CITY COUNCIL: Municipal Endowment Fund

Meeting Date: June 6, 2008
Prepared by: Joyce Giuffre,
Admin. Services Director

City Council
Agenda Item Summary

Name: Request for policy direction regarding the establishment of a Municipal Endowment Fund (comprised of a number of individual endowment funds) and the related policies governing the acceptance of gifts, investment, spending, accounting, and reporting of all endowed funds.

Description: The City Treasurer and Administrative Services Director request that City Council provide policy direction regarding the establishment and marketing of a city-run endowment fund. The primary purpose of this Endowment Fund would be to generate income to support the development and enhancement of the City’s programs and activities, and to provide the City with long-term financial stability.

The City Treasurer and Administrative Services Director have determined that a review of a program of this nature is appropriate at this time. In light of the current national economy and the state budget outlook over both the near and long terms, the City’s revenue from all major sources could be trending downward.

Staff requests approval from the City Council to move forward with establishing the Carmel-by-the-Sea Municipal Endowment Fund.

Overall Cost: City Funds: to be determined
Grant Funds: N/A

Staff Time: estimated at between 10-40 hours per month

Staff Recommendation: Provide policy direction regarding establishing a Municipal
Endowment Fund for the City of Carmel-by-the-Sea.

Decision Record: None

Reviewed by:


Rich Guillen, City Administrator Date


CITY OF CARMEL-BY-THE-SEA
STAFF REPORT
TO: MAYOR McCLOUD AND COUNCIL MEMBERS
THROUGH: RICH GUILLEN, CITY ADMINISTRATOR
FROM: JOYCE GIUFFRE, ADMINISTRATIVE SERVICES DIRECTOR
DATE: JUNE 6, 2008
SUBJECT: REQUEST FOR POLICY DIRECTION REGARDING ESTABLISHMENT OF A MUNICIPAL ENDOWMENT FUND IN THE CITY OF CARMEL-BY-THE-SEA
______________________________________________________________________________
RECOMMENDED MOTION:
Provide policy direction about whether or not to establish a Municipal Endowment Fund in the City of Carmel-by-the-Sea.

BACKGROUND:
In light of the current national economy and the state budget outlook over both the near and long terms, the City’s revenue from all major sources could be trending downward.

The primary purpose of an endowment fund is to generate income to support the development and enhancement of the City’s programs and activities, and to provide long-term financial stability to the City.

It is intended that the Endowment Fund will provide an income base not subject to major shortterm fluctuations resulting from changes in economic and other conditions which affect the City’s major sources of income. Thus, it should enable the City to better plan, enhance, and carry out its duties of service to the public.

Among the municipalities that have established endowments to allow their citizens to help fund public programs and commitments are:
• San Francisco, CA (pop. 770,000) – has a Cultural Equity Endowment Fund
• Des Moines, IA (pop. 540,000) – has an Affordable Housing Endowment Fund
• Kalamazoo, MI (pop. 80,000) – has a Recreation Endowment Fund
• Lacombe, Alberta, Canada (pop. 11,000) – has an endowment fund to help pay for its
ambulance services and also a fund to assist in paying for its Arts programs
• McFarland, WI (pop. 6,000) – has a Senior Outreach Services Endowment Fund

The establishment of a municipal endowment fund (which is comprised of any number of
individual, donor-specific funds) would allow the City to consistently address needs that have been determined to be municipal in nature, which might otherwise be postponed for economic reasons.

There are several costs related to establishing an endowment fund: those related to staff time (estimated at 10-40 hours per month); those related to the legal expense of evaluating individual endowments; and those related to directly marketing the program. These costs will be fully explored and estimated should City Council decide to move in this direction.

Accompanying this staff report is a draft Endowment Policy analysis that outlines the
numerous required policies regarding gift acceptance, investments, spending, accounting and reporting.

SUMMARY:
The City Treasurer and Administrative Services Director request policy direction from the City Council to move forward with establishing the Carmel-by-the-Sea Municipal Endowment Fund.

