s Approval of the Pension Z, Approval of the April;2,007 Pension List There were no changes to the;pension List from the previous month Pete Reaganmoved to approve the March, 2007 Pension List. Ron Wood seconded the motion Upon roll calF�the motion passed 4-0. Mayor Coody, Marshall E. Mahan and Gene Warford;were absent. New Business Kim Skelton — Proof,' Enrollment Sondra Smith: Ms. Skelton is still enrolled in college and she has not turned twenty three yet. Old Business: Dennis Mullens retirement classification (Tabled from the February 22, 2007 meeting.) Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes March 29,2007 Page 2 of 12 Marion Doss: We tabled this at the last meeting. He sent a letter requesting his retirement be changed to a disability retirement for IRS purposes. We really don't know if we can do that or not. Kit Williams: We also requested some additional information on him. Did we get anything? Sondra Smith: I haven't sent anything. I didn't know who was going to request additional information. Kit Williams: I did not ask. I did not communicate with him. Sondra Smith: I didn't either. Do I need to do that? I will if I°meed to: Kit Williams: I thought we asked for something fromtheCidn't wet ,a Sondra Smith: We got off on a different subject ai d we neve]' decided. r _. Marion Doss: The Fire Chief made a statement thate\ nigtit see more of this in the future. I took that to mean that as health related problems come up e find that exposures are causing health problems there might be things like that in the future Someone else on the board took it to mean that everybody else would jump on ;the band wagon if thatvhpl5ened. For instance heart disease atone time was not a job related disability and m some st`at;s it is for fire fighters now. That is what I thought he meant by the statement, that there may be things like that in the future as people find out about the _ ngs that cause illnesses thatIhey may have been exposed to previously. Sondra Smith: I know *,ou talked° about gettinuch with his CPA and his CPA proving that it's allowable under the TRS rules That.he would have to prove that can be done. s Marion Doss. That soutads like a good idea. I think that we need to contact someone from PRB o and se cif that's been Bnet m the state before and see what their thoughts are on doing it retro r active ' Sondra Smith: Trish has already done that. Marion Doss: Oh have you: Trish Leach: I spoke to LOPFI and they have never reclassified anyone. Sondra Smith: We talked about that at the last meeting and they've never done that. Marion Doss: Did you ask them if any of the old pension funds had ever done that? Trish Leach: No, we just discussed LOPFI because they are so much larger. They are a good gage for what we do and they are right there with PRB. I assume they consult each other. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes March 29,2007 Page 3 of 12 Marion Doss: That is what I would think too. Kit Williams: The letter we got from the doctor really wasn't clear. What he wrote was extremely short and wasn't clear. There are a lot of problems with this application. Marion Doss: My sympathy is with Dennis and I can understand completely. I just don't know if we have the right to do that. I guess if his CPA could prove that then I guess the burden of proof would be on them if they want that changed. AA ,A Kit Williams: I guess the first thing is if the CPA can establish that this would be something that might actually make a difference. I think until he can do hat we rlrll shouldn't go out on a limb and do something that has not been done anywhere in the state yet It„could be for naught anyone the IRS is not real sympathetic on giving people;a brek. '" , P ./ Pete Reagan: If a doctor says that a guy is disabled then he's di abled. Denm§'19' of�"asking for x any extra money, all he is asking for is a disaHis doctofPsays he has diminished lung capacity. I just read the minutes and T take exception to some of the comments made by the chairman about people coming back and domg this and everybody's going to want to do it. Dennis was a fire fighter back in the time when we did/not have air packs and we can all remember that. I came on just as we got a>rpacks: So you are goi,Mto see a lot of this. All he is asking for is a benefit that is not going to `cost this board anything To the point of LOPFI and PRB we have a retiree from Fayetteville on LOPFI,�hisxname,is//Ted Youman's and he does not get a disability pension even though he was disabled off thejob. His check from LOPFI is not marked disabled even thoughh,,6--Js,,on disabihty,pension Now what they are doing at LOPFI I have no idea but there are problems there and it�fls not clear with the IRS on how to do it. All Dennis is looking for­1something That says that lus,check will be considered disabled. For tax purposes that's all it is. Marion Doss: To clarify, if Ileft That impression, I didn't say that people are going to jump in and startidoing that. Wl%a I=said was we might find exposure things that cause illnesses and that there`iniftbe things discovered in the Inure. I didn't say people are going to start coming back and doings „I meant there-i§,a possibility of finding that we were exposed to something ten or twenty years"" mthat impair&our health. That is a very real possibility. That is what I meant by that. Pete Reagan: There are alt kinds of new studies out and heart disease is the number one. Marion Doss: Right. Matter of fact I read something about that regarding fire fighters a few days ago in a newspaper article. Trish Leach: According to our research we have done a lot of looking into what the IRS says. He retired when he reached the determination for retirement. He put in his twenty years and he was at the age where he could and that was when he retired. According to them it's retirement Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes March 29,2007 Page 4 of 12 it's not disability. Disability would be where you went off on disability before you reached the age of retirement. He met the retirement determination. Pete Reagan: Right. Trish Leach: In everything we are reading we don't see where we can change it. Sondra Smith: What they are saying is that they have to change the 1099R. Paul Becker: He made a declaration and he petitioned