HomeMy WebLinkAbout2013-10-31 - Agendas - Final Fayetteville Fireman's Pension and Relief Fund
Meeting Date 10--?1-13
Adjourn Time -3 :3 5
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Attendees:
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Subject: Subject:
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Motion By: (Motion By: ZVOOY
Seconded: 'Seconded: i
Roy Cate ✓ (Roy Cate
Mayor Jordan S (Mayor Jordan
Dennis Mullens e4je t Dennis Mullen CLA 9,k
Pete Reagan ✓ Pete Reagan r/
Sondra Smith ✓ :Sondra Smith ✓
Ronnie Wood ✓ (Ronnie Wood ✓
Subject: Subject:
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(Motion BY: ( Motion By:
Seconded: We)od Seconded: A)ODqf
Roy Cate ✓ Roy Cate ✓
Mayor Jordan OJeJ Mayor Jordan 44,5
Dennis Mullens Abse Dennis Mullens a4sbd-
Pete Reagan ✓ Pete Reagan ✓
Sondra Smith ✓ Sondra Smith ✓
Ronnie Wood Ronnie Wood
Fayetteville Fireman's Pension and Relief Fund
Meeting Date )D- 31-/3
Adjourn Time
Attendees:
Subject: Subject:
NC f�� 5 •.fin
Motion B Motion By:
Seconded: Seconded:
Roy Cate ✓ Roy Cate
Mayor Jordan Mayor Jordan
Dennis Mullen 1 Dennis Mullens
Pete Reagan Pete Reagan
Sondra Smith Sondra Smith
Ronnie Wood Ronnie Wood
Subject: Subject:
Motion By. Motion By-
Seconded:
:Seconded: Seconded:
Roy Cate Roy Cate
Mayor Jordan Mayor Jordan
Dennis Mullens Dennis Mullens
Pete Reagan Pete Reagan
Sondra Smith Sondra Smith
Ronnie Wood lRonnieWood
Lioneld Jordan Chairman tO
Pete Reagan Position 2 Retired
Sondra E.Smith Secretary Taye Dennis Mullen Position 3 Retired
Roy Cate Position 1 Retired Ron Wood Position 4 Retired
S le
Firemen's Pension and Relief Fund
Board of Trustees Meeting Agenda
October 31, 2013
A meeting of the Fayetteville Firemen's Pension and Relief Fund Board of Trustees will be
held at 3:00 PM on October 31, 2013 in Room 326 of the City Administration Building.
Call to Order
Roll Call
Garrison Financial:
• 3rd quarter reports
• Monthly reports
Approval of the Minutes:
• Approval of the July 25, 2013 meeting minutes
Pension List Changes:
• Maggie Watts —deceased August 4, 2013
Approval of the Pension List:
• Re-Approval of the September and October 2013 pension lists (Maggie Watts deceased
08/04/13. Monthly benefit was $437.09)
• Approval of the November and December 2013 and January 2014 pension lists
New Business:
• Revenue & expense report: 3rd Quarter—September 30, 2013 report
• 2012 Annual Actuarial Valuation
• January 30, 2014 Meeting date is during the Arkansas Municipal League Conference.
The Mayor and Sondra will be attending the conference. Do we want to reschedule the
January 30, 2014 meeting?
• NCPERS Invoice
Informational:
• 2014 meeting schedule
GARRISONOCTRECEIVED
0 7 2013
F I N A N C I A L
CITY OF FAYETTEVf1.I.E
_-
CITY OLE RK'50FFICE
October 4, 2013
Ms. Sondra Smith
City of Fayetteville
113 West Mountain Street
Fayetteville, Arkansas 72701
Dear Ms. Smith,
Enclosed is the quarterly report for the Firemen's Pension& Relief Fund for the quarter ended
September 30, 2013.
The equity markets continued their positive advance in the 3`d quarter with the S&P 500 closing out
the three month period up+5.24% leaving the year-to-date gains at+19.79%. A great year by any
standard, but the enthusiasm has been tempered recently thanks to the standoff on Capitol Hill.
Cyclical names performed the best in the 3`d quarter as Materials, Industrials and Consumer
Discretionary names gained the most, +9.68%, +8.31%&7.38% respectively. Interest rate sensitive
sectors were the worst performing with Telecoms falling -.81% and Utilities retreating -5.45%.
The long term outlook for equities remains constructive given reasonable valuations (for the most
part), low interest rates, low inflation and the housing market coming back to life. Valuations,
although certainly higher than this time last year(the market has risen almost+20%the last 12
months), do not strike us as excessive given the strength of corporate balance sheets, solid cash
generation, low interest rates and the lack of attractiveness of other investment options.
The short-term outlook is much less clear as the government shutdown, debt ceiling and Obamacare
implementation create uncertainty. We continue to assess investment opportunities based on a
longer term view and expect volatility in the short run as these issues come to pass.