Table of Contents
1. Purpose of Endowment Funds
2. Key Concepts
3. Endowment Gift Acceptance Policy
4. Endowment Investment Policy
5. Endowment Spending Policy
6. Endowment Accounting Policy
7. Endowment Reporting Policy
8. Appendix A - Endowment Management Start-Up
9. Appendix B – Reporting Formats

1. Purpose of the Endowment Fund
The primary purpose of the Endowment Fund of Carmel-by-the-Sea is to generate income to support the development and enhancement of the City’s programs and activities, and to provide long-term financial stability to the City.

It is intended that the Endowment Fund will provide an income base not subject to major short-term fluctuations resulting from changes in economic and other conditions which affect the City’s major sources of income. It should thus enable the City to better plan, enhance and carry out its duties of service to the public.
The Endowment Fund is to be permanent and never closed.

2. Key Concepts
Endowments and gifts are donations of cash, securities or other endowment assets to provide income for the maintenance and operation of the City. Donations are set up and accounted for in special funds. The use of the endowment and gift funds may be permanently restricted, temporarily restricted (based on donor imposed restrictions) or unrestricted.

Endowment funds are generally established as a donor-restricted gift or bequest to provide a permanent endowment (a permanent source of funds) or a term endowment (funds for a specified period of time).

Endowment funds functioning as an endowment are Council designated and are not subject to permanent restriction.

Gifts that are available for current purposes are classified as “gifts for
current use”. Gifts that have been restricted by the donor or designated
by the Council for construction, endowment, or similar purposes are classified as “gifts of capital”.

Net Asset Balances
Net Assets are the excess or deficiency of assets over/under liabilities classified according to the existence or absence of donor-imposed restrictions.

Permanently Restricted Endowment
Permanently Restricted assets are determined when the donor specifies that the entire donated principal is to remain in perpetuity within the Endowment Fund (a true endowment). The spending of such principal is prohibited. Earnings associated with this principal can be retained or used to fulfill the donor’s wishes (temporarily restricted) or applied under the direction of the City (unrestricted).

Temporarily Restricted Endowment
Temporarily Restricted Assets are endowment earnings associated with true endowments to fill the donor’s wishes. Quasi Endowments established by the provisions of the City whose source of principal is from Current

Restricted Funds are Temporarily Restricted. Earnings associated with Temporarily Restricted Quasi Endowments are unrestricted because Current Restricted funds have no donor restrictions on income.

Unrestricted Endowment
Unrestricted Assets include donations by parties who did not specify that the assets be used for a certain purpose. Endowment earnings associated with true endowments that are to be applied under the direction of the City are unrestricted. Quasi Endowments established by the provisions of the City whose source of principal is from Current Unrestricted funds remain classified as Unrestricted Funds including the
associated income.

Current Funds (Spending Accounts)
Current Unrestricted Funds and Current Restricted Funds retain the classification for the Net Asset Class as the fund name signifies; that is, Unrestricted Net Assets and Temporarily Restricted Net Assets respectively.

Gifts and Grants
When the City is to receive something of value there is the possibility of confusion as to whether it is a gift or a grant. The City will make that determination based on the definitions below, regardless of the characterization by the donor or sponsor.

A gift is something of value, such as money or other economic assets, given to the City by a donor in support of City programs. There is no economic benefit provided by the City in return.

There are several types of gifts. It is important to understand the distinctions because different policies may apply.

Restricted Gifts – A gift is considered restricted if it is available for operations but limited by the donor to specific purposes, programs, or departments. The City is responsible for ensuring the donor’s intentions are followed when expending restricted gift funds.

Unrestricted Gifts – A gift is considered unrestricted if the donor does not
specify how it is to be used.

In-kind Gifts – non-cash gifts of tangible or intangible property. Gifts –inkind can fall into two distinct categories: (1) objects such as equipment, software, printed materials, food, or other tangible items, and (2) services.

Regardless of the type, gifts-in-kind need to be reported to the City for
proper gift acknowledgment and stewardship.

Employee Gifts - gifts made by City employees. Gifts made to the city may not be earmarked for the donor nor be under the control of the donor.

Endowments – gifts structured by the donor such that only the income may be spent, while the principal is held indefinitely. An endowment may also be a term endowment, wherein the donor specifies the principal must be held for specific length of time.

