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HomeMy WebLinkAbout2015-07-16 - Agendas - FinalFayetteville Policeman's Pension and Relief Fund Meeting Date Aua Adjourn Time S "t p , M , Subject: UL Motion To: 9 Motion By: Seconded: John Brown John Brown }} t R t)ti} f i)t Ruston Cole J Frank Johnson Mayor Jordan Mayor Jordan Eldon Roberts Eldon Roberts Sondra Smith Sondra Smith Sondra Smith Melvin Stanley I/ Subject: {i Motion To: Motion By: 9 Seconded: Seconded: John Brown Ruston Cole Ruston Cole Frank Johnson Frank Johnson Mayor Jordan Ma or Jordan Eldon Roberts Eldon Roberts Sondra Smith Sondra Smith Sondra Smith Melvin Stanley Melvin Stanley{/ Subject: Motion To: �¢p Motion By: Seconded: Seconded: John Brown Ruston Cole Ruston Cole Frank Johnson Frank Johnson Ma or Jordan Ma or Jordan Eldon Roberts Eldon Roberts Sondra Smith Sondra Smith OLbALk Melvin Stanley{/ / Subject: Motion To: Motion By: Seconded: John Brown Ruston Cole Frank Johnson Ma or Jordan Eldon Roberts Sondra Smith Melvin Stanley Lioneld Jordan Chairman Sondra E. Smith Treasurer Eldon Roberts Secretary Retired Position I Policemen's Pension Meeting July 16, 2015 Page 1 of 78 Ruston Cole Retired Position 2 John Brown Retired Position 3 Melvin Stanley Retired Position 4 Frank Johnson Retired Position 5 Policemen's Pension and Relief Fund Board of Trustees Meeting Agenda July 16, 2015 A meeting of the Fayetteville Policemen's Pension and Relief Fund Board of Trustees will be held on July 16, 2015 at 3:00 p.m. in Room 326 of the City Administration Building located at 113 West Mountain Street, Fayetteville, Arkansas. Roll Call Garrison Financial: • 2nd Quarter reports Approval of the Minutes: Approval of the April 16, 2015 meeting minutes Pension List Changes: • None Approval of the Pension List: • Approval of the August, September and October, 2015 pension lists Unfinished Business: • None New Business: • Revenue & Expense Reports: 1st Quarter— March 31, 2015 report and 2nd Quarter— June 30, 2015 • PRB — 2014 Annual Actuarial Valuation • 2015 Evaluating Local Plan Investments Memo • Election results — Eldon Roberts, Melvin Stanley, and John Brown Informational: • Longer View July 10, 2015 0 2015 Meeting calendar — October 15, 2015 next meeting Policemen's Pension Meeting July 16, 2015 Page 2 of 78 Meeting GARRISON ' 6,Zo,5 Page 3 of 78 JUL 13 2015 F I N A N C I A L CIiY OF FA ffT$VILLE crTr agar E July 9, 2015 Ms. Sondra Smith City of Fayetteville 113 West Mountain Street Fayetteville, Arkansas 72701 Dear Ms. Smith, Enclosed are the quarterly reports for both Firemen's Pension & Relief Fund and Police Pension and Relief Fund for the quarter ended June 30, 2015. Slight gains in the equity markets in April and May gave way to a June retreat leaving year to date gains about where they were at the end of the 15t quarter. Turmoil in the Eurozone led to increased volatility and a decline in the U.S. equity markets of around -2% the last month of the quarter leaving 2nd quarter gains for the S&P 500 +.28% and +1.23% for the first six months. Developed global markets were relatively flat as well for the quarter up only +.62%, for a +5.52% gain year to date coming off of dismal performance the last few years. Sector performance weakened with only three sectors in the black year to date. Health Care (+8.74%), Consumer Discretionary (+6%) and Telecom (+.61%) are positive for the year with the other seven sectors now in the red. The worst performing sectors were Utilities (-12.32%) and Energy (-6.05%). Although economic conditions continue to be mixed, interest rates (as measured by the 10 year Treasury bond) rose dramatically during the second quarter, from 1.92% to 2.35°/x. Rates peaked near 2.50% in late May and again in late June. The low in rates occurred at the beginning of the quarter at 1.86%. Year-to-date the rise was not as pronounced, with rates up from 2.18% to the 2.35% mentioned above. Volatility continues. For the year ended June rates are actually down slightly, peaking at 2.64% in early July 2014, falling to a low of 1.64% at the end of January 2015, and then beginning their rise into mid -2015. Although the continuing crisis in Greece, and more recently in Puerto Rico, have caused their fair share of a flight to quality into US Treasuries, the Fed still seems to be poised to raise rates slightly at least once during 2015. For the year-to-date period through June the market was up less than 1 % at +,82% as measured by the Barclay's Intermediate Government/Credit Index. Garrivon Financia! 605 W. Dickson Street, Suite 201 • Fayetteville, Arkansas 72701 479-587-1045 • 888-442-7637. 479-587-1257 Facsimile • www.GarrisonFinancial.com Policemen's Pension Meeting July 16, 2015 Page 4 of 78 Economic data on the home front improved moderately in the quarter. The jobless rate fell to a seven year low of 5.3% mainly due to folks dropping out of the workforce. Consumers are finally beginning to open up their wallets after a year of declining energy prices. Consumer purchases rose +.9% in May, the biggest gain since August 2009. University of Michigan's index of sentiment increased to 96.1 in June registering the most optimistic first half for households since 2004. Housing starts retreated -11 % in May which was expected given the surge in April, but despite the pullback in May, housing continues to make progress as permits for future projects climbed to the highest level in almost eight years. Consensus for GDP growth for the year remain modest, in the 2% camp in spite of the contraction in the 1st quarter of -.2%. As always, the positives in the economy can certainly be counter balanced with a number of clouds on the horizon. We continue to expect muted returns in the mid-term from stocks and bonds given the expectation of rising rates and subdued global economic growth, but remain optimistic the forces of capitalism will prevail and the future of this great nation remains bright. As we just celebrated our country's independence, we would like to remind everyone to reflect on the freedoms we enjoy and send out a heartfelt thank you to all the military and public servants past and present. We hope you had a great 4th of July and God Bless America! "My God! How little do my countrymen know what precious blessings they are in possession of, and which no other people on earth enjoy!" — Thomas Jefferson Cordially, e.�lli Kerry Bradley, CFA, MBA Equity Portfolio Manager Policemen's Pension Meeting July 16, 2015 Page 5 of 78 a akIsor� F I N A N C I A L City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 Quarter Ending June 30, 2015 Policemen's Pension Meeting July 16, 2015 Page 6 of 78 PORTFOLIO SUMMARY City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 June 30, 2015 5.3% ■ Cash & Equivalents 346,736.60 ■ Account Fixed Income 2,289,399.37 ■ Account Equities 3,883,121.87 Policemen's Pension Meeting July 16, 2015 Page 7 of 78 Garrison Financial PORTFOLIO APPRAISAL City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 June 30, 2015 Adj Unit Total Adjusted Market Pct. Unit Annual Quantity Security Cost Cost Price Value Assets Income Income Yield CASH AND EQUIVALENTS Schwab Advisor Cash Res - 346,736.60 346,736.60 5.3 0.010 34.67 0.0 Premier 346,736.60 346,736.60 5.3 34,67 0.0 TREASURY NOTE 700,000 US Treasury Note 101.44 710,058.13 109.17 764,203.30 11.7 4.000 28,000.00 1.0 4.000% Due 08.15-18 Accrued Interest -, 10,441.99 0.2 710,058.13 774,645.29 11.9 28,000.00 1.0 AGENCYBONDS 200,000 Federal Farm Credit 100.00 199,996.75 102.88 205,758.40 3.2 6.125 12,250.00 0.3 Bank 6.125% Due 12-29-15 Accrued Interest _ 34.03 0.0 199,996.75 205,792.43 3.2 12,250.00 0.3 CORPORATE BONDS 125,000 Verizon 99.94 124,930.59 99.86 124,822.87 1.9 1.350 1,687.50 1.4 Communications 1.350% Due 06-09-17 125,000 Lab Corp. of America 101.01 126,263.61 100.84 126,048.37 1.9 2.500 3,125.00 2.2 l 2.500% Due 11-01-18 125,000 Kroger COmpuny 100.20 125,246.63 100.37 125,468.00 1.9 2.300 2,875.00 2.2 2.300% Due 01-15-19 125,000 Honeywell International 111.20 139,004.04 111.06 138,821.37 2.1 5.000 6,250.00 1.8 5,000% Due 02-15-19 125,000 Union Pacific Corp. 101.51 126,892.17 101.31 126,642.50 1.9 2.250 2,812.50 1.9 2.250% Due 02-15-19 125,000 1 B Hunt Transportation 101.70 127,120.09 100.91 126,139.00 l.9 2.400 3,000.00 2,2 Svcs. 2.400% Due 03-15-19 125,000 Walt Disney Co. 99.90 124,877.47 100.01 125,014.50 1.9 1.850 2,312.50 1.9 1.850% Due 05.30-19 125,000 Berkshire Hathaway 105.70 132,123.13 103.00 128,755.75 2.0 2.900 3,625.00 2.3 Financial 2.900% Due 10-15-20 125,000 AT&T, Inc. 100.46 125,576.31 97.61 122,013.37 1.9 3.000 3,750.00 3.4 3.000% Due 02.13-22 Accrued Interest 8,555.90 0.1 1,152,034.04 1,152,281.65 17.7 29,437.50 2.1 CONVERTIBLE PREFERRED 300 Bunge4.875%Conv. 108.63 32,588.95 108.99 32,696.10 0.5 4.875 1,462.50 4.5 Pfd. 32,588.95 32,696.10 0.5 1,462.50 45 COMMONSTOCK 300 3MCorp. 164.93 49,479.55 154.30 46,290.00 0.7 4.100 1,230.00 2.7 2,000 AT&T, Inc. 28.24 56,475.88 35.52 71,040.00 1.1 1.880 3,760.00 5.3 905 AbbVie, Inc. 66.58 60,253.90 67.19 60,806.95 0.9 2,040 1,846.20 3.0 1,965 Abbott Laboratories 40.06 78,727.14 49.08 96,442.20 l.5 0.960 1,886.40 2.0 550 Accenture Plc. 90.81 49,943.51 96.78 53,229.00 0.8 2.040 1,122.00 2.1 440 Airgas, Inc. 112.76 49,614.11 105.78 46,543.20 0.7 2.400 1,056.00 23 120 Alliance Data Systems 283.98 34,077.36 291.94 35,032.80 0.5 0.000 0.00 0.0 Policemen's Pension Meeting July 16, 2015 Page 8 of 78 Garrison Financial PORTFOLIO APPRAISAL City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 June 30, 1015 Adj Unit Total Adjusted Market Pct. Unit Annual Quantity Security Cost Cost Price Value Assets Income Income Yield 625 Amgen, Inc. 114.33 71,456.06 153.52 95,950.00 1.5 3.160 1,975.00 2.1 825 Anadarko Petroleum 85.82 70,805.10 78.06 64,399.50 1.0 1.080 891.00 1.4 500 Ansys, Inc. 75.67 37,836.95 91.24 45,620.00 0.7 0.000 0.00 0.0 1,680 Apple Computer 72,69 122,121.54 125.42 210,714.00 3.2 2,080 3,494.40 1.7 785 AptarGroup, Inc. 63.47 49,825.05 63.77 50,059.45 0.8 1.120 879.20 1.8 125 AutoZone, Inc. 516.09 64,511.70 666.90 83,362.50 1.3 0.000 0.00 0.0 1,350 BCE, Inc. Cl F 24.40 32,934.20 42.50 57,375.00 0.9 2.650 3,577.50 6.2 350 Becton, Dickinson & 113.97 39,889.45 141.65 49,577.50 0.8 2,400 840.00 1.7 Company 1,500 Broadridge Financial 41.33 62,000.35 50.01 75,015.00 1.2 1.080 1,620.00 2,2 Solutions 675 Brown-Forman Corp. 88.81 59,946.93 100.18 67,621,50 1.0 1.260 850.50 1.3 665 CH Robinson 74.84 49,768.25 62.39 41,489,35 0.6 1.520 1,010.80 2.4 Worldwide 3,000 CSX Corporation 28.88 86,627.40 32.65 97,950.00 1.5 0.720 2,160.00 2.2 1,300 Cal -Maine Foods, Inc. 36.68 47,687.88 52.20 67,860.00 1.0 1.400 1,820.00 2.7 585 Check Point Software 85.44 49,979.59 79.55 46,536.75 0.7 0.000 0.00 0.0 400 Chevron Corporation 85.21 34,084.61 96.47 38,588.00 0.6 4.280 1,712.00 4.4 2,800 Cisco Systems, Inc. 19.70 55,168.69 27.46 76,888.00 1.2 0.840 2,352.00 3.1 1,400 Coca-Cola Company 30.98 43,374.60 39.23 54,922.00 0.8 1.320 1,848.00 3.4 680 Compass Minerals Ind 87.89 59,765.06 82.14 55,855.20 0.9 2.640 1,795.20 3.2 1,150 ConocoPhillips 55.58 63,918.42 61.41 70,621.50 1.1 2.920 3,358.00 4.8 565 Deere & Co. 87.76 49,585.72 97.05 54,833.25 0.8 2.400 1,356,00 2.5 500 Disney, Walt Holdings 110.91 55,454.90 114.14 57,070.00 0.9 1.320 660.00 1.2 2,000 EMC Corp. 25.64 51,282,21 26.39 52,780.00 0.8 0.460 920,00 1.7 830 Eastman Chemical 86.14 71,495.64 81.82 67,910.60 1.0 1.600 1,328.00 2.0 1,310 Emerson Electric 68.00 89,080.00 55.43 72,613.30 1.1 1.880 2,462.80 3.4 3,825 General Electric Co. 19.53 74,709.32 26.57 101,630.25 1.6 0.920 3,519.00 3.5 1,200 GlaxoSmithKline Plc. 50.10 60,124.15 41.65 49,980.00 0.8 2.290 2,748.00 5 5 2,250 Intel Corp, 20.53 46,202.71 30.41 68,433.75 1.0 0.960 2,160.00 3.2 800 Johnson & Johnson 64.70 51,756.60 97.46 77,968.00 1.2 3.000 2,400.00 3.1 465 Kimberly Clark Corp. 107.07 49,786.64 105.97 49,276.05 0.8 3.520 1,636.80 3.3 395 Laboratory Corp. 125.86 49,715.75 121.22 47,881.90 0.7 0.000 0.00 0.0 1,000 Lincoln Electric 6721 67,209.18 60.89 60,890.00 0.9 1.160 1,160.00 1.9 640 Medtronic Plc. 77.60 49,662.77 74.10 47,424.00 0.7 1.520 972.80 2.1 1,100 Merck &Co., Inc. 51.39 56,525.78 56,93 62,623.00 1.0 1.800 1,980.00 3.2 800 National Oilwell Varco 85.35 68,280.15 48.28 38,624.00 0.6 1.840 1,472.00 3.8 1,000 Patterson Companies 51.07 51,074.75 48.65 48,650.00 0.7 0.880 880,00 1.8 530 Pepsico, Inc. 93.75 49,690.09 93.34 49,470.20 0,8 2.810 1,489.30 3.0 830 Phillips 66 72.18 59,911.86 80.56 66,864.80 1.0 2.240 1,859.20 2.8 1,000 Procter&Gamble Co. 59.42 59,417.61 78.24 78,240.00 1.2 2.650 2,650.00 3.4 1,000 Qualcomm, Inc. 63.62 63,616.39 62.63 62,630.00 1.0 1.920 1,920.00 3.1 2,790 Raven Industries, Inc. 28.37 79,148.48 20.33 56,720.70 0.9 0.520 1,450.80 2.6 700 Sanofi ADR 55.71 38,995.10 49.53 34,671.00 0.5 1.320 924.00 27 770 Sensienl Technologies 64.55 49,704.67 68.34 52,621.80 0.8 1.000 770.00 1.5 900 St. Jude Medical, Inc. 66.56 59,900.53 73.07 65,763.00 1.0 1.160 1,044.00 1.6 1,055 Syngenla AG ADR 71.44 75,370.40 81.61 86,098.55 1.3 1.970 2,078.35 2.4 850 Texas Instruments 58.53 49,754.69 51.51 43,783.50 0.7 1.360 1,156.00 2.6 465 Valmont Industries 128.60 59,797.26 118.87 55,274.55 0.8 1.500 697.50 1.3 450 Wabtec Corp. 93.64 42,137.64 94.24 42,408.00 0.7 0.320 144.00 0.3 1,150 Wal-Mart Stores, Inc. 62.11 71,423.42 70.93 81,569.50 1.3 1.960 2,254.00 2.8 2,000 Waste Management 42.21 84,414.32 46.35 92,700.00 1.4 1.540 3,080.00 3.3 3,265,502.02 3,587,193.10 55.0 88,256.75 25 MUTUAL FUNDS 2,248.991 Dodge & Cox Intl Stk 45.41 102,132.74 43.75 98,393.36 1.5 0.970 2,181.52 2.2 Policemen's Pension Meeting July 16, 2015 Page 9 of 78 Garrison Financial PORTFOLIO APPRAISAL City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 June 30, 2015 Adj Unit Total Adjusted Market Pet Unit Annual Quantity Security Coat Cost Price Value Assets Income Income Yield 2,587.463 Oppenheimer 39.33 101,776.46 35.31 9063.32 1.4 0.100 258.75 0.3 Developing Mkts A 203,909.20 189,756.67 2.9 2,440.27 1.3 UNIT TRUSTS 2,340 FT Energy Income & 34.20 80,032.95 31.40 73,476.00 1.1 2.200 5,148.00 7.0 Growth 4,000 iShares S&P US Pfd Sdr 38.34 153,340.30 39.17 _ 156,680.00 2.4 2.400 _ 91600.00 6.1 233,373.25 230,156.00 3.5 14,748.00 6,4 TOTAL PORTFOLIO 6,144,198.95 6,519,257.84 100.0 176,629.69 2.2 You should carefully compare this statement to the statement you receive from your custodian and notify us immediately of any discrepancies. 3 Policemen's Pension Meeting July 16, 2015 Page 10 of 78 Garrison Financial PURCHASE AND SALE City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 From 01-01-15 To 06-30-15 Trade Settle Unit Date Date Quantity Security Price Amount PURCHASES 03-19-15 03-24-15 300 3M Corp. 164.93 49,479.55 03-24-15 03-27-15 125,000 AT&T, Inc. 100.48 125,597.62 3.000% Due 02-13-22 03-19-15 03-24-15 550 Accenture Plc. 90.81 49,943.51 03-19-15 03-24-15 200 Airgas,lnc. 112.76 22,551.87 03-19-15 03-24-15 100 Airgas, Inc. 112.76 11,275.93 03-19-15 03-24-15 140 Airgas, Inc. 112.76 15,786.31 03-19-15 03-24-15 785 AptarGroup,Inc. 63.47 49,825.05 03-24-15 03-27-15 125,000 Berkshire Hathaway Financial 105.98 132,470.38 2.900% Due 10-15-20 03-19-15 03-24-15 200 CH Robinson Worldwide 74.85 14,970.69 03-19-15 03-24-15 100 CH Robinson Worldwide 74.83 7,483.35 03-19-15 03-24-15 365 CH Robinson Worldwide 74.83 27,314.21 03-10-15 03-13-15 1,300 Cal -Maine Foods, Inc. 36.68 47,687.88 03-19-15 03-24-15 585 Check Point Software 85.44 49,979.59 03-19-15 03-24-15 565 Deere & Co. 87.76 49,585.72 06.04-15 06-09-15 500 Disney, Walt Holdings 110.91 55,454.90 03-19-15 03-24-15 100 FT Energy Income & Growth 34.18 3,418.38 03-19-15 03-24-15 100 FT Energy Income & Growth 34.18 3,418.38 03-19-15 03-24-15 100 FT Energy Income & Growth 34.20 3,420.38 03-19-15 03-24-15 140 FT Energy Income & Growth 34.20 4,788.54 03-19-15 03-24-15 60 FT Energy Income & Growth 34.20 2,052.23 03-19-15 03-24-15 20 FT Energy Income & Growth 34.20 684.08 03-19-15 03-24-15 100 FT Energy Income & Growth 34.20 3,420.38 03-19-15 03-24-15 900 FT Energy Income & Growth 34.20 30,783.44 03-19-15 03-24-15 100 FT Energy Income & Growth 34.20 3,420.38 03-19-15 03-24-15 300 FT Energy Income & Growth 34.20 10,261.15 03-19-15 03-24-15 300 FT Energy Income & Growth 34.20 10,261.15 03-19-15 03-24-15 100 FT Energy Income & Growth 34.20 3,420.38 03-19-15 03-24-15 20 FT Energy Income & Growth 34.20 684.08 05-08-15 05-13-15 125,000 J B Hunt Transportation Svcs. 101.76 127,201.62 2.400% Due 03-15-19 03-19-15 03-24-15 100 Kimberly Clark Corp. 107.07 10,706.72 03-19-15 03-24-15 100 Kimberly Clark Corp. 107.07 10,706.82 03-19-15 03-24-15 65 Kimberly Clark Corp. 107.07 6,959.44 03-19-15 03-24-15 100 Kimberly Clark Corp. 107.07 10,706.82 03-19-15 03-24.15 100 Kimberly Clark Corp. 107.07 10,706.84 03-19-15 03-24-15 395 Laboratory Corp. 125.86 49,715.75 03-19-15 03-24-15 640 Medtronic Plc. 77.60 49,662.77 01-28-15 02-02-15 1,000 Patterson Companies 51.07 51,074.75 03-19-15 03-24-15 530 Pepsico,Inc. 93.75 49,690.09 03-19-15 03-24-15 770 Sensient Technologies 64.55 49,704.67 Policemen's Pension Meeting July 16, 2015 Page 11 of 78 Garrison Financial PURCHASE AND SALE City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 From 01-01-15 To 06-30-15 Trade Settle Unit 16.34 Date Date Quantity Security Price Amount 03-19-15 03-24-15 850 Texas Instruments 58.53 49,754.69 03-12-15 03-17-15 450 Wabtec Corp. 93.64 42,137.64 1,308,168.13 SALES 03-19-15 03-24-15 2,000 Alerian MLP 16.34 32,676.02 03-19-15 03-24-15 3,000 Alerian MLP 16.34 49,014.03 05-07-15 05-12-15 200 Cisco Systems, Inc. 28.81 5,762.90 05-07-15 05-12-15 1,300 Cisco Systems, Inc. 28.81 37,458.85 03-19-15 03-24-15 100 Ensco Plc. 20.62 2,061.55 03-19-15 03-24-15 250 Ensco Plc. 20.62 5,153.88 03-19-15 03-24-15 300 Ensco Plc. 20.62 6,184.66 03-19-15 03-24-15 300 Ensco Plc. 20.62 6,184.66 03-19-15 03-24-15 800 Ensco Plc. 20.61 16,491.60 03-19-15 03-24-15 100 Freeport-McMoRan Copper & Gold, 17.20 1,720.02 Inc. 03-19-15 03-24-15 200 Freeport-McMoRan Copper & Gold, 17.20 3,440.04 Inc. 03-19-15 03-24-15 100 Freeport-McMoRan Copper & Gold, 17.20 1,720.02 Inc. 03-19-15 03-24-15 100 Freeport-McMoRan Copper & Gold, 17.20 1,720.02 Inc. 03-19-15 03-24-15 100 Freeport-McMoRan Copper & Gold, 17.20 1,720.02 Inc. 03-19-15 03-24-15 100 Freeport-McMoRan Copper & Gold, 17.20 1,720.02 Inc. 03-19-15 03-24.15 100 Freeport-McMoRan Copper & Gold, 17.20 1,720.02 Inc. 03-19-15 03-24-15 100 Freeport-McMoRan Copper & Gold, 17.20 1,720.02 Inc. 03-19-15 03-24-15 1,100 Freeport-McMoRan Copper & Gold, 17.20 18,915.85 Inc. 05-07-15 05-12-15 250 Intel Corp. 32.32 8,080.37 05-07-15 05-12-15 750 Intel Corp. 32.32 24,241.09 05-07-15 05-12-15 450 Johnson & Johnson 99.86 44,938.97 03-19-15 03-24-15 5,650 Keycorp 14.41 81,406.62 05-08-15 05-13-15 635 McDonald's Corp. 98.51 62,554.99 04-08-15 04-13-15 150 Microsoft Corp. 41.35 6,201.93 04-08-15 04-13-15 2,675 Microsoft Corp. 41.35 110,601.00 03-19-15 03-24-15 1,750 Noble Corp. 13.53 23,685.79 04-08-15 04-13-15 50 Pfizer, Inc. 34.66 1,732.85 04-08-15 04-13-15 3,600 Pfizer, Inc. 34.66 124,765.24 03-19-15 03-24-15 2,000 Sector SPDR Fncl Select Shs 24.41 48,818.36 2 Garrison Financial PURCHASE AND SALE City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 From 01-01-15 To 06-30-15 Trade Settle Unit Date Date Quantity Security Price 03-19-15 03-24-15 1,775 Sector SPDR Fuel Select Shs 24.41 03-19-15 03-24-15 1,700 Sector SPDR Utility Select Shs 44.91 03-19-15 03-24.15 2,300 Sector SPDR Utility Select Shs 44.91 03-19-15 03-24-15 3,000 iShares DJ Select Div 78.45 03-24-15 03-27.15 800 iShares IBOXX Inv Grade Corp Bond 121.86 03-24-15 03-27-15 46 iShares IBOXX Inv Grade Corp Bond 121.86 03.24-15 03-27-15 1,204 MareslBOXX Inv Grade Corp Bond 121.86 05-08-15 05-13.15 1,250 iSharesIBOXX Inv Grade Corp Bond 119.06 3 Policemen's Pension Meeting July 16, 2015 Page 12 of 78 Amount_ 43,324.52 76,343.50 103,288.25 235,336.72 97,490.72 5,605.72 146,723.52 148,825.94 1,589,350.28 Policemen's Pension Meeting July 16, 2015 Page 13 of 78 Garrison Financial REALIZED GAINS AND LOSSES City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 From 01-01-15 Through 06-30-15 Cain Or Loss Open Close Cost Amort. or Date (late Quantity Security Basis Accretion Proceeds Short Term Lonil 04.16.14 03.19-15 100 Ensco Plc. 5,034.33 2,061.55 -2,972.78 04.16.14 03.19.15 250 Ensco Pie. 12,585.82 5,153.88 -7,431.94 04-16-14 03.19.15 300 Ensco Plc. 15,102.98 6,184.66 -8,918.32 04-16-14 03-19-15 300 Ensco Plc. 15,102.98 6,184.66 -8,918.32 04.16.14 03-19.15 800 Ensco Plc. 40,274.61 16,491.60 -23,783.01 06-10-14 03.19.15 1,750 Noble Corp. 48,930.13 23,685.79 -25,244.34 06.26.14 03-19-15 2,000 Alerian MLP 36,190.60 32,676.02 -3,514.58 01-16-13 03-19-15 3,000 Alerian MLP 51,451.61 49,014.03 -2,437.58 12-20-10 03-19-15 1,700 Sector SPDR Utility Select 58,043.02 76,343.50 18,300.48 Shs 12-20-10 03-19-15 2,300 Sector SPDR Utility Select 78,528.80 103,288.25 24,759.45 Shs 05-19-14 