The fixed income markets continue to be challenging, particularly within the context of continually
contradictory statements from Chairman Bemanke and the Federal Reserve. Surprisingly, in late
June the Fed was out with an unexpected announcement that their years-long quantitative easing
program might end sooner than the market thought. That is, they would begin reducing their
monthly$85 billion bond purchase program sometime in late 2013. The market reacted violently,
going straight down(yields higher).
Garrison Financial
605 W. Dickson Street, Suite 201 •Fayetteville,Arkansas 72701
479-587-1045 • 888-442-7637. 479-587-1257 Facsimile•www.GarrisonFinancial.com
Chairman Bernanke has always been fixated on the data as a prelude to the end of easing—
inflation north of 2% and unemployment south of 6.5%. The data is not that, has not been that,
and shows no signs of becoming that any time soon. In September, the market perceived that the
Fed had reversed course, suggesting no end to easing until the data shows its hand. The market
went straight up(yields lower), again violently.
Rates on the ten year Treasury ended the quarter nearly where they began: 2.61% at the end
versus 2.49%at the beginning. Twelve basis points are not a lot, but the round trip from a low of
2.47%to 3.00% and nearly back again was not pleasant. For the quarter the Barclays
Intermediate Government/Credit Index gained .62%, bringing year-to-date performance to
negative -.84%.
Longer term the interest rate trend will be up and as the economy continues to improve rates will
rise. However, we continue to believe rates will remain artificially low for some time given the
lack of more robust economic improvement.
We remain vigilant seeking good long-term investments in which to commit your capital—and
ours. As you know, these are important decisions to us and we do not take them lightly. It's
really a two-sided process—try to pick above average investments and try to avoid obvious
mistakes. We are continually grateful for your trust and confidence in us.
Cordially,
el"ir
Kerry Bradley, CFA, MBA
Equity Portfolio Manager
1 11
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GARRISON
F I N A N C I A L
City of Fayetteville Firemen 's Pension & Relief Fund
Charles Schwab #7851-1206
Quarter Ending September 30, 2013
Garrison Financial
PORTFOLIO SUMMARY
City of Fayetteville Firemen's Pension & Relief Fund
Charles Schwab #7851-1206
September 30, 2013
■Cash & Equivalents 419,238.64
■Account Fixed Income 1,308,846.43
■Account Equities 2,751,639.41
Garrison Financial
PORTFOLIO APPRAISAL
City of Fayetteville Firemen's Pension & Relief Fund
Charles Schwab#7851-1206
Seplenlber30, 2013
Unit Total Markel Pct. Unit Annual
Quantity Security Cost Cost Price Value Assets Income Income Yield
CASH AND EQUIVALENTS
Schwab Advisor Cash Res- 419,238.64 419,238.64 9A 0.010 4192 0.0
Premier
419,238.64 419,238.64 9.4 41.92 OA
TREASURY NOTE
400,000 US Treasury Note 102.22 408,875.00 112-8[ 451,250.00 10.1 4.000 16,000.00 1.3
4.000%Due 08-15-18
Accrued Interest 2,000.00 OA
408,875.00 453,250.00 10.1 16,000.00 1.3
CORPORATE BONDS
50,000 IBM Corp. 100.01 50,004.00 129.65 64,827.40 1.4 7.000 3,500.00 3,9
7.000%Due 10-30-25
Accrued Interest 1,458.33 0.0
50,004.00 66,285.73 1.5 3,500.00 3.9
COMMON STOCK
1,710 AT&T,Inc. 24.39 41,702.95 33.82 57,832.20 1.3 1.800 3,078.00 5.3
1,575 AbbVie,Inc. 24.41 38,451.37 44.73 70,449.75 1.6 1.600 2,520.00 3.6