Quasi-endowment – Any individual donation or gift in excess of $100,000 is generally classified as a quasi-endowment, and treated like an endowment. A related gift income fund is set up for the earnings on the quasiendowment principal. Quasi-endowments may be either restricted or unrestricted, depending on whether there are purpose restrictions on the use of the income from the quasi-endowment.

A grant, in contrast, returns something of value to the donor. There is generally a formal agreement, and there may be effective dates for results, requirements that financial or technical reports be provided to the donor, requirements that the donor retain the rights to intellectual property, or access to City resources or services be given to the donor.

Fiduciary Responsibility
A crucial frame of reference in making all business decisions, including whether to make a given expenditure. A fiduciary relationship exists when someone (the fiduciary) acts in the capacity of a “caretaker” of another’s rights, assets and/or well being. The fiduciary has an ethical and/or legal obligation to carry out this responsibility with discretion, intelligence, honest and impartiality. Those who make decisions or give approval for expenditures must ensure that the funds are expended responsibly, reasonably, and in compliance with the intentions, rules, law and concerns of the provider of the funds.

Authority
Relates to the responsibility for making decisions. At the City, a specific department may be the recipient of a gift, or it may be deemed available for general use. If not specified by the donor, authority to spend with gift will generally be given to the City Administrator.

3. Endowment Gift Acceptance Policy
General Policy
Federal and state law requires that the City satisfy various requirements regarding gifts made the City. The City will act in accordance with all such requirements and this gift acceptance policy will be amended to reflect any changes in applicable law.

To qualify as a charitable contribution, a transfer of cash or assets to the City must be made for the use of the City. The City must have legal authority over the distribution of the contributed funds, although the donor may request that the City apply the funds to a particular need if such application of funds is consistent with the exempt purpose of the City, the donor’s request to the City does not interfere with the donor’s charitable contribution deduction unless the request becomes a material restriction or condition with respect to the transferred assets. A material
restriction exists if any condition is imposed on the actions taken by the City which prevents it from exercising ultimate control over the assets received from the donor for purposes that are consistent with its exempt purpose. There is no material restriction if the following guidelines are observed.

1. The City has the full ownership, benefit and control of the assets it receives.

2. The assets to be administered by the City are consistent with its exempt purposes.

3. The fund to which the assets were contributed is independent of any donor.

Federal law denies contribution deductions when recipients of contributions act as “conduits” – funneling gifts to particular individuals. However, the City can legally establish discretionary distribution funds that are consistent with its exempt purpose. Donations to such funds will be credited as charitable contributions as long as they meet the following criteria:

1. The donor has no family relationship or legal obligation to support the recipient.

2. No other relationship exists by which the donor directly or indirectly benefits from the donation.

3. The donation is not made in lieu of an existing financial responsibility that may reasonably be required or expected of the donor.

Execution of Endowment Agreements
A named endowment can be established either by a lifetime gift or by bequest. When it is created by a lifetime gift, the donor and officials of the City will sign an endowment agreement that sets forth the terms of the endowment. When the donor executes a will containing language directing that a named endowment be established, no other documentation is required, though the donor will be encouraged to execute an endowment agreement in addition to the will. Contributions for existing unrestricted or restricted endowment funds, but not for a new named endowment, require only a transmittal letter or bequest language stating the donor’s intention.

Departmental Endowments
Departments may establish endowments or add to exiting Department endowments from any source including existing fund balances once the Department has reached a minimum fund balance as determined by the Department and approved in accordance with the budget review process and approved financial plan. The establishment of Department endowments will follow the guidelines outlined in the City policy. The use
of the interest from these Department endowments will be subject to City Administrator approval and applicable City policy.

City Council Approval
Prior to the acceptance of restricted gifts or donations to the Endowment Fund, all conditions, restrictions, and stipulations of any kind associated with the gift must be examined and approved by the City Council as being consistent with the City’s purposes and policies, and being helpful to it in its work.

All funds in the Carmel-by-the-Sea Endowment Fund, regardless of their
source, are considered to be the funds of Carmel-by-the-Sea.

4. Endowment Investment Policy
Investment Philosophy
In recognition of its fiduciary responsibility, the City of Carmel-by-the-Sea has adopted the following investment management guidelines for its long-term holdings and endowment funds.