to retire with retirement benefits. Pete Reagan: I understand that. AW t2. c E i1 ^ Paul Becker: Be realistic everybody feels sorry for him Nob0dy wants to� ee this happen. If we could do something about it we would. The fact of the°matter is when he petrtioned he petitioned for retirement. He did not petition for disability,: Our position is we don't thrik«we have the authority to change that. Pete Reagan: Does the IRS regulations,,say that we can't do it?,,. v.. Trish Leach: It says that when someone that is retired on disability,reaches the required age or s the years of service to be retired then the `, assification changes i6--' etired. There is a code for disabled or regular retirement. Reading the ZRS stuff s � uch Like reading anything a lawyer gqi writes. It seems pretty plain that when you reach the age thatgyou are considered retired that code changes to "retirement", evenif he-j,-,-,,,,had originally went outn disability with us and he did not. So that is where we think we are We don't thinly we have an option because he had his twenty years in when he retired; Pete Reagan. I understand Kit Williams: I think l�ll'i e t1ko ma�orburdens that he would have to have before this board should do anything. One is bunging his CPA in and explaining why that's not correct. Why he can now be.elassified as disability and that will give him some advantage with the IRS. Second thing is he would. have to have a lot better medical evidence for this board to look at than that very very short letter that was submitted that was not clear. Pete Reagan: Under , A I don't think we can look at his records. Kit Williams: If he wants this board to make a determination then he is going to have to submit something this board can consider. Trish Leach: I don't care if the CPA comes and says whatever he wants to say. What I think we need for the city is a ruling in writing from the IRS that we can change it. So if something comes up later on we are protected if we do this. They can petition the IRS for this. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes March 29,2007 Page 5 of 12 Kit Williams: I don't know that this board can actually make a determination. He is already retired I think it's probably beyond our jurisdiction now to do anything to change it. Ron Wood: Would that not be an IRS decision? The bottom line is would that not be left to the IRS to make that decision? Paul Becker: I don't think so. I think it is what where the terms when he left employment. I don't think the IRS is going say what were the terms in which he left employment. I don't think it's an IRS's decision. You could try and petition them. Kit Williams: If he wants to claim that he is disabled now he might:be able to go to the IRS and say this should be disabled pay now. I just don't thmk `we le jurisdiction to change somebody's classification at this point and time. Marion Doss: I think those are all points taken. I just don't know. I don't'knoEw if the IRS is going to care much about what we say after the fact That is what I'm concerned:'with " They are the ones that need to say its okay. I don't know whether we can o'r not either. Kit Williams: It's certainly the IRS's final decision. Trish said she read the regulations. I have a little bit of familiarity with that too Yqu.get a certain breAl ff you are disabled but that ends when you reach regular retirement becausethe IRS is going to want to tax it. I think some of the disability stuff you don't have to be taxed or you 4&1,axed at a different rate. Pete Reagan: The city has an;employee pension fund doesn0t70 Kit Williams: No, we have a 401= 3 which is ready separately owned by each pensioner so it's not a defined pension pian like the police and fire have although we would like to have one. Pete Reagan. I would suggest you get :' ;"'started ori one. It's not a bad deal Kit. Kit Wdliams: I think it" -w6be a good deal except I don't think the city can afford it. Sondra Smith: We might bankrupt the city if we did that. Kit Williams It; would be nice to have but there has been no inclination that the City Council would want to do that;because I think it would be a very expensive proposition for the city to do. Pete Reagan: Do you suggest that we ask the IRS for a ruling? Trish Leach: I suggest that we tell Dennis Mullens that he needs to pursue this with the IRS and if they can come back to us with something in writing from the IRS that says we can do this then we will discuss it again. Kit Williams: I think it should really be his burden with him and his CPA to do that. Frankly I don't think he's going to get anywhere. If they want to go to the IRS and come back and show Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes March 29,2007 Page 6 of 12 that we are wrong, that we actually have some authority to do this and that it will make some difference then I think the board should look at then. I think the burden is on him at this point in time and his CPA to show us that everything that we think is wrong. Sondra Smith: Does the board want a letter to go to Dennis Mullens or to his CPA? Kit Williams: It needs to go to Dennis. Marion Doss: We don't even know who his CPA is. Kit Williams: It's up to him to deal with the CPA. Marion Doss: Gene Warford called me after the last meetings and Gene said his CPA said that we could do it. Aa Kit Williams: The CPA can get something fromethe IRS saying that we have the right to do it then at that point we can look at it very seriously.' eriously We could then determine what kind of medical evidence we need to satisfy that he was dlsable �irorir�a job related situation and make a decision then. But, I think we need to have something from >the CPA showing the IRS ruled in this way to give us the power to do it. ' Pete Reagan: I think it looks bad as a board and we axe, representrlg the retirees and we know that there's going to be a bunch more of this has we all get older, Dennis has sought advice from his CPA and has petitioned us to change it I"think it is this ,board's problem to deal with and I think we should ask the,4RS I we ,can legally do it as a board. We have been petitioned by a retiree. Marion Doss: What Pete says souiads good, about'`ns asking the IRS if we can do it. There is nothing wrong with Dennis asking his CPI to pursue it also. One thing that