1,575 Abbott Laboratories 22.40 35,277.06 33.19 52,274.25 1.2 0.560 882,00 1.7
2,000 American Electric 33.69 67,374.79 43.35 86,700.00 1.9 1.960 3,920.00 4.5
Power
2,300 BCE,Inc.Cl F 24.40 56,110.11 42.70 98,210.00 2.2 2.330 5,359.00 5.5
700 Chevron Corporation 73.07 51,150.83 121.50 85,050.00 1.9 4.000 2,800.00 3.3
3,000 Cisco Systems,Inc. 17.43 52,302.90 23.43 70,293.00 1.6 0.680 2,040.00 2.9
2,200 Coca-Cola Company 26.40 58,074.28 37.88 83,336.00 1.9 1.120 2,464.00 3.0
1,200 ConocoPhillips 44.94 53,930.85 69.51 83412.00 1,9 2.760 3,312.00 4.0
833 Duke Energy Coq). 57.48 47,880.86 66.78 55,627.71 1.2 3.120 2,598.96 4.7
1,000 Emerson Elech'ic 38.01 38,012.30 64.70 64,700.00 1.4 1.640 1,640.00 2.5
4,000 General Electric Co. 15.96 63,844.01 23.89 95,560.00 2.1 0.760 3,040.00 3.2
900 Genuine Parts Co. 36.65 32,986.53 80.89 72,801.00 1.6 2.150 1,935.00 2.7
2,000 Gla oiSmitlrKline Pic 38.47 76,936.20 50.17 100,340.00 2.2 2.350 4,700.00 4.7
ADR
450 IBM Corporation 122.43 55,091.76 185.18 83,331.00 1.9 3.800 1,710.00 2.1
3,725 Intel Corp. 17.61 65,581.48 22.92 85,380.72 L9 0.900 3,352.50 3-9
1,115 Johnson&Johnson 60.77 67,758.33 86.69 96,659.35 2.2 2.640 2,943.60 3.0
850 Kimberly Clark Corp. 60.71 51,599.58 94.22 80,087.00 1.8 3.240 2,754.00 3.4
2,700 Microsoft Corp. 26.30 71,00140 33.28 89,856.00 2.0 1.120 3,024.00 3.4
4,120 Pfizer,Inc. 16.52 68,077.88 28.72 118,347.00 2.6 0.960 3,955.20 3.3
1,000 Procter&Gamble Co. 50.46 50,458.56 75.59 75,590.00 1.7 2.410 2,410.00 3.2
1,400 Wal-Mat Stores,Inc. 50.36 70,497.97 73.96 103,544.00 _ 2.3 1.880 2,632.00 2.5
1,214,102.00 1,809,380.98 40.4 63,070.26 3.5
MUTUAL FUNDS
1,296.008 Columbia Acorn hit']Z 38.58 50,000.00 46.58 60,368-05 1.3 0.500 648.00 1.1
3,984.064 Fed Lateran Corp Bond 10.04 40,000.00 9.99 39,800.80 0.9 0.420 1,673.31 4.2
3,600.360 PIMCO Total Return Cl 11.11 40,000.00 10.82 38,955.90 0.9 0.660 2,376.24 6.1
D
4,683.407 Steell ath MLP Income 10.68 50,000.00 10.86 50,861.80 1.1 0 780 3,653.06 7.2
1,833.272 Vanguard Developed 27.27 50,000.00 32.38 59,361.35 1.3 1.010 1,851.60 3.1
Markets
1,443.113 Vanguard Emerging 34.65 50,000.00 32.30 46,612,55 1.0 0.360 519.52 1.1
Markets
2,615.123 Vanguard Hi-Div Yld 19.12 50,000.00 22.76 59,520.20 1.3 0.670 1,752.13 2.9
Garrison Financial
PORTFOLIO APPRAISAL
City of Fayetteville Firemen's Pension & Relief Fund
Charles Schwab#7851-1206
September 30, 2013
Unit Total Market Pet. Unit Annual
Quantity Security Cost Cost Price Value Assets Income Income Yield
3,412.116 Vanguard Mid-Cap 29.31 100,000.00 36.67 125,122.29 2.8 0.205 699.48 0.6
Growth
3,410.952 Vangoard Mid-Cap 29.32 100,000.00 37.93 129,377.41 2.9 0.600 2,046.57 1.6
Value
3,290.816 Vanguard Small-Cap 30.39 100,000.00 40.23 132,389.53 3.0 0.330 1,085.97 0.8
Growth
3,324.742 Vanguard Small-Cap 30.08 100,000.00 38.75 128,833.75 2.9 0.810 2,693.04 2.1
Value
730,000.00 871,203.63 19.4 18,998.93 2.2
UNIT TRUSTS
2,500 Sector Utility Select Shs 31.96 79,899.25 37.37 93,422.50 2.1 1.460 3,650.00 3.9
1,400 iShares Barclays 7-10 104.43 146,198.70 102.11 142,954.00 3.2 1.810 2,534.00 1.8
yrTreasury
850 iShares DJ Select Div 47.39 40,285.75 66.34 56,389.00 1.3 2.150 1,827.50 3.2
5,000 iShares IBOXX Inv 106.90 534,506.93 113.52 567,600.00 12.7 4.390 21,950.00 3.9
Grade Cm Bond _
800,890.63 860,365.50 19.2 29,961.50 3.5
TOTAL PORTFOLIO 3,623,110.27 4,479,724.48 100.0 131,572.61 2.7
You should carefully compare this statement to the statement you receive from your custodian and notify us immediately of any discrepancies.