03-19-15 5,650 Keycorp 75,839.95 81,406.62 5,566.67 02-10-14 03-19-15 2,000 Sector SPDR Friel Select Shs 43,639.23 48,818.36 5,179.13 02-10-14 03-19-15 1,775 Sector SPDR Fncl Select Shs 38,729.82 43,324,52 4,594.70 05-12-14 03.19-15 100 Freeport-McMoRan Copper 3,487.70 1,720.02 -1,767.68 & Gold, Inc. 05-12.14 03-19-15 200 Freeport-McMoRan Copper 6,975.40 3,440.04 -3,535.36 & Gold, Inc. 05-12-14 03-19-15 100 Freeport-McMoRan Copper 3,487.70 1,720.02 -1,767.68 & Gold, Inc. 05-12-14 03-19-15 100 Freeport-McMoRan Copper 3,487.70 1,720.02 -1,767.68 & Gold, Inc. 05-12-14 03-19.15 100 Freeport-McMoRan Copper 3,487.70 1,720,02 -1,767.68 & Gold, Inc. 05-12-14 03-19-15 100 Freeport-McMoRan Copper 3,487.70 1,720.02 -1,767.68 & Gold, Inc. 05-12-14 03-19-15 100 Freeport-MCMORan Copper 3,487.70 1,720.02 -1,767.68 & Gold, Inc. 05-12-14 03-19-15 100 Freeport-McMoRan Copper 3,487.70 1,720,02 -1,767.68 & Gold, Inc. 05-12-14 03-19.15 1,100 Freeport-McMoRarr Copper 38,364.70 18,915.85 -19,448.85 & Gold, Inc. 08-08-11 03-19-15 3,000 iShares D1 Select Div 156,695.97 235,336.72 78,640.74 10-06-09 03-24-15 800 iShares IBOXX Inv Grade 87,773.42 97,490,72 9,717.30 Corp Bond 10-06-09 03.24-15 46 iShares IBOXX Inv Grade 5,046.97 5,605,72 558.75 Corp Bond 10-06-09 03-24-15 1,204 iShares IBOXX Inv Grade 132,099.00 146,723.52 14,62452 Corp Bond 06-26-14 04.08-15 150 Microsoft Corp. 6,271.50 6,201.93 -69.57 11-05-13 04.08-15 2,675 Microsoft Corp. 100,543.80 110,601.00 10,057.20 06.26.14 04-08-15 50 Pfizer, Inc. 10,088.00 1,732.85 -8,355.15 05-07-10 04-08-15 3,600 Pfizer, Inc. 72,441.75 124,765.24 52,323.49 06.26-14 05-07-15 250 Intel Corp, 7,037.50 8,080.37 1,042.87 06-22-06 05-07-15 750 Intel Corp, 15,400.90 24,241.09 8,840.18 06-26-14 05-07-15 200 Cisco Systems, Inc. 4,642.00 5,762.90 1,120,90 03-29-I1 05.07.15 1,300 Cisco Systems, Inc. 25,614.04 37,458.85 11,844.81 04.15-11 05-07-15 450 Johnson & Johnson 29,113.09 44,938.97 15,825.88 10-06-09 05-08-15 1,250 iShares IBOXX Inv Grade 137,145.97 148.825.94 11,679.97 Corp Bond Garrison Financial REALIZED GAINS AND LOSSES City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 From 01-01-15 Through 06-30-15 Open Close Date Date Quantity Security 12.31-14 05.08-15 635 McDonald's Corp. TOTAL GAMS TOTAL LOSSES TOTAL REALIZED GAINILOSS 150,162.51 NO CAPITAL GAINS DISTRIBUTIONS Cost Amort. or Basis Accretion Proceeds Policemen's Pension Meeting July 16, 2015 Page 14 of 78 Gain Or Loss Short Term Lang Term 60,065.98 62,554.99 2,489.01 10,219.45 -124,565.97 1,439,187.77 0.00 1,589,350.28 -114,346.52 2 266,946.61 -2,437.58 264,509.03 Garrison Financial PERFORMANCE SUMMARY GROSS OF FEES City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 June 30, 2015 PORTFOLIO COMPOSITION Total Account 40% Fixed Income/60% Equity Blended Index Account Fixed Income Barclays Capital Intermed Govt/Credit Account Equities S&P 500 6,519,257.84 100.0 2.2 Policemen's Pension Meeting July 16, 2015 Page 15 of 78 CHANGE IN PORTFOLIO Portfolio Value on 12-31-14 7,023,870.27 Accrued Interest 16,134.03 Net Additions/Withdrawals Market Pct. -48,890.72 Unrealized Gains Value Assets Yield Cash & Equivalents 346,736.60 5.3 0.0 Account Fixed 2,289,399.37 35.1 1.9 Income 1.14 2.23 2.23 Account Equities 3,883,121.87 59.6 2.5 Account 0.00 0.0 - Commodities 1.23 7.42 7.42 Total Account 40% Fixed Income/60% Equity Blended Index Account Fixed Income Barclays Capital Intermed Govt/Credit Account Equities S&P 500 6,519,257.84 100.0 2.2 Policemen's Pension Meeting July 16, 2015 Page 15 of 78 CHANGE IN PORTFOLIO Portfolio Value on 12-31-14 7,023,870.27 Accrued Interest 16,134.03 Net Additions/Withdrawals -480,585.48 Realized Gains -48,890.72 Unrealized Gains -79,602.83 Income Received 85,434.68 Change in Accrued Interest 2,897.89 Portfolio Value on 06-30-15 6,500,225.92 Accrued Interest 19,031.92 5.20 6,519,257.84 TIME WEIGHTED RETURN Annualized Quarter Year Last 12 Inception To Date To Date Months To Date -0.09 -0.61 0.04 0.04 -0.08 1.15 5.20 5.20 -0.48 1.14 2.23 2.23 -0.62 0.82 1.69 1.69 0.10 -1.66 -1.25 -1.25 0.28 1.23 7.42 7.42 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. Owl GARRISON F l N A N C l A L July 7, 2015 City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 113 West Mountain Fayetteville, AR 72701 STATEMENT OF MANAGEMENT FEES Policemen's Pension Meeting July 16, 2015 Page 16 of 78 For The Period April 1 through June 30, 2015 Portfolio Value as of 03-31-15 6,736,027 Portfolio Value as of 04-30-15 6,685,525 Portfolio Value as of 05-31.15 6,632,855 Portfolio Value as of 06-30-15 6,519,258 Average of 4 Months 6,643,416 6,643,416 @ 0.5000% per annum 8,304 Quarterly Management Fee 8,304 TOTAL DUE AND PAYABLE 8,304 This statement is for informational purposes only. As you requested, the fee will be automatically deducted from your account. Please be advised that it is the responsibility of the client to verify the accuracy of each fee calculation. The custodian will not determine whether the fee is properly calculated. Lioneld Jordan Chairman Sondra E. Smith Treasurer Eldon Roberts Secretary Retired Position 1 Policemen's Pension Meeting Policemen's Pension & Relief Fundjuly 16, 2015 Board of Trustees Meeting MinuteBage 17 of 78 April 16, 2015 Page 1 of 8 Ruston Cole Retired Position 2 John Brown Retired Position 3 Melvin Stanley Retired Position 4 Frank Johnson Retired Position 5 Policemen's Pension and Relief Fund Board of Trustees Meeting Agenda April 16, 2015 A meeting of the Fayetteville Policemen's Pension and Relief Fund Board of Trustees was held on April 16, 2015 at 3:00 P.M. in Room 326 of the City Administration Building located at 113 West Mountain Street, Fayetteville, Arkansas. Eldon Roberts called the meeting to order. PRESENT: Frank Johnson, Melvin Stanley, Eldon Roberts, Ruston Cole, Sondra Smith, City Clerk, Dee McCoy, City Clerk Office, Glenn Atkins, James Bell, Garrison Financial, Trish Leach, Accounting, Kit Williams, City Attorney, Paul Becker, Finance Director ABSENT: Mayor Jordan, John Brown Garrison Financial: 1St Quarter reports Glenn Atkins: Thank you for allowing us to be here. We appreciate your business and confidence. What I'd like to do briefly is walk you through your first quarterly report. I will talk a little bit on the fixed income markets then I will tum it over to James Bell. He will talk about the stocks. Then we'll take some questions, comments, ideas and thoughts. My name is Glenn Atkins and I do the bond portion of the portfolio. If you will look at the pie chart in your package we are about 63%, at the end of the quarter, in stocks and about 35% in bonds, and a little bit in cash. Your policy is 60% equity and 40% bonds. We're essentially right on target there. Given what interest rates are doing, we're comfortable being a little overweight in equity. A lot of that is market fluctuations over time. We're well positioned in terms of your policy. I will call your attention to the performance page, which is very near the back of our quarterly report. For the first quarter, the account was down fractionally and the market was up fractionally. We underperformed slightly, which is not unusual. We don't like it but it's not unusual as we're structuring portfolios and getting them into things that we like. I would not put too much credence in that as long as it doesn't continue for five or ten years. From the fixed income side, we did a Policemen's Pension Meeting Policemen's Pension & Relief Funduly 16, 2015 Board of Trustees Meeting Minut&ge 18 of 78 April 16, 2015 Page 2 of 8 couple of things in the quarter. We bought a couple of individual bonds that we thought had some value, specifically AT&T, which is the big telephone company. We also bought a position in Berkshire Hathaway, which is Warren Buffett's Company. Those two bonds, and others that we will purchase going forward, tend to be cheap to the market. In other words, they provide more yield than similarly rated and similarly mature securities. We sold about $250,000 in the LQD position, which is the iShares Bond ETF that we had. The reason that we sold that position was to try to shorten up the maturity of the portfolio a little bit. The maturity of that ETF that we sold, actually is the duration, but it's functionally equivalent, the duration on that ETF is 7.7 years. There is some interest rate risk in there because it's longer maturity than we're running our portfolios now. We liquidated that position and bought those two bonds. We have talked in the past and we will in the future probably sell the Treasury note and the agency security that's in there. Even though they have high coupons, the yields are relatively low and we can go into bonds that pay more yield. We wanted to sell the EFT first to shorten the average maturity of the portfolio. Right now, the average duration on your fixed income is about 3.5 years. The index that we benchmark ourselves to, its duration is about 3.8 years. We are right on top of that. Where I would like to end up, as we continue to restructure this, is a duration that is about a year longer than the index. It's not so long that if rates rise rapidly you get hurt too bad, but it's long enough to get just a little bit of extra yield and it should outperform almost any scenario where the rates goes up or down. We'll be more heavily weighted in corporate bonds than index. I would like to be about a year longer than the index. Over the next year you will probably see that average maturity somewhere in the 4.5 to 5 range, roughly. I was telling the group that we sold some of the long ETF's and brought the maturities down to 3.75 years right now, which is about the index. I want to be about a year longer than the index. Paul Becker: And that's for fear of interest rate increase? Glenn Atkins: Well, it is and that's the reason we sold the ETF because its duration was 7.75 years. I would like to be, when we get it totally restructured, about a year longer than the index and more heavily weighted in corporate bonds than the index. Paul Becker: So 4.5 to 5 is what you're looking at? Glenn Atkins: 4.5 to 5 is where I want to be. That's where we've got the majority of our other portfolios. If we're at 4.5 years, a year from now we'll be at 3.5 years but the index will stay the same. The Index really never changes much. That gives us a little more yield without a whole lot of price risk. If rates stay where they are or go down slightly, we should be in a position to get a little bit more yield in income than the market. Long way of saying we're trying to find the sweet spot of that. The total withdrawals for the year ended March were, and this is from our portfolio, so it is not the entire pension payment, $465,000 went to the pension payments and about $18,000 for the year ended March for management fees. At the end of the quarter the portfolio had an ending market value of about $6.7 million. Policemen's Pension Meeting Policemen's Pension & Relief FurJPIY 16, 2015 Board of Trustees Meeting Minutes ge 19 of 78 April 16, 2015 Page 3 of 8 From the fixed income side we are making a lot of progress in terms of getting it restructured how we would like to see it, in individual bonds and out of that longer maturity or ETF. We called it the liquid, it's basically a longer corporate bond fund. I passed out some pictures. We use the 10 year yield on the 10 year Treasury as our proxy for the market. The first page is what it's done year to date in yield. The second page is what it's done for the past year. The third page is what it's done for the past five years. The point that we keep talking to our clients about is this volatility, these rapid moves in the market particularly as you see on the first page. The market can move twenty or thirty basis points in a couple weeks' time in either direction. It's a little bit harrowing to me, so what I'm trying to do is be opportunistic in terms of restructuring the portfolio without trying to time the market. I want to be in the market but I want to try to be opportunistic as we restructure it. With that, I will turn it over to Mr. James Bell, who will talk about equities. James Bell: On the stock side, as Glenn mentioned, we did underperform for the quarter. From our perspective, any quarter like that is not really a good gage of performance. You can have great quarters, you can have poor quarters, that's really not kind of a long term time horizon that we like to focus on performance. Just so you know, the contributors to the underperformance mainly were the oil field services stocks that we inherited from the previous manager. With perfect hindsight we should have been quicker to roll out of those stocks. With the price of oil doing what it's done over the past nine months, those stocks have been hit probably the hardest of any energy related stocks. We also saw, just in the quarter, a tendency for growth stocks to outperform value stocks. We're never going to be all growth and we're never going to be all value stocks. We want to have a good mix of both in your portfolio to the extent that we own value stocks in addition to growth stocks. Growth way outperformed value this quarter. That contributed some to the underperformance. Going forward, over the course of the quarter, the equity portion is essentially completely rebalanced. The portfolio that you see on the equity side is essentially more or less where we want to see it going forward. We have more or less cycled out of any of the securities that came from the prior manager. We are very, very comfortable with the portfolio as it is going forward. What that entailed was selling a number of those energy and oil field services stocks as well as a number of the utility stocks that were in the portfolio. We sold utility for the same reasons that Glenn's talking about shortening duration on the fixed income side. A lot of utility stocks are high yielding dividend paying stock, but they are sensitive to interest rates just like bonds are because they do tend to pay out a lot of income. They act kind of like bonds. We want to shift out of some of those things in anticipation of eventually higher interest rates. We think utility stocks might be the most affected by that scenario. What we bought were other dividend paying stocks, consumer staple type stocks, stocks that are focused on U.S. businesses. As you know, the dollar has been very, very strong so a lot of companies that are selling outside of the U.S. have to convert those currencies back to dollars and that's hurt their performances. We had a particular focus on U.S. based companies. The market has been strong since the end of the quarter, and your stocks are up since the end of the quarter almost 2.5%. The negative performance that you see on this quarter end report has been erased and the account is actually up 1% through yesterday's close. We're starting to see some of the things improve. That's where we are on the equity side. We'll continue to work for you going forward. I'll certainly be happy to answer any questions you might have. Policemen's Pension Meeting Policemen's Pension & Relief Fually 16, 2015 Board of Trustees Meeting MinutEgge 20 of 78 April 16, 2015 Page 4 of 8 Glenn Atkins: Thank you for having us. We appreciate your business and confidence. If you need us in the middle of the quarter give us a buzz and we'll do whatever it is you need. Approval of the Minutes: Approval of the January 22, 2015 meeting minutes Sondra Smith: I sent the minutes out. I send them to Garrison Financial also. They had two or three minor changes to them, just typos. We've made those changes, so they're ready for your approval. If you want a new copy of them we can send another copy out. Frank Johnson: What were the changes that Garrison made? Sondra Smith: One of them was, we had a dollar amount instead of a percentage. When they are talking in a meeting they will say 220, we don't know when we're typing when we're transcribing it if its $2.20 or 2.20%. Just minor things like that. I can send them out. He sent them to me in red if you want to see it. Frank Johnson: It was just grammar, mechanic kind of stuff? I just felt that there was a discussion that you had about what they reported on here on our portfolio and the risk associated with interest rates. I have an opinion on that, but anyway. Sondra Smith: There's are what I would call scrivener's errors. Melvin Stanley moved to approve the January 22, 2015 meeting minutes. Frank Johnson seconded the motion. The motion passed with a 5-0 vote. Mayor Jordan and John Brown were absent. Pension List Changes: None Approval of the Pension List: Approval of the May, June and July, 2015 pension lists Frank Johnson moved to approve the May, June, and July, 2015 pension lists. Eldon Roberts seconded the motion. The motion passed with a 5-0 vote. Mayor Jordan and John Brown were absent. Unfinished Business: None Policemen's Pension Meeting Policemen's Pension & Relief Fundy 16, 2015 Board of Trustees Meeting Minuf8age 21 of 78 April 16, 2015 Page 5 of 8 New Business: Revenue & Expense Report: 411 Ouarter — December 31, 2014 report Trish Leach: I noticed, looking at this, we didn't update it for the end of the quarter. It's just through the end of December. I will get with Toni and have her do the one for the quarter and e- mail it. Sondra Smith: I've already talked to her and she's going to do both the first and second quarter. It will be on our July agenda. LOPFI — Consolidation of Local Plan Letter — January 2015 Sondra Smith: That's a standard letter we get regarding if you're interested in consolidation then this is the process that you have to go through to consolidate. Kit Williams: I want to let you know that the city asked Representative Whitaker to have a bill that would actually give clear authority to pension plans, to your board of trustees, to reduce benefits if you believed that was necessary to save your plan, and if the state actuary said that your plan is in extreme risk of ruin. In other words, about to go bankrupt. It passed through the joint committee, it passed in the House but then the Senate defeated it. So, you're left in the same position you were before where the former Attorney General has said that he does not believe that the boards had that power. It's been my opinion you. Nothing has been changed in the state law. I will say the members of the Fayetteville Firemen's Pension Board went to the state and opposed that. They did not want that authority. They were successful in not having that authority given to them. Frank Johnson: In the future, I'm not asking for a civics lesson here necessarily, but I think the language that made it to the bill that gives us the authority to reduce benefits, to me the difference in giving us the power to reduce benefits versus the authority to adjust benefits are quite different. In the future, if we're just part of the discussion, moving forward I think it would be really important. Kit Williams: You already have the power to increase benefits. The only argument or disagreement is whether you have the power to reduce benefits. I don't think that we would have wanted to put in just to adjust benefits, if that would circumscribe the procedure already set up for the increasing the benefits, which is set forth in the statutes. That's why the city had suggested to the legislature that in fact you all, every closed pension plan in the state, be authorized to have that authority to look at that, and if the state actuary had determined that there was substantial risk of ruin that the board could determine by a majority vote to reduce benefits. It was interesting down there that there six very similar to the firefighters' pension and likely to run out of money within ten years. There's another twenty that are in fairly serious position. I don't think you all are listed in the twenty. There are over a 100 of the 160 that are not actuarially sound, which is where I think you all are. That doesn't mean that you're likely in the near term at all to have a risk of ruin to where you can't pay your bills. Y'all are in far better shape at this point than the Fire Pension. Policemen's Pension Meeting Policemen's Pension & Relief FunWly 16, 2015 Board of Trustees Meeting MinutEs9ge 22 of 78 April 16, 2015 Page 6 of 8 Eldon Roberts: Whenever you said the city went to David Whitaker to have this legislation proposed, was the council involved in that? Kit Williams: No, it was the city administration and myself. You wouldn't have the power yet because you don't fit the criteria, but the Fire Pension Board would have the power, if they wanted too, to adjust their benefits downwards. But, that did not pass. Everything is just the way it was. Melvin Stanley: I think pretty much everybody's fear is that if we did have the authority to reduce our benefits by 10%, 15%, 20%, whatever, and then five years from now our fund goes crazy with the stock market and there's $20 million in there, way more than we'd ever need. Our fear is that we would never get back to where we are now. We fear that we wouldn't have the votes. Kit Williams: That can be a fear. If you look at past history, I think that any time that a fund has requested or wants to raise the benefits because they're actuarially sound and you can do that, I think the Mayor and the City Clerk, the city's representatives have gone with the board on each one of those votes. I can't guarantee what future mayors and city clerks would do. Fortunately, you all don't have to worry about that right now because you're not in the kind of financial strains that the Fire Pension is. Sondra Smith: I don't see this plan shooting up to an unrealistic amount of money being in the plan. It would take an event where half of the pensioners on the plan deceased before that could happen. Melvin Stanley: But whenever all these benefits were increased to 100%, even the widows' benefits, no one foresaw what was going to happen in 2008. Things can happen, or they could go the other direction too. That's everyone's fear that even if we had the authority to reduce our benefits by 10% or 15%, we would never see that again we would die and that would go to the city and the state. That's our fear, at least that's mine, and that's what I understand from other people. Kit Williams: It's legitimate for you to think about that. You need to think about your own personal interest. Sondra Smith: I don't think people felt like they'd get those benefits increases in the past and they were all voted in. If it's sound, it probably wouldn't be an issue with anybody. Kit Williams: Of course the reason that motivated the administration and me to propose this to Representative Whitaker was to make sure there wouldn't come a time that you wouldn't get benefits because the pension plan had run dry. They would always have the millage that comes in, but when that got distributed for the year and was out then that would be it. There would be no more benefits and that's something that obviously I don't think anybody in this room wants to see. I know that we don't and I think that's why we thought at least the pension board ought to have a right to look at it. I also believe, because of what you said and that kind of feelings that even if they had the power you all wouldn't want to exercise it. I knew you would be the best guardians of it. It wouldn't be reduced any more than absolutely necessary. I just thought you all should have the power as the board of trustees looking over the pension plan to do whatever you thought was in the best interest of your beneficiaries. Policemen's Pension Meeting Policemen's Pension & Relief Fuddly 16, 2015 Board of Trustees Meeting MinuRRge 23 of 78 April 16, 2015 Page 7 of 8 Melvin Stanley: But you already say that we have the authority Kit Williams: The Attorney General and I disagree on a particular interpretation of the statue. That can't be tested unless we actually lowered the benefits and somebody sues. You can't test it the other way until the fund runs out of money. Eldon Roberts: The articles I read in the newspaper, for someone who doesn't know, they sound kind of slanted. They look like that this board arbitrarily raised the rates just to sit here one day and raised them, not that we worked with state law, met all the criteria, the actuary signed off on it, the mayors of the city signed off on it too. It just sounds like, to somebody who's reading it that's not familiar with how it really works, that those guys raised their benefits now to where they're going to go broke and good enough for them, they just raised their benefits on their own. None of us ever speak to those people that write those articles. I see Pete Reagan's name mentioned in there a time or two. We did everything right and we followed the law, the Mayor signed off on it. Nothing is gone afoul of the law here. We just ran into a situation where the fund's not generating the revenue now. I guess it's partially due to the year 2008. Everybody else that has pension funds and 401 k's are facing the same dilemma. That doesn't make it any easier to put up with, but that happened. I just wanted to point out that we followed the rules and regulations that set out by Arkansas Code when we did these benefit increases, they weren't just arbitrarily done. Kit Williams: That's absolutely correct. Both you and the Fire Pension did follow the state law as set forth. The one thing that could be questioned is not any of that but what the state retirement board chose as to determine what was going to be the rate of return on the pension fund. They say it's going to make this much money per year and they were wrong. They chose an amount that was too high. I don't criticize the actuary, he's taken there figures that they gave him to run. Unfortunately it was too rosy a scenario and it has not lived up what they predicted would happen in the stock market. Sondra Smith: I can tell you, Eldon, the city does not slant that story Eldon Roberts: I'm just saying it sounds that way. Kit Williams: They never hear that from us, I guarantee you. Eldon Roberts: I didn't say that, I'm saying it sounds that way to someone who doesn't know how it really happens. Sondra Smith: I understand, I read that story. Melvin Stanley: When I heard it on the local talk radio, talking about how reckless the Fayetteville Fire Pension was in increasing their benefits. Kit Williams: I wouldn't necessarily take all my facts out of talk radio. Paul Becker: He does tend to slant some things. But, unfortunately, I think all of us thought there were certain things in that article that weren't portrayed exactly fairly and unfortunately we don't write the article. Policemen's Pension Meeting Policemen's Pension & Relief FunWly 16, 2015 Board of Trustees Meeting Minutegge 24 of 78 April 16, 2015 Page 8 of 8 Eldon Roberts: Pete Reagan was just as right as you all are because it hadn't been determined in a court of law yet. We just have differences of opinion. You say the city's not responsible for these pension plans, we think they are. It will take a court decision. We'll have to follow suit with whatever the court's decision is whenever some pension fund sues the city. Other: Sondra Smith: We're getting ready to start the election so we'll be sending out election ballots here in the next week or so. Eldon Roberts: It's myself, Melvin and John Brown? Sondra Smith: I think so. Frank Johnson: I remember reading something in the minutes, maybe there was still some open decision that had to be made on the process? Kit Williams: No, she just talked about how the Fire Pension does it. They do a whole nominating process before they go to the election. Sondra Smith: This board was happy with the way we do the process. Eldon Roberts: Ours seems to work pretty well. Informational: 2015 Meeting calendar Eldon Roberts: Look at the last page, the next meeting is July 16th. Sondra Smith: I think I am on vacation during that time. We may have to reschedule if we don't have a quorum. Adjourn: 3:36 p.m. POLICE PENSION FUND August 2015 Month 8 8 EMP# NAME 154 ALLEN, CHARLES 206 BAYLES, BOBBI J 216 BLACK, MILDRED 147 BRADLEY, GERALD 139 BRADLEY, RANDALL 167 BROWN, JOHN 157 CARROLL,RONALD L 151 COLE, RUSTON 160 DUGGER,GARY 140 FOSTER, BILLY D. 148 FRIEND, JERRY 161 HANNA, JANICE 145 HANNA, MARK 169 HELDER, TIM 180 HOYT, RICK 180 HOYT, RICK Plus 25 add pay 146 HUTCHENS, BERNICE 194 JOHNSON, FRANK 215 JOHNSON, JOYCE 103 JOHNSON, WENDELL 118 JONES, BOB 211 JONES, MICHELE 144 KILGORE, DONALD 218 MARTIN, CONNIE 128 MCCAWLEY, LARRY 136 MITCHELL, MICHAEL 158 MUNSON,ANGELA 112 MURPHY, JAKE 137 PERDUE, LARRY 164 PERSHALL, ROBIN 132 PHILLIPS, HOMER GENE 199 PRESTON, NORMA J 135 RICKMAN, LOREN 214 RIGGINS, BONNIE 183 ROBERTS, ELDON 183 ROBERTS, ELDON Plus 25 add pay 212 ROBERTS, CAROLYN K 212 ROBERTS, CAROLYN K Plus 25 add pay 159 SCHUSTER,JOHN H. 168 STANLEY, MELVIN 133 SURLES, JERRY 142 TAYLOR, DENNIS 163 WATSON, RICHARD 163 Watson, Richard Plus 25 Add1 Pay 149 WILLIAMS, JOYCE 195 WITT, BETTY J 213 WOOD, RUTHIE 8 8 8 Policemen's Pension Meeting 6800-9800 6800-9800 July 16, 2015 Regular Me 5335 -OD 5335-05 Page 25 of 78 Benefit YTD Reg Benefit Suppl. YTD Suppl. Future Supple $ 2,584.64 $ 20,677.12 $ 50.00 $ 400.00 $ 1,587.41 $ 12,699.28 $ 50.00 $ 400.00 $ 1,125.64 $ 9,005.12 $ 50.00 $ 400.00 $ 4,820.09 $ 38,560.72 $ 50.00 $ 400.00 $ 2,860.17 $ 22,881.36 $ 50.00 $ 400.00 $ 4,362.01 $ 34,896.08 $ 50.00 $ 400.00 $ 2,106.04 $ 16,848.32 $ 50.00 $ 400.00 $ 3,065.74 $ 24,525.92 $ 50.00 $ 400.00 $ 3,163.74 $ 25,309.92 $ 50.00 $ 400.00 $ 3,207.35 $ 25,658.80 $ 50.00 $ 400.00 $ 1,970.42 $ 15,763.36 $ 50.00 $ 400.00 $ 1,368.59 $ 10,948.72 $ - $ - $ 1,368.59 $ 10,948.72 $ 50.00 $ 400.00 $ 5,838.12 $ 46,704.96 $ 50.00 $ 400.00 $ 7,460.01 $ 59,680.08 $ 50.00 $ 400.00 $ 272.01 $ 2,176.08 $ 1,825.54 $ 14,604.32 $ 50.00 $ 400.00 $ 7,974.81 $ 63,798.48 $ 50.00 $ 400.00 $ 2,455.50 $ 19,644.00 $ 50.00 $ 400.00 $ 783.15 $ 6,265.20 $ 50.00 $ 400.00 $ 3,300.45 $ 26,403.60 $ 50.00 $ 400.00 $ 1,182.26 $ 9,458.08 $ 2,046.48 $ 16,371.84 $ 50.00 $ 400.00 $ 3,692.85 $ 29,542.80 $ 50.00 $ 50.00 $ 1,694.79 $ 13,558.32 $ 50.00 $ 400.00 $ 2,305.29 $ 18,442.32 $ 50.00 $ 400.00 $ 4,198.15 $ 33,585.20 $ 50.00 $ 400.00 $ 405.75 $ 3,246.00 $ 50.00 $ 400.00 $ 2,322.67 $ 18,581.36 $ 50.00 $ 400.00 $ 1,525.07 $ 12,200.56 $ - $ - $ 1,754.44 $ 14,035.52 $ 50.00 $ 400.00 $ 1,601.37 $ 12,810.96 $ 50.00 $ 400.00 $ 2,231.07 $ 17,848.56 $ 50.00 $ 400.00 $ 1,669.37 $ 13,354.96 $ 50.00 $ 400.00 $ 4,263.24 $ 34,105.92 $ 50.00 $ 400.00 $ 587.09 $ 4,696.72 $ - $ - $ 3,216.13 $ 25,729.04 $ - $ 442.89 $ 3,543.12 $ - $ 3,117.36 $ 24,938.88 $ 50.00 $ 400.00 $ 4,880.07 $ 39,040.56 $ 50.00 $ 400.00 $ 2,721.40 $ 21,771.20 $ 50.00 $ 400.00 $ 2,063.93 $ 16,511.44 $ 50.00 $ 400.00 $ 6,947.05 $ 55,576.40 $ 50.00 $ 400.00 $ 948.76 $ 7,590.08 $ - $ - $ 2,539.66 $ 20,317.28 $ 50.00 $ 400.00 $ 1,766.83 $ 14,134.64 $ 50.00 $ 400.00 $ 1,580.93 $ 12,647.44 $ 50.00 $ 400.00 $ 125,204.92 $ 1,001,639.36 $1,950.00 $ 15,250.00 $ - POLICE PENSION FUND September 2015 Month 9 9 EMP# NAME 154 ALLEN, CHARLES 206 BAYLES, BOBBI J 216 BLACK, MILDRED 147 BRADLEY, GERALD 139 BRADLEY, RANDALL 167 BROWN, JOHN 157 CARROLL,RONALD L 151 COLE, RUSTON 160 DUGGER,GARY 140 FOSTER, BILLY D. 148 FRIEND, JERRY 161 HANNA, JANICE 145 HANNA, MARK 169 HELDER, TIM 180 HOYT, RICK 180 HOYT, RICK Plus 25 add pay 146 HUTCHENS, BERNICE 194 JOHNSON, FRANK 215 JOHNSON, JOYCE 103 JOHNSON, WENDELL 118 JONES, BOB 211 JONES, MICHELE 144 KILGORE, DONALD 218 MARTIN, CONNIE 128 MCCAWLEY, LARRY 136 MITCHELL, MICHAEL 158 MUNSON,ANGELA 112 MURPHY, JAKE 137 PERDUE, LARRY 164 PERSHALL, ROBIN 132 PHILLIPS, HOMER GENE 199 PRESTON, NORMA J 135 RICKMAN, LOREN 214 RIGGINS, BONNIE 183 ROBERTS, ELDON 183 ROBERTS, ELDON Plus 25 add pay 212 ROBERTS, CAROLYN K 212 ROBERTS, CAROLYN K Plus 25 add pay 159 SCHUSTER,JOHN H. 168 STANLEY, MELVIN 133 SURLES, JERRY 142 TAYLOR, DENNIS 163 WATSON, RICHARD 163 Watson, Richard Plus 25 Add'I Pay 149 WILLIAMS, JOYCE 195 WITT, BETTY J 213 WOOD, RUTHIE 9 9 9 Policemen's Pension Meeting 6800-9800 6800-9800 July 16, 2015 Regular Mo 5335-00 5335-05 Page 26 of 78 Benefit YTD Reg Benefit Suppl. YTD Suppl. Future Supple $ 2,584.64 $ 23,261.76 $ 50.00 $ 450.00 $ 1,587.41 $ 14,286.69 $ 50.00 $ 450.00 $ 1,125.64 $ 10,130.76 $ 50.00 $ 450.00 $ 4,820.09 $ 43,380.81 $ 50.00 $ 450.00 $ 2,860.17 $ 25,741.53 $ 50.00 $ 450.00 $ 4,362.01 $ 39,258.09 $ 50.00 $ 450.00 $ 2,106.04 $ 18,954.36 $ 50.00 $ 450.00 $ 3,065.74 $ 27,591.66 $ 50.00 $ 450.00 $ 3,163.74 $ 28,473.66 $ 50.00 $ 450.00 $ 3,207.35 $ 28,866.15 $ 50.00 $ 450.00 $ 1,970.42 $ 17,733.78 $ 50.00 $ 450.00 $ 1,368.59 $ 12,317.31 $ - $ - $ 1,368.59 $ 12,317.31 $ 50.00 $ 450.00 $ 5,838.12 $ 52,543.08 $ 50.00 $ 450.00 $ 7,460.01 $ 67,140.09 $ 50.00 $ 450.00 $ 272.01 $ 2,448.09 $ 1,825.54 $ 16,429.86 $ 50.00 $ 450.00 $ 7,974.81 $ 71,773.29 $ 50.00 $ 450.00 $ 2,455.50 $ 22,099.50 $ 50.00 $ 450.00 $ 783.15 $ 7,048.35 $ 50.00 $ 450.00 $ 3,300.45 $ 29,704.05 $ 50.00 $ 450.00 $ 1,182.26 $ 10,640.34 $ 2,046.48 $ 18,418.32 $ 50.00 $ 450.00 $ 3,692.85 $ 33,235.65 $ 50.00 $ 50.00 $ 1,694.79 $ 15,253.11 $ 50.00 $ 450.00 $ 2,305.29 $ 20,747.61 $ 50.00 $ 450.00 $ 4,198.15 $ 37,783.35 $ 50.00 $ 450.00 $ 405.75 $ 3,651.75 $ 50.00 $ 450.00 $ 2,322.67 $ 20,904.03 $ 50.00 $ 450.00 $ 1,525.07 $ 13,725.63 $ - $ - $ 1,754.44 $ 15,789.96 $ 50.00 $ 450.00 $ 1,601.37 $ 14,412.33 $ 50.00 $ 450.00 $ 2,231.07 $ 20,079.63 $ 50.00 $ 450.00 $ 1,669.37 $ 15,024.33 $ 50.00 $ 450.00 $ 4,263.24 $ 38,369.16 $ 50.00 $ 450.00 $ 587.09 $ 5,283.81 $ - $ - $ 3,216.13 $ 28,945.17 $ - $ 442.89 $ 3,986.01 $ - $ 3,117.36 $ 28,056.24 $ 50.00 $ 450.00 $ 4,880.07 $ 43,920.63 $ 50.00 $ 450.00 $ 2,721.40 $ 24,492.60 $ 50.00 $ 450.00 $ 2,063.93 $ 18,575.37 $ 50.00 $ 450.00 $ 6,947.05 $ 62,523.45 $ 50.00 $ 450.00 $ 948.76 $ 8,538.84 $ - $ - $ 2,539.66 $ 22,856.94 $ 50.00 $ 450.00 $ 1,766.83 $ 15,901.47 $ 50.00 $ 450.00 $ 1,580.93 $ 14,228.37 $ 50.00 $ 450.00 $ 125,204.92 $ 1,126,844.28 $1,950.00 $ 17,150.00 $ - POLICE PENSION FUND 10 10 10 1 Policemen's Penosion Meeting October 2015 6800-9800 6800-9800 July 16, 2015 Month 10 Regular Mo 5335-00 5335-05 Page 27 of 78 10 EMP# NAME Benefit YTD Reg Benefit Suppl. YTD Suppl. Future Supple 154 ALLEN, CHARLES $ 2,584.64 $ 25,846.40 $ 50.00 $ 500.00 206 BAYLES, BOBBI J $ 1,587.41 $ 15,874.10 $ 50.00 $ 500.00 216 BLACK, MILDRED $ 1,125.64 $ 11,256.40 $ 50.00 $ 500.00 147 BRADLEY, GERALD $ 4,820.09 $ 48,200.90 $ 50.00 $ 500.00 139 BRADLEY, RANDALL $ 2,860.17 $ 28,601.70 $ 50.00 $ 500.00 167 BROWN, JOHN $ 4,362.01 $ 43,620.10 $ 50.00 $ 500.00 157 CARROLL,RONALD L $ 2,106.04 $ 21,060.40 $ 50.00 $ 500.00 151 COLE, RUSTON $ 3,065.74 $ 30,657.40 $ 50.00 $ 500.00 160 DUGGER,GARY $ 3,163.74 $ 31,637.40 $ 50.00 $ 500.00 140 FOSTER, BILLY D. $ 3,207.35 $ 32,073.50 $ 50.00 $ 500.00 148 FRIEND, JERRY $ 1,970.42 $ 19,704.20 $ 50.00 $ 500.00 161 HANNA, JANICE $ 1,368.59 $ 13,685.90 $ - $ - 145 HANNA, MARK $ 1,368.59 $ 13,685.90 $ 50.00 $ 500.00 169 HELDER, TIM $ 5,838.12 $ 58,381.20 $ 50.00 $ 500.00 180 HOYT, RICK $ 7,460.01 $ 74,600.10 $ 50.00 $ 500.00 180 HOYT, RICK Plus 25 add pay $ 272.01 $ 2,720.10 146 HUTCHENS, BERNICE $ 1,825.54 $ 18,255.40 $ 50.00 $ 500.00 194 JOHNSON, FRANK $ 7,974.81 $ 79,748.10 $ 50.00 $ 500.00 215 JOHNSON, JOYCE $ 2,455.50 $ 24,555.00 $ 50.00 $ 500.00 103 JOHNSON, WENDELL $ 783.15 $ 7,831.50 $ 50.00 $ 500.00 118 JONES, BOB $ 3,300.45 $ 33,004.50 $ 50.00 $ 500.00 211 JONES, MICHELE $ 1,182.26 $ 11,822.60 144 KILGORE, DONALD $ 2,046.48 $ 20,464.80 $ 50.00 $ 500.00 218 MARTIN, CONNIE $ 3,692.85 $ 36,928.50 $ 50.00 $ 50.00 128 MCCAWLEY, LARRY $ 1,694.79 $ 16,947.90 $ 50.00 $ 500.00 136 MITCHELL, MICHAEL $ 2,305.29 $ 23,052.90 $ 50.00 $ 500.00 158 MUNSON,ANGELA $ 4,198.15 $ 41,981.50 $ 50.00 $ 500.00 112 MURPHY, JAKE $ 405.75 $ 4,057.50 $ 50.00 $ 500.00 137 PERDUE, LARRY $ 2,322.67 $ 23,226.70 $ 50.00 $ 500.00 164 PERSHALL, ROBIN $ 1,525.07 $ 15,250.70 $ - $ - 132 PHILLIPS, HOMER GENE $ 1,754.44 $ 17,544.40 $ 50.00 $ 500.00 199 PRESTON, NORMA J $ 1,601.37 $ 16,013.70 $ 50.00 $ 500.00 135 RICKMAN, LOREN $ 2,231.07 $ 22,310.70 $ 50.00 $ 500.00 214 RIGGINS, BONNIE $ 1,669.37 $ 16,693.70 $ 50.00 $ 500.00 183 ROBERTS, ELDON $ 4,263.24 $ 42,632.40 $ 50.00 $ 500.00 183 ROBERTS, ELDON Plus 25 add pay $ 587.09 $ 5,870.90 $ - $ - 212 ROBERTS, CAROLYN K $ 3,216.13 $ 32,161.30 $ - 212 ROBERTS, CAROLYN K Plus 25 add pay $ 442.89 $ 4,428.90 $ - 159 SCHUSTER,JOHN H. $ 3,117.36 $ 31,173.60 $ 50.00 $ 500.00 168 STANLEY, MELVIN $ 4,880.07 $ 48,800.70 $ 50.00 $ 500.00 133 SURLES, JERRY $ 2,721.40 $ 27,214.00 $ 50.00 $ 500.00 142 TAYLOR, DENNIS $ 2,063.93 $ 20,639.30 $ 50.00 $ 500.00 163 WATSON, RICHARD $ 6,947.05 $ 69,470.50 $ 50.00 $ 500.00 163 Watson, Richard Plus 25 Add'I Pay $ 948.76 $ 9,487.60 $ - $ - 149 WILLIAMS, JOYCE $ 2,539.66 $ 25,396.60 $ 50.00 $ 500.00 195 WITT, BETTY J $ 1,766.83 $ 17,668.30 $ 50.00 $ 500.00 213 WOOD, RUTHIE $ 1,580.93 $ 15,809.30 $ 50.00 $ 500.00 $ 125,204.92 $ 1,252,049.20 $1,950.00 $ 19,050.00 $ - Policemen's Pension Meeting July 16, 2015 Page 28 of 78 Police Pension Fund Revenue Expense Summary Book Value Total Reserve Assets' $ 6,389,748.27 $ 6,653,793.10 $ 6,682,459.70 $ 7,081,891.04 $ 7,468,021.86 $ 7,785,041.00 $ 7,950,215.00 $ 8,398,199.00 $ 9,880,601.00 $ 10,104,083.00 Market Value Total Reserve Assets" $ 6,740,291.56 $ 7,030,014.20 $ 7,443,057.63 $ 7,689,491.43 $ 8,168,105.82 $ 8,555,897.00 $ 8,360,804.00 $ 8,046,356.00 $ 10,819,789.00 $ 10,891,530.00 'Assets less any liabilities Market Value calculated at year end 7/7/2015 K:\Police Pension\Revenue 8 Expense Summary\2015 PP Revenue Expense Summary\Revenue and Expense Report 033115 Policemen's Pension Meeting 3/31/2015 2014 2013 2012 2011 2010 2D09 2008 2007 July 16FM5 Revenues: Five 29 0 7 Employee Contributions $ - $ - $ - $ - $ - $ - $ - $ - $ - d, 139.00 Employer Contributions $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 8,278.00 State Insurance Tax $ - $ 152,519.00 $ 142,151.31 $ 138,410.77 $ 205,694.53 $ 213,357.83 $ 214,429.30 $ 186,429.42 $ 190,192.00 $ 226,826.00 Local Millage (A mills) $ 25,008.36 $ 525,620.07 $ 494,749.58 $ 511,961.22 $ 498,380.57 $ 508,192.07 $ 485,345.06 $ 441,696.50 $ 388,877.00 $ 370,649.00 10% City Fines and Forfeitures $ 34,388.47 $ 101,595.92 $ 112,992.59 $ 125,274.87 $ 126,045.40 $ 130,723.07 $ 123,653.64 $ 131,583.83 $ 106,385.00 $ 119,147.00 Sale of Confiscated Goods $ 727.22 $ 5,367.25 $ 1,898.28 $ 3,491.81 $ 5,026.40 $ 5,487.59 $ 9,732.16 $ 7,715.61 $ 10,806.00 $ 6,343.00 Interest and Dividends $ 40,702.17 $ 250,152.16 $ 263,480.49 $ 285,514.18 $ 263,520.02 $ 267,714.80 $ 256,907.42 $ 359,998.26 $ 356,699.00 $ 373,776.00 Gain (Loss) on Sales $ 25,467.15 $ 513,762.17 $ 160,066.59 $ 168,288.38 $ 209,001.15 $ 362,318.64 $ 153,193.23 $ (885,460.76) $ 395,378.00 $ 420,298.00 Police Supplement $ 11,700.00 $ 37,200.00 $ 37,800.00 $ 39,900.00 $ 40,500.00 $ 42,000.00 $ 31,200.00 $ 30,000.00 $ 30,000.00 $ 30,300.00 Future Supplement $ - $ 44,280.00 $ 46,62D.00 $ 55,575.00 $ 36,450.00 $ 26,061.50 $ 38,350.D0 $ 41,370.00 $ 86,040.00 $ 60,060.00 Mise Revenue $ 2.00 $ - $ 195.77 $ 53.39 $ 1134.60 $ 1,561.27 $ 5,757.99 $ 161.46 $ 907.00 $ 1,126.00 Total Revenue $ 137,995.37 $ 1,630,496.57 $ 1,259,954.61 $ 1,328,469.62 $ 1,384,722.67 $ 1,557,416.77 $ 1,318,568.80 $ 313,494.32 $ 1,565,284.00 $ 1,620,942.00 Expenditures Regular Monthly Benefits $ 375,614.76 $ 1,533,945.72 $ 1,535,372.30 $ 1,551,087.50 $ 1,564,986.62 $ 1,582,900.00 $ 1,628,521.36 $ 1,638,067.76 $ 1,581,319.00 $ 1,456,466.00 Police Supplement $ 5,850.00 $ 24,550.00 $ 24,650.00 $ 25,500.00 $ 26,400.00 $ 27,250.00 $ 29,300.00 $ 30,000.00 $ 30,000.00 $ 29,600.00 Future Supplement $ - $ 44,280.00 $ 45,510.00 $ 51,870.00 $ 35,640.00 $ 24,952.50 $ 36,816.00 $ 41,370.00 $ 86,040.00 $ 60,060.00 Investment Manager Fees $ 8,858.00 $ 56,395.86 $ 66,240.45 $ 69,500.53 $ 71,050.23 $ 70,369.02 $ 68,150.57 $ 82,754.75 $ 87,712.00 $ - 86,243.00 Other Expenses: $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Office Supplies/printing $ - $ 51.52 $ 56.81 $ 46.20 $ - $ - $ 84.00 $ - $ - $ - Audit Fees $ - $ 3,500.00 $ 3,400.00 $ 3,600.00 $ 3,500.00 $ 3,500.00 $ 3,500.00 $ 3,500.00 $ 3,500.00 $ 3,300.00 Professional Services $ - $ 103.75 $ - $ - $ - $ - $ - $ - $ - $ - Legal Fees $ - $ - $ - $ - $ - $ - $ - $ - $ 1,025.00 Bank Fees $ 17.44 $ 77.18 $ 99.10 $ 89.83 $ 164.48 $ 119.34 $ 161.69 $ 203.21 $ 195.00 $ 156.00 Total Expenses $ 390,340.20 $ 1,662,904.03 $ 1,675,328.66 $ 1,701,694.06 $ 1,701,741.33 $ 1,709,090.86 $ 1,766,553.62 $ 1,795,895.72 $ 1,788,766.00 $ 1,636,850.00 Net Income (Loss) Before Market Adj"` $ (252,344.83) $ (32,407.46) $ (415,374.05) $ (373,224.44) $ (317,018.66) $ (151,674.09) $ (447,984.82) $ (1,482,401.40) $ (223,482.00) $ (15,908.00) Market Adjustment $ - $ (355,917.05) $ 95,442.84 $ (13,498.87) $ (687.82) $ 360,267.86 $ 762,432.96 $ (1,291,031.77) $ 151,740.00 $ 344,973.00 Net Income (Loss) $ (252,344.83) $ (388,324.51) $ (319,931.21) $ (386,723.31) $ (317,706.48) $ 208,593.77 $ 314,448.14 $ (2,773,433.17) $ (71,742.00) $ 329,065.00 Book Value Total Reserve Assets' $ 6,389,748.27 $ 6,653,793.10 $ 6,682,459.70 $ 7,081,891.04 $ 7,468,021.86 $ 7,785,041.00 $ 7,950,215.00 $ 8,398,199.00 $ 9,880,601.00 $ 10,104,083.00 Market Value Total Reserve Assets" $ 6,740,291.56 $ 7,030,014.20 $ 7,443,057.63 $ 7,689,491.43 $ 8,168,105.82 $ 8,555,897.00 $ 8,360,804.00 $ 8,046,356.00 $ 10,819,789.00 $ 10,891,530.00 'Assets less any liabilities Market Value calculated at year end 7/7/2015 K:\Police Pension\Revenue 8 Expense Summary\2015 PP Revenue Expense Summary\Revenue and Expense Report 033115 Book Value Total Reserve Assets * $ 6,373,437.93 $ 6,653,793.10 $ 6,682,459.70 $ 7,081,891.04 $ 7,468,021.86 $ 7,785,041.00 $ 7,950,215.00 $ 8,398,199.00 $ 9,880,601.00 $ 10,104,083.00 Market Value Total Reserve Assets * $ 