comes to mind is in the Vietnam War when they were using Agent Orange there was no problem. Dennis said he was in an area where they were used phutI and they didn't recognize it for years and finally the government,admitted it and so the VA riow recognizes that problem. That is kind of the same thing it's a delayed thing It wasn't a"problem then but now they realize that it did cause health �y. problems. Ron Wood: What kind ofsteps would we need to take to petition the IRS? Kit Williams: I don't know. Pete Reagan: All we are doing is asking them if we can change it. Ron Wood: If we get a yes or a no from the IRS. Trish Leach: I'm a CPA and I'm sure there is a health group because I get emails and books from them. If you all want to go down that road we will. We'll put something in writing and Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes March 29,2007 Page 7 of 12 bring it back to the board with the contact number and get you can approve it at the next meeting and we will send it to them, if you want to go that direction. Pete Reagan: I would prefer that. Ron Wood: I would too. I feel like Pete he has petitioned the board and I think the board needs to do as much as we can do. Kit Williams: The city is the one actually doing the work. So it is up to M, r. Becker and his staff if they willing to take on this extra work because the board is not doing this: Paul Becker: We will write a letter but that's about it. We are not goln to spend an inordinate amount of time. Personally I don't think we are going to get anywhere with,the IRS. I've been a Certified Public Accountant for over thirty years. We will atterript to make contact and see if we can get a quick answer to it but it are not going to spend a massive about of time Marion Doss: I feel like the city staff would have a lat bettex luck at making contact than me, Ronnie or Pete could. I don't have any idea who to call Paul Becker: We'll spend some time, I'ln dust saying were notgoing to spend an inordinate amount of time. Trish Leach: I don't think it will be quickly,as far,as getting somewhere with it but we will at least go down the road. Pete Reagan: Thank you. Marion Doss: I think any movement s positive. I don't expect it to go quickly. I think it will take time. I appre",tate your 6fler on that. r Sondra Smith: Dowe`Mill need i&lsend a;:.letter to Dennis Mullens or not? Kit Williaifi : , I think you should still? send him a letter saying that the city is going to spend a little bit of effort to see if in fact the IRS has rulings on this but he should also be working on it with his CPA because maybe his CPA already has the ruling or already knows something. Marion Doss: It would be good to make contact with Dennis that way he will know that we are considering it and trying to do what we can. Kit Williams: Consider about whether or not you have the power to do it. Marion Doss: That sounds good. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes March 29, 2007 Page 8 of 12 Appointment of Pension Board representative for the Baxter International lawsuit case Pete Reagan moved to table the Appointment of a Pension Board representative for the Baxter International lawsuit to the next meeting. Ron Wood seconded the motion. Upon roll call the motion passed 4-0. Mayor Coody, Marshall E. Mahan and Gene Warford were absent. Kit Williams: I will inform the attorney that we are having difficulty finding a representative and that no one has volunteered to represent the board. Marion Doss: I brought Pete's name forward at the last meeting `., I didn't talk to him I just assumed that he would. Pete Reagan: I stated the reasons that I don't feel like I"ean and that would, not do the board justice nor would it do my other obligations justice Kit Williams: That is a duty that we have to have if you want to .be the lead plaintiff but on the other hand there is only about $13,000 out there if they were=-'totally successful that is at risk or that we might be able to recover back for the pension. I realize:being a representative would be a time commitment. I don't know how long_hut,at least a number of days. I will communicate that to Mark Martin and indicate that at this' "',tim, e„ do not have someone that is ready to step forward. Pension Protection Act Oibled from the February 22, 2007 meeting) Paul Becker: The issue:was whether or not we legally were responsible for making deductions for pensioner's insurance foi those, Who-.,.deal directly with insurance companies. We have no statutory requirements we are not require, ' ,y the IRS to perform the duties and we really don't have the staff tine I mentioned fast time that"we would look and see if we had anybody who could d, it or be willm to do it on an individual basis and charge the individual pensioner for Y the pfocess but that is not feasible. Vie do not anybody that could do that at this point. Kit Williams: floes it require overtime? Paul Becker: It would require overtime. Someone would have to be willing to do it on their own. We cannot be reltnhursed by the pension fund directly because it doesn't serve the entire pensioner's. Pete Reagan: How much time do you estimate it will take to do this? Paul Becker: It depends on how many people. Pete Reagan: I'm not sure I understand all of this. If we had 10 people sign up to do this and the checks are printed by computers so all that it is going to take is some computer entry. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes March 29,2007 Page 9 of 12 Paul Becker: No, everybody could have a different premium time you would have to go in and analyze each insurance company. Pete Reagan: I'm sure the petitioner would supply that information to accounting. I'm going to use me for an example if I was using my insurance company it's going to be on the same day every month or whenever the checks are written. I don't really foresee this as being as time consuming as what it is lead to be. Paul Becker: Well it is. Pete Reagan: You're in the business I'm not. Paul Becker: You have to do this for each individual. Pete Reagan: I understand. Paul Becker: That can all change. There are also liabshty Issues we statutorily don't have a requirement, and we don't have the time. Pete Reagan: Well we'll have to find soeoneto. do it then 7'm interested in doing it; it will save me money on my taxes. I guess I'll sign up to do jt, . Trish Leach: If all the pensioners were like you,I?ete, I canP'see`where you would think it would not be time consuming ;but alt of our pensioners .,are not as `cin top of their stuff as you are. Our z concerns are we have pensioners that we have rouble getting affidavits from and we have pensioners that don't cath their cheeks which weareal-'ways chasing. Pete Reagan: I°understand Trish Leach: It's those penple Ifwe signed up to deduct their insurance and then for some HED"'., reason their insurance changed and we weren't given notification that their premium changed or the place w&ere the payment,,v ent was different and the pensioner's insurance company dropped them, where does.;that leave u ? It's different because you handle your business different than a lot of the pensiondo. That,,`-`,`i,`§ one of our concerns. Sondra Smith: Trash isn't it only the first $3,000 of premiums that is pretaxed? So if someone's premium >s`$10,000 only $3,000 of that will be pretaxed and the rest will not be pretaxed. Pete Reagan: Right, it would just be a supplement type deal. Trish Leach: When we were discussing how we could make it work we said we would have to pay all the insurance premiums for the year. When the city's premium goes up we receive notification. You said there might be 10 people but there might be 50 people and all those Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes March 29, 2007 Page 10 of 12 premiums are different and companies change and are bought out. A pensioner thinks we are handling everything for him but if we don't receive the information there is a big issue there that I would be concerned about because if you lose your health insurance coverage it's hard to get back. Kit Williams: Especially at our age. Pete Reagan: It's just going to be for the ones that are between 50 and 62 or 65. Sondra Smith: I hope this board doesn't think we are just not willing to `work for this board. I don't think you realize how much time we put in for the pension plans. Just getting the affidavits back for this board has taken us four months. We started in 116cember and it has taken that much time, additional phone calls, additional letters and it is something that shouldn't take that much time. The pensioners should be willing to turn that aff davit back in. We have other situations that come up. We had to!",go down;to the city hospital and visit a pensioner because of problems that arose with their pension. There;are all kinds of things that we do. It's not that we don't want to help; it's not that weare �ust being stubborn; it's just that we are strapped and our time is maxed out. ,,,, Pete Reagan: I understand that and I `want to, go on record `thanking everyone for their assistance with all our duties as this board,`."?", ut this board is constituted to try to make sure we take care of our retirees. _ Marion Doss: I also appl`ecia the extra effort you go through getting those affidavits. I know a lot of big cities ororgan><zations ><f:;they didn't get the affidavit back there just wouldn't be a check the next month and.;hreallyappreciate you all taking that extra time. Sondra Sm>Lth: that's dust ode thing, that's notall the things they go through in accounting, there are ehaigesof addresses, and we could go on and on. Mar tin Doss: I appreciate the help ' en I got ready to retire I didn't know there was as much paperwork Avolved. I thought it was�just the simple matter of turning in a letter of resignation and walking out the door. Trish Leach: We wish we could make everyone be on direct deposit. If they don't cash their check we have to chase it down, have they lost the check and we don't give up until we get in touch with someone We feel your pain. Sondra Smith: Yes, we do. Can I ask is there any additional information that you need before the next meeting or are you just wanting more people here to talk about it? Is there something that we need to do for you before the next meeting? Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes March 29,2007 Page I 1 of 12 Pete Reagan: I don't know how many of our retirees would use this. I'm going to guess probably 15 to 20. I plan on talking to them to see if they are interested in doing it. I personally am interested in doing it. It's going to save me money at the end of the year. Sondra Smith: Another thing Pete if we offer it to the Fire Pension we have to do it for the Police Pension. It maybe 15 to 20 on this board but it also maybe 20 to 30 on the other board. That is the reason it's more involved than what you realize. Kit Williams: That is part of the problem about them finding someone willing to work overtime to do it. There are two things, one is that and second thing is the potential liability. The liability if something happened and they lose their insurance coverage and soieone goes into the hospital with massive bills then who pays the bills if we haven't sent" pre in, because we didn't get a notice of the new insurance company, or the new/.,place to send `the bill. That concerns accounting to accept potentially hundreds of thousand odd 11tir of liability: a Trish Leach: President Bush had a proposal and% aven't keep track of where it's going but if his bill passes then you could get a credit on your ta)�esrfor healthinsurance. So this wouldn't be necessary. Paul Becker: The fact of the matter; ds we have lim ted staff, we have a multitude responsibilities, and we just have to make dec>�s on at some poi,4 tune whether we can do it or not. Kit Williams: With sales�tax revenue down 1 , if new staff is on the horizon. Y Rn Pete Reagan moved`f6, table th ¢ Pension Protection Act to the next meeting. Ron Wood seconded the motion. FlTpon roll,=Ncall the motion passed 4-0. Mayor Coody, Marshall E. Mahan and Gene Warford ,err absent. Longer Tnvestments: >> t L Letter regarding Northern T1 ust C6mpany's transaction fee on the January statement. Sondra Smrth�' Zh ,first rtemunder Longer Investments is a letter from Kim Cooper stating that the transaction fee for 2006 'in the amount of $2,100 that was on the January Northern Trust statement was incorrectrand will be removed on the next Northern Trust statement. Marion Doss: Thank you. Equity Overage - Equity Allocation is at 54.6% Marion Doss: We have the equity overage we have to act on. Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes March 29,2007 Page 12 of 12 Sondra Smith: Yes, we have to move to approve the equity overage. Pete Reagan moved to approve the equity overage. Ron Wood seconded the motion. Upon roll call the motion passed 4-0. Mayor Coody, Marshall E. Mahan and Gene Warford were absent. Monthly Report A copy of the Longer Investments monthly report was given to the board. Marion Doss: Does anyone have any comments on the monthly repbrt� SRR , ..u�l Informational• 611 %y;�� 2 , s VV Pete Reagan: Just for the boards information I requested Elain Longer to review,our actuary to ✓W, confirm the investment returns for the last four years thut�were used on your actuary. I sent that to her in an email a couple days ago. ,d, rs r i�r Marion Doss: Okay. Did you think there"', ie a discrepancy<� x 4 Pete Reagan: I was asked to do so by a member of-the Arkansas Pension Review Board. Marion Doss: Okay. Th'ank'yod aI niZ " tr Meeting Adjourned at Z h✓ FIREMEN'S RELIEF AND PENSION May 2007 5 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 9,063.70 R 177 4/04 BACHMAN, EDDIE 2,618.55 13,092.75 S 74 3/86 BAIRD, JULIA 1,802.08 9,010.40 V 63 5/72 BOLAIN,ANN 109.27 546.35 R 68 7/99 BONADUCE, MICHAEL 2,988.76 14,943.80 S 44 9/86 BOUDREY, BETTY MRS. 2,477.42 12,387.10 R 45 9/86 BOUDREY, HOWARD 2,089.28 10,446.40 R 49 7/88 BOUDREY, JACK 1,647.63 8,238.15 V 5 5/72 CASELMAN,ARTHUR 131.13 655.65 R 57 5/90 CATE, ROY 1,788.90 8,944.50 V 6 4/68 CHRISTIE,ARNOLD 109.27 546.35 V 8 10176 COUNTS, WAYNE 109.27 546.35 R 77 11/99 DILL,GARY JOHN 1,812.75 9,063.75 188 12/05 DOSS, MARION H 5,376.91 26,884.55 R 11 2/76 FARRAR,ALONZO 998.86 4,994.30 R 192 4/06 FARRAR, DANNY 4,155.36 20,776.80 R 38 5/84 FRALEY, JOSEPH G. 1,768.12 8,840.60 R 170 5/03 FREEDLE, LARRY 3,816.75 19,083.75 R 92 03/02 GAGE,TOMMY 2,596.69 12,983.45 V 34 6179 HARRIS, JAMES E. 109.27 546.35 V 70 11/99 HARRIS, MARY RUTH 109.27 546.35 Q 182 10/04 JENKINS, EILEEN 1,788.75 8,943.75 R 93 06/02 JENKINS, JOHN 1,788.76 8,943.80 R 86 07/01 JOHNSON,ROBERT 3,073.47 15,367.35 R 64 4/95 JORDAN, CHARLIE 2,274.95 11,374.75 S 76 5/88 JUDY, JAN 1,647.63 8,238.15 R 37 3/84 KING,ARNOLD D. 1,522.37 7,611.85 R 54 5/89 KING,ARVIL 1,711.21 8,556.05 V 12 3/60 LANE, HOPE MRS 109.27 546.35 R 13 10/67 LAYER, MERLIN 456.22 2,281.10 R 173 12/03 LEDBETTER, DENNIS 3,775.80 18,879.00 V 181 10/04 LEE, VIOLA LOUISE 109.27 546.35 R 51 10/88 LEWIS, CHARLES 1,647.63 8,238.15 R 40 9/85 LOGUE, PAUL D. 2,868.28 14,341.40 R 50 9188 MASON, LARRY 1,631.25 8,156.25 R 39 4/85 MC ARTHUR, RONALD A. 1,753.74 8,768.70 V 35 2182 MC CHRISTIAN, DWAYNE 109.27 546.35 R 15 4/77 MC WHORTER, CHARLES 1,334.51 6,672.55 R 29 8/81 MILLER, DONALD 1,304.07 6,520.35 R 73 2/00 MILLER,KENNETH 3,180.02 15,900.10 V 42 2/86 MOORE, JAMES H. 109.27 546.35 V 176 4/04 MORRIS, DIXIE E. 125.66 628.30 R 48 7/88 MULLENS, DENNIS W. 2,191.30 10,956.50 R 184 3/05 NAPIER, LONNIE 3,518.28 17,591.40 R 196 01/02 ONEAL,TEDDY 4,120.99 20,604.95 R 46 5/88 OSBURN, TROY 1,899.66 9,498.30 R 81 02/01 PHILLIPS,LARRY 2,765.09 13,825.45 R 53 2/89 POAGE, LARRY 2,346.70 11,733.50 R 186 06/05 REAGAN, PETE 3,535.71 17,678.55 V 22 4/73 REED, JOE 109.27 546.35 S 172 12/03 SCHADER, MADGE 1,386.01 6,930.05 R 41 9/85 SCHADER,TROY 1,524.99 7,624.95 R 190 04/06 SHACKELFORD, GLEN 3,647.18 18,235.90 S 83 03/01 SKELTON, KIMBERLY 2,434.98 12,174.90 R 36 5/76 SPRINGSTON, CARL 806.19 4,030.95 S 90 03/02 STOUT, IMOGENE W. 767.80 3,839.00 R 165 12/02 TATE, RALPH 3,668.10 18,340.50 V 65 3/66 TUNE, BILLIE SUE 136.59 682.95 R 71 1/00 WARFORD,THOMAS 2,502.72 12,513.60 R 28 7/68 WATTS, DONALD 437.09 2,185.45 R 88 01/02 WOOD,RONNIE D 3,077.15 15,385.75 R 52 9/88 WRIGHT, RANDALL1,691.34 8,456.70 113,316.82 566,584.10 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 BOAMMIT THAT 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 : 4/11/2007 K:\Fire Pension\Pension List\Pension List 2007\050107 FP WM rayeiL 7eviile ARKANSAS 113 West Mountain Fayetteville, AR 72761 Telephone: (479) 575-8323 Fax: (479) 718-7695 city—clerk@ci.fayetteville.ar.us City Clerk/Treasurer Division April 189 2007 Dennis W. Mullens 19078 Clearwater Road Springdale, AR 72762 Re: Retirement classification change to disabled Dear Dennis, The Firemen's Pension and Relief Fund Board of Trustees is considering your request for retirement classification change to disabled. A final determination has not been made at this time. Our next Firemen's Pension meeting will be Thursday, April 26, 2007 at 11 :00 AM in Room 326 at the City Administration Building. You should be present at this meeting so the Board can ask any questions they may have regarding your request. Should you have any questions you may contact me at (479) 575-8323. Sincerely, d�'►n.�it-cam- � �A' ' Sondra E. Smith Secretary Firemen's Pension and Relief Fund Board of Trustees c LONGER INVESTMENTS INCORPORATED A Registered Investment Advisor April 6, 2007 RECEIVED APR 2007 Ms. Sondra Smith CITY QFFAYETTEVILLE City of Fayetteville Fire Pension & Relief Fund CITY CLERr<'8 OFFICE 113 W. Mountain Fayetteville, Arkansas 72701 Dear Sondra: Enclosed you will find the 2007 first-quarter reports for the Fayetteville Fire Pension and Relief Fund account. These reports include a portfolio appraisal and a summary of realized gains/losses and income/expenses. Detailed reports of realized gains/losses and income/expenses are included at the back of the report package. As instructed, the account at Northern Trust will be billed for the management fee. During the first quarter of the year, we saw considerable volatility in the markets, with most indices ending the quarter unchanged or slightly lower. The S&P 500, Dow Jones Industrial Average, and NASDAQ returns (on a cash basis) for the quarter were 0.2%, -0.9%, and 0.3%, respectively. Bonds outperformed stocks, and the Salomon Brothers Treasury Index was up 1.4% year to date. International markets performed well. The EAFE (Morgan Stanley Capital International Inc. Europe, Australasia, Far East) index was up 3.5% in the first quarter. Expectations for the next few months are modest, as investors battle fears about the impact of mortgage defaults and the housing downturn on the economy. Other looming concerns include slowing corporate earnings growth, energy prices that have