2
Garrison Financial
PURCHASE AND SALE
City of Fayetteville Firemen's Pension & Relief Fund
Charles Schwab#7851-1206
From 01-01-13 To 09-30-13
Trade Settle Unit
Date Date Quantity Security Price Amount
SALES
05-15-13 05-20-13 1,650 Archer Daniels Midland 34.52 56,965.92
05-15-13 05-20-13 100 Chevron Corporation 122.69 12,268.85
05-15-13 05-20-13 45 Chevron Corporation 122.69 5,521.21
05-15-13 05-20-13 80 Chevron Corporation 122.69 9,815.48
01-02-13 01-02-13 351 Gen Elec Cap 6.625%06-28-32 25.00 8,775.00
O1-02-13 01-02-13 5,000 Gen Electric Cap 6.1% 11-15-32 25.00 125,000.00
05-15-13 05-20-13 300 Kimberly Clark Corp. 104.61 31,384.15
06-13-13 06-18-13 1,675 Oracle Corporation 34.13 57,161.16
05-15-13 05-20-13 300 Procter&Gamble Co. 80.75 24,224.05
05-15-13 05-20-13 100 Procter&Gamble Co. 80.75 8,074.68
06-13-13 06-18-13 1,000 Sector Utility Select Shs 37.72 37,722.39
06-13-13 06-18-13 1,000 iShares DJ Select Div 64.83 64,831.92
441,744.81
Garrison Financial
REALIZED GAINS AND LOSSES
City of Fayetteville Firemen's Pension & Relief Fund
Charles Schwab#7851-1206
From 01-01-13 Through 09-30-13
Gain Or Loss
Open Close Cost
Date Date Quantity Security Basis Proceeds Short Term Long Term
12-31-05 01-02-13 5,000 Gen Electric Cap 6.1% 124,888.90 125,000.00 111.10
11-15-32
12-31-05 01-02-13 351 Gen Elec Cap 6.625% 8,783.51 8,775.00 -8.51
06-28-32
12-31-05 05-15-13 1,650 Archer Daniels Midland 52,809.08 56,965.92 4,156.84
12-31-05 05-15-13 100 Chevron Corporation 7,30726 12,268.85 4,961.59
12-31-05 05-15-13 45 Chevron Corporation 3,288.27 5,521.21 2,232.94
12-31-05 05-15-13 80 Chevron Corporation 5,845.81 9,815.48 3,969.67
12-31-05 05-15-13 300 Kimberly Clark Corp. 18,211.62 31,384.15 13,172.53
12-31-05 05-15-13 300 Procter&Gamble Co. 15,137.57 24,224.05 9,086.48
12-31-05 05-15-13 100 Procter&Gamble Co. 5,045.86 8,074.68 3,028.82
12-31-05 06-13-13 1,000 iShares Dl Select Div 47,395.00 64,831.92 17,436.92
12-31-05 06-13-13 1,675 Oracle Corporation 26,297.33 57,161.16 30,863.83
12-31-05 06-13-13 1,000 Sector Utility Select Shs 31,959.70 37,722.39 5,762.69
TOTAL GAINS 0.00 94,783.42
TOTAL LOSSES 0.00 -8.51
346,969.90 441,744.81 0.110 94,774.91
TOTAL REALIZED GAIN/LOSS 94,774.91
NO CAPITAL GAINS DISTRIBUTIONS
Garrison Financial
PERFORMANCE SUMMARY
GROSS OF FEES
City of Fayetteville Firemen's Pension & Relief Fund
Charles Schwab #7851-1206
September 30, 2013
PORTFOLIO COMPOSITION CHANGE IN PORTFOLIO
Market Pct.
Value Assets Yield
Cash&Equivalents 419,238.64 9.4 0.0 Portfolio Value on 12-31-12 4,533,056.42
Account Fixed 1,308,846.43 29.2 2.8 Accrued Interest 6,583.33
Income
Account Equities 2,751,639.41 61.4 3.0 Net Additions/Withdrawals -457,826.75
Account 0.00 0.0 - Realized Gains 38,981.29
Commodities
Unrealized Gains 263,820.90
Income Received 98,234.28
Change in Accrued Interest -3,125.00
Portfolio Value on 09-30-13 4,476,266.15
Accrued Interest 3,458.33
Total 4,479,724.48 100.0 2.7 4,479,724.48
TIME WEIGHTED RETURN
Annualized
Quarter Year Last 12 Inception
To Date To Date Months To Date
Account 2.13 8.98 8A 9.45
40%Fixed Income/60% 3.41 11.19 11.09 11.52
Equity Blended Index
Account Fixed Income 0.73 -2.72 -3.19 1.16
Barclays Capital Intermed 0.62 -0.84 -0.50 1.18
Govt/Credit
Account Equities 3.17 16.43 15.27 15.04
S&P 500 5.24 19.79 19.34 18.71
All "Account" returns refer to your portfolio. Benchmark indexes are also listed for reference. All returns are reported as
percentages.
This report is calculated using industry-standard accounting and performance calculation methodologies and is generated by our Axys
portfolio accounting software. Calculations are a time-weighted total return series based on monthly valuations, including all cash
and equivalents. All calculations are done based on trade date, employing the accrual method of accounting and include cash,
interest, dividends and realized and unrealized gains and losses. Performance is adjusted to accurately reflect portfolio deposits and
withdrawals. Results are presented after transaction costs but before management fees. Inception-to-date returns are annualized
numbers, except for accounts under management less than one year. Unsupervised assets are excluded in performance calculation.
At any given point in time an investment may be worth more or less than the original purchase price.