6,498,639.03 $ 7,030,014.20 $ 7,443,057.63 $ 7,689,491.43 $ 8,158,105.82 $ 8,555,897.00 $ 8,360,804.00 $ 8,046,356.00 $ 10,819,789.00 $ 10,891,530.00 "Assets less any liabilities Market Value calculated at year end 7/15/2015 K:\Police Pension\Revenue & Expense Summary\2015 PP Revenue Expense Summary\Revenue and Expense Report 063015 Police Pension Fund Revenue Expense Summary Policemen's Pension Meeting 6/30/2015 2014 2013 2012 2011 2010 2009 2008 2007 July 162A915 Revenues: Page 30 of 78 Employee Contributions $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 4,139.00 Employer Contributions $ - $ - $ - $ - $ - $ - $ - $ - $ - $ 8,278.00 Stale Insurance Tax $ - $ 152,519.00 $ 142,151.31 $ 138,410.77 $ 205,694.53 $ 213,357.83 $ 214,429.30 $ 186,429.42 $ 190,192.00 $ 226,826.00 Local Millage (A mills) $ 224,365.65 $ 525,620.07 $ 494,749.58 $ 511,961.22 $ 498,380.57 $ 508,192.07 $ 485,345.06 $ 441,696.50 $ 388,877.00 $ 370,649.00 10% City Fines and Forfeitures $ 64,276.75 $ 101,595.92 $ 112,992.59 $ 125,274.87 $ 126,045.40 $ 130,723.07 $ 123,653.64 $ 131,583.83 $ 106,385.00 $ 119,147.00 Sale of Confiscated Goods $ 1,717.86 $ 5,367.25 $ 1,898.28 $ 3,491.81 $ 5,026.40 $ 5,487.59 $ 9,732.16 $ 7,715.61 $ 10,806.00 $ 6,343.00 Interest and Dividends $ 87,245.32 $ 250,152.16 $ 263,480.49 $ 285,514.18 $ 263,520.02 $ 267,714.80 $ 256,907.42 $ 359,998.26 $ 356,699.00 $ 373,776.00 Gain (Loss) on Sales $ 122,520.56 $ 513,762.17 $ 160,066.59 $ 168,288.38 $ 209,001.15 $ 362,318.64 $ 153,193.23 $ (885,460.76) $ 395,378.00 $ 420,298.00 Police Supplement $ 11,700.00 $ 37,200.00 $ 37,800.00 $ 39,900.00 $ 40,500.00 $ 42,000.00 $ 31,200.00 $ 30,000.00 $ 30,000.00 $ 30,300.00 Future Supplement $ - $ 44,280.00 $ 46,620.00 $ 55,575.00 $ 36,450.00 $ 26,061.50 $ 38,350.00 $ 41,370.00 $ 86,040.00 $ 60,060.00 Misc Revenue $ 2.00 $ - $ 195.77 $ 53.39 $ 104.60 $ 1,561.27 $ 5,757.99 $ 161.46 $ 907.00 $ 1,126.00 Total Revenue $ 511,828.14 $ 1,630,496.57 $ 1,259,954.61 $ 1,328,469.62 $ 1,384,722.67 $ 1,557,416.77 $ 1,318,568.80 $ 313,494.32 $ 1,565,284.00 $ 1,620,942.00 Expenditures Regular Monthly Benefits $ 751,229.52 $ 1,533,945.72 $ 1,535,372.30 $ 1,551,087.50 $ 1,564,986.62 $ 1,582,900.00 $ 1,628,521.36 $ 1,638,067.76 $ 1,581,319.00 $ 1,456,466.00 Police Supplement $ 11,700.00 $ 24,550.00 $ 24,650.00 $ 25,500.00 $ 26,400.00 $ 27,250.00 $ 29,300.00 $ 30,000.00 $ 30,000.00 $ 29,600.00 Future Supplement $ - $ 44,280.00 $ 45,510.00 $ 51,870.00 $ 35,640.00 $ 24,952.50 $ 36,816.00 $ 41,370.00 $ 86,040.00 $ 60,060.00 Investment Manager Fees $ 17,524.02 $ 56,395.86 $ 66,240.45 $ 69,500.53 $ 71,050.23 $ 70,369.02 $ 68,150.57 $ 82,754.75 $ 87,712.00 $ 86,243.00 Other Expenses: $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - Offce Supplies/printing $ - $ 51.52 $ 56.81 $ 46.20 $ - $ - $ 84.00 $ - $ - $ - Audit Fees $ - $ 3,500.00 $ 3,400.00 $ 3,600.00 $ 3,500.00 $ 3,500.00 $ 3,500.00 $ 3,500.00 $ 3,500.00 $ 3,300.00 Professional Services $ - $ 103.75 $ - $ - $ - $ - $ - $ - $ - $ - Legal Fees $ - $ - $ - $ - $ - $ - $ - $ - $ 1,025.00 Bank Fees $ 29.77 $ 77.18 $ 99.10 $ 89.83 $ 164.48 $ 119.34 $ 181.69 $ 203.21 $ 195.00 $ 156.00 Total Expenses $ 780,483.31 $ 1,662,904.03 $ 1,675,328.66 $ 1,701,694.06 $ 1,701,741.33 $ 1,709,090.86 $ 1,766,553.62 $ 1,795,895.72 $ 1,788,766.00 $ 1,636,850.00 Net Income (Loss) Before Market Adj *** $ (268,655.17) $ (32,407.46) $ (415,374.05) $ (373,224.44) $ (317,018.66) $ (151,674.09) $ (447,984.82) $ (1,482,401.40) $ (223,482.00) $ (15,908.00) Market Adjustment $ - $ (355,917.05) $ 95,442.84 $ (13,498.87) $ (687.82) $ 360,267.86 $ 762,432.96 $ (1,291,031.77) $ 151,740.00 $ 344,973.00 Net Income (Loss) $ (268,655.17) $ (388,324.51) $ (319,931.21) $ (386,723.31) $ (317,706.48) $ 208,593.77 $ 314,448.14 $ (2,773,433.17) $ (71,742.00) $ 329,065.00 Book Value Total Reserve Assets * $ 6,373,437.93 $ 6,653,793.10 $ 6,682,459.70 $ 7,081,891.04 $ 7,468,021.86 $ 7,785,041.00 $ 7,950,215.00 $ 8,398,199.00 $ 9,880,601.00 $ 10,104,083.00 Market Value Total Reserve Assets * $ 6,498,639.03 $ 7,030,014.20 $ 7,443,057.63 $ 7,689,491.43 $ 8,158,105.82 $ 8,555,897.00 $ 8,360,804.00 $ 8,046,356.00 $ 10,819,789.00 $ 10,891,530.00 "Assets less any liabilities Market Value calculated at year end 7/15/2015 K:\Police Pension\Revenue & Expense Summary\2015 PP Revenue Expense Summary\Revenue and Expense Report 063015 Policemen's Pension Meeting July 16, 2015 Page 31 of 78 ARKANSAS FIRE & POLICE PENSION REVIEW BOARD 620 W. 3rd, Suite 200 Little Rock, Arkansas 72201-2223 Telephone: 501.682.1745 Toll -Free: 866.859.1745 Fax: 501.682.1751 email: info@lopfi-prb.com website: www.lopfi-prb.com To: Board of Trustees FAYETTEVILLE Police Pension Fund From: PRB Staff Re: 2014 Annual Actuarial Valuation Date: May 11, 2015 Under state law the actuary for the PRB tests each local fire and police pension fund for actuarial soundness. The PRB uses an annual valuation cycle to assist each Local Plan in monitoring the funding progress of their plan. The enclosed valuation for December 31, 2012, answers the following questions about your plan: YES NO Does income meet or exceed the Necessary XX Employer Contribution (see page 4)? 2. Is the funded percentage at least 97% (see page 10), OR are there enough assets to cover: all active member contributions; all payments to current beneficiaries; and 100% of all future payments earned by active members (see page 11)? XX Is the Local Plan actuarially sound? (YES response to items 1 and 2) XX Policemen's Pension Meeting July 16, 2015 Page 32 of 78 FAYETTEVILLE POLICE PENSION FUND ACTUARIAL VALUATION AS OF DECEMBER 31, 2014 Osborn, Carreiro & Associates, Inc. Actuaries Consultants Analysts Little Rock, Arkansas Osborn, Carreiro & Associates, Inc. ACTUARIES CONSULTANTS ANALYSTS May 8, 2015 Board of Trustees Fayetteville Police Pension Fund Gentlemen: Policemen's Pension Meeting July 16, 2015 Page 33 of 78 124 West Capitol Avenue, Suite 1690 Little Rock, Arkansas 72201 (501) 376-8043 This report presents the results of our actuarial valuation of the assets and liabilities of the Fayetteville Police Pension Fund as of December 31, 2014. This valuation is required by Arkansas Code Annotated 24-11-205. The purpose of this report is to (1) evaluate the actuarial status of the Fund, (2) determine the level contribution requirement needed, (3) review the development of the Fund over the past several years, and (4) present certain actuarial items on page 9 for disclosure under Governmental Accounting Standards. This report is not intended for any other purpose. The Arkansas Fire & Police Pension Review Board reviewed the experience study we performed and a change in the assumed interest discount rate was made to 5%. If your plan assumed something other than 5% in previous valuations, the effect of this change in assumption is disclosed on page 5 of this report. The implementation of Government Accounting Standards Board Statement No. 67 (GASB 67) is included in this report for the first time. GASB 68 will be added for the next valuation. There are four Appendices added to this report to disclose the necessary items for GASB 67. The member and financial information used in this report was supplied by the Arkansas Fire & Police Pension Review Board. We did not audit this information, although we did review it for reasonableness and consistency. I certify that this report has been prepared in accordance with generally accepted actuarial principles and practices. In my opinion, the actuarial methods used are appropriate and the actuarial assumptions produce results which, in the aggregate, are reasonable. Sincerely/, Jody Carreiro, A.S.A., M.A.A.A. Actuary Policemen's Pension Meeting July 16, 2015 Page 34 of 78 TABLE OF CONTENTS EXHIBIT 1 CONTRIBUTIONS EXHIBIT 2 COST AND LIABILITIES EXHIBIT 3 SUMMARY OF FINANCIAL INFORMATION EXHIBIT 4 COMPARISON WITH PRIOR YEARS EXHIBIT 5 SHORT CONDITION TEST EXHIBIT 6 EMPLOYEE AND RETIREE PROFILES EXHIBIT 7 PRINCIPLE PROVISIONS OF THE PLAN EXHIBIT 8 ACTUARIAL METHODS AND ASSUMPTIONS APPENDIX I DISSCUSSION OF GASB 67 APPENDIX 2 NOTES TO THE FINANCIAL STATEMENTS APPENDIX 3 REQUIRED SUPPLEMENTARY INFORMATION APPENDIX 4 CALCULATION OF SINGLE DISCOUNT RATE 3 Policemen's Pension Meeting July 16, 2015 Page 35 of 78 EXHIBIT 1 CONTRIBUTIONS The following contribution level reflects the payment of the current year Normal Cost for benefits attributable to said year (see Exhibit 2) plus an amount sufficient to pay off the Unfunded Actuarial Liability over a 5 -year period. These costs DO NOT include the contributions due to the Local Police and Firefighters Retirement System ("LOPFI") for persons hired after 1982. 2015 Necessary Annual Contribution to pay: 1 Normal Cost, plus 2 Pay off the Unfunded Actuarial Accrued Liability 3 Total necessary Less 4 Expected Employee Contribution (6.00% of salary) Necessary Employer Contribution (This is the amount needed in addition to investment income) Covered Payroll Necessary Employer Rate $ 0 2,950,140 $ 2,950,140 0 $ 2,950,140 $ 0 0.00% The contributions are assumed to be made continuously throughout the year. The actual 2014 contribution was $782,624 from the employer. 4 Policemen's Pension Meeting July 16, 2015 Page 36 of 78 EXHIBIT 2 COSTS AND LIABILITIES 5 December 31.2014 A Normal Cost Dollar Percent (Cost to fund current active members) Amount of pay 1 Regular Retirement Benefits $ 0 0.00% 2 Voluntary Termination Benefits 0 0.00% 3 Survivors' Benefits 0 0.00% 4 Disability Benefits 0 0.00% TOTAL $ 0 0.00% B Actuarial Accrued Liability 1 Active Lives Regular Retirement Benefits $ 0 Voluntary Termination Benefits 0 Survivors' Benefits 0 Disability Benefits 0 TOTAL ACTIVE LIVES $ 0 2 Inactive Lives Retirees $ 14,463,340 Disability Retirees 2,712,594 Widows & Children 2,504,520 TOTAL INACTIVE LIVES $ 19,680,454 3 Total Liability $ 19,680,454 C Assets $ 6,596,365 D Unfunded Actuarial Accrued Liability $ 13,084,089 5 Policemen's Pension Meeting July 16, 2015 Page 37 of 78 EXHIBIT 3 SUMMARY OF FINANCIAL INFORMATION (Items C, F -H, and I determined by Osborn, Carreim and Associates, Inc.) 6 Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended A. INCOME 12/31/2014 12/31/2013 12/312012 12/312011 12/312010 12/312009 12/312008 12/312007 121312006 12/312005 I Employee Contributions $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 4,139 $ 5,193 2 Emplaver Contributions Employer/Gaon Fines/Other 106,536 127,094 128,767 131,071 136,210 133,386 139,299 117,191 133,768 137,338 Local Mdlage 523,569 527,430 511,961 498,381 508,192 485,345 441,697 388,877 370,649 339,416 3 State Insurance Premium Tax Premium Tax Allocation 120,410 117,370 103,808 205,695 213,358 214,429 186,429 190,192 226,826 353,271 Additional Allocation 32,109 24,781 34,603 0 0 0 0 0 0 0 Guarantee Fund 0 0 0 0 0 0 0 0 0 0 4 Other Income LOPFI Subsidy 0 0 0 0 0 0 0 0 0 0 Police Supplement (Act 1452 of 199 25,500 25,200 27,300 27,600 28,500 31,200 30,000 30,000 30,000 31,275 Future Supplement (Act 1373 of200 44,280 46,620 55,575 36,450 26,062 38,350 41,370 86,040 60,060 51,199 Other lncome/Donations 427 196 53 0 1,561 5,758 161 907 1,427 2,401 Adjustment to prior year value 0 0 0 0 0 0 0 0 0 0 5 Net inveshnem Income 707,518 357,307 384,301 401,576 559,665 341,867 (608,217) 664,365 707,831 492,771 TOTALINCOME S 1,560,349 $ 1,225,998 S 1,246,368 S 1,300,773 $ 1,473,548 $ 1,250,335 $ 230,739 S 1,477,572 $ 1,534,700 $ 1,412,864 B. EXPENSES 1 Administrative $ 3,732 $ 3,556 $ 3,736 $ 3,671 $ 3,619 $ 3,682 $ 3,703 $ 3,695 $ 4,481 $ 5,366 2 Benefits Paid Monthly Benefits 1,533,946 1,535,372 1,551,087 1,564,987 1,582,900 1,628,521 1,638,068 1,581,319 1,456,466 1,362,068 Police Supplements 24,550 24,650 25,500 26,400 27,250 29,300 30,000 30,000 29,600 29,800 Future Supplements 44,280 45,510 51,870 35,640 24,953 36,816 41,370 86,040 60,060 48,245 DROP Payouts 0 0 0 0 0 0 0 0 0 0 Paid Cutsent Year for Previous Year 0 0 0 0 0 0 0 0 0 0 3 Refunds 0 0 0 0 0 0 0 0 0 0 4 Ocher Expenses 0 0 0 0 0 0 0 0 0 0 TOTAL EXPENSES S 1,606,508 $ 1,609,088 $ 1,632,193 $ 1,630,698 $ 1,638,722 $ 1,698,319 S 1,713,141 $ 1,701,054 $ 1,550,607 $ 1A45,479 C. Non -Investment Cash Flow $ (753,677) $ (740,397) S (770,126) $ (731,501) $ (724,839) S (789,851) S (874,185) S (887,847) S (723,738) $ (525,386) 6 Policemen's Pension Meeting July 16, 2015 Page 38 of 78 EXHIBIT 3 (Continued) D. ASSETS (at book value) 12/312014 12/312013 12/312012 12/31/2011 12/31/2010 12/3111009 12/312008 12/312007 12/312006 12/312005 1 Cash & Checking Accounts $ 25,812 $ 4,403 $ 10,906 $ 19,643 $ 3,018 $ 0 $ 0 $ 0 $ 0 $ 0 2 Bank Deposits 0 0 0 0 0 2,932 1,818 5,952 1,260 18,524 3 Savings and Lcen Deposits 0 0 0 0 0 0 0 0 0 0 4 Other Cash Equivalents 429,234 167,633 116,827 109,154 212,637 91,470 882,635 503,276 272,024 13,795 5 US Gevt. Securities 1,148,919 1,258,389 1,352,185 1,279,004 1,586,099 1,963,872 2,455,193 4,049,437 4,395,290 4,559,937 6 Non -US Govt Securities 0 0 0 0 0 0 0 0 0 0 7 Mortgages 0 0 0 0 0 0 0 0 0 0 8 Corporate Bonds 950,077 883,239 1,443,125 1,324,587 922,200 1,024,106 401,276 258,140 381,729 482,122 9 Common Stocks 4,068,324 4,329,152 4,135,803 4,711,054 5,044,965 4,842,939 4,601,263 5,003,139 4,984,362 4,985,062 10 Other 29,375 55,985 23,044 24,574 29,622 38,696 71,029 75,657 84,418 75,850 tl Payables (11,700) (12,600) (12,600) (12,900) (13,500) (13,800) (15,015) (15,000) (15,000) (15,300) TOTAL ASSETS S 6,640,042 $ 6,686,201 $ 7,069,291 $ 7,455,116 $ 7,785,041 $ 7,950,215 $ 8,398,199 $ 9,880,601 S 10,104,083 $ 10,119,990 E. TOTAL MARKET VALUE S 7,136,238 5 7,538,314 S 7,825,962 $ 8,225,285 $ 8,555,897 $ 8,360,804 $ 8,046,356 $ 10,819,789 $ 10,891,530 $ 10,562,465 F. RATIO OF ASSETS TO ANNUAL EXPENSES Book Value Basis 4.1 4.2 4.3 4.6 4.8 4.7 4.9 5.8 6.5 7.0 Market Value Basis 4.4 4.7 4.8 5.0 5.2 4.9 4.7 6.4 7.0 7.3 G. RATIO OF ASSETS TO NON -INVESTMENT CASH OUTFLOW Book Value Basis g8 9.0 9.2 10.2 10.7 10.1 9.6 11.1 14.0 19.3 Markel Value Basis 9.5 10.2 10.2 11.2 11.8 10.6 9.2 12.2 15.0 20.1 H. SUMMARY OF NET INVESTMENT RETURNS Book Value Rate of Return 11.21% 5.33% 5.44% 5.41% 7.38% 4.27% -6.44% 6.88% 7.25% 4.98% 10 Year Average Return 5.08% Market Value Rate ofRaturn 4.91% 6.07% 4.73% 4.89% 1150% 14.43% -18.29% 7.81% 10.32% 1.22% 10 Year Average Return 4.37 Note: The assumed liability discount rate is 5%. Ifthe plan does not realise an investment return of 5% or more over the long term, the ultimate cost of the plan will be greater than the liabilities shown in this report. That is, the plan would need more money to meet its obligations. 7 EXHIBIT 3 (Continued) I. TOTAL MARKET VALUE 1. Market Value, end of year (Used for GASB calculations, page 9) 2. Market Value, beginning of year Policemen's Pension Meeting July 16, 2015 Page 39 of 78 12/31/2014 12/31/2013 12/31/2012 12/31/2011 12/31/201 7,136,238 7,538,314 7,825,962 8,225,285 8,555,897 7,538,314 7,825,962 8,225,285 8,555,897 8,360,804 J. DEVELOPMENT OF ACTUARIAL VALUE OF ASSETS 1. Actuarial Value of Assets, beginning of year 6,897,517 7,088,826 7,815,210 8,429,143 8,923,776 2. Non Investment Net Cash Flow (753,677) (740,397) (770,126) (731,501) (724,839) 3. Development of Investment Income (a) Total Market Investment Income (I14242) 351,602 452,749 370,803 400,889 919,932 (b) Assumed Rate for Immediate Recognition 5% 5% 5% 5% 5% (c) Amount for Immediate Recognition (JI x b) 344,876 354,441 390,761 421,457 446,189 (d) Amount for Phased In Recognition (a -c) 6,726 98,308 (19,958) (20,568) 473,743 (e) Phased In Recognition Current year: 20% of 3(d) 1,345 19,662 (3,992) (4,114) 94,749 First Prior Year 19,662 (3,992) (4,114) 94,749 88,341 Second Prior Year (3,992) (4,114) 94,749 88,341 (522,003) Third Prior Year (4,114) 94,749 88,341 (522,003) 39,138 Fourth Prior Year 94,749 88,341 (522,003) 39,138 83,792 Total Phased In Recognition 107,650 194,646 (347,018) (303,889) (215,983) (f) Actuarial Value Investment Income 452,526 549,088 43,742 117,568 230,205 ( 3(c) + 3(e) ) 4. Actuarial Value of Assets, End of year ( l +2+3(f)) 6,596,365 6,897,517 7,088,826 7,815,210 8,429,143 5. Net Investment Return on the 6.9% 8.2% 0.60/. 1.5% 2.7% Actuarial Value of Assets Note: The Pension Review Board's Board Rule #I I fast applies this methodology to determine the Actuarial Value of Assets for the 12/31/99 actuarial valuation report Different methods were used to determine the Actuarial Value of Assets for the 12/31/98 and earlier reports. EXHIBIT 3 (Continued) ACCOUNTING INFORMATION Policemen's Pension Meeting July 16, 2015 Page 40 of 78 This page is included to provide the information required by the Governmental Accounting Standards Board Statement No. 25 and 27. The values below are based on the assumptions contained in Exhibit 8. The Annual Pension Cost disclosed in this exhibit will almost always differ from the actual cash contribution to the fund. We must emphasize that these disclosures are shown in the city's financial statements; Sound actuarial projections should be used to determine the actual cash contribution requirements. RECONCILIATION OF NET PENSION OBLIGATION (NPO) E 2012 2013 2014 1. Actuarially Required Contribution 2,944,130 2,919,366 2,872,624 2. Interest on NPO 361,595 406,393 441,216 3. Adjustment to (1) 1,630,615 1,832,634 1,989,666 4. Annual Pension Cost(1)+(2)-(3) 1,675,110 1,493,125 1,324,173 5. Actual Contribution Made 779,139 796,675 782,624 6. Increase in NPO (4)-(5) 895,971 696,450 541,550 7. NPO Beginning of Year 7,231,898 8,127,868 8,824,318 8. NPO End of Year 8,127,868 8,824,318 9,365,868 REQUIRED SUPPLEMENTARY INFORMATION (a) (b) (c) (d) (e) (f) (g) Unfunded Entry Age Accrued UAL as a % Actuarial Market Actuarial Liability Funded Annual of Covered Valuation Value of Accrued (UAL) Ratio Covered Payroll Date Plan Assets Liability (c) -(b) (b)/(c) Payroll (d)/(f) 12/31/2003 10,937,721 18,596,975 7,659,254 58.8% 219,008 3497.2% 12/31/2005 10,562,465 20,132,980 9,570,515 52.5% 70,279 13617.9% 12/31/2007 a 10,819,789 18,707,210 7,887,421 57.8% 0 N/A 12/31/2008 8,046,356 19,015,138 10,968,782 42.3% 0 N/A 12/31/2009 b 8,360,804 22,485,442 14,124,638 37.2% 0 N/A 12/31/2010 8,555,897 21,801,583 13,245,686 39.2% 0 N/A 12/31/2011. 