crept higher lately, increased geopolitical risks, and lingering uncertainty about the Fed's next move. We expect earnings growth to slow, but still produce a positive return in 2007. Stocks remain undervalued relative to current bond yields, but are consolidating the strong gains of last year. We still expect stocks to outperform bonds in 2007, but the consolidation phase may last through the better part of this year. We will send a mid- year newsletter in the second quarter that profiles the market's activities and our outlook for the second half P.O. Box 1269 Fayetteville,Arkansas 72702 Telephone:479-443-5851 Toll free: 800-827-7710 Fax:479-443-7129 Web site:www.longerimcom Ms. Sondra Smith April 6, 2007 Page Two Longer Investments appreciates the opportunity to assist with the management of the Fayetteville Fire Pension and Relief Fund's assets. Please do not hesitate to call if you have any questions or comments, or if we can be of further service. Sincerely, Elaine M. Longer, A President EML:cml Enclosures i City of Fayetteville Fire Pension and Relief Fund U/A Dated 06-18-86 - FIRST QUARTER REPORTS ' March 31, 2007 LONGER INVESTMENTS INCORPORATED A Registered Investment Advisor Longer Investments Inc. PORTFOLIO APPRAISAL Fayetteville Fire Pension and Relief Fund U/A DTD 6-18-86 March 31, 2007 Unit Total Market Pct. Unit Annual Cur. Quantity Security Cost Cost Price Value Assets Income Income Yield Common Stock 4,210 AT& T 27.06 113,926.00 39.43 166,000.30 1.9 1.420 5,978.20 5.2 4,750 Applied Materials Inc. 16.08 76,402.33 18.32 87,020.00 1.0 0.240 1,140.00 1.5 1,750 Avon Products Inc. 34.75 60,812.50 37.26 65,205.00 0.8 0.740 1,295.00 2.1 1,000 B.P. Amoco PLC A.D.S. 39.63 39,625.00 64.75 64,750.00 0.7 2.480 2,480.00 6.3 2,570 Bank of America Corp. 46.98 120,743.23 51.02 131,121.40 1.5 2.240 5,756.80 4.8 2,700 Barclays PLC 39.80 107,472.69 56.94 153,738.00 1.8 2.810 7,587.00 7.1 1,750 Bed Bath &Beyond 41.78 73,120.60 40.17 70,297.50 0.8 0.000 0.00 0.0 3,250 Bristol Myers Squibb 26.42 85,868.75 27.76 90,220.00 1.0 1.120 3,640.00 4.2 2,000 Cameco Corp. 39.35 78,693.80 40.94 81,880.00 0.9 0.140 280.00 0.4 2,250 Chevron Corp. 38.26 86,084.01 73.96 166,410.00 1.9 2.080 4,680.00 5.4 2,750 Citigroup 39.33 108,149.59 51.34 141,185.00 1.6 2.160 5,940.00 5.5 2,950 Coca-Cola 41.85 123,445.69 48.00 141,600.00 1.6 1.360 4,012.00 3.3 2,000 Computer Sciences 53.36 106,717.00 52.13 104,260.00 1.2 0.000 0.00 0.0 Corp. 1,335 Devon Energy Corp. 66.34 88,561.63 69.22 92,408.70 1.1 0.560 747.60 0.8 3,260 Disney Company 25.57 83,349.00 34.43 112,241.80 1.3 0.310 1,010.60 1.2 2,680 Emerson Electric 23.99 64,279.80 43.09 115,481.20 1.3 1.050 2,814.00 4.4 1,475 ExxonMobil 34.89 51,457.58 75.45 111,288.75 1.3 1.280 1,888.00 3.7 5,500 General Electric 26.59 146,257.35 35.36 194,480.00 2.2 1.120 6,160.00 4.2 2,750 Hain Celestial Group, 19.49 53,591.18 30.07 82,692.50 1.0 0.000 0.00 0.0 Inc. 1,225 Health Care Select 31.28 38,317.88 33.65 41,221.25 0.5 0.497 609.41 1.6 Sector SPDR Fund 1,900 Ingersoll-Rand 41.13 78,149.66 43.37 82,403.00 1.0 0.720 1,368.00 1.8 5,025 Intel Corp. 18.36 92,242.67 19.13 96,128.25 1.1 0.450 2,261.25 2.5 2,350 J.B. Hunt 22.17 52,092.22 26.24 61,664.00 0.7 0.360 846.00 1.6 2,050 Johnson & Johnson 60.33 123,685.67 60.26 123,533.00 1.4 1.500 3,075.00 2.5 4,285 Newell Rubbermaid Inc. 25.21 108,023.80 31.09 133,220.65 1.5 0.840 3,599.40 3.3 2,800 Newmont Mining 47.33 132,523.72 41.99 117,572.00 1.4 0.400 1,120.00 0.8 Corporation 1,885 Northern Trust Corp. 57.34 108,090.96 60.14 113,363.90 1.3 1.000 1,885.00 1.7 4,650 Oracle Corp. 17.06 79,307.23 18.13 84,304.50 1.0 0.000 0.00 0.0 1,050 Parker Hannifin Corp. 82.56 86,683.87 86.31 90,625.50 1.0 0.920 966.00 1.1 2,750 Patterson-UTI Energy 23.37 64,267.50 22.44 61,710.00 0.7 0.320 880.00 1.4 Inc. 1,850 Peabody Energy Corp 38.95 72,050.10 40.24 74,444.00 0.9 0.240 444.00 0.6 3,735 Powershares Dynamic 20.15 75,262.49 20.98 78,360.30 0.9 0.000 0.00 0.0 Oil &Gas Services 5,300 Powershares Water 17.56 93,060.25 18.69 99,057.00 1.1 0.094 499.90 0.5 Resource 2,250 St. Jude Medical 37.98 85,444.20 37.61 84,622.50 1.0 0.000 0.00 0.0 3,665 Texas Instruments 30.07 110,195.05 30.10 110,316.50 1.3 0.160 586.40 0.5 4,875 Time-Warner, Inc. 17.85 87,022.44 19.72 96,135.00 1.1 0.220 1,072.50 1.2 4,000 US Bancorp 32.06 128,240.68 34.97 139,880.00 1.6 1.600 6,400.00 5.0 2,250 Walmart Stores 46.72 105,108.90 46.95 105,637.50 1.2 0.880 1,980.00 1.9 3,388,327.02 3,966,479.00 45.8 83,002.06 2.7 Preferred Debt Securities 5,375 G.E. Preferred 6.625% 25.60 137,585.24 25.25 135,718.75 1.6 1.656 8,902.34 6.5 AAA/AAA(C 6-28-07) 137,585.24 135,718.75 1.6 8,902.34 6.5 � 1 LONGER INVESTMENTS INCORPORATED A Registered Investment Advisor Longer Investments Inc. PORTFOLIO APPRAISAL Fayetteville Fire Pension and Relief Fund U/A DTD 6-18-86 March 31, 2007 Unit Total Market Pct. Unit Annual Cur. Quantity Security Cost Cost Price Value Assets Income Income Yield Mutual Funds-Equity 20,000.0000 iShares MSCI Japan 10.69 213,850.00 14.57 291,400.00 3.4 0.099 1,989.18 0.9 Index Fund 1,500.0000 iShares MSCI Taiwan 12.54 18,803.55 13.94 20,910.00 0.2 0.302 452.45 2.4 Index Fund 3,000.0000 iShares S&P Europe 82.03 246,094.10 108.34 325,020.00 3.8 2.083 6,248.48 2.5 350 Index 478,747.65 637,330.00 7.4 8,690.11 1.8 Calls -10 B.P. Amoco PLC April 5.92 -5,916.90 5.00 -5,000.00 -0.1 60 Calls -5,916.90 -5,000.00 -0.1 Corporate Bonds 50,000 NationsBank Corp. 99.79 49,894.00 100.73 50,366.60 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 66,687.00 101.43 65,927.61 0.8 6.700 4,355.00 6.5 Bank AA2/AA- (NC) 6.700%Due 08-15-08 I 50,000 Bankers Trust NY Corp 99.26 49,630.00 101.21 50,603.95 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 23,446.00 101.30 25,325.35 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 24,373.00 100.86 25,215.58 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 48,816.00 108.38 54,191.65 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 48,014.00 109.57 54,786.05 0.6 6.950 3,475.00 7.2 Branch Subordinated Notes AA3/AA- (NC) 6.950% Due 07-22-13 75,000 Merrill Lynch & Co. 99.26 74,442.00 107.66 80,745.53 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 48,326.00 111.10 55,548.65 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 March 31, 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 