GARRISON
F I N A N C I A L
October 4,2013
City of Fayetteville Firemen's Pension & Relief Fund
Charles Schwab #7851-1206
113 West Mountain Street
Fayetteville,AR 72701-6069
STATEMENT OF MANAGEMENT FEES
For The Period July 1 through September 30,2013
Portfolio Value as of 06-30-13 4,451,280
Portfolio Value as of 07-31-13 4,565,449
Portfolio Value as of 08-31-13 4,446,535
Portfolio Value as of 09-30-13 4,479,724
Average of 4 Months 4.485.747
4,485,747 @ 0.5000%per annum 5,607
Quarterly Management Fee 5,607
TOTAL DUE AND PAYABLE 5,607
605 WEST DICKSON STREET,SUITE 201 • FAYETTEVILLE,ARKANSAS 72701
PHONE (479)587-1045 • FAx(479)587-1257
W W W.GARRISONFINANCIAL.COM
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Board Members Firemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
Mayor Jordan Chairman July 25,2013
Sondra E.Smith Secretary Page 1 of 7
Roy Cate Position l/Refired
Pete Reagan Position 2/Refired
Dennis Mullen Position 3/Refired
Ronnie Wood Position 4/Retired
aye Vl
ARKANSAS
Firemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
July 25, 2013
A meeting of the Fayetteville Firemen's Pension and Relief Fund Board of Trustees will be
held at 3:00 PM on July 25, 2013 in Room 326 of the City Administration Building.
Mayor Jordan called the meeting to order.
Present: Mayor Jordan, Roy Cate, Ronnie Wood, Sondra Smith, City Clerk, Kit Williams,
City Attorney,Dee McCoy, Glenn Atkins and James Bell of Garrison Financial.
Absent: Pete Reagan, Dennis Mullens
Garrison Financial:
2nd quarter reports
A copy was given to the Board.
James Bell,Equity Portfolio Manager for Garrison Financial: At the end of June 30 the portfolio
was $4.45 million. On page two, your asset allocation is 60% equities and 40%fixed income. As
you can see on the equity side we are at 60%, about 30% bonds and about 10% cash. That cash
level is there because we have sold some things on the equity side, as equity markets have done
well over the past 18 months,just to keep your portfolio allocation in line with the target as well
as to fund the distributions as they come monthly. We always keep a healthy cash balance in
anticipation of those distributions as they come out monthly. If you'll turn to the last page we can
look at performance. The portfolio is up 6.7%for the year. I'll let Glenn Atkins, our fixed income
manager speak to the fixed income portion and also the Monte Carlo Simulation.
Glenn Atkins, Fixed Income Manager for Garrison Financial: Thanks for having us again this
quarter. When we were here last we talked about the very high likelihood of selling that 4%
treasury that matured in 2018. In the information we passed out today you have a chart that is the
yield on the ten year treasury from April 25th until yesterday. Since we were here and talked about
the potential of selling that Treasury bond, the fixed income market has been straight down. The
yield is up, but as you know, prices move opposite to yields. I made the decision not to sell that
Firemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
July 25,2013
Page 2 of 7
bond in this kind of market.As it turns out,if you compare the performance of that security versus
the performance on the mutual funds that we would have put the proceeds of that in,you're actually
better off that we chose not to do that. If the markets were to stabilize there still might be some
value in liquidating that position and investing it at a higher yield but literally since the day we left
the market has been straight down the last quarter for the bonds.
You're better off relatively by about 58 basis points. We looked at that comparison several times
during the quarter and you're better off than 58 basis points at various points during the quarter. I
still think maybe longer term that we would sell that and reinvest it at a higher yield. It's certainly
been to the benefit of the portfolio for us not to have done that given this kind of market. If you
look at this market period in the last quarter, in eight or nine trading days in June, we had the
fastest move in interest rates since 1962. Since then it's been fairly stable. If it continues to be
stable, we'll invest some of the cash, but we will continue to hold a relatively large cash balance
simply because of the withdrawal needs of the portfolio over time. Having said that, I think we are
in good shape,the best shape we can be in given what we have to deal with.
Equities have been performing well except for that little hiccup during that time. The fixed income
market seems to have stabilized with the ten year around 2.6% yield. That particular situation we
talked about in April, we've been monitoring it very closely and we will eventually do something
there to try and get some more yield.
This package that we passed out today is what we call the Monte Carlo Simulation. That's
something that we have shown you periodically over time. Last quarter you asked us to do it once
a quarter and this is an update of that. On the second page I took the market value of the portfolio
right off of Schwab this morning at$4.5 million. I left the estimated withdrawals at $720,000.00.
That's the same figure we had used last quarter. The 12 months into June have been slightly less
than that in withdrawals. They have been$668,000.00. I left it at$720,000.00 because that makes
it more conservative. It stresses it even more. We've left the asset allocation at 60% stocks and
40% bonds with an estimated long-term return on stocks at 8%and bonds at 3% which is exactly
the same as it was last quarter. On the third page you can see the same sort of scenario that we had
last quarter. I think when we did this a couple of years ago, given the fact that the equity markets
have performed so well in the past couple of years, that this life has been extended a year or two.
When we did it originally a couple of years ago, it was in the five to six year range,now it's in the
six to seven year range in terms of longevity on the portfolio. That's all I have in terms of formal
comments. We'd be happy to entertain questions, observations, comments, concerns or anything
that you guys have. What can we do better or different?
Mayor Jordan: I think you are doing fine.
Ron Wood: It looks good to me. It's better than I expected.