The Endowment Investment Policy of the City is to enhance the value of funds held in the portfolio and at the same time provide a dependable, increasing source of income, which will be used to support various programs of the City. The portfolio shall be composed of diversified assets, including both equities and fixed-income investments. The equities are designed to provide current income, growth of income and appreciation of principal. The fixed-income investments are intended to provide a
predictable and reliable source of interest income while reducing the volatility of the portfolio. Investments will be diversified in order to enhance return and reduce risk.

It is the intent of these guidelines to conform to the prudent investor standard. This standard requires the exercise of reasonable care, skill and caution, and is to be applied to investments, not in isolation, but in the context of the trust portfolio and as part of an overall investments strategy, which should incorporate risk and return objectives reasonably suitable to the City of Carmel-by-the-Sea.

Investment Objectives
The investment objectives for the management of endowment and longer tern assets are to manage contributions in a manner that will best realize the benefit intended by the donor; to produce current income to support the programs of the City and donor objectives; and to achieve growth of both principal value and income over time sufficient to preserve or increase the purchasing power of the assets, thus protecting the assets against inflation.

Total return shall be the method for measuring the performance of market invested funds. This refers to the combination of income (interest and dividends) and appreciation/depreciation in the fund’s value for a certain period of time. The specific financial objective is for total return, less expenses and distributions, to equal or exceed the Consumer Price Index (CPI) for that period. Real growth is a measure of the extent to which total return, less expenses and distributions, exceeds the CPI. It is 100 recognized that this objective will not be attained every year because of market fluctuations, but it is expected to be attained over time.

City Council Approval
Investment of monies of the Endowment Fund will be made by the City Treasurer only in investment vehicles approved by the City Council.

Asset Structure
To facilitate investment and accounting, the endowments and other invested funds shall function as a pooled fund. Each individually-named endowment shall hold its pro rata share as part of the investment pool. On occasion, income may be capitalized and transferred to the principal of a fund.

When contributions for either temporarily restricted funds or the endowments are received, they shall be temporarily retained by the City in a holding account and added to the endowment on the first day of the following quarter.

The funds within the endowment shall consist of all individually-named funds, plus such other funds as the City may from time to time establish.

Investment Management
The investment portfolio shall be overseen by the Finance and Investment Committee of the City, whose responsibilities in the area of investment administration are as follows:
• To recommend policies to the City for the management of the investments,
• To make recommendations to the City on the selection of portfolio managers,
• To determine how assets are to be allocated,
• To monitor the management of the portfolio in order to enhance return and control risk and to keep the City fully informed of any material changes in the portfolio value or composition.

Asset Allocation
The general policy shall be to diversify investments with both equity and fixed-income securities so as to provide a balance that will enhance total return while avoiding undue risk concentration in any single asset class or investment category.
The monitoring and adjustment of the mix of assets among the investment classes is a major factor in achieving investment return. The Finance and Investment Committee shall carefully review the mix of assets in the investment pool and periodically make, or instruct the portfolio managers to make, transfers within prescribed asset class limitations.

As a long-term policy guideline, equity investments will constitute no more
than 80 percent of endowment assets.
1. Equity Investments
Common Stocks – Equities – Mutual Funds
The principal category of equity investments will be common stocks that are generally considered high quality, financially sound, and readily marketable in the open market. Investments made in professionally manage, pooled real estate funds (commonly referred to as REIT’s) will also be considered a component of this
type of investment.

Stock investments should be diversified in terms of market segment, industry, capitalization, and nation of origin.

Real Estate
Equity investments may also include real estate investments in professionally managed, income-producing commercial property, unless otherwise approved by Council action. Gifts of income-producing real estate may be included in the equity portfolio, provided they are consistent with these management guidelines. To the extent that such gifts of real estate would require a greater percentage of endowment assets to be committed to this asset class, or would constitute a negative cash flow, or would be deemed by professional management counsel to constitute undue market risk, such gifts would be disposed of at sale and the proceeds directed to the general endowment pool for the benefit of programs consistent with the donor’s original intent.

Private Equity and Venture Capital
Equity investments may also include private equity or venture capital investments. Such investments, however, shall not exceed 5 percent of the total endowment assets and must be made through pooled funds offered by professional investments managers with proven records of superior performance over time.