50,004.00 113.90 56,949.65 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 47,731.00 106.58 53,292.30 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 10,098.97 0.1 531,363.00 583,051.89 6.7 35,780.00 6.8 Government Bonds 50,000 U. S. Treasury Bond 100.01 50,004.00 107.56 53,781.25 0.6 5.500 2,750.00 5.5 5.500% Due 08-15-28 50,000 U. S. Treasury Bond 98.95 49,474.00 104.38 52,187.50 0.6 5.250 2,625.00 5.3 5.250%Due 11-15-28 Accrued Interest 1,320.44 0.0 99,478.00 107,289.19 1.2 5,375.00 5.4 Government Agency 110,000 Federal Home Loan 100.00 110,000.00 100.03 110,034.38 1.3 5.280 5,808.00 5.3 Bank (C 9-19-07 @ 100, 1X) 5.280%Due 09-19-08 100,000 Fed Nat'l Mortgage 100.00 100,000.00 99.91 99,906.25 1.2 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 99.84 99,843.75 1.2 5.100 5,100.00 5.1 Bank (C 12-26-07 @ 100, IX) 5.100% Due 12-26-08 200,000 Federal Home Loan 100.00 200,000.00 99.72 199,437.50 2.3 5.100 10,200.00 5.1 Bank (C 5-20-08 @ 100, 1X) 5.100%Due 11-20-09 525,000 Federal Home Loan 100.00 525,000.00 100.06 525,328.13 6.1 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 49,474.00 102.63 51,315.55 0.6 5.625 2,812.50 5.7 Authority (NC) 5.625% Due 01-18-11 350,000 Federal Home Loan 100.00 350,000.00 100.25 350,875.00 4.1 5.250 18,375.00 5.3 Bank (C 2-9-09 @ 100, 1X) 5.250%Due 02-09-11 125,000 Federal Home Loan 100.00 125,000.00 100.72 125,898.44 1.5 5.500 6,875.00 5.5 Bank (C 2-18-09 @ 100, 1X) 5.500%Due 08-18-11 3 LONGER INVESTMENTS INCORPORATED R Registered Investment Advisor Longer Investments Inc. PORTFOLIO APPRAISAL Fayetteville Fire Pension and Relief Fund U/A DTD 6-18-86 March 31, 2007 Unit Total Market Pct. Unit Annual Cur. Quantity Security Cost Cost Price Value Assets Income Income Yield 200,000 Fed Nat'l Mortgage 100.00 200,000.00 100.13 200,250.00 2.3 5.400 10,800.00 5.4 Assoc (C 9-15-08 @ 100, 1X) 5.400% Due 09-15-11 70,000 Federal Home Loan 100.00 70,000.00 99.56 69,693.75 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 99.31 99,312.50 1.1 5.020 5,020.00 5.0 Bank (C 12-12-08 @ 100, 1X) 5.020%Due 06-12-12 55,556 Federal Home Loan 100.00 55,555.56 98.91 54,947.92 0.6 5.080 2,822.22 5.1 Bank (C 4-30-07, continuously thereafter) 5.080%Due 10-03-12 250,000 Federal Home Loan 100.00 250,000.00 98.72 246,796.88 2.9 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 99.88 99,875.00 1.2 5.250 5,250.00 5.3 Bank (C 11-14-08 @ 100, 1X) 5.250% Due 11-14-12 75,000 Federal Home Loan 100.00 75,000.00 99.22 74,414.06 0.9 5.375 4,031.25 5.4 Bank (C 4-30-07, continuously thereafter) 5.375% Due 11-07-13 125,000, Federal Farm Credit 100.00 125,000.00 98.59 123,242.19 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 100.00 100,000.00 100.89 100,885.30 1.2 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 100.00 210,000.00 100.56 211,181.25 2.4 6.000 12,600.00 6.0 Assoc (C 10-24-08 @ 100, quarterly) 6.000% Due 10-24-16 Accrued Interest 38,751.48 0.4 2,845,029.56 2,881,989.32 33.3 152,633.97 5.4 Cash and Equivalents Dividends Accrued 5,193.64 5,193.64 0.1 0.000 0.00 0.0 Money Market 250,386.84 250,386.84 2.9 4.630 11,592.91 4.6 Restricted Cash 95,000.00 95,000.00 1.1 4.630 4,398.50 4.6 350,580.48 350,580.48 4.0 15,991.41 4.6 4 LONGER INVESTMENTS INCORPORATED A Registered Investoren( Advisor Longer Investments Inc. PORTFOLIO APPRAISAL Fayetteville Fire Pension and Relief Fund U/A DTD 6-18-86 March 31, 2007 Unit Total Market Pct. Unit Annual Cur. Quantity Security Cost Cost Price Value Assets Income Income Yield TOTAL PORTFOLIO 7,825,194.05 8,657,438.63 100.0 310,374.89 4.0 : i 5 LONGER INVESTMENTS INCORPORATED A Registered Investment Advisor Longer Investments Inc. REALIZED GAINS AND LOSSES WITH INCOME AND EXPENSES SUMMARY Fayetteville Fire Pension and Relief Fund U/A DTD 6-18-86 From 01-01-07 Through 03-31-07 Realized Gains and Losses Short-Term 37,247.98 Long-Term 40,577.30 TOTAL REALIZED GAINS AND LOSSES 779825.28 Income and Expenses Income: Common Stock 19,248.85 Preferred Debt Securities 2,225.57 Corporate Bonds 9,683.75 Government Bonds 1,375.00 Government Agency 39,716.94 Cash and Equivalents 2,411.83 Certificate of Deposit 988.05 Expenses: Automated Cash Mgmt. 75.67 Northern Trust Fee 13486.93 Management Fee 17,793.35 NET INCOME 569294.04 ti LONGER INVESTMENTS INCORPORATED A Registered hivestmenl Advisor Longer Investments Inc. CONTRIBUTIONS/WITHDRAWALS Fayetteville Fire Pension and Relief Fund U/A DTD 6-18-86 From 01-01-07 To 03-31-07 Tran Trade Settle Broker Code Date Date Security Amount Quantity Code Commission CONTRIBUTIONS 0.00 WITHDRAWALS wd 01-04-07 01-11-07 Money Market 117,000.00 wd 02-01-07 02-01-07 Money Market 80,000.00 wd 03-05-07 03-08-07 Money Market 108,000.00 305,000.00 EXPENSE ACCOUNTS dp 01-31-07 01-31-07 Automated Cash Mgmt. 26.39 dp 02-28-07 02-28-07 Automated Cash Mgmt. 17.15 dp 03-31-07 03-31-07 Automated Cash Mgmt. 32.13 dp 01-31-07 01-31-07 Northern Trust Fee 498.52 dp 02-28-07 02-28-07 Northern Trust Fee 484.22 dp 03-30-07 03-30-07 Northern Trust Fee 504.19 1,562.60 AFTER FEE PERFORMANCE EXPENSE ACCOUNTS dp 01-08-07 01-08-07 Management Fee 17,793.35 17,793.35 PORTFOLIO NET TOTAL -324,355.95 EXPENSE ACCOUNTS PAID BY CLIENT 0.00 AFTER FEE PERFORMANCE EXPENSE ACCOUNTS PAID BY CLIENT 0.00 GRAND TOTAL -324,355.95 LONGER INVESTMENTS INCORPORATED A Registered Divestment Advisor March 31, 2007 Fayetteville Fire Pension and Relief Fund U/A DTD 6-18-86 113 West Mountain Fayetteville, Arkansas 72701 Longer Investments Inc. STATEMENT OF MANAGEMENT FEES For The Period Ending March 31, 2007 Portfolio Valuation as of 03-31-07 $ 8,607,267.74 3,000,000 @ 1.000% per annum 7,500.00 3,000,000 @0.750% per annum 5,625.00 2,607,268 @ 0.650% per annum 4,236.81 Quarterly Management Fee $ 17,361.81 TOTAL DUE AND PAYABLE $ 179361.81 Pursuant to Section 204-3 of the Investment Advisors Act of 1940, Part II of Form ADV is available to all clients of Longer Investments Inc. This statement may be obtained by submitting a written request to the company. As instructed, the management fee has been billed to the account. It is the responsibility of the client to verify the accuracy of the fee calculation. The custodian will not determine if the fee is properly calculated. LONGER INVESTMENTS INCORPORATED lih A Registered Investment Advisor 2i Longer Investments Inc. A REALIZED