8,225,285 21,282,718 13,057,433 38.6% 0 N/A 12/31/2012 7,825,962 20,773,565 12,947,603 37.7% 0 N/A 12/31/2013 c 7,538,314 20,278,614 12,740,300 37.2% 0 N/A 12/31/2014 7,136,238 19,680,454 12,544,216 36.3% 0 N/A a Includes change in assumptions to 7% discount rate and 83GAM mortality. b Includes change in assumptions to 5% discount rate and 83GAM mortality. c Includes change in assumptions to 5% discount rate and 83GAM mortality. E Policemen's Pension Meeting July 16, 2015 Page 41 of 78 EXHIBIT 4 COMPARISON WITH PRIOR YEARS 10 Full Paid Actuarial Computed Active Members Employer Contribution Total Plan Unfunded Normal Valuation Annual Percent Dollar Actuarial Cost Funded Date No. Payroll of Pay Amount Assets Liability Percent Percent 12/31/1984 38 691,245 32.9% 227,671 2,637,566 1,685,881 23.7% 61.0% 12/31/1986 29 604,566 35.5% 214,342 3,251,235 1,712,937 23.9% 65.5% 12/31/1987 * 28 666,941 37.8% 252,114 3,374,250 2,065,775 24.6% 62.0% 12/31/1989 25 634,711 38.8% 246,132 4,009,866 2,175,493 27.2% 64.8% 12/31/1991 24 675,900 35.9% 242,541 5,144,950 1,632,194 28.2% 75.9% 12/31/1993 17 536,070 37.2% 199,314 6,293,999 1,232,923 27.8% 83.6% 12/31/1995 * 15 518,643 37.5% 194,517 7,187,710 989,655 27.7% 87.9% 12/31/1997 12 491,422 15.1% 74,142 9,126,449 (255,946) 26.9% 102.9% 12/31/1999 * 11 482,457 175.7% 847,558 10,572,573 4,788,608 45.2% 68.8% 12/31/2001 7 384,312 252.4% 969,851 11,353,564 4,549,239 41.6% 71.4% 12/31/2003 * 3 219,008 0.0% 1,678,182 11,125,006 7,471,969 36.4% 59.8% 12/31/2005 * 1 70,279 0.0% 2,071,290 10,564,072 9,568,908 40.6% 52.5% 12/31/2007 * 0 0 0.0% 1,872,657 10,153,822 8,553,388 0.0% 54.3% 12/31/2008 0 0 0.0% 2,108,536 9,384,367 9,630,771 0.0% 49.4% 12/31/2009 0 0 0.0% 3,057,822 8,923,775 13,561,667 0.0% 39.7% 12/31/2010 * 0 0 0.0% 3,015,156 8,429,143 13,372,440 0.0% 38.7% 12/31/2011 0 0 0.0% 3,036,591 7,815,210 13,467,508 0.0% 36.7% 12/31/2012 0 0 0.0% 3,085,572 7,088,826 13,684,739 0.0% 34.1% 12/31/2013 0 0 0.0% 3,017,108 6,897,517 13,381,097 0.0% 34.0% 12/31/2014 0 0 0.0% 2,950,140 6,596,365 13,084,089 0.0% 33.5% * Benefits or assumptions changed 10 Policemen's Pension Meeting July 16, 2015 Page 42 of 78 EXHIBIT 5 SHORT CONDITION TEST The Arkansas General Assembly has stated that the funding objective for these plans is to pay for benefits with contributions that remain level as a percentage of employee payroll. Thus, the long- term condition test is met when the actual contributions are fairly level and are paid when due. A short condition test can be used to measure a plan's progress. Under the short condition test, the fund's assets are compared with: 1) Active member contributions; 2) The liabilities for future benefits to the present retirees and inactive members; 3) The liabilities for service already rendered by active members. If the plan has been following level cost funding, liability (1) and liability (2) above will almost always be fully covered by the rest of the present assets. In addition, liability (3) above will at least partially funded. The larger the funded portion of liability (3), the stronger the condition of the fund. For a closed fund i.e., one like yours, where no new members are admitted), the funded portion of liability (3) should be steadily increasing. The following table illustrates the history of the short condition test for this plan: Computed Actuarial Liabilities Portion of Liabilities (1) (2) (3) covered by Assets Active Retirees Actives - Valuation Members and Employer Valuation Date Contributions Inactives Financed Assets (1) (2) (3) 12/31/1984 186,492 2,220,660 1,916,295 2,637,566 100% 100% 12% 12/31/1986 200,487 2,982,120 1,781,565 3,251,235 100% 100% 4% 12/31/1987 229,457 3,095,232 2,115,336 3,374,250 100% 100% 2% 12/31/1989 266,726 3,719,388 2,199,245 4,009,866 100% 100% 1% 12/31/1991 336,940 3,674,180 2,766,024 5,144,950 100% 100% 41% 12/31/1993 299,612 4,834,716 2,392,594 6,293,999 100% 100% 48% 12/31/1995 319,728 5,358,162 2,499,475 7,187,710 100% 100% 60% 12/31/1997 317,594 5,944,842 2,608,067 9,126,449 100% 100% 110% 12/31/1999 347,267 10,047,770 4,966,144 10,572,573 100% 100% 4% 12/31/2001 291,291 11,488,981 4,122,531 11,353,564 100% 96% 0% 12/31/2003 155,251 16,072,819 2,368,905 11,125,006 100% 68% 0% 12/31/2005 50,523 19,314,460 767,997 10,564,072 100% 54% 0% 12/31/2007 0 18,707,210 0 10,153,822 100% 54% 0% 12/31/2008 0 19,015,138 0 9,384,367 100% 49% 0% 12/31/2009 0 22,485,442 0 8,923,775 100% 40% 0% 12/31/2010 0 21,801,583 0 8,429,143 100% 39% 0% 12/31/2011 0 21,282,718 0 7,815,210 100% 37% 0% 12/31/2012 0 20,773,565 0 7,088,826 100% 34% 0% 12/31/2013 0 20,278,614 0 6,897,517 100% 34% 0% 12/31/2014 0 19,680,454 0 6,596,365 100% 34% 0% 11 Policemen's Pension Meeting July 16, 2015 Page 43 of 78 EXHIBIT 6 Employee Profile Employee data needed for the valuation was obtained from the records famished by the Arkansas Fire and Police Pension Review Board. The following table shows a detailed breakdown of the present participants by the number of participants and total salary. Actives Years of Service 30 and Age 0-5 5-10 10-15 15-20 20-25 25-30 Over Total Under Count 0 0 0 0 0 0 0 ', 0 25 Salary 0 0 0 0 0 0 0 Q` 25-29 Count 0 0 0 0 0 0 0 Salary 0 0 0 0 0 0 0, 30-34 Count 0 0 0 0 0 0 0 '^0 Salary 0 0 0 0 0 0 0:' 35-39 Count 0 0 0 0 0 0 0 0-.. Salary 0 0 0 0 0 0 0 s a '. A` 40-44 Count 0 0 0 0 0 0 0.,." Salary 0 0 0 0 0 0 0 ". U 45-49 Count 0 0 0 0 0 0 0 Salary 0 0 0 0 0 0 0 50-54 Count 0 0 0 0 0 0 0 Salary 0 0 0 0 0 0 0 +Q 55-59 Count 0 0 0 0 0 0 0 ,�: " Salary 0 0 0 0 0 0 60-64 Count 0 0 0 0 0 0 0 Salary 0 0 0 0 0 0 0 0 65 & Count 0 0 0 0 0 0 0 A Over Salary 0 0 0 0 0 0 0., i 0� Unknown Count 0 0 0 0 0 0 0., Q, Age Salary 0 0 0 0 0 0 0 "' : V Total Count 00 Q 0 0` - ,:0,-' Salary 0, ? . Q..' 0 12 Policemen's Pension Meeting July 16, 2015 Page 44 of 78 EXHIBIT 6 Inactive Profile Employee data needed for the valuation was obtained from the records furnished by the Arkansas Fire and Police Pension Review Board. The following table shows a detailed breakdown of the present payees by the number of payees and total annual benefit. Retirees and Survivors Years Since Retirement 10 and n i i o 1_9 a -d d-5 5-10 Over Total Under Count 0 0 0 0 0 0 0 0 40 Benefit 0 0 0 0 0 0 0 0 40-44 Count 0 0 0 0 0 0 0 0 Benefit 0 0 0 0 0 0 0 0 45-49 Count 0 0 0 0 0 0 0 0 Benefit 0 0 0 0 0 0 0 -0 50-54 Count 0 0 0 0 0 0 1 1 Benefit 0 0 0 0 0 0 18,301 18,301 55-59 Count 0 0 0 0 0 1 9 -10 Benefit 0 0 0 0 0 95,698 293,461 389,159 60-64 Count 0 0 0 0 0 1 4 5 Benefit 0 0 0 0 0 92,784 138,675 231,459 65-69 Count 0 0 0 0 0 3 7 10 Benefit 0 0 0 0 0 102,113 256,552 358,665 70-74 Count 0 0 0 0 0 0 10 '.10 Benefit 0 0 0 0 0 0 238,589 238,589 75-79 Count 0 0 0 0 0 0 5 5. Benefit 0 0 0 0 0 0 203,956 203,956 80-84 Count 0 0 0 0 0 0 2 2 Benefit 0 0 0 0 0 0 43,357 43,357 85 & Count 0 0 0 0 0 0 1 1 Over Benefit 0 0 0 0 0 0 18,971 18,971 Unknown Count 0 0 0 0 0 0 0 0 Age Benefit 0 0 0 0 0 0 0 0 Total Count 0 0 0 0 0 5 39 44 Benefit 0 0 0 0 0 290,595 1,211,862 1,501,457. This includes 25 retirees with annual benefit of $1,029,935 . This includes 9 disableds with annual benefit of $234,382 . This includes 10 survivors with annual benefit of $238,140 . 13 Policemen's Pension Meeting July 16, 2015 Page 45 of 78 EXHIBIT 7 PRINCIPLE PROVISIONS OF THE PLAN EMPLOYEE Member of Police Department EMPLOYER Fayetteville Police Department MEMBERSHIP Condition of Employment. Police officers hired after 1982 must join the statewide Local Police and Firefighters Retirement System CREDITABLE SERVICE Determined on basis of service since employment CONTRIBUTIONS Employee 6% of salary. Refundable if member terminates before retirement eligibility. Emnlover 1. Matching contribution equal to employee contribution 2. State Insurance Premium Tax tumback 3. Local Millage 4. 10% of all fines & forfeitures collected by the Police Department. FINAL SALARY Highest salary for any continuous twelve-month period of time worked prior to retirement. RETIREMENT BENEFITS Eligibili1y 20 Years of Service regardless of age. Benefit 95% of Final Salary, but not less than $4,200. If service exceeds 20 years, the annual benefit is increased by $240 for each year over 20, up to $1,200/year extra. If service is more than 25 years, member receives an extra 1.25% (for each year over 25) of Final Salary, payable once the retiree reaches age 60. The benefit cannot exceed 100% of Final Salary. DEATH BENEFITS Eligibility Death of an active member or member receiving benefits. Benefit 1. Widow receives same amount as member is receiving or eligible to receive, excluding the 1.25% additional formula for service over 25 years. 2. Each child under age 18 (23 if still in school) receives $1,500/year. If no surviving spouse, children receive spouse's benefit to age 18. 3. If no widow or children, widowed mother receives $1,500/year. 14 Policemen's Pension Meeting July 16, 2015 Page 46 of 78 EXHIBIT 7 (Continued) DISABILITY BENEFITS Eli ibili Permanent physical or mental disability. Five year service requirement unless disability is incurred in the line of duty. Benefit Non -duty disability Retirement benefit but not less than $4,200/year. Duty related disability Retirement benefit but not less than 65% of Final Salary and not less than $4,200/year. 15 Policemen's Pension Meeting July 16, 2015 Page 47 of 78 EXHIBIT 8 ACTUARIAL METHODS AND ASSUMPTIONS The assumptions for this valuation have been selected in accordance with Actuarial Standards of Practice No. 27. The asset valuation method is prescribed in Arkansas Code Annotated 24-11-207. This prescribed asset valuation method directly impacts the investment return assumption. The assumed salary growth is restricted by A.C.A. 24-11-205 in relation to the investment return assumption. ACTUARIAL COST METHOD The "entry age normal' cost method has been used. PRE -RETIREMENT MORTALITY Deaths have been projected on the basis of the 1983 Group Annuity Table for Males, set back five years for females. Mortality rates at a few sample ages are: Age Mortality rate per 1.000 25 0.464 35 0.860 45 2.183 55 6.131 POST RETIREMENT MORTALITY The 1983 Group Annuity Mortality Table was used. For females, the male table was used with a five-year setback. The life expectancy according to this table is as follows: Age Males Females 55 24.87 29.23 65 16.74 20.68 MORTALITY BASIS AND PROJECTION The mortality assumptions do not include a projection for mortality improvement. These rates were chosen after an experience study for 2007-2012. No projection was deemed necessary at this time since the recent experience study did not show significant improvement over an experience study for 2000- 2006 deaths. The 1971 Group Annuity Table for Males, set back five years for females was used before the 12/31/2007 Valuation. VOLUNTARY TERMINATIONS Annual termination rates at a few sample ages are: Age Termination rate per 1.000 20 50 25 45 30 39 35 23 40 9 45 5 50 5 55 5 16 EXHIBIT 8 (Continued) Policemen's Pension Meeting July 16, 2015 Page 48 of 78 When a person had less than 4 years of service, we assumed that his chances of voluntary termination were a multiple of thereafter rates, with the following multiples being used: 1st year 2.85 2nd year 2.00 3rd year 1.50 4th year 1.15 ASSUMED DISCOUNT RATE 5.0% The reports for the valuations as of 12/31/2009 through 12/31/ 2012 were completed using an assumed discount rate of 5%. A study of the returns of all fire and police plans was made of the 2006-2012 experience. The components and variations of appropriate portfolios were also reviewed. The Pension Review Board determined that for comparison with previous years and with other similar plans that a single discount assumption of 5% should be used. DISABILITIES We continued the disability rates used in prior reports. Disability rates at a few sample ages are: Age Disability rate per 1.000 20 0.8 25 0.8 30 0.8 35 0.8 40 2.0 45 2.6 50 4.9 55 8.9 60 14.1 One third of the disabilities were assumed to be service related. For mortality after disability, we assumed rates based on the Eleventh Actuarial Valuation of the Railroad Retirement System, for occupational disabilities ASSET VALUATION See Exhibit 3, Part J 17 Policemen's Pension Meeting July 16, 2015 Page 49 of 78 EXHIBIT 8 (Continued) SALARY GROWTH We have used the salary scale used in prior reports. Annual assumed growth at a few sample ages is: ANNUAL SALARY INCREASE Age Base Merit Total 20 4.0% 4.0% 8.0% 25 4.0% 3.2% 7.2% 30 4.0% 2.8% 6.8% 35 4.0% 2.5% 6.5% 40 4.0% 2.2% 6.2% 45 4.0% 1.7% 5.7% 50 4.0% 1.2% 5.2% 55 4.0% 0.7% 4.7% 60 4.0% 0.2% 4.2% EXPECTED RETIREMENT PATTERN Since the plan allows full benefits at ages younger than the traditional "65", an assumption that will have an important impact is what percentage of people who are eligible for this early retirement will actually take advantage of it. This will depend on intangible things such as the economy, health, financial ability to retire, Social Security eligibility, and work patterns. Based on recent experience, we are using the following assumed rates: Retirement rate per 1.000 Age 40-44 200 45-50 250 51 250 52-58 250 59 250 60+ 1,000 Note: A member was assumed to be eligible for retirement after attaining age 40 with 20 years of service. It is also assumed that twice the normal number will retire in the first year of eligibility. 18 APPENDIX 1 Discussion of GASB 67 Accounting Standard Policemen's Pension Meeting July 16, 2015 Page 50 of 78 For pension plans that are administered through trusts or equivalent arrangements, Govermental Accounting Stands Board (GASB) Statement No. 67, "Financial Reporting for Pension Plans," (GASB 67) replaces Statements No. 25 and No. 50. GASB 67 establishes standards of financial reporting and specifies the required approach for measuring the pension liability of employers for benefits provided through the pension plan. This discussion provides a summary of the information that is required to be disclosed under GASB 67. A number of these disclosure items are provided in this report as noted. However, certain information, such as notes regarding accounting policies and investments, is not included in this report, and your internal staff will be responsible for preparing that information to fully comply with this accounting standard. Financial Statements GASB 67 requires defined benefit pension plans to present two financial statements: a statement of fiduciary plan net position and a statement of changes in fiduciary plan net position. Based on the information that was provided to our firm, we compiled the Financial Statements that are included in this report as Exhibit 3. Notes to Financial Statements Paragraph 30 of GASB 67 is an extensive list of notes to the plan's financial statements that are required to provide additional disclosure. Many of these notes concern the plan provisions and the actuarial assumptions used in making the calculations under this standard. Those items are included as Exhibits 7 and 8 in this report. Please note that several items mentioned in Paragraph 30 are beyond the scope of the included information. Your internal staff will be responsible for preparing those notes. This report includes some notes that are actuarial in nature and are written in the format we understand is desired by GASB 67. These notes are included as Appendix 2 of this report. These are only selected notes and not intended to be a complete compilation of notes to the financial statements. 19 Policemen's Pension Meeting July 16, 2015 Page 51 of 78 Required Supplementary Information GASB 67 requires a 10 -fiscal year history of various information about the pension liability. These schedules may be built prospectively since the presentation is not the same as all previous years under previous standards. The four schedules are: • Schedule of changes in the net pension liability. • Schedule of the components of net pension liability along with related ratios. • Comparison of actual employer contributions to the actuarially determined contributions based on the plan's funding policy. • Schedule of the annual money -weighted rate of return on pension plan investments. These compilations can be found in Appendix 4 of this report. Please note that the money - weighted rate of return schedule is based on all transactions occurring at mid -year. The standard calls for a monthly calculation of the weighted, but we do not have the data sufficient to make that calculation. Single Discount Rate Projected benefit payments are required to be discounted to actuarial present values using a single discount rate that reflects (1) a long-term expected rate of return on pension plan investments (to the extent that the plan's fiduciary net position is projected to be sufficient to pay benefits) and (2) a tax-exempt municipal bond rate based on an index of 20 -year general obligation bonds with an average AA credit rating as of the measurement date (to the extent that the plan's net position with contributions associated with current plan member and the long-term expected rate of return are not sufficient to pay benefits). For the purpose of this valuation, the expected rate of return on pension plan investments is 5.0%; the municipal bond rate is 4.29%; and the resulting single discount rate is 5.0%. The resulting demonstration of the single discount rate calculation is shown in Appendix 4. Valuation Date, Effective Date and Transition GASB 67 is effective for fiscal years beginning after June 15, 2013. Since the fiscal year under consideration for this report is 2014, the corresponding financial statement covers the fiscal year from January 1, 2014 to December 31, 2014. We understand that the plan fiscal year and the employer's fiscal year are the same. Therefore, the calculations included in this report are not projected and reflect the beginning and the end of the above stated fiscal year. RM Policemen's Pension Meeting July 16, 2015 Page 52 of 78 APPENDIX 2 Notes to the Financial Statements Cost of Living Adjustment (COLA) The board of trustees has the ability to make ad hoc cost of living adjustments (COLA) and other benefit improvements through a process that requires actuarial soundness and approval by the Pension Review Board. Therefore, in the opinion of the actuary, any increases are not substantively automatic, and no COLA is included in the determination of the Total Pension Liability. Long -Term Expected Return on Plan Assets The Long -Term Expected Rate of Return on pension plan investments was determined using a building block method in which best -estimate ranges of expected future real rates of return. The rates were built on a target allocation for all local police and fire pension funds, the target for an individual fund will vary within the guidelines of Arkansas law and regulation. The target allocation and the long-term expec rates of return are shown in the table below: Asset Class Target Allocation Long-term Expected Rate of Return Domestic Fixed Income 80% 5.0% International Fixed Income Domestic Equity 10% 7.8% Foreign Equity Cash 10% 2.0% Total 100% 5.0% Single Discount Rate A single discount rate of 5.0% was used to measure the Total Pension Liability. This single discount rate was based on the expected rate of return on pension plan investments of 5.0%. The projection of cash flows, based on the assumptions made, found that the pension plan's net position was available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the Total Pension Liability. Regarding the sensitivity of the Net Pension Liability to changes in the single discount rate, the follow presents the plan's net pension liability, calculated using a single discount rate of 5.0%, as well as what the plan's net pension liability would be if it were calculated using a single discount rate that is 1 -percentage point lower or 1 -percentage point higher: 1% Current Single 1% Decrease Rate Assumed Increase 4.00% 5.00% 6.00% Total Pension Liability 21,948,777 19,680,454 17,927,905 Net Pension Liability 14,812,539 12,544,216 10,791,667 21 Policemen's Pension Meeting July 16, 2015 Page 53 of 78 APPENDIX 3 Required Supplementary Information GASB 67 requires a 10 -fiscal year history of various information about the pension liability. These schedules may be built prospectively since the presentation is not the same as all previous years under previous standards. The four schedules are: • Schedule of changes in the net pension liability. • Schedule of the components of net pension liability along with related ratios. • Comparison of actual employer contributions to the actuarially determined contributions based on the plan's funding policy. • Schedule of the annual money -weighted rate of return on pension plan investments. Please note that the money -weighted rate of return schedule is based on all transactions occurring at mid -year. The standard calls for a monthly calculation of the weighted return, but we do not have the data sufficient to make that calculation. The actuarially determined contribution rate was not calculated in the fashion described historically. Therefore, that schedule will be completed prospectively. The schedules follow this page. 22 Fiscal Year ending December 31, Total Pension Liability Service Cost Interest Benefit Changes Difference between Actual & Expected Experience Assumption changes Benefit Payments Net Change in Total Pension Liability Total Pension Liability - Beginning Total Pension Liability - Ending Plan Fiduciary Net Position Contributions - Employee Contributions - Employer Net Investment Income Benefit Payments Administrative Expense Reconciliation Net Change in Plan Net Position Plan Fiduciary Net Position - Beginning Plan Fiduciary Net Position - Ending Plan Fiduciary Net Position as a Percentage of Total Pension Liability Covered Employee Payroll Net Pension Liability as a Percentage of Covered Employee Payroll Policemen's Pension Meeting July 16, 2015 Page 54 of 78 City of Fayetteville, Arkansas Police Pension Fund Schedules of Required Supplementary Information Schedule of Changes in the Employers' Net Pension Liability and Related Ratios 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 0 0 0 0 0 0 0 975,582 1,000,294 1,025,359 1,050,954 1,084,700 910,044 894,409 0 0 0 0 0 0 0 -39,796 40,127 16,575 -4,832 -185,659 145,511 1,051,587 0 0 0 0 0 4,043,270 0 -1,533,946 -1,535,372 -1,551,087 -1,564,987 -1,582,900 -1,628,521 -1,638,068 -598,160 -494,951 -509,153 -518,865 -683,859 3,470,304 307,928 19,680,454 20,278,614 20,773,565 21,282,718 21,801,583 22,485,442 19,015,138 0 0 0 0 0 0 0 782,624 796,675 779,139 835,147 859,321 838,918 767,586 349,246 451,049 372,625 399,228 918,672 1,104,051 -1,902,951 -1,533,946 -1,535,372 -1,551,087 -1,564,987 -1,582,900 -1,628,521 -1,638,068 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -402,076 -287,648 -399,323 -330,612 195,093 314,448 -2,773,433 7,538,314 7,825,962 8,225,285 8,555,897 8,360,804 8,046,356 10,819,789 7,136,238 7,538,314 7,825,962 8,225,285 8,555,897 8,360,804 8,046,356 36.26% 37.17% 37.67% 38.65% 0 0 0 0 N/A N/A N/A N/A 23 39.24°% 37.18% 42.32% 0 0 0 N/A N/A N/A Policemen's Pension Meeting July 16, 2015 Page 55 of 78 Appendix 3 — Continued City of Fayetteville, Arkansas Police Pension Fund Schedule of Required Supplementary Information Schedule of Net Pension Liability FY ending December 31, (TPL) Total Pension Liability Plan Net Position (NPL) Net Pension Liability Net Position as % of TPL Covered Payroll NPL as % of Payroll 12/31/2007 a 18,707,210 10,819,789 7,887,421 57.84% 0 N/A 12/31/2008 a 19,015,138 8,046,356 10,968,782 42.32% 0 N/A 12/31/2009 b 22,485,442 8,360,804 14,124,638 37.18% 0 N/A 12/31/2010 b 21,801,583 8,555,897 13,245,686 39.24% 0 N/A 12/31/2011 b 21,282,718 8,225,285 13,057,433 38.65% 0 N/A 12/31/2012 b 20,773,565 7,825,962 12,947,603 37.67% 0 N/A 12/31/2013 b 1 20,278,614 7,538,314 12,740,300 37.17% 0 N/A 12/31/2014 b 19,680,454 1 7,136,238 12,544,216 36.26% 0 1 N/A Note: a full 10 year schedule will be completed as information is available. a. 1983 GAM, 7.00% b. 1983 GAM, 5.00% 24 Policemen's Pension Meeting July 16, 2015 Page 56 of 78 Appendix 3 —Continued City of Fayetteville, Arkansas Police Pension Fund Schedule of Required Supplementary Information Schedule of Contributions FY ending December 31, Actuarially Determined Contribution Actual Contribution(Excess) Contribution Deficiency Covered Payroll Contribution as % of Payroll 2005 Market Value Investment rate of return 5.00% Mortality 1983 Group Annuity Mortality 2006 2007 2008 2009 2010 2011 2012 2,944,130 779,139 2,164,991 N/A N/A 2013 2,919,366 796,675 2,122,691 N/A N/A 2014 2,872,624 1 782,624 2,090,000 N/A N/A Key Assumptions for ADC: Cost Method Entry Age Normal Amortization Method Level dollar, open Remaining amortization 5 years Asset Valuation Market Value Investment rate of return 5.00% Mortality 1983 Group Annuity Mortality Note: a full 10 year schedule will be completed as information is available. 