Glenn Atkins: Equity market has been very kind to us in the portfolio over that last couple of
years. Fixed income market has too, except for the last quarter it's been a little rough.
Kit Williams, City Attorney: You think that's kind of stabilized again?
Firemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
July 25,2013
Page 3 of 7
Glenn Atkins: It appears to have been stabilized. There was talk in the market for a number of
years that this quantitative easing that Bemanke has been doing may be affecting the market about
one percentage points or 100 basis points. We've had that move from the low in rates to where we
are now. I don't see anything hugely positive in the economy that would generate any intermediate
term inflation that would cause rates to go down. He came out with his announcement I believe
June 17t1i or 19" that they were eventually going to stop quantitative easing which caused the
market to do what it did, which on the surface of it doesn't make any sense because he had been
saying for years that he was going to stop.He came out and said we are going to stop at some point
if unemployment gets below 7%or 6 V2%and the market went crazy. It appears to have stabilized
in this 2.6% range on the ten year treasury which is what we use as a benchmark. Could it go to
3%, it certainly could. My hope would be that it would not do it in eight or nine trading days like
it did this other major move.
James Bell: It wasn't the size of the move, it was the quickness.
Glenn Atkins: I think we've mentioned to you guys before that if rates were a little bit higher it
would actually be good because cash would be paying something other than zero. You could get
higher rates on everything. It would also imply that the economy was doing better which would
hopefully translate into even better stock market performance. If we get a controlled rise in rates
over the next three to five years, it'll give us an opportunity to reinvest the cash flow at higher
rates. If you get a little bit of increase in rates it portends a lot of good things, higher investment
rates on the fixed income side,better economy and better stock market performance.
Kit Williams: What about on the downside? I hear threats again from Congress saying they are
not going to raise the debt limit for the country and the other side is saying we're not going to
negotiate. Do you have any thoughts on the brinkmanship that looks like it's on the way again?
Glenn Atkins: It gives me a headache to wonder about it and think about it.I get up every morning
and ask myself"How can I not mess this up?" I think the way to not mess it up is to invest it the
way we are investing it, keep the quality of the portfolio high, the maturities on the fixed income
side relatively short and just manage through it.
James Bell: Given that scenario, if history and experience is any guide, each time this has
happened in the past there has been a sell off of the market and a dislocation but it's resolved itself,
recovered and gone even higher. To panic or do something too extreme in anticipation of
something like that historically would have been the wrong call unless you were good enough to
get it right. We try to not be smarter than the market, if you will.
Glenn Atkins: It is very frustrating for us to see that and think of all the possibilities of what
could be versus what should be or might be. At the end of the day, we have to come back to the
stocks and the mutual funds that we buy and hope to buy good companies and good mutual funds
and not get caught up in the reaction to it over time. What do you guys think about it?
A short discussion followed about how stocks affect different retirement programs.
Firemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
July 25,2013
Page 4 of 7
Joseph Schwab:
Pension Plan Information
Sondra Smith: Glenn, we received this letter from Schwab, it's a prospectus. I went ahead and
put it in the packet. They talked to Paul Becker first. I thought it may be good for the viewers that
may be listening for you to explain it.
Glenn Atkins: It looks like this is actually from a fellow by the name of Joseph Schwab at the
Collar Fund.
Sondra Smith: It's nothing that we need to be concerned about is it?
Glenn Atkins: No. That looks to me to be solicitation for what appears to be a bond hedging
strategy. I think it's only Schwab by coincidence. Without commenting on the merits of it, it's
probably something that we wouldn't recommend for the portfolio. Hedging and collars are
appropriate in some circumstances but I would suggest not in this case.
Approval of the Minutes:
April 25,2013 meeting minutes
Roy Cate moved to approve the April 25, 2013 meeting minutes. Ron Wood seconded the
motion. Upon roll call the motion passed 4-0. Pete Reagan and Dennis Mullens were absent.
Pension List Changes:
Gary John Dill-deceased July 3,2013
Sondra Smith:Mr. Dill passed away,unfortunately.His ex-wife was receiving benefits according
to a Qualified Domestic Relations Order. Therefore, her portion of the benefits will cease
according to the State Statute and his portion of the benefits will cease.We pay benefits out through
the month they decease, so his estate received a check for the month of July. August is when the
pension list changed,that's why there are changes to the August, September and October pension
lists.
Kit Williams: The reason her benefits ceased is because she was not a survivor under the law
because she was an ex-wife. She was only drawing half of his benefits. When he no longer has
benefits because he died there was nothing for the divorce decree to attach to anymore. That's why
even though they were paying her directly pursuant to this court order they can't anymore. I played
little league with Mr. Dill on the Elk Club Team years back. I was very sorry to hear this.
Firemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
July 25,2013
Page 5 of 7
Mayor Jordan: I certainly offer our condolences.
Ron Wood: Is that a judge's order?
Kit Williams: It is state law. You have to be married at the time you retire and not get divorced
in order for the spouse to continue to receive benefits after the death of the principal person.