GAINS AND LOSSES Fayetteville Fire Pension and Relief Fund U/A DTD 6-18-86 From 01-01-07 Through 03-31-07 Gain Or Loss Open Close Cost Date Date Quantity Security Basis Proceeds Short Term Long Term 11-22-06 01-03-07 -27 Dell January 25 Calls 2,511.00 7,464.76 4,953.76 10-13-06 01-03-07 750 Schlumberger, LTD 44,377.50 45,844.89 1,467.39 12-29-06 01-04-07 2,130 Chico's FAS Inc. 44,666.53 44,329.04 -337.49 12-28-06 01-04-07 2,350 ProShares Ultrashort Dow 30 134,573.22 134,509.63 -63.59 11-24-06 01-05-07 1,000 streetTRACKS Gold Shares 63,560.00 59,885.25 -3,674.75 03-10-06 01-05-07 2,000 Powershares Dynamic 33,940.00 35,668.90 1,728.90 Networking 06-22-06 01-05-07 1,000 Powershares Dynamic 15,170.00 17,834.45 2,664.45 Networking 11-24-06 01-09-07 1,550 streetTRACKS Gold Shares 98,518.00 93,237.23 -5,280.77 I1-17-06 01-19-07 -10 B.P. Amoco PLC January 60 4,671.80 7,016.70 2,344.90 Calls 11-17-06 01-22-07 -3 B.P. Amoco PLC January 60 2,105.01 2,105.01 0.00 Calls 12-19-02 01-22-07 300 B.P. Amoco PLC A.D.S. 11,898.00 20,074.45 8,176.45 11-22-06 01-22-07 300 Caterpillar Inc. 18,803.49 17,519.67 -1,283.82 05-02-05 01-22-07 1,500 Caterpillar Inc. 65,915.03 87,598.35 21,683.33 11-24-06 01-22-07 300 streetTRACKS Gold Shares 19,068.00 18,941.69 -126.31 11-28-06 01-22-07 1,150 streetTRACKS Gold Shares 72,972.79 72,609.80 -362.99 09-19-06 01-22-07 1,175 Time-Wamer, Inc. 20,497.52 26,413.19 5,915.67 09-18-06 01-22-07 325 Time-Warner, Inc. 5,590.00 7,305.77 1,715.77 01-04-07 01-25-07 250 American International 17,925.00 17,204.35 -720.65 Group Inc. 12-07-06 01-25-07 275 American International 19,401.00 18,924.78 -476.22 Group Inc. 10-18-06 01-25-07 1,350 American International 91,147.68 92,903.46 1,755.78 Group Inc. 10-13-06 01-25-07 775 Schlumberger, LTD 45,856.75 49,160.06 3,303.31 12-11-06 01-26-07 1,750 BB &T Corp. 76,986.00 73,418.99 -3,567.01 10-26-06 01-30-07 1,650 Gannett Co., Inc. 95,998.16 94,966.79 -1,031.37 02-23-06 02-01-07 1,500 Health Care Select Sector 49,095.00 52,004.15 2,909.15 SPDR Fund 04-20-06 02-01-07 350 Health Care Select Sector 10,947.96 12,134.30 1,186.34 SPDR Fund 01-03-07 02-02-07 425 Dell Computer Corporation 11,056.38 10,115.07 -941.31 09-05-06 02-02-07 2,700 Dell Computer Corporation 61,530.57 64,260.44 2,729.87 02-01-07 02-06-07 460 Avon Products Inc. 15,985.00 17,486.64 1,501.64 02-21-06 02-06-07 350,000 Federal Home Loan Bank (C 350,000.00 349,303.50 -696.50 9-14-06 @ 100, 1X) 5.020%Due 09-14-07 02-06-07 02-08-07 850 HSBC Holdings PLC ADS 78,557.00 76,081.33 -2,475.67 02-01-07 02-16-07 1,150 Amgen Inc. 79,895.56 76,683.44 -3,212.12 02-11-02 02-20-07 40,000 Capital One Bank FSB Falls 40,000.00 40,000.00 0.00 Church, VA BAAI/NR (NC) FDIC-Insured 4.900%Due 02-20-07 10-09-06 02-22-07 525 Intl Business Machines 43,763.48 51,378.86 7,615.39 01-22-07 02-22-07 2,500 Sara Lee Corp. 43,275.00 42,923.68 -351.32 02-01-07 02-22-07 600 Sara Lee Corp. 10,385.10 10,301.68 -83.42 i 1 LONGER INVESTMENTS INCORPORATED A Registered Investment Advisor Longer Investments Inc. REALIZED GAINS AND LOSSES Fayetteville Fire Pension and Relief Fund U/A DTD 6-18-86 From 01-01-07 Through 03-31-07 Gain Or Loss Open Close Cost Date Date Quantity Security Basis Proceeds Short Term Long Term 01-24-07 02-22-07 1,335 Sara Lee Corp. 22,935.30 22,921.24 -14.06 10-09-06 02-23-07 825 Intl Business Machines 68,771.18 80,586.82 11,815.65 01-29-07 02-23-07 750 J.B. Hunt 17,893.73 20,828.28 2,934.55 01-04-07 02-23-07 315 J.B. Hunt 7,334.85 8,747.88 1,413.03 12-11-06 02-23-07 75 J.B. Hunt 1,662.52 2,082.83 420.31 12-14-06 03-01-07 2,750 Par Pharmaceutical 58,763.10 66,443.45 7,680.35 12-07-06 03-01-07 1,550 Barr Pharmaceuticals Inc. 79,283.74 78,551.58 -732.16 02-22-07 03-01-07 410 Electronic Arts Inc. 21,765.13 20,427.37 -1,337.76 02-20-07 03-01-07 1,290 Electronic Arts Inc. 67,307.56 64,271.50 -3,036.06 02-08-07 03-02-07 1,075 Gap, Inc. 21,591.05 19,563.21 -2,027.84 02-01-07 03-02-07 2,250 Gap, Inc. 43,965.00 40,946.26 -3,018.74 02-01-07 03-07-07 325 Ceradyne Inc. 17,856.25 17,478.19 -378.06 01-31-07 03-07-07 1,500 Ceradyne Inc. 81,282.60 80,668.57 -614.03 03-05-07 03-08-07 560 Diamonds Trust Series I 68,022.14 68,757.70 735.56 02-13-07 03-08-07 200.0000 iShares FTSE China Index 21,003.68 19,756.39 -1,247.29 Fund 03-05-07 03-09-07 700 Diamonds Trust Series I 85,027.67 85,920.82 893.15 02-27-06 03-14-07 200,000 Federal Home Loan 200,000.00 200,000.00 0.00 Mortgage Corp. (C 3-14-07 @ 100, 1X) 5.100%Due 03-14-08 02-14-07 03-15-07 835 Anadarko Petroleum Corp. 35,161.85 33,184.30 -1,977.55 08-05-04 03-15-07 1,000 Anadarko Petroleum Corp. 29,024.15 39,741.67 10,717.52 12-11-06 03-23-07 1,150 J.B. Hunt 25,491.94 31,832.09 6,340.15 03-21-07 03-26-07 170 Google 76,302.20 78,723.22 2,421.02 01-24-07 03-28-07 2,020 Powershares Dynamic 36,501.40 36,483.27 -18.13 Networking 01-24-07 03-29-07 1,480 Powershares Dynamic 26,743.60 26,632.49 -111.11 Networking TOTAL GAINS 76,446.08 40,577.30 i TOTAL LOSSES -39,198.10 0.00 I 2,914,334.15 2,992,159.43 37,247.98 40,577.30 TOTAL REALIZED GAIN/LOSS 77,825.28 NO CAPITAL GAINS DISTRIBUTIONS This realized gain/loss report has been prepared using cost basis and acquisition date information provided by third parties. While every effort has been made to verify the accuracy of this information, it is not possible to unconditionally confirm that it is correct. Longer Investments Inc. can only attest to the accuracy of transactions that were executed under its direction. 2 LONGER INVESTMENTS INCORPORATED A Registered Investmetlt Advisor Longer Investments Inc. INCOME AND EXPENSES Fayetteville Fire Pension and Relief Fund U/A DTD 6-18-86 From 01-01-07 Through 03-31-07 Security Ex-Date Pay-Date Amount Common Stock AT & T 01-08-07 02-01-07 1,494.55 Anadarko Petroleum Corp. 03-12-07 03-28-07 165.15 Applied Materials Inc. 02-13-07 03-08-07 237.50 Avon Products Inc. 02-13-07 03-01-07 323.75 B.P. Amoco PLC A.D.S. 02-21-07 03-12-07 619.50 BB & T Corp. 01-10-07 02-01-07 735.00 Bank of America Corp. 02-28-07 03-23-07 1,439.20 Cameco Corp. 03-28-07 04-13-07 84.39 Caterpillar Inc. 01-18-07 02-20-07 540.00 Chevron Corp. 02-14-07 03-12-07 1,170.00 Citigroup 02-01-07 02-23-07 1,485.00 Coca-Cola 03-13-07 04-01-07 1,003.00 Devon Energy Corp. 03-13-07 03-30-07 186.90 Emerson Electric 1 LONGER INVESTMENTS INCORPORATED ALA Registered Inveshnew Advisor