2. Fixed-Income Investments
Cash Equivalents
Fixed-income investments may include short-term money market securities, which historically have produced the lowest return of available investment options. Such investments, however, shall be kept at the minimum level that the Finance and Investment Committee considers necessary to meet foreseeable short-term liquidity requirements. Such investment shall be made in U. S.

Treasury securities commercial paper rated A-1 or P-1, and money market securities issued by institutions with proved high-quality credit ratings or by pooled funds with demonstrably high-quality standards and proven records of superior performance over time.

Bonds
The managed portfolios will be well-diversified and consist of readily marketable securities in the open market.

Investments in fixed-income securities will consist of investment
grade securities
1
5. Endowment Spending Policy
It shall be the intention to retain the principal included in the Carmel-bythe-
Sea Endowment Fund by using only a portion of the net earnings of the fund (defined as cash dividend and interest income) to support activities of Carmel-by-the-Sea to be determined from time to time by the City Council.

Spending Policy
The allocation/spending policy shall be determined on a year-to-year basis by the City upon recommendation of the Finance and Investment Committee. In recommending a spending policy for the forthcoming year, the Finance and Investment Committee shall take into consideration total return and CPI for the immediately preceding year and projections for the following year. While the allocation/spending policy may fluctuate within a narrow range, it is expected to average approximately 3-5
percent of market value.

It shall be the responsibility of the Finance and Investment Committee to annually review the spending policy against actual returns in order to make adjustments necessary for the preservation of the purchasing power of the endowment funds, and for the maximization of earnings on all other funds deemed not to be used in the short term/current allocation period.

All monies deposited in the Endowment Fund (including sub-accounts) will remain in it as its principal sum, and will not be spent except as specially permitted.

All interest and other income generated by the Endowment Fund will be
applied and spent as follows:
1. At least ten (10) percent of non-restricted income generated will be retained in the Endowment Fund to enable it to grow and maintain its real value during inflationary periods

2. The remaining ninety (90) percent of the non-restricted income generated may be spent in whatever manner the City Council decides will at any particular time best carry out the work of the City.

The Budget and Finance Committee with advice from the City Administrator will recommend to the City Council disposition of net interest earnings if earnings are sufficient in nature to warrant action. The City Council will determine the use of these net earnings with the provision that the earnings be used for Carmel-by-the-Sea program enhancements and special initiatives. In the absence of specific action, net earnings revert to endowment principal.

Emergency Withdrawal of Principal
In the event of unavoidable serious financial emergency situations for the City, the principal amount of the Endowment Fund may be used under the following conditions:
A vote of 2/3 of the total number of City Council at two successive regular
meetings is required;
1. Not more than twenty (20) percent of the principal sum may be used in any one calendar year;

2. Money in sub-accounts subject to restrictions will not be used;

3. Amounts utilized by the City from the Endowment Fund principal sum will be replaced as a priority budget item as soon as financial conditions permit

The City Council recommends withdrawals from the Endowment Fund principal only when the need is so great that the purposes and programs of Carmel-by-the-Sea would otherwise be seriously impaired and in accordance with the Carmel-by-the-Sea Long Term Investment Policy.

6. Endowment Accounting Policy
The policy on accounting for endowments and gifts defines the accounting procedures for assets donated to the City to support its operations.

Steps involved in process:
Receipt of donation
1. A donor transfers gift to City. The donor is responsible for stipulating the nature of the gift.

2. Treasurer analyzes the terms of the gift and sets up new endowment on accounting system, specifying the net asset class of the corpus, and of the income.

If cash, the gift is deposited into an investment account. It is recorded as an asset and as gift revenue.

If a marketable security, the security is placed with an investment advisor. It is recorded as an asset (at FMV) and as gift revenue.

If real estate, Treasurer should contact professional management counsel to determine if real estate should be held or liquidated. If held, real estate is to be recorded as asset at FMV (GASB Statement 52, Nov. 2007) and as gift revenue. If liquidated, record as cash, above.

Allocation of investment income
3. Once a month (quarter), the endowment accountant credits each endowment with its share of the investment income. A “Payout Roll-Forward Schedule” is prepared for each endowment. See Section 7 – “Endowment Reporting Policies”.

Payout requests
4. When payout is requested, requestor submits “payout request” to endowment administrator. Treasurer verifies that request