Sondra Smith: If they are receiving benefits according to a Qualified Domestic Relations Order,
when we receive the turn back money they do not receive those funds.
Kit Williams: About ten or eleven years ago there was a suit on this locally. The local judge
agreed on my interpretation that it is what we have to do to follow state law.
Approval of the Pension List:
Approval of August, September and October 2013 Pension lists
Sondra Smith: They are different because of the reduction in not paying them, which is about a
$3,000.00 a month reduction in the pension list cost.
Ron Wood moved to approve the August, September and October 2013 pension lists. Roy
Cate seconded the motion. Upon roll call the motion passed 4-0. Pete Reagan and Dennis
Mullens were absent.
Unfinished Business:
GFOA Best Practices on the Governance of Public Employee Post-Retirement
Sondra Smith: You voted at the last meeting to table this to this meeting. I don't know if you are
interested in even pursuing this. The Policemen's Pension board decided it wasn't anything they
really needed to do because we have to follow state statutes. That's just up to the board on what
they want to do whether they want me to put it on the agenda for the next meeting or we can always
bring it back sometime in the future if we so choose.
Ron Wood: Let's table it indefinitely.
Sondra Smith: That means it won't come back unless we decide to bring it back.
Kit Williams: You can at any meeting bring it back.
Firemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
July 25,2013
Page 6 of 7
Ron Wood moved to table the GFOA Best Practices on the Governance of Public Employee
Post Retirement indefinitely. Roy Cate seconded the motion. Upon roll call the motion
passed 4-0. Pete Reagan and Dennis Mullens were absent.
Election Results
Sondra Smith: Everyone that was currently serving is still serving according to the election.
New Business:
PRB Evaluating Investments Memo
Sondra Smith: This is an email we received from the Pension Review Board. They show what
kind of investments you should have. It is for you to evaluate your investments to be sure you're
doing what you're supposed to be doing. It's basically for the board to review.
Kit Williams: We are following state law so I think everything is fine.
Board of Trustees List
Sondra Smith: I try to put the Board of Trustee listing in the packet every year after an election
so you can look at the information that we currently have. If there are any changes that need to be
made,please let us know.
2nd Quarter revenue & expense report 06/30/13
Sondra Smith: That's the report that Accounting graciously does for our plan. It shows the
06/30/13 book value is $3,799,612.74 and the market value is $4,451,076.02. No action needs to
be taken. It's an information item only.
Turn back from State
Sondra Smith: That is the money that we receive from the state every year. I've completed a
spreadsheet to give you an idea of what you've received over the past few years and what you
received this year. This year you received $925 per retiree and that went out in a lump sum
payment. You should have already received that. If you were a volunteer Firefighter and a
volunteer spouse, you received$185 for a lump sum payment. The total amount that we received
this year was for the future supplement was $44,215.00. Last year, we received in that category
$36,105.00. This year we received an additional allocation. Last year was the first year we
received the additional allocation. It's for the funds that aren't doing very well. This year we
Firemen's Pension and Relief Fund
Board of Trustees Meeting Minutes
July 25,2013
Page 7 of 7
received $38,366.07 and last year we received $57,282.44. Last year, the big lump sum that we
received that goes back into your plan was $229,129.75 and this year we only received
$181,714.89. The total amount received this year was a little bit less than last year. We receive the
tum back once a year, either in July or August. There's a copy of the letter we received that tells
us how to distribute the money.
Informational:
2013 meeting schedule
A copy was given to the Board
Meeting adjourned at 3:35 p.m.
Office of the City Clerk Treasurer
le 113 West Mountain
TayeMl Fayetteville, AR 72701
KANSAS Phone: (479)575-8323
Fax: (479)718-7695
city—clerk@ci.fayetteville.ar.us
www.accessfayetteville.org
August 12, 2013
Estate of Maggie Watts
PO Box 10351
Fayetteville,AR 72703
RE: Firemen's Pension&Relief Fund
Dear Family,
I am very sorry to hear about the loss of your family member. The pension benefit Mrs. Watts
was receiving will end due to no surviving spouse or children under the age of 23. We do not
prorate benefits during the month the pensioner deceased therefore the pension benefit will cease
in September. Please send a copy of Mrs. Watts' death certificate to:
City of Fayetteville
City Clerk Treasurer
113 West Mountain
Fayetteville,AR 72701
If you have any questions you may contact my office at 575-8323. 1 will keep you in my
thoughts and prayers during this difficult time.
Sincerely,
Sondra E. Smith
City Clerk Treasurer
Secretary Firemen's Pension and Relief Fund
Board of Trustees
Telecommunications Device for the Deaf TDDrrT1'(479)521-1316
Maggie Abilene
Watts
FAYETTEVILLE — Maggie
.Abilene Watts, 86,a resident
of Fayetteville passed away
;Aug. 4, 2013,
at Circle of
+'Life Hospice
in Spring-
dale. She was .
;'born Oct. 31,
1926, in Hazel
19
'ii Valley, Ark., Watts
c!%the daughter
of John Harrison and Mary
$lien May Schader Skelton.