25 Policemen's Pension Meeting July 16, 2015 Page 57 of 78 Appendix 3 —Continued City of Fayetteville, Arkansas Police Pension Fund Schedule of Required Supplementary Information Schedule of Investment Returns FY ending December 31, Annual Money -weighted Rate of Return 2005 1.22% 2006 10.32% 2007 7.81% 2008 -18.29% 2009 14.43% 2010 11.50% 2011 4.89% 2012 4.73% 2013 6.07% 2014 4.91% The amounts shown are net of investment expenses. The actuary calculated these rates with the information that was provided, therefore, these rates are annual money -weighted. Monthly money -weighted returns are not available. OR Policemen's Pension Meeting July 16, 2015 Page 58 of 78 APPENDIX 4 Calculation of the Single Discount Rate GASB 67 includes a specific requirement for the discount rate that is used for the purpose of the measurement of the Total Pension Liability. This rate considers the ability of the fund to meet benefit obligations in the future. To make this determination, employer contributions, employee contributions, benefit payments, expenses and investment returns are projected into the future. The Plan Net Position (assets) in future years can then be projected and compared to the obligation to make benefit payments in those years. As long as assets are projected to be on hand in a future year, the assumed valuation discount rate is used. In years where assets are not projected to be sufficient to meet benefit payments, the use of a "risk-free" rate is required. The single discount rate is equivalent to applying these two rates to the benefits that are projected to be paid during the different time periods. For the purpose of this valuation, the expected rate of return on pension plan investments if 5.0%; the municipal bond rate is 4.29%; and the resulting single discount rate is 5.0%. The following tables are shown in this exhibit to provide the background for the development of the single discount rate: • Projection of Benefit Payments and Actuarially Determined Contributions • Projection of Contributions. Since this plan is frozen with no new participants, there are no expected contributions projected for new participants • Projection of Plan Fiduciary Net Position • Present Values of Projected Benefit Payments The Local Police and Fire Pension Funds do not have formal funding policies. They typically contribute the amounts required by law as outlined in Exhibit 7. For purposes of this projection, any millage amount is assumed to increase by 1% annually; the premium tax and additional allocation revenues, if any, are changed in proportion to the Net Pension Liability; all other sources are assumed to remain level. These projections are generated under the guidelines of GASB 67 and the related implementation guide. They should be used solely to determine the single discount rate as defined in the GASB statements. Any implication beyond that determination is beyond the scope of this report. 27 Year Policemen's Pension Meeting July 16, 2015 Page 59 of 78 28 City of Fayetteville, Arkansas Police Pension Fund Single Discount Rate Devleopment Projection of Benefit Payments Beginning January 1, 2015 Projected Projected Proiected Benefit Payments Net Pension Actuarially Current Current Liability at Determined Retirees DROP Actives Total Beg of Year Contribution 1 1,498,393 0 0 1,498,393 12,716,514 2,867,261 2 1,489,458 0 0 1,489,458 12,534,741 2,826,276 3 1,479,114 0 0 1,479,114 12,340,760 2,782,538 4 1,467,194 0 0 1,467,194 12,134,062 2,735,932 5 1,453,506 0 0 1,453,506 11,914,117 2,686,340 6 1,437,879 0 0 1,437,879 11,680,379 2,633,638 7 1,420,113 0 0 1,420,113 11,432,278 2,577,698 8 1,399,980 0 0 1,399,980 11,169,225 2,518,386 9 1,377,319 0 0 1,377,319 - 10,890,608 2,455,564 10 1,352,058 0 0 1,352,058 10,595,792 2,389,090 11 1,324,092 0 0 1,324,092 10,284,118 2,318,816 12 1,293,305 0 0 1,293,305 9,954,901 2,244,585 13 1,259,736 0 0 1,259,736 9,607,432 2,166,239 14 1,223,470 0 0 1,223,470 9,240,972 2,083,612 15 1,184,598 0 0 1,184,598 8,854,757 1,996,530 16 1,143,336 0 0 1,143,336 8,447,988 1,904,813 17 1,100,028 0 0 1,100,028 8,019,838 1,808,276 18 1,055,053 0 0 1,055,053 7,569,447 1,706,724 19 1,OD8,707 0 0 1,008,707 7,095,919 1,599,955 20 961,294 0 0 961,294 6,598,322 1,487,759 21 913,083 0 0 913,083 6,075,688 1,369,918 22 864,268 0 0 864,268 5,527,011 1,246,205 23 814,931 0 0 814,931 4,951,245 1,116,384 24 765,190 0 0 765,190 4,347,305 980,210 25 715,259 0 0 715,259 3,714,061 837,429 26 665,391 0 0 665,391 3,050,341 687,777 27 615,830 0 0 615,830 2,354,927 530,978 28 566,810 0 0 566,810 1,626,554 366,748 29 518,665 0 0 518,665 863,905 194,789 30 471,640 0 0 471,640 65,614 14,794 31 425,912 0 0 425,912 0 0 32 381,804 0 0 381,804 0 0 33 339,481 0 0 339,481 0 0 34 299,063 0 0 299,063 0 0 35 260,833 0 0 260,833 0 0 36 225,019 0 0 225,019 0 0 37 191,887 0 0 191,887 0 0 38 161,630 0 0 161,630 0 0 39 134,422 0 0 134,422 0 0 40 110,366 0 0 110,366 0 0 41 89,394 0 D 89,394 0 0 42 71,430 0 0 71,430 0 0 43 56,373 0 0 56,373 0 0 44 43,960 0 0 43,960 0 0 45 33,884 0 0 33,884 0 0 46 25,835 0 0 25,835 0 0 47 19,508 0 0 19,508 0 0 48 14,601 0 0 14,601 0 0 49 10,832 0 0 10,832 0 0 50 7,955 0 0 7,955 0 0 28 Policemen's Pension Meeting July 16, 2015 Page 60 of 78 City of Fayetteville, Arkansas Police Pension Fund Single Discount Rate Devleopment Projection of Benefit Payments Beginning January 1, 2015 Projected Projected Projected Benefit Payments Net Pension Actuarially Current Current Liability at Determined Year Retirees DROP Actives Total Beg of Year Contribution 51 5,779 0 0 5,779 0 0 52 4,147 0 0 4,147 0 0 53 2,934 0 0 2,934 0 0 54 2,043 0 0 2,043 0 0 55 1,399 0 0 1,399 0 0 56 941 0 0 941 0 0 57 621 0 0 621 0 0 58 402 0 0 402 0 0 59 256 0 0 256 0 0 60 160 0 0 160 0 0 61 99 0 0 99 0 0 62 60 0 0 60 0 0 63 37 0 0 37 0 0 64 22 0 0 22 0 0 65 13 0 0 13 0 0 66 7 0 0 7 0 0 67 4 0 0 4 0 0 68 2 0 0 2 0 0 69 1 0 0 1 0 0 70 0 0 0 0 0 0 71 0 0 0 0 0 0 72 0 0 0 0 0 0 73 0 0 0 0 0 0 74 0 0 0 0 0 0 75 0 0 0 0 0 0 76 0 0 0 0 0 0 77 0 0 0 0 0 0 78 0 0 0 0 0 0 79 0 0 0 0 0 0 80 0 0 0 0 0 0 81 0 0 0 0 0 0 82 0 0 0 0 0 0 83 0 0 0 0 0 0 84 0 0 0 0 0 0 85 0 0 0 0 0 0 86 0 0 0 0 0 0 87 0 0 0 0 0 0 88 0 0 0 0 0 0 89 0 0 0 0 0 0 90 0 0 0 0 0 0 91 0 0 0 0 0 0 92 0 0 0 0 0 0 93 0 0 0 0 0 0 94 0 0 0 0 0 0 95 0 0 0 0 0 0 96 0 0 0 0 0 0 97 0 0 0 0 0 0 98 0 0 0 0 0 0 99 0 0 0 0 0 0 100 0 0 0 0 0 0 29 Policemen's Pension Meeting July 16, 2015 Page 61 of 78 30 City of Fayetteville, Arkansas Police Pension Fund Single Discount Rate Devleopment Projection of Benefit Payments Beginning January 1, 2015 Payroll for Employee Employer Employer Employer Employer Current Contributions Contributions Contributions Contributions Contributions Total Year Employees Current Emps. Millage Other Prem Tax Add Alloc Contribuitons 1 0 0 525,000 115,000 120,000 32,000 792,000 2 0 0 530,250 115,000 118,285 31,543 795,077 3 0 0 535,553 115,000 116,454 31,054 798,061 4 0 0 540,908 115,000 114,504 30,534 800,946 5 0 0 546,317 115,000 112,428 29,981 803,726 6 0 0 551,780 115,000 110,222 29,393 806,395 7 0 0 557,298 115,000 107,881 28,768 808,948 8 0 0 562,871 115,000 105,399 28,106 811,376 9 0 0 568,500 115,000 102,770 27,405 813,675 10 0 0 574,185 115,000 99,988 26,663 815,836 11 0 0 579,927 115,000 97,047 25,879 817,852 12 0 0 585,726 115,000 93,940 25,051 819,716 13 0 0 591,583 115,000 90,661 24,176 821,420 14 0 0 597,499 115,000 87,203 23,254 822,956 15 0 0 603,474 115,000 83,558 22,282 824,315 16 0 0 609,509 115,000 79,720 21,259 825,487 17 0 0 615,604 115,000 75,680 20,181 826,465 18 0 0 621,760 115,000 71,429 19,048 827,237 19 0 0 627,977 115,000 66,961 17,856 827,795 20 0 0 634,257 115,000 62,265 16,604 828,127 21 0 0 640,600 115,000 57,334 15,289 828,222 22 0 0 647,006 115,000 52,156 13,908 828,070 23 0 0 653,476 115,000 46,723 12,459 827,658 24 0 0 660,011 115,000 41,024 10,940 826,974 25 0 0 666,611 115,000 35,048 9,346 826,005 26 0 0 673,277 115,000 28,785 7,676 824,737 27 0 0 680,010 115,000 22,222 5,926 823,158 28 0 0 686,810 115,000 15,349 4,093 821,252 29 0 0 693,678 115,000 8,152 2,174 819,004 30 0 0 700,615 115,000 619 165 816,399 31 0 0 707,621 115,000 0 0 822,621 32 0 0 714,697 115,000 0 0 829,697 33 0 0 721,844 115,000 0 0 836,844 34 0 0 729,062 115,000 0 0 844,062 35 0 0 736,353 115,000 0 0 851,353 36 0 0 743,716 115,000 0 0 858,716 37 0 0 751,154 115,000 0 0 866,154 38 0 0 758,665 115,000 0 0 873,665 39 0 0 766,252 115,000 0 0 881,252 40 0 0 773,914 115,000 0 0 888,914 41 0 0 781,653 115,000 0 0 896,653 42 0 0 789,470 115,000 0 0 904,470 43 0 0 797,365 115,000 0 0 912,365 44 0 0 805,338 115,000 0 0 920,338 45 0 0 813,392 115,000 0 0 928,392 46 0 0 821,526 115,000 0 0 936,526 47 0 0 829,741 115,000 0 0 944,741 48 0 0 838,038 115,000 0 0 953,038 49 0 0 846,419 115,000 0 0 961,419 50 0 0 854,883 115,000 0 0 969,883 30 Policemen's Pension Meeting July 16, 2015 Page 62 of 78 City of Fayetteville, Arkansas Police Pension Fund Single Discount Rate Devleopment Projection of Benefit Payments Beginning January 1, 2015 31 Payroll for Employee Employer Employer Employer Employer Current Contributions Contributions Contributions Contributions Contributions Total Year Employees Current Emps. Millage Other Prem Tax Add Alloc Contribuitons 51 0 0 863,432 115,000 0 0 978,432 52 0 0 872,066 115,000 0 0 987,066 53 0 0 880,787 115,000 0 0 995,787 54 0 0 889,595 115,000 0 0 1,004,595 55 0 0 898,490 115,000 0 0 1,013,490 56 0 0 907,475 115,000 0 0 1,022,475 57 0 0 916,550 115,000 0 0 1,031,550 58 0 0 925,716 115,000 0 0 1,040,716 59 0 0 934,973 115,000 0 0 1,049,973 60 0 0 944,323 115,000 0 0 1,059,323 61 0 0 953,766 115,000 0 0 1,068,766 62 0 0 963,303 115,000 0 0 1,078,303 63 0 0 972,936 115,000 0 0 1,087,936 64 0 0 982,666 115,000 0 0 1,097,666 65 0 0 992,492 115,000 0 0 1,107,492 66 0 0 1,002,417 115,000 0 0 1,117,417 67 0 0 1,012,442 115,000 0 0 1,127,442 68 0 0 1,022,566 115,000 0 0 1,137,566 69 0 0 1,032,792 115,000 0 0 1,147,792 70 0 0 1,043,120 115,000 0 0 1,158,120 71 0 0 1,053,551 115,000 0 0 1,168,551 72 0 0 1,064,086 115,000 0 0 1,179,086 73 0 0 1,074,727 115,000 0 0 1,189,727 74 0 0 1,085,474 115,000 0 0 1,200,474 75 0 0 1,096,329 115,000 0 0 1,211,329 76 0 0 1,107,292 115,000 0 0 1,222,292 77 0 0 1,118,365 115,000 0 0 1,233,365 78 0 0 1,129,549 115,000 0 0 1,244,549 79 0 0 1,140,845 115,000 0 0 1,255,845 80 0 0 1,152,253 115,000 0 0 1,267,253 81 0 0 1,163,775 115,000 0 0 1,278,775 82 0 0 1,175,413 115,000 0 0 1,290,413 83 0 0 1,187,167 115,000 0 0 1,302,167 84 0 0 1,199,039 115,000 0 0 1,314,039 85 0 0 1,211,029 115,000 0 0 1,326,029 86 0 0 1,223,140 115,000 0 0 1,338,140 87 0 0 1,235,371 115,000 0 0 1,350,371 88 0 0 1,247,725 115,000 0 0 1,362,725 89 0 0 1,260,202 115,000 0 0 1,375,202 90 0 0 1,272,804 115,000 0 0 1,387,804 91 0 0 1,285,532 115,000 0 0 1,400,532 92 0 0 1,298,387 115,000 0 0 1,413,387 93 0 0 1,311,371 115,000 0 0 1,426,371 94 0 0 1,324,485 115,000 0 0 1,439,485 95 0 0 1,337,730 115,000 0 0 1,452,730 96 0 0 1,351,107 115,000 0 0 1,466,107 97 0 0 1,364,618 115,000 0 0 1,479,618 98 0 0 1,378,264 115,000 0 0 1,493,264 99 0 0 1,392,047 115,000 0 0 1,507,047 100 0 0 1,405,968 115,000 0 0 1,520,968 31 Policemen's Pension Meeting July 16, 2015 Page 63 of 78 32 City of Fayetteville, Arkansas Police Pension Fund Single Discount Rate Devleopment Projection of Benefit Payments Beginning January 1, 2015 Projected Projected Beginning Projected Projected Projected Investment Ending Plan Net Total Benefit Admin Earnings Plan Net Year Position Contributions Payments Expenses 5.00% Position 1 7,136,238 792,000 1,498,393 0 339,152 6,768,997 2 6,768,997 795,077 1,489,458 0 321,090 6,395,707 3 6,395,707 798,061 1,479,114 0 302,759 6,017,413 4 6,017,413 800,946 1,467,194 0 284,214 5,635,379 5 5,635,379 803,726 1,453,506 0 265,524 5,251,124 6 5,251,124 806,395 1,437,879 0 246,769 4,866,409 7 4,866,409 808,948 1,420,113 0 228,041 4,483,285 8 4,483,285 811,376 1,399,980 0 209,449 4,104,131 9 4,104,131 813,675 1,377,319 0 191,115 3,731,602 10 3,731,602 815,836 1,352,058 0 173,175 3,368,554 11 3,368,554 817,852 1,324,092 0 155,772 3,018,086 12 3,018,086 819,716 1,293,305 0 139,065 2,683,562 13 2,683,562 821,420 1,259,736 0 123,220 2,368,467 14 2,368,467 822,956 1,223,470 0 108,410 2,076,364 15 2,076,364 824,315 1,184,598 0 94,811 1,810,891 16 1,810,891 825,487 1,143,336 0 82,598 1,575,641 17 1,575,641 826,465 1,100,028 0 71,943 1,374,021 18 1,374,021 827,237 1,055,053 0 63,006 1,209,210 19 1,209,210 827,795 1,008,707 0 55,938 1,084,236 20 1,084,236 828,127 961,294 0 50,883 1,001,952 21 1,001,952 828,222 913,083 0 47,976 965,067 22 965,067 828,070 864,268 0 47,348 976,217 23 976,217 827,658 814,931 0 49,129 1,038,073 24 1,038,073 826,974 765,190 0 53,448 1,153,304 25 1,153,304 826,005 715,259 0 60,434 1,324,484 26 1,324,484 824,737 665,391 0 70,208 1,554,039 27 1,554,039 823,158 615,830 0 82,885 1,844,252 28 1,844,252 821,252 566,810 0 98,574 2,197,267 29 2,197,267 819,004 518,665 0 117,372 2,614,978 30 2,614,978 816,399 471,640 0 139,368 3,099,104 31 3,099,104 822,621 425,912 0 164,873 3,660,686 32 3,660,686 829,697 381,804 0 194,232 4,302,810 33 4,302,810 836,844 339,481 0 227,575 5,027,748 34 5,027,748 844,062 299,063 0 265,012 5,837,759 35 5,837,759 851,353 260,833 0 306,651 6,734,930 36 6,734,930 858,716 225,019 0 352,589 7,721,216 37 7,721,216 866,154 191,887 0 402,917 8,798,401 38 8,798,401 873,665 161,630 0 457,721 9,968,156 39 9,968,156 881,252 134,422 0 517,079 11,232,065 40 11,232,065 888,914 110,366 0 581,067 12,591,680 41 12,591,680 896,653 89,394 0 649,765 14,048,705 42 14,048,705 904,470 71,430 0 723,261 15,605,007 43 15,605,007 912,365 56,373 0 801,650 17,262,649 44 17,262,649 920,338 43,960 0 885,042 19,024,069 45 19,024,069 928,392 33,884 0 973,566 20,892,142 46 20,892,142 936,526 25,835 0 1,067,374 22,870,208 47 22,870,208 944,741 19,508 0 1,166,641 24,962,082 - 48 24,962,082 953,038 14,601 0 1,271,565 27,172,084 49 27,172,084 961,419 10,832 0 1,382,369 29,505,040 50 29,505,040 969,883 7,955 0 1,499,300 31,966,269 32 Policemen's Pension Meeting July 16, 2015 Page 64 of 78 33 City of Fayetteville, Arkansas Police Pension Fund Single Discount Rate Devleopment Projection of Benefit Payments Beginning January 1, 2015 Projected Projected Beginning Projected Projected Projected Investment Ending Plan Net Total Benefit Admin Earnings Plan Net Year Position Contributions Payments Expenses 5.00% Position 51 31,966,269 978,432 5,779 0 1,622,630 34,561,551 52 34,561,551 987,066 4,147 0 1,752,651 37,297,121 53 37,297,121 995,787 2,934 0 1,889,677 40,179,651 54 40,179,651 1,004,595 2,043 0 2,034,046 43,216,249 55 43,216,249 1,013,490 1,399 0 2,186,115 46,414,455 56 46,414,455 1,022,475 941 0 2,346,261 49,782,251 57 49,782,251 1,031,550 621 0 2,514,886 53,328,066 58 53,328,066 1,040,716 402 0 2,692,411 57,060,791 59 57,060,791 1,049,973 256 0 2,879,282 60,989,791 60 60,989,791 1,059,323 160 0 3,075,969 65,124,922 61 65,124,922 1,068,766 99 0 3,282,963 69,476,551 62 69,476,551 1,078,303 60 0 3,500,784 74,055,578 63 74,055,578 1,087,936 37 0 3,729,976 78,873,454 64 78,873,454 1,097,666 22 0 3,971,114 83,942,212 65 83,942,212 1,107,492 13 0 4,224,798 89,274,489 66 89,274,489 1,117,417 7 0 4,491,660 94,883,559 67 94,883,559 1,127,442 4 0 4,772,364 100,783,360 68 100,783,360 1,137,566 2 0 5,067,607 106,988,532 69 106,988,532 1,147,792 1 0 5,378,121 113,514,444 70 113,514,444 1,158,120 0 0 5,704,675 120,377,238 71 120,377,238 1,168,551 0 0 6,048,076 127,593,865 72 127,593,865 1,179,086 0 0 6,409,170 135,182,121 73 135,182,121 1,189,727 0 0 6,788,849 143,160,698 74 143,160,698 1,200,474 0 0 7,188,047 151,549,219 75 151,549,219 1,211,329 0 0 7,607,744 160,368,292 76 160,368,292 1,222,292 0 0 8,048,972 169,639,557 77 169,639,557 1,233,365 0 0 8,512,812 179,385,734 78 179,385,734 1,244,549 0 0 9,000,400 189,630,683 79 189,630,683 1,255,845 0 0 9,512,930 200,399,458 80 200,399,458 1,267,253 0 0 10,051,654 211,718,365 81 211,718,365 1,278,775 0 0 10,617,888 223,615,029 82 223,615,029 1,290,413 0 0 11,213,012 236,118,454 83 236,118,454 1,302,167 0 0 11,838,477 249,259,098 84 249,259,098 1,314,039 0 0 12,495,806 263,068,943 85 263,068,943 1,326,029 0 0 13,186,598 277,581,570 86 277,581,570 1,338,140 0 0 13,912,532 292,832,242 87 292,832,242 1,350,371 0 0 14,675,371 308,857,984 88 308,857,984 1,362,725 0 0 15,476,967 325,697,676 89 325,697,676 1,375,202 0 0 16,319,264 343,392,142 90 343,392,142 1,387,804 0 0 17,204,302 361,984,249 91 361,984,249 1,400,532 0 0 18,134,226 381,519,007 92 381,519,007 1,413,387 0 0 19,111,285 402,043,679 93 402,043,679 1,426,371 0 0 20,137,843 423,607,894 94 423,607,894 1,439,485 0 0 21,216,382 446,263,761 95 446,263,761 1,452,730 0 0 22,349,506 470,065,997 96 470,065,997 1,466,107 0 0 23,539,953 495,072,057 97 495,072,057 1,479,618 0 0 24,790,593 521,342,268 98 521,342,268 1,493,264 0 0 26,104,445 548,939,978 99 548,939,978 1,507,047 0 0 27,484,675 577,931,700 100 577,931,700 1,520,968 0 0 28,934,609 608,387,277 33 Policemen's Pension Meeting July 16, 2015 Page 65 of 78 34 City of Fayetteville, Arkansas Police Pension Fund Single Discount Rate Devleopment Projection of Benefit Payments Beginning January 1, 2015 Present Value Present Value Present Value Beginning Projected Funded Unfunded Funded Unfunded Projected Plan Net Benefit Portion of Portion of Portion of Portion of Payments at Year Position Payments Payments Payments Payments Payments Single Disc. Rate 1 7,136,238 1,498,393 1,498,393 0 1,468,240 0 1,468,240 2 6,768,997 1,489,458 1,489,458 0 1,389,984 0 1,389,984 3 6,395,707 1,479,114 1,479,114 0 1,314,602 0 1,314,602 4 6,017,413 1,467,194 1,467,194 0 1,241,912 0 1,241,912 5 5,635,379 1,453,506 1,453,506 0 1,171,739 0 1,171,739 6 5,251,124 1,437,879 1,437,879 0 1,103,944 0 1,103,944 7 4,866,409 1,420,113 1,420,113 0 1,038,385 0 1,038,385 8 4,483,285 1,399,980 1,399,980 0 974,917 0 974,917 9 4,104,131 1,377,319 1,377,319 0 913,463 0 913,463 10 3,731,602 1,352,058 1,352,058 0 854,010 0 854,010 11 3,368,554 1,324,092 1,324,092 0 796,519 0 796,519 12 3,018,086 1,293,305 1,293,305 0 740,952 0 740,952 13 2,683,562 1,259,736 1,259,736 0 687,352 0 687,352 14 2,368,467 1,223,470 1,223,470 0 635,775 0 635,775 15 2,076,364 1,184,598 1,184,598 0 586,262 0 586,262 16 1,810,891 1,143,336 1,143,336 0 538,897 0 538,897 17 1,575,641 1,100,028 1,100,028 0 493,794 0 493,794 18 1,374,021 1,055,053 - 1,055,053 0 451,053 0 451,053 19 1,209,210 1,008,707 1,008,707 0 410,704 0 410,704 20 1,084,236 961,294 961,294 0 372,761 0 372,761 21 1,001,952 913,083 913,083 0 337,206 0 337,206- 22 965,067 864,268 864,268 0 303,980 0 303,980 23 976,217 814,931 814,931 0 272,978 0 272,978 24 1,038,073 765,190 765,190 0 244,111 0 244,111 25 1,153,304 715,259 715,259 0 217,316 0 217,316 26 1,324,484 665,391 665,391 0 192,538 0 192,538 27 1,554,039 615,830 615,830 0 169,711 0 169,711 28 1,844,252 566,810 566,810 0 148,764 0 148,764 29 2,197,267 518,665 518,665 0 129,646 0 129,646 30 2,614,978 471,640 471,640 0 112,277 0 112,277 31 3,099,104 425,912 425,912 0 96,563 0 96,563 32 3,660,686 381,804 381,804 0 82,441 0 82,441 33 4,302,810 339,481 339,481 0 69,812 0 69,812 34 5,027,748 299,063 299,063 0 58,572 0 58,572 35 5,837,759 260,833 260,833 0 48,652 0 48,652 36 6,734,930 225,019 225,019 0 39,973 0 39,973 37 7,721,216 191,887 191,887 0 32,464 0 32,464 38 8,798,401 161,630 161,630 0 26,043 0 26,043 39 9,968,156 134,422 134,422 0 20,628 0 20,628 40 11,232,065 110,366 110,366 0 16,130 0 16,130 41 12,591,680 89,394 89,394 0 12,442 0 12,442 42 14,048,705 71,430 71,430 0 9,469 0 9,469 43 15,605,007 56,373 56,373 0 7,117 0 7,117 44 17,262,649 43,960 43,960 0 5,286 0 5,286 45 19,024,069 33,884 33,884 0 3,880 0 3,880 46 20,892,142 - 25,835 25,835 0 2,817 0 2,817 47 22,870,208 19,508 19,508 0 2,026 0 2,026 48 24,962,082 14,601 14,601 0 1,444 0 1,444 49 27,172,084 10,832 10,832 0 1,020 0 1,020 5o 29,505,040 7,955 7,955 0 714 0 714 34 Policemen's Pension Meeting July 16, 2015 Page 66 of 78 35 City of Fayetteville, Arkansas Police Pension Fund Single Discount Rate Devleopment Projection of Benefit Payments Beginning January 1, 2015 Present Value Present Value Present Value Beginning Projected Funded Unfunded Funded Unfunded Projected Plan Net Benefit Portion of Portion of Portion of Portion of Payments at Year Position Payments Payments Payments Payments Payments Single Disc. Rate 51 31,966,269 5,779 5,779 0 494 0 494 52 34,561,551 4,147 4,147 0 337 0 337 53 37,297,121 2,934 2,934 0 227 0 227 54 40,179,651 2,043 2,043 0 151 0 151 55 43,216,249 1,399 1,399 0 98 0 98 56 46,414,455 941 941 0 63 0 63 57 49,782,251 621 621 0 40 0 40 58 53,328,066 402 402 0 24 0 24 59 57,060,791 256 256 0 15 0 15 60 60,989,791 160 160 0 9 0 9 61 65,124,922 99 99 0 5 0 5 62 69,476,551 60 60 0 3 0 3 63 74,055,578 37 37 0 2 0 2 64 78,873,454 22 22 0 1 0 1 65 83,942,212 13 13 0 1 0 1 66 89,274,489 7 7 0 0 0 0 67 94,883,559 4 4 0 0 0 0 68 100,783,360 2 2 0 0 0 0 69 106,988,532 1 1 0 0 0 0 70 113,514,444 0 0 0 0 0 0 71 120,377,238 0 0 0 0 0 0 72 127,593,865 0 0 0 0 0 0 73 135,182,121 0 0 0 0 0 0 74 143,160,698 0 0 0 0 0 0 75 151,549,219 0 0 0 0 0 0 76 160,368,292 0 0 0 0 0 0 77 169,639,557 0 0 0 0 0 0 78 179,385,734 0 0 0 0 0 0 79 189,630,683 0 0 0 0 0 0 80 200,399,458 0 0 0 0 0 0 81 211,718,365 0 0 0 0 0 0 82 223,615,029 0 0 0 0 0 0 83 236,118,454 0 0 0 0 0 0 84 249,259,098 0 0 0 0 0 0 85 263,068,943 0 0 0 0 0 0 86 277,581,570 0 0 0 0 0 0 87 292,832,242 0 0 0 0 0 0 88 308,857,984 0 0 0 0 0 0 89 325,697,676 0 0 0 0 0 0 90 343,392,142 0 0 0 0 0 0 91 361,984,249 0 0 0 0 0 0 92 381,519,007 0 0 0 0 0 0 93 402,043,679 0 0 0 0 0 0 94 423,607,894 0 0 0 0 0 0 95 446,263,761 0 0 0 0 0 0 96 470,065,997 0 0 0 0 0 0 97 495,072,057 0 0 0 0 0 0 98 521,342,268 0 0 0 0 0 0 99 548,939,978 0 0 0 0 0 0 100 577,931,700 0 0 0 0 0 0 19,852,752 0 19,852,752 19,852,752 35 Policemen's Pension Meeting July 16, 2015 Smith, Sondra Page 67 of 78 From: Leach, Trish Sent: Tuesday, June 02, 2015 1:24 PM To: Smith, Sondra; Becker, Paul; Hertweck, Marsha Subject: FW: Evaluating Investments Attachments: Evaluating Investments 2015.docx Importance: High From: Tracy Warfe [mailto twarfe@lopfi-prb.comj Sent: Tuesday, June 02, 2015 11:38 AM Cc: Denise Collins; len Sines Subject: Evaluating Investments Importance: High Good morning - Attached you will find the 2015 Evaluating Local Plan Investments Memo. Please provide the information to the Local Fire and Police Pension Plan's Board of Trustees. If you should have any questions please call our office toll free at 866-859-1745. Sincerely, PRB Staff ARKANSAS FIRE & POLICE PENSION REVIEW BOARD To: Local Fire and Police Pension Fund Boards' of Trustees From: Arkansas Fire and Police Pension Review Board (PRB) Re: Evaluating Local Plan Investments Date: June 2, 2015 Policemen's Pension Meeting July 16, 2015 Page 68 of 78 620 W. 3rd, Suite 200 Little Rock, Arkansas 72201-2223 Telephone: (501) 682-1745 Toll -Free: (866) 859-1745 Fax: (501) 682-1751 email: info@lopfi-prb.com website: www.lopfi-prb.com The following information is meant to assist Local Plan trustees with a regular review of the Local Plan's investment portfolio, which is an essential function as a trustee. Trustees must ensure all holdings and fees comply with the local board's investment policy and state law. The local board should seek advice from their investment professional(s) and legal counsel to verify compliance with ACA 24-11-805 (fire funds) and 24-11-410 (police funds). Local Plans that utilize an investment advisor should also review ACA 24-10-402 for additional restrictions on allowable investments. The PRB understands these code sections to say that permissible asset classes for Local Plans with assets over $100,000 and under $5,000,000 are Cash (including savings accounts and CDs), state and federal government bonds, and no load mutual funds (this also means no sales or redemption charges for mutual funds). Annuity products are not an allowable investment. At a minimum, items for review should include: • Liquidity Is an asset able to be sold with relative ease? Will the Local Plan incur surrender charges or other costs to exit a holding? If so, were such charges fully disclosed to the trustees when the asset(s) were purchased? • Performance -Does each investment produce the expected return and is performance consistent with an asset's benchmark (index)? • Index -What information was provided to the local board to demonstrate that a specific index is the correct one to use? • Allocation -Is each style (equities, bonds, domestic, international, etc.) operating within the board's investment policy or is rebalancing the portfolio necessary? • Fees -Clear disclosure of all investment related fees must be on all monthly, quarterly, and annual statements prepared for the board. Trustees should be able to easily identify the total amount the Local Plan spends on all fees. • Prohibited investments -Do all assets conform to the board's investment policy? Were assets purchased in violation of the policy or, in the case of a bond holding, was the bond downgraded? Are there any assets not allowed under the above referenced code sections? This memo is not a complete checklist or a legal opinion. It should be used as a guide to assist local boards with a regular review of their investment program. Please feel free to contact Denise Collins with any questions. OFFICE OF THE CITY CLERK TREASURER Sondra E. Smith — City Clerk Treasurer Lisa Branson — Deputy City Clerk May 26, 2015 113 W. Mountain Street, Suite 308 Fayetteville, AR 72701 Dear Policemen's Pension Fund Member, Policemen's Pension Meeting July 16, 2015 Page 69 of 78 Phone 479.575.8323 cityclerk@fayetteville-ar.gov The Policemen's Pension and Relief Fund Board of Trustees has completed the 2015 board elections. Eldon Roberts, Melvin Stanley, and John Brown have been elected. Their term will begin June 1, 2015 and end May 31, 2017. Enclosed is the current list of Board members with their term end dates. The next Policemen's Pension Board meeting will be on July 16, 2015 at 3:00 p.m, at City Hall. This meeting date and time is subject to change. If you have any questions please call the City Clerk office at (479) 575-8323. Sincerely, Sondra E. Smith City Clerk Treasurer Policemen's Pension & Relief Fund Board of Trustees Treasurer Policemen's Pension Meeting July 16, 2015 Page 70 of 78 Policemen's Pension and Relief Fund Board of Trustees DESCRIPTION: The Policemen's Pension and Relief Fund Board of Trustees was established pursuant to the A.C.A 24-11-405. The board shall make all necessary rules and regulations for its government and the discharge of its duties and shall hear and decide all applications for relief or pension. The Board shall have the power to make all rules and regulations needful of its guidance to implement the provisions regarding Board composition. TERMS: Two-year terms, ending May 31. MEMBERS: The Board shall be composed of seven members as follows: • The chief executive, who shall serve as chairman of the board • The city treasurer, who shall be the treasurer of the fund; • Five active or retired members of the pension fund; APPOINTMENT: If there are no active members of the pension fund, all five members shall be elected from and by the retired membership of the pension fund. The retired member or members shall be chosen in May of each year by a method to be determined by the board, with the member or members to be chosen in alternating years. CONTACT: Sondra Smith, City Clerk, 575-8323. PUBLIC NOTIFICATION: A weekly meetings list is prepared by the Office of the City Clerk Treasurer which is distributed to the press and posted on the City's web site: www.fayetteville- ar.gov MEETING TIMES: Regular meetings are held the third Thursday of each quarter in January, April, July and October at 3:00 p.m. in Room 326 at the City Administration Building. Due to elections not being held until May of each year, the term end date was changed to May 31 at the Police Pension meeting on October 21, 2004 37 Policemen's Pension Meeting July 16, 2015 Page 71 of 78 Policemen's Pension and Relief Fund Board of Trustees Chairman Retired Position 3 Mayor Lioneld Jordan John Brown 113 W. Mountain 11701 Illinois Chapel Road Fayetteville, AR 72701 Prairie Grove, AR 72753 575-8330 — Business 846-6414 — Home 01/01/09-Indef 225-3540 — Cell Replaced Tim Helder Treasurer 06/01/13-05/31/15 1" Term Sondra Smith 06/01/15-05/31/17 2nd Term 113 W. Mountain Fayetteville, AR 72701 Retired Position 4 442-7838 — Home Melvin W. Stanley 575-8323 —Business PO Box 289 02/03/03-Indef. Greenland, AR 72737 839-3106 — Home Secretary 601-1224 — Cell Retired Position 1 Replaced Dr. James Mashburn Eldon Roberts 11/15/06-05/31/07 Unexpired Term 4199 E. Huntsville Rd. 06/01/07-05/31/09 1" Term Fayetteville, AR 72701 06/01/09-05/31/112 d Term 521-0183 —Home 06/01/11-05/31/13 3`d Term 601-6469 — Cell 06/01/13-05/31/15 4th Term Replaced Randy Bradley 06/01/15-05/31/17 5th Term 06/01/05-05/31/07 1" Term 06/01/07-05/31/09 2"d Term Retired Position 5 06/01/09-05/31/113 d Term Frank Johnson 06/01/11-05/31/13 4th Term 3328 Jasper Lane 06/01/13-05/31/15 5th Term Fayetteville, AR 72704 06/01/15-05/31/17 6th Term 204-2588 —Business Replaced Jerry Surles Retired Position 2 06/01/06-05/31/08 1" Term Ruston Cole 06/01/08-05/31/10 2nd Term 4201 East Canvas Road 06/01/10-05/31/12 3`d Term Fayetteville, AR 72701 06/01/12-05/31/14 4th Term 841-2356 — Cell 06/01/14-05/31/16 5th Term Replaced Jerry Friend 06/01/14-05/31/16 1 st Term In 2005 Act 386 changed the composition of the board eliminating the physician position and adding one active member. The active position is now a retired position due to the fact that there are no current active members on the pension plan. The physician position was also replaced by a retired member. 38 Policemen's Pension Meeting July 16, 2015 Page 72 of 78 c•' Policemen's Pension Meeting In the first half of 2015, the market_ - continued todisplay volatility. Bondprices declined as interest Fates rose. In the second quarter, stocks continued the narrow trading behavior of the first quarter, closing flat (S&P 500 index +0.2%) to slightly lower (Dow Jones Industrial Average -1.1 %) for the first half of the year. In this newsletter, we'll review the activity in the markets and discuss our outlook for the second half of the year. Table l U.S. Treasury Yields Maturity 12/31/14 03/31/15 6/30/15 _ Page 73 of 78 1.37% 1.63% COMMENTS 2.14% =a.,i' AND OUTLOOKS FROM LONGER INVESTMENTS INCORPORATED 30 -Year 2.75% 2.54% 3.i0% July 10, 2015 In the first half of 2015, the market_ - continued todisplay volatility. Bondprices declined as interest Fates rose. In the second quarter, stocks continued the narrow trading behavior of the first quarter, closing flat (S&P 500 index +0.2%) to slightly lower (Dow Jones Industrial Average -1.1 %) for the first half of the year. In this newsletter, we'll review the activity in the markets and discuss our outlook for the second half of the year. Table l U.S. Treasury Yields Maturity 12/31/14 03/31/15 6/30/15 Five -Year 1.65% 1.37% 1.63% 10 -Year 2.14% 1.93% 2.33% 30 -Year 2.75% 2.54% 3.i0% In 2014 the Federal Reserve ended Quantitative Easing (QE), the program through which it purchased Treasury debt by expanding its balance sheet. The Fed is expected to begin raising interest rates in the second half of 2015. Fed Chair Janet Yellen has not named the date when this will happen, indicating the Fed will be data dependent instead of date dependent. Most market participants expect the first increase of 0.25% to be announced in September. However, anything that would cause a growth slowdown before then could cause the Fed to rethink its rate increase schedule. The Fed wants to see unemployment near 5% and inflation at 2% before it makes its move. The most recent unemployment number in June was 5.3%; the current year -over -year Consumer Price inflation number is 1.4%. Janet Yellen is a "dovish" Fed chair, which means she will tend to err on the side of caution as the Fed begins to raise rates. Our strategy in the fixed-income markets has been to hold top-quality U.S. Treasury, corporate, and municipal bonds of short or moderate maturities. We also trade the long end of the Treasury curve on a tactical basis by using an exchange -traded fund (ETF) that mirrors the 20 -year Treasury bond. There is a duration risk inherent in longer -dated bonds at this point in the bond market cycle, so we exercise a stop -loss discipline for downside protection. We believe that the economy is not yet on a flight path to stronger growth. Therefore we are willing to be somewhat opportunistic in the fixed-income arena, watching the volatility for good entry points. This active trading strategy represents only about 5% to 6% of portfolio value. We have also allocated some capital to "other income assets." These are investments that offer growth potential while generating more income than bonds. This asset class, a strong performer since 2012, was down in the first half of the year as interest rates rose. We have the cash balances to make additional investments in this asset class if conditions are right. However, we expect the bond market to continue to be volatile as we move toward the Fed's first rate hike since 2006. The Stock Market The stock market's activity so far in 2015 can best be characterized as' -violently flat." In the first six months of 2015, the market (as measured by the DJ1A) traded between a high of 18,351 and a low of 17,037. This is a range of about 7.5%. At June 30, the S&P 500 was up 0.2%; the DJ1A was down 1.1%. Although the S&P 500 and the DJ1A were relatively quiet in the first half, there was volatility elsewhere, The Dow Jones Utility Index was down 11.4%, and the economically sensitive Dow Jones Transportation Index (DJTI) was down 10.7%. The Transportation Index, which peaked in the fourth quarter of 2014, did not confirm the new DJiA high in May. This discordant behavior --the Transportation Index and the Industrial Index failing to move in the same direction — is an example of "Dow Theory non -confirmation." Briefly, the Dow Theory states that when the DJ1A advances past a previously important high, the DJTI should advance too. When there is no such confirmation, investors are right to be skeptical about the durability of the new DJIA high. Economically sensitive stocks trailed the more defensive stocks in the first half. As the quarter drew to a close, we were seeing other signs of technical deterioration or weakness. The markets are anticipating, indeed hoping for, a return to growth in both the domestic economy and the world economy- Growth is vital to support further advances in stock prices from these levels. Stock prices depend on two elements: the stock's earnings and the valuation (or price/ earnings multiple) applied to those earnings, The combination gives us the price of the stock and, cumulatively, the price of the stock market indices. At mid -year, the price/earnings multiple was about 18 times the estimated 2015 earnings of Chart A Policemen's Pension Meeting 1 -do Is_ tea, -c Page 74 of 78 $115 for the S&P 500 (Chart A). This is a valuation that has not been seen since the late 1990s, in the run-up to the tech bubble. This multiple ranks in the 80th percentile of valuations going back to 1990. Atthis level, the market is no longer cheap- It is possible that the multiple could go to 20 times earnings or higher, of course. But that is not an assumption upon which to build an investment strategy. When valuation is bumping against its historical ceiling, the only way left forthe market to produce a positive return is through earnings growth. As we entered 2015, projections called for S&P 500 earnings growth of 5% to 8% this year. Following a first- quarter GDP decline of 02%, the estimates for earnings growth fell. The estimate is now 0% to 2%. In our year-end newsletter we wrote, "Our forecast calls for equity returns to mirror earnings growth in 2015. Whether that will be 5% to 8% or some other amount is hard to determine until more of these variables precipitate into hard facts." Now that the 2015 earnings growth outlook is only 0% to 2%, markets have adjusted to the weaker numbers. That explains the flat but volatile performance we saw in the first half of the year. S&P 500 Valuation 25 25 S&P valuattpns are stretched accordingta 23 history, cych tally adj usted earnings and 23 21 - macro tactors - 21 19 119 17 17 t It 11 g 9 7 Source: Evercere 151 (6117115) 7 1990 1992 1994 19% 199e 2000 2002 2004 2006 2008 2010 2012 2014 2015 S&P 500MTM PE - - - LT Median —80th Pctlle — — 20th Pctlle This combination of high valuation (at the high end of historical ranges) and low earnings growth gives us a market that is heavily dependent upon a resumption of economic growth domestic and foreign to advance to a higher level. Anything that threatens the outlook for growth (Greek crisis, Chinese slowdown, Mideast turmoil) also threatens the outlook for the stock market. Chart B S&P 500 Operating Margins (Quarterly) Policemen's Pension Meeting Irly 16 5 Page 75 of 78 At this point, operating margins appear to have peaked (Chart B). They came under pressure in early 2015 as labor wage costs started to rise (Chart C on page 4). In June, the unemployment rate fell to 5.3%. As a result of higher wages and other corporate expenses, productivity declined in the first half putting profit margins at risk. To support earnings at these levels, revenue growth (the top line) must pick up. Revenue growth is directly correlated with economic growth. Any risks to economic 1415 margins inaea5ed40bpsversv5 6V11.f Fart am Fmm�-iRhncYnV law iQo1 1= roes WIN 1QJ5 1a, 1Q, 1QM low lata 10U 1412 1413 1014 1Q15 ■ 5&p 500 operat nr y source, Everwro !SI (6115,15) Let's look for a moment at the components of earnings growth. Earnings are a function of a company's top line (its gross revenue) and the operating profit margin achieved on that revenue base. The resultant number, earnings, can be divided by the number of shares outstanding to find the company's earnings per share, or EPS. Companies can improve their EPS in three ways: by increasing revenues, by increasing operating profit margins, or by decreasing the number of outstanding shares through corporate share buybacks. Since the 2008-2009 financial crisis, earnings growth has dramatically exceeded revenue growth chiefly because operating margins improved (Chart B). Better operating margins and fewer shares outstanding (as corporations repurchased stock) propelled EPS growth. The information provided herein is illustrative only. It should not he construed as a formal recommendation by Longer Investments Inc. a growth — domestic and foreign --could e threaten the e% outlook for revenue growth and hence, 4% earnings growth. 2% At this point, in spite of massive Fed monetization of debt (QE I, QE2, and QE3) and similarly aggressive monetization of debt by other central banks (the People's Bank of China, the Bank of Japan, the European Central Bank), growth has yet to break out of its post- crisis range of 3% to 5% nominal GDP, or 1% to 3% real GDP (Chart D on page 4). In a world where margins appear to be peaking and valuations are no longer cheap. investors are wat.Nng for a resumption of nominal GDP growth that can support revenue growth, and thus earnings growth. We have maintained a conservative stance in the equity market. We emphasize large blue- chip companies that pay good dividends and exhibit strong balance sheets and cash flow. The dividend yield on our established equity portfolios is 3.5% to 4.0%. Since the DJIA peak in May, the stock market has declined, and it has challenged important price support levels. The technical overlay we use with our fundamental research triggered the sale of select stocks. As a result, you will see higher than normal cash balances in the June reports. Policemen's Pension Meeting LONGER INVESTMENTS I?NCORPORA-ED Page 76 of 78 Chart C U.S. Employment Rate and Average Hourly Earnings moll= Chart D U.S. Nominal GDP U.S. NOMINAL GDP Y/Y % 2015:10: 3.6% r z 41 U �a �l1fN�J source: Evercdre tsr (6�4a15) lIS AVEML�c NO`JIAIEMHHGS - 1998 2001 2004 2007 2070 2013 z°elf Y `Y" decline in the stock market with policy changes is 99 92 9. 9' li m m m ue m iu ',2 is will instill greater fear and uncertainty in source: Em cora ISI (rVlaiS) investors' minds. It's unclear if they will be successful or if they We anticipate a correction in the stock market as a result of the risks to growth we see now in Greece, the Eurozone, and in China. We close the quarter cautiously positioned. The situation in Greece drags on as Greece tries to negotiate with the Eurozone officials for yet another extension of its debt repayment. China's stock market is in turmoil, having declined over 30% since mid-June. At this point we know these events will dampen the world growth outlook, but we don't know the extent nor the duration of the impact on world economies. As this newsletter is written, Greece and Eurozone officials head into the weekend for what appears to be a "final' summitondebt renegotiation. China's government officials are ftghtingthe violent Next week we begin "earnings release season" where second-quarter earnings and attendant conference calls will shine a light on the current state of revenues and profitability of U.S. corporations. And so, as we close this newsletter, there are more questions than answers. But over the next few weeks there will be more cards turned up, and we will have a better picture of the second half of the year. We are well positioned to respond as appropriate and anticipate that we will be investing cash balances at a more opportune time. LONGER INVESTMENTS INCORPORATED Srnues I'nmiJr�! br l.miger hivvsf��iniM Grr: ih - w�r�i , �. ii : • Yi:' T �;- r;� .;,��._ • !]rn d0; c'i. J ' 21,.1" _ -1 :i r'R:i �.;., '.d'I ;i l 11 'ti!IR'!I I I?i .. .I. it i�Idl. 1Lt!I �.,i ;'r �;i. i`. PI'. foi r?d�•1:r. rlln�il5_,h.laii;,.=__..L h. (;iuJ-0 .', l:ii Sli:': it II". r.lcuur�wia ani Policemen's Pension Meeting July 16, 2015 Page 77 of 78 Policemen's Pension and Relief Board of Trustees Third Thursday of the First Month of each Quarter 3:00 p.m. City Administration Room 326 January 22, 2015 April 16, 2015 July 16, 2015 October 15, 2015 Policemen's Pension Meeting July 16, 2015 Page 78 of 78 0001, GARRISON F I N A N C I A L City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 Quarter Ending June 30, 2015 PORTFOLIO SUMMARY City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 June 30, 2015 5.3% ■ Cash & Equivalents 346,736.60 ■ Account Fixed Income 2,289,399.37 ■ Account Equities 3,883,121.87 Garrison Financial PORTFOLIO APPRAISAL City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 June 30, 2015 Adj Unit Total Adjusted Market Pct. Unit Annual Quantity Security Cost Cost Price Value Assets Income Income CASH AND EQUIVALENTS Schwab Advisor Cash Res Premier TREASURY NOTE 700,000 US Treasury Note 101.44 4.000% Due 08-15-18 Accrued Interest AGENCY BONDS 200,000 Federal Farm Credit 100.00 Bank 6.125% Due 12-29-15 Accrued Interest CORPORATE BONDS 53 0.010 125,000 Verizon 99.94 2,000 Communications 28.24 905 1.350% Due 06-09-17 66.58 125,000 Lab Corp. of America 101.01 550 2.500%Due I1-01-18 90.81 125,000 Kroger Company 100.20 120 2.300% Due 0 1 -15-19 283.98 125,000 Honeywell International 111.20 5.000% Due 02-15-19 125,000 Union Pacific Corp. 101.51 2.250% Due 02-15-19 125,000 J B Hunt Transportation 101.70 Svcs. 2.400% Due 03-15-19 125,000 Walt Disney Co. 99.90 1.850% Due 05-30-19 125,000 Berkshire Hathaway 105.70 Financial 2.900% Due 10-15-20 125,000 AT&T, Inc. 100.46 3.000% Due 02-13-22 Accrued Interest CONVERTIBLE PREFERRED 300 Bunge4-875%Conv- 108.63 Pfd. COMMON SPOCK 53 0.010 300 3M Corp. 164.93 2,000 AT&T, Inc. 28.24 905 AbbVie, Inc. 66.58 1,965 Abbott Laboratories 40.06 550 Accenture Plc 90.81 440 Airgas, Inc. 112.76 120 Alliance Data Systems 283.98 346,736.60 346,736.60 710,058.13 109.17 710,058.13 199,996.75 102.88 199,996.75 124,930.59 99.86 126,263.61 53 0.010 100.84 125,246.63 764 203.30 100.37 139,004.04 0.2 111.06 126,892.17 205.758.40 101.31 127,120.09 1.9 100.91 124,877.47 1.9 100.01 132,123.13 2.0 103,00 125,576.31 97.61 1,152,034.04 32,588.95 108.99 32,588.95 49,479.55 53 0.010 154.30 56,475.88 764 203.30 35.52 60,253.90 0.2 67.19 78,727.14 205.758.40 49.08 49,943.51 1.9 96.78 49,614.11 1.9 105.78 34,077.36 2.0 291.94 346,736.60 53 0.010 346,736.60 5.3 764 203.30 11.7 4.000 10,441.99 0.2 774,645.29 11.9 205.758.40 3.2 6-125 34.03 0.0 205,792.43 3.2 124,822.87 1.9 1.350 126,048.37 1.9 2.500 125,468.00 1.9 2.300 138,821.37 2.1 5.000 126,642.50 1.9 2.250 126,139.00 1.9 2.400 125,014.50 1.9 1.850 128,755.75 2.0 2.900 122,013.37 1.9 3.000 8,555.90 0.1 1,152,281.65 177 32,696.10 0.5 4.875 32,696.10 0.5 46,290.00 0.7 4.100 71,040.00 1.1 1.880 60,806.95 0.9 2040, 96,442.20 1.5 0.960 53,229.00 0.8 2040, 46,543.20 0.7 2.400 35,032.80 0.5 0.000 Yield 34.67 00 34.67 0.0 28,000.00 1 0 28,000.00 LO 12,250.00 03 12,250.00 0.3 1,687.50 1.4 3,125.00 2.2 2,875.00 2.2 6,250.00 1.8 2,812.50 1.9 3,000.00 2.2 2,312.50 1.9 3,625.00 2.3 3,750.00 3.4 29,437.50 2.1 1,462.50 4.5 1,462.50 4.5 1,230.00 2.7 3,760.00 5.3 1,846.20 3.0 1,886.40 2.0 1,122.00 2.1 1,056.00 2.3 0.00 0.0 Garrison Financial PORTFOLIO APPRAISAL City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 June 30, 2015 Adj Unit Total Adjusted Market Pct. Unit Amoral Quantity Security Cost Cost Price Value Assets Income Income Vivid 625 Amgen, Inc. 11433 71,456.06 153,52 95,950.00 1 5 3.160 1,975.00 2.1 825 Anadarko Petroleum 85.82 70,805,10 78.06 64,399.50 1.0 1,080 89100 IA 500 Ansys, Inc- 75.67 37,836.95 91.24 45,620.00 0-7 0.000 0.00 0.0 1,680 Apple Computer 72.69 122,121,54 125.42 210,714.00 3.2 2.080 3,494.40 1.7 785 AptarGroup, Inc. 63.47 49,825.05 63.77 50,059.45 0.8 1.120 879.20 1,8 125 AutoZone, Inc. 516.09 64,511,70 666.90 83,362.50 1.3 0.000 0.00 0.0 1,350 BCE, Inc. Cl F 24.40 32,934 20 42.50 57,375.00 09 2.650 3,577.50 6.2 350 Becton, Dickinson & 113.97 39,889 45 141.65 49,577.50 0.8 2.400 84000 1 7 Company 1,500 Broadridge Financial 4133 62,000.35 5001 75,015.00 12 1.080 1,62000 2.2 Solutions 675 Brown-Forman Corp. 88.81 59,94693 100.18 67,621.50 1.0 1.260 850,50 1.3 665 CH Robinson 74.84 49,768.25 6239 41,489.35 0.6 1.520 1,010,80 2.4 Worldwide 3,000 CSX Corporation 28.88 86,62740 32.65 97,950.00 1.5 0.720 2,160.00 22 1,300 Cal -Maine Foods, Inc. 36.68 47,687.88 52.20 67,860.00 1,0 1.400 1,820.00 2.7 585 Check Point Software 85.44 49,979.59 79.55 46,536.75 0.7 0.000 0.00 Ott 400 Chevron Corporation 85.21 34,084.61 96.47 38,58800 0.6 4.280 1,712.00 4.4 2,800 Cisco Systems, Inc. 19.70 55,16869 27.46 76,888.00 1.2 0-840 2,352.00 3.1 1,400 Coca-Cola Company 3098 43,374.60 3923 54,922.00 08 1.320 1,848.00 3,4 680 Compass Minerals Intl 87.89 59,765.06 82.14 55,855.20 0.9 2,640 1,795.20 3.2 1,150 ConocoPhillips 55.58 63,918,42 6141 70,621.50 1.1 2.920 3,358.00 4.8 565 Deere &Co. 87,76 49,585.72 97.05 54,833.25 0.8 2.400 1,35600 2,5 500 Disney, Walt Holdings 110.91 55,454.90 114.14 57,070.00 09 1320 660.00 12 2,000 EMC Corp- 25.64 51,282.21 26.39 52,780.00 0.8 0.460 92000 1.7 830 Eastman Chemical 86,14 71,495.64 8182 67,910.60 1-0 1.600 1,328.00 2.0 1,310 Emerson Electric 68.00 89,080.00 55.43 72,613.30 1.1 1.880 2,46280 3.4 3,825 General Electric Co. 19.53 74,709.32 26.57 101,630.25 1.6 0.920 3,519.00 3.5 1,200 GlaxoSmithKline Plc. 50,10 60,124.15 41.65 49,980.00 0.8 2.290 2,748,00 5.5 2,250 Intel Corp. 20.53 46,202.71 3041 68,433.75 10 0.960 2,160.00 32 800 Johnson & Johnson 64.70 51,756.60 97-46 77,968.00 1.2 3.000 2,400.00 3 1 465 Kimberly Clark Corp. 107.07 49,786.64 105.97 49,276.05 0.8 3.520 1,636,80 3.3 395 Laboratory Corp. 125,86 49,715.75 121.22 47,881.90 0.7 0000 0.00 0.0 1,000 Lincoln Electric 67.21 67,209.18 60.89 60,890.00 0.9 1,160 1,160.00 1.9 640 Medtronic Pie, 77.60 49,662 77 74.10 47,424.00 0.7 1.520 972.80 2.1 1,100 Merck & Co., Inc. 5139 56,525.78 56,93 62,623.00 10 1,800 1,980.00 32 800 National Oilwell Varco 8535 68,280.15 4828 38,624-00 0.6 1,840 1,472.00 3.8 1,000 Patterson Companies 51.07 51,074.75 48,65 48,650.00 0.7 0.880 880.00 1.8 530 Pepsico, Inc. 93.75 49,690.09 93.34 49,47020 0.8 2.810 1,489.30 3.0 830 Phillips 66 72.18 59,911.86 80.56 66,864.80 1.0 2240 1,85920 2.8 1,000 Procter & Gamble Co. 59.42 59,41761 78.24 78,240.00 1.2 2650 2,65000 3.4 1,000 Qualcomm, Inc. 63.62 63,616.39 62.63 62,630,00 1.0 1.920 1,920.00 3.1 2,790 Raven Industries, Inc. 28.37 79,148.48 20.33 56,720.70 0-9 0.520 1,450.80 2.6 700 Sanofi ADR 55.71 38,995.10 49.53 34,671.00 0.5 1320 924.00 2.7 770 Sensient Technologies 64.55 49,704.67 68.34 52,621.80 0.8 1.000 770.00 1,5 900 St. Jude Medical, Inc, 66.56 59,900.53 73.07 65,763.00 1.0 1, 160 1,044.00 1.6 1,055 Syngenta AG ADR 71.44 75,370,40 81.61 86,098.55 1.3 1.970 2,078.35 2.4 850 Texas Instruments 58.53 49,754.69 51.51 43,783.50 0,7 1.360 1,156.00 2.6 465 Valmont Industries 128.60 59,797.26 118.87 55,274.55 0.8 1.500 697.50 1.3 450 Wabtec Corp, 93.64 42,137,64 9424 42,408.00 0.7 0.320 144.00 0.3 1,150 Wal -Marl Stores, Inc. 62.11 71,423,42 70.93 81,569.50 13 1,960 2,254.00 2.8 2,000 Waste Management 42.21 84.414.32 46.35 92,700.00 1-4 1-540 3,080.00 3.3 3,265,502-02 3,587,193-10 55.0 88,256.75 2.5 MUTUALFUNDS 2,248,991 Dodge &Cox Intl Sik 45.41 102,132,74 43.75 98,393.36 1.5 0.970 2,181.52 2.2 You should carefully compare this statement to the statement you receive from your custodian and notify us immediately of any discrepancies. 3 Garrison Financial PORTFOLIO APPRAISAL City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 June 30, 2015 Adj Unit Total Adjusted Market Pct Unit Annual Quantity Security Cost Cost Price Value Assets Income Income Yield 2,587.463 Oppenheimer 39.33 101,776.46 35.31 91,363.32 1.4 0.100 258.75 0.3 Developing Mkts A 203,909.20 189,756.67 2.9 2;44027 1.3 UNIT TRUSTS 2,340 FT Energy Income& .5420 80,032.95 31,40 73,476.00 I.1 2.20a 5,148.110 7.0 Growth 4,000 iShares S&P US Pfd Stk 38.34 153,340.30 39.17 156,680.00 2.4 2-100 9.60000 6.1 233,373.25 230,156.00 3.5 14.748W 6.4 TOTAL PORTFOLIO 6,144,198.95 6,519,257.84 100.0 176,629.69 2.2 You should carefully compare this statement to the statement you receive from your custodian and notify us immediately of any discrepancies. 3 Garrison Financial PURCHASE AND SALE City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 From 01-01-15 To 06-30-15 Trade Settle Unit Date Date Quantity Security Price Amount PURCHASES 03-19-15 03-24-15 300 3M Corp. 164.93 49,479.55 03-24-15 03-27-15 125,000 AT&T, Inc. 100.48 125,597.62 3.000% Due 02-13-22 03-19-15 03-24-15 550 Accenture Plc. 90.81 49,943.51 03-19-15 03-24-15 200 Airgas, Inc. 112.76 22,551.87 03-19-15 03-24-15 100 Airgas,lnc. 112.76 11,275.93 03-19-15 03-24-15 140 Airgas,lnc. 112.76 15,786.31 03-19-15 03-24-15 785 AptarGroup,Inc. 63.47 49,825.05 03-24-15 03-27-15 125,000 Berkshire Hathaway Financial 105.98 132,470.38 2.900% Due 10-15-20 03-19-15 03-24-15 200 CH Robinson Worldwide 74.85 14,970.69 03-19-15 03-24-15 100 CH Robinson Worldwide 74.83 7,483.35 03-19-15 03-24-15 365 CH Robinson Worldwide 74.83 27,314.21 03-10-15 03-13-15 1,300 Cal -Maine Foods, Inc. 36.68 47,687.88 03-19-15 03-24-15 585 Check Point Software 85.44 49,979.59 03-19-15 03-24-15 565 Deere & Co. 87.76 49,585.72 06-04-15 06-09-15 500 Disney, Walt Holdings 110.91 55,454.90 03-19-15 03-24-15 100 FT Energy Income & Growth 34.18 3,418.38 03-19-15 03-24-15 100 FT Energy Income & Growth 34.18 3,418.38 03-19-15 03-24-15 100 FT Energy Income & Growth 34.20 3,420.38 03-19-15 03-24-15 140 FT Energy Income & Growth 34.20 4,788.54 03-19-15 03-24-15 60 FT Energy Income & Growth 34.20 2,052.23 03-19-15 03-24-15 20 FT Energy Income & Growth 34.20 684.08 03-19-15 03-24-15 100 FT Energy Income & Growth 34.20 3,420.38 03-19-15 03-24-15 900 FT Energy Income & Growth 34.20 30,783.44 03-19-15 03-24-15 100 FT Energy Income & Growth 34.20 3,420.38 03-19-15 03-24-15 300 FT Energy Income & Growth 34.20 10,261.15 03-19-15 03-24-15 300 FT Energy Income & Growth 34.20 10,261.15 03-19-15 03-24-15 100 FT Energy Income & Growth 34.20 3,420.38 03-19-15 03-24-15 20 FT Energy Income & Growth 34.20 684.08 05-08-15 05-13-15 125,000 J B Hunt Transportation Svcs. 101.76 127,201.62 2.400% Due 03-15-19 03-19-15 03-24-15 100 Kimberly Clark Corp. 107.07 10,706.72 03-19-15 03-24-15 100 Kimberly Clark Corp. 107.07 10,706.82 03-19-15 03-24-15 65 Kimberly Clark Corp. 107.07 6,959.44 03-19-15 03-24-15 100 Kimberly Clark Corp. 107.07 10,706.82 03-19-15 03-24-15 100 Kimberly Clark Corp. 107.07 10,706.84 03-19-15 03-24-15 395 Laboratory Corp. 125.86 49,715.75 03-19-15 03-24-15 640 Medtronic Plc. 77.60 49,662.77 01-28-15 02-02-15 1,000 Patterson Companies 51.07 51,074.75 03-19-15 03-24-15 530 Pepsico,Inc. 93.75 49,690.09 03-19-15 03-24-15 770 Sensient Technologies 64.55 49,704.67 Garrison Financial PURCHASE AND SALE City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 From 01-01-15 To 06-30-15 Trade Settle Date Date Quantity Seen rity Unit Price Amount 03-19-15 03-24-15 850 Texas Instruments 58.53 49,754.69 03-12-15 03-17-15 450 Wabtec Corp. 93.64 42,137.64 1,308,168.13 SALES 03-19-15 03-24-15 2,000 Alerian MLP 16.34 32,676.02 03-19-15 03-24-15 3,000 Alerian MLP 16.34 49,014.03 05-07-15 05-12-15 200 Cisco Systems, Inc. 28.81 5,762.90 05-07-15 05-12-15 1,300 Cisco Systems, Inc, 28.81 37,458.85 03-19-15 03-24-15 100 Ensco Plc. 20.62 2,061.55 03-19-15 03-24-15 250 Ensco Plc. 20.62 5,153.88 03-19-15 03-24-15 300 Ensco Plc. 20.62 6,184.66 03-19-15 03-24-15 300 Ensco Plc. 20.62 6,184.66 03-19-15 03-24-15 800 Ensco Plc. 20.61 16,491.60 03-19-15 03-24-15 100 Freeport-McMoRan Copper & Gold, 17.20 1,720.02 Inc. 03-19-15 03-24-15 200 Freeport-McMoRan Copper & Gold, 17.20 3,440.04 Inc. 03-19-15 03-24-15 100 Freeport-McMoRan Copper & Gold, 17.20 1,720.02 Inc. 03-19-15 03-24-15 100 Freeport-McMoRan Copper & Gold, 17.20 1,720.02 Inc. 03-19-15 03-24-15 100 Freeport-McMoRan Copper & Gold, 17.20 1,720.02 Inc. 03-19-15 03-24-15 100 Freeport-McMoRan Copper & Gold, 17.20 1,720.02 Inc. 03-19-15 03-24-15 100 Freeport-McMoRan Copper & Gold, 17.20 1,720.02 Inc. 03-19-15 03-24-15 100 Freeport-McMoRan Copper & Gold, 17.20 1,720.02 Inc. 03-19-15 03-24-15 1,100 Freeport-McMoRan Copper & Gold, 17.20 18,915.85 Inc. 05-07-15 05-12-15 250 Intel Corp. 32.32 8,080.37 05-07-15 05-12-15 750 Intel Corp. 32.32 24,241.09 05-07-15 05-12-15 450 Johnson & Johnson 99.86 44,938.97 03-19-15 03-24-15 5,650 Keycorp 14.41 81,406.62 05-08-15 05-13-15 635 McDonald's Corp. 98.51 62,554.99 04-08-15 04-13-15 150 Microsoft Corp. 41.35 6,201.93 04-08-15 04-13-15 2,675 Microsoft Corp. 41.35 110,601.00 03-19-15 03-24-15 1,750 Noble Corp. 13.53 23,685.79 04-08-15 04-13-15 50 Pfizer, Inc. 34.66 1,732.85 04-08-15 04-13-15 3,600 Pfizer, Inc. 34.66 124,765.24 03-19-15 03-24-15 2,000 Sector SPDR Fncl Select Shs 24.41 48,818.36 2 Garrison Financial PURCHASE AND SALE City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 From 01-01-15 To 06-30-15 Trade Settle Unit Date Date Quantity Security Price Amount 03-19-15 03-24-15 1,775 Sector SPDR Friel Select Shs 24.41 43,324.52 03-19-15 03-24-15 1,700 Sector SPDR Utility Select Shs 44.91 76,343.50 03-19-15 03-24-15 2,300 Sector SPDR Utility Select Shs 44.91 103,288.25 03-19-15 03-24-15 3,000 iShares DJ Select Div 78.45 235,336.72 03-24-15 03-27-15 800 iShareslBOXX Inv Grade Corp Bond 121.86 97,490.72 03-24-15 03-27-15 46 iShares IBOXX Inv Grade Corp Bond 121.86 5,605.72 03-24-15 03-27-15 1,204 iShareslBOXX Inv Grade Corp Bond 121.86 146,723.52 05-08-15 05-13-15 1,250 iShareslBOXX Inv Grade Corp Bond 119.06 148,825.94 1,589,350.28 3 Garrison Financial REALIZED GAINS AND LOSSES City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 From 01-01-15 Through 06-30-15 Open Close Gain Or Date Date Quantity Security 04-16-14 03-19-15 100 Ensco Plc. 04-16-14 03-19-15 250 Ensco Plc. 04-16-14 03-19-15 300 Ensco Plc. 04-16-14 03-19-15 300 Ensco Plc. 04-16-14 03-19-15 800 Ensco Ple. 06-10-14 03-19-15 1,750 Noble Corp. 06-26-14 03-19-15 2,000 Alerian MLP 01-16-13 03-19-15 3,000 Alerian MLP 12-20-10 03-19-15 1,700 Sector SPUR Utility Select 36,190.60 Shs 12-20-10 03-19-15 2,300 Sector SPDR Utility Select 49,014.03 -2,437.58 Shs 05-19-14 03-19-15 5,650 Keycorp 02-10.14 03-19-15 2,000 Sector SPUR Foci Select Shs 02-10-14 03-19-15 1,775 Sector SPUR Foci Select Shs 05-12-14 03-19-15 100 Freeport-McMoRan Copper 48,818.36 5,179.13 & Gold, Inc. 05-12-14 03-19-15 200 Freeport-McMoRan Copper 3,487.70 1,720.02 & Gold, Inc. 05-12-14 03-19-15 100 Freeport-McMoRan Copper -3,535.36 3,487.70 & Gold, Inc. 05-12-14 03-19-15 100 Freeport-McMoRan Copper 1,720.02 -1,767.68 & Gold, Inc. 05-12-14 03-19-15 100 Freeport-McMoRan Copper 3,487.70 & Gold, Inc. 05-12-14 03-19-15 100 Freeport-McMoRan Copper 1,720.02 -1,767.68 & Gold, Inc. 05-12-14 03-19-15 100 Freeport-McMoRan Copper 38,364.70 18,915.85 & Gold, Inc. 05-12-14 03-19-15 100 Freeport-McMoRan Copper 78,640.74 87,773.42 & Gold, Inc. 05-12-14 03-19-15 1,100 Freeport-McMoRan Copper 5,605.72 & Gold, Inc. 08-08-I1 03-19-15 3,000 iShares D1 Select Div 10-06-09 03-24-15 800 iShares IBOXX Inv Grade -69.57 100, 543.80 Corp Bond 10-06-09 03-24-15 46 iShares IBOXX Inv Grade 1,732.85 -8,355.15 Corp Bond 10-06-09 03-24-15 1,204 iShares IBOXX Inv Grade 52,323.49 7,037.50 Corp Bond 06-26-14 04-08-15 150 Microsoft Corp. 11-05-13 04-08-15 2,675 Microsoft Corp. 06-26-14 04-08-15 50 Pfizer, Inc - 05-07-10 04-08-15 3,600 Pfizer, Inc. 06-26-14 05-07-15 250 Intel Corp. 06-22-06 05-07-15 750 Intel Corp. 06-26-14 05-07-15 200 Cisco Systems, Inc. 03-29-11 05-07-15 1,300 Cisco Systems, Inc. 04-15-I1 05-07-15 450 Johnson & Johnson 10-06-09 05-08-15 1,250 iShares IBOXX Inv Grade Corp Bond Gain Or Loss Cost Amort. or Basis Accretion Proceeds Short Term Long Term 5,034.33 2,061,55 -2,972.78 12,585.82 5,153,88 -7,431.94 15,102.98 6,184.66 -8,918.32 15,102.98 6,184.66 -8,918.32 40,274.61 16,491.60 -23,783.01 48,930.13 23,685.79 -25,244.34 36,190.60 32,676.02 -3,514.58 51,451.61 49,014.03 -2,437.58 58,043.02 76,343.50 18,300.48 78,528.80 103,288.25 24,759.45 75,839.95 81,406.62 5,566.67 43,639.23 48,818.36 5,179.13 38,729.82 43,324.52 4,594.70 3,487.70 1,720.02 -1,767.68 6,975.40 3,440.04 -3,535.36 3,487.70 1,720.02 -1,767.68 3,487.70 1,720.02 -1,767.68 3,487.70 1,720.02 -1,767.68 3,487.70 1,720.02 -1,767.68 3,487.70 1,720.02 -1,767.68 3,487.70 1,720.02 -1,767.68 38,364.70 18,915.85 -19,448.85 156,695.97 235,336.72 78,640.74 87,773.42 97,490.72 9,717.30 5,046.97 5,605.72 558.75 132,099.00 146,723.52 14,624.52 6,271.50 6,201.93 -69.57 100, 543.80 110,601.00 10, 057.20 10,088.00 1,732.85 -8,355.15 72,441.75 124,765.24 52,323.49 7,037.50 8,080.37 1,042.87 15,400.90 24,241.09 8,840.18 4,642.00 5,762.90 1,120.90 25,614.04 37,458.85 11,844.81 29,113.09 44,938.97 15,825.88 137,145.97 148,825.94 11,679.97 Garrison Financial REALIZED GAINS AND LOSSES City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 From 01-01-15 Through 06-30-15 Open Close Date Date Quantity Security 12-31-14 05-08-15 635 McDonald's Corp. TOTAL GAINS TOTAL LOSSES TOTAL REALIZED GAIN/LOSS 150,16251 NO CAPITAL GAINS DISTRIBUTIONS Cost Amort. or Basis Accretion Proceeds 60,065.98 62,554.99 1,439,187.77 0.00 1,589,350.28 H Gain Or Loss Short Term Long Term 2,489.01 10,219.45 -124,565.97 -114,34652 266,946.61 -2,437.58 264,509.03 Garrison Financial PERFORMANCE SUMMARY GROSS OF FEES City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 June 30, 2015 PORTFOLIO COMPOSITION CHANCE IN PORTFOLIO Account 40% Fixed Income/60% Equity Blended Index Account Fixed Income Barclays Capital Intermed Govt/Credit Account Equities S&P 500 TIME WEICHTED RETURN Annualized Quarter Market Pct. Inception To Date To Date Months Value Assets Yield 0.04 0.04 Cash & Equivalents 346,736.60 5.3 0.0 Portfolio Value on 12-31-14 7,023,870.27 Account Fixed 2,289,399.37 35.1 1.9 Accrued Interest 16,134.03 Income -1.66 -1.25 -1.25 0.28 1.23 Account Equities 3,883,121.87 59.6 2.5 Net Additions/Withdrawals -480,585.48 Account 0.00 0.0 - Realized Gains -48,890.72 Commodities Unrealized Gains -79,602.83 Income Received 85,434.68 Change in Accrued Interest 2,897.89 Portfolio Value on 06-30-15 6,500,225.92 Accrued Interest 19,031.92 Total 6,519,257.84 100.0 2.2 6,519,257.84 Account 40% Fixed Income/60% Equity Blended Index Account Fixed Income Barclays Capital Intermed Govt/Credit Account Equities S&P 500 TIME WEICHTED RETURN Annualized Quarter Year Last 12 Inception To Date To Date Months To Date -0.09 -0.61 0.04 0.04 -0.08 1.15 5.20 5.20 -0.48 1.14 2.23 2.23 -0.62 0.82 1.69 1.69 0.10 -1.66 -1.25 -1.25 0.28 1.23 7.42 7.42 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 July 7, 2015 City of Fayetteville Police Pension and Relief Fund Charles Schwab #2448-5630 113 West Mountain Fayetteville, AR 72701 STATEMENT OF MANAGEMENT FEES For The Period April 1 through June 30, 2015 Portfolio Value as of 03-31-15 6,736,027 Portfolio Value as of 04-30-15 6,685,525 Portfolio Value as of 05-31-15 6,632,855 Portfolio Value as of 06-30-15 6,519,258 Average of 4 Months 6,643,416 6,643,416 @ 0.5000% per annum 8,304 Quarterly Management Fee 8,304 TOTAL DUE AND PAYABLE 8,304 This statement is for informational purposes only. As you requested, the fee will be automatically deducted from your account. Please be advised that it is the responsibility of the client to verify the accuracy of each fee calculation. 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