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MINUTES <br />CITY COUNCIL <br />NOVEMBER 24, 2004 <br />decreased the work load for the volunteers, however, also increased costs <br />for the city. <br />Dan Croonquist, .RBC Dain Rauscher, reported that he has worked with <br />the Relief Association since 1987 on the investment of its pension fund. <br />Croonquist stated that he is present this evening to answer any questions <br />relative to the fund. He noted the basic purpose of the fund is to provide a <br />retirement benefit for the volunteer fire fighters. Croonquist reviewed <br />some past history of the fund noting the investment statement for the <br />pension fund calls for investments of 40% in equity or growth funds and <br />60% in fixed income. Croonquist then presented some historical data for <br />the fund since 9-1 I and the impacts of the 2000 tech rwis. As a result of <br />fund performance over the past few years, the pension food has not been <br />fully funded. However, at this point, it is close to being fully funded. <br />Croonquist indicated that some of the issues the Pire'Department asked <br />him to discuss this evening include the impact of 9-] 1 on the pension fund <br />and the investment plan for the fund including bonds versus fixed income <br />versus annuities. Croonquist again reviewed market performance from 9- <br />llthrough April of 2003 when the market bottomed out. Croonquist also <br />discussed the impact of interest rates on the bond market. He pointed out <br />that the market has turned around significantly in the last year, and felt <br />that the pension fund is responding nicely. Croonquist stated that he <br />would have to give serious thought to making any changes to the fund at <br />this point. With regard to annuities, Croonquist pointed out that they are a <br />tax shelter investment and are less liquid. If the pension fund was invested <br />in annuities, and there was a need to generate funds for retirement, there <br />would be charges for liquidating funds. Croonquist stated that the current <br />account structure provides access to funds if needed for retirements and is <br />geared toward a level of performance that will not be #], but will not be an <br />embarrassment. Croonquist noted that a significant portion of the fund is <br />in Washington Mutual, which has done very well. The fund is currently <br />invested 39% in stocks, 59% in Fixed income, and there is $100,000 iu <br />cash that is waiting for au investment decision- Croonquist noted that the <br />Relief Association recently sold its investment in the AIM Fund which it <br />held since 1999. <br />There was a detailed discussion relative to why the decision was made to <br />initially invest iu the AIM Fund when there were other funds that had <br />better rankings. Croonquist explained the various criterion that he <br />considers in making an investment decision, as well as noted the point i^ <br />time that the decision was made, which was prior to 9-7 'l . There was also <br />a discussia~ as to why the AIM Fund was sold just prior to the November <br />election, when it was projected that there would be an upswing in that <br />fund miler the election. Croonquist indicated that the AIM Fund <br />investment was sold as it was underperforming and after a discussion with <br />3 <br />