She was preceded in death
by her husband, Donald
Wayne Watts;one son,Garry
Pon Watts; two grandsons,
-lJ,amin Aaron Watts and
Jeremy Nathan Waits; three
brothers,Frank,Burl and Lee
Skelton; one sister, Gladys
Caselman
Survivors include one
daughter-in-law,Janice Watts
-of Fayetteville, Ark.; one
grandson, Shawn Watts and
his wife,Jennifer;one grand-
daughter, Whitney LeBlanc
and her husband, Jerry; six
",great-grandchildren, John
'Plyler and Julia Watts, Isaac
nd Elijah Bustamante,
abriella LeBlanc and Jayden
ieBlanc.
The family will receive
firiends this evening from
7 p.m.at Luginbuel Funeral
Rome.
Funeral service will be held
ednesday Aug.7,2013,2 pm.
lat Eastside Baptist Church
"tn Fayetteville, Ark., with
urial in Fairview Memorial
dGardens in Fayetteville.
Memorial may be made to
the Alzheimer's Association
of Arkansas, 210 N. Walton
Blvd.,Suite 25, Bentonville,
AR 72712.
Online guest book,www.
luginbueLcom
® Sondra City Clerk Division
aye City e City of Fayetteville, Arkansas
E. Smith, City Clerk/Treasurer
ARKANSAS Lisa Branson, Deputy City Clerk
Departmental Correspondence
TO: Trish Leach,Accounting
Summer Fallen,Accounting
FROM: Sondra E. Smith, City Clerk/Treasurer
DATE: August 12,2013
RE: Maggie Abilene Watts
Firemen's Pension
I am forwarding this memo to you due to the death of a Firemen's Pensioner. Please stop the
pension benefit for Mrs. Watts. She was receiving benefits due to being on the old Pension Plan.
There are no survivors for the benefit Mrs. Watts was receiving. When the death certificate is
received a copy will be forwarded to Accounting.
DURABLE POWER OF ATTORNEY WITH HEALTH CARE PROVISION'S
KNOW ALL BY THESE PRESENTS:
I,Maggie Watts,by these presents do make,constitute,and appoint Garry Shawn Watts as
my true and lawful attorney-in-factforuse,and in my name and stead,to execute all documents and
to do any and all brings on my behalf including,but not limited to,the conduct of my business and
personal affairs,execution of deeds,mortgages,and all documents affecting title to real or personal
property and any and all interests therein,7vith full power to substitute an attorney or attorneysunder
him in the premises,giving and granting unto each ofthe said attorney(s)-in-fact full and complete
power and authority to do,say,act,transact and perform each,any,all and every act,thing and deed
whatsoever as fully to all intents andpurposes as I might or could do ifpersonallypresent and acting
in my own behalfincluding,but not limited to,entry into safety deposit boxes and authority to sign
all checks on all my banking accounts and to transfer,cash and deal in any way with certificates of
deposit or other securities.
Pursuant to Ark.Code Ann.§20-13-104,1 grant my attorney-in-fact full authority to make
decisions for me regarding my health care. In exercising this authority,my attorney-in-fact shall
l
follow my desires as stated in this document or otherwise known to him_ In making any decisions,
my attorney-in-fact shall attempt to discuss the proposed decision with me to determine my desires
ifl am able to communicate in any way. Ifmy attorney-in-fact cannot determine the cboice I would
want made, then he shall make a choice for me based upon what he believes to be in my best
interests. My attomey4ii-faets authority to interpret my desires is intended to be as broad as
possible, except for any limitations I may state herein. Accordingly, my attorney-in-fact is
authorized: �9N���� �IIYIIitlIIUNI®III�➢YIgW�I�
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A. To consent, refuse, or withdraw consent to all types of medical care, treatment,
surgical procedures, diagnostic procedures, medication, and the use of mechanical or other
Procedures that affect any bodily function, including (but not limited to) artificial respiration,
nutritional support and hydration,and cardiopulmonary resuscitation;
E. To have access to medical records and information to the same extent that I am
entitled to,including the right to disclose the contents to others;
C. To authorize my admission to or discharge(even against medical advice)from any
hospital,nursing home,residential care assisted living or similar facility or service;
D. Tocontractonmybehalfforauyheaith-care-related service orfacilityonmybehalf,
Without my attomey-in fact incurring personal financial liability for those contracts;
E. To hire and fire medical,social service,and other support personnel responsible for
my care;
F. To authorize,or refuse to authorize,any medication or procedure intended to relieve
Pain,even though my attorney-in-fact's decision may lead to physical damage,addiction,or hasten w '
the moment of(but not intentionally cause)my death;
Cr. To make anatomical gifts ofpart or all of my body for medical purposes,authorize
an autopsy,and direct the disposition of my remains,to the extent permitted by law;and
H. To take any other scion necessary to do what I authorize here,including(but not
limited to)granting any waiver or release from liability required by any hospital,physician,or other
health care provider; signing any documents relating to refusals of treatment or the leaving of a
facility against medical advice,and pursuing any legal action in my name,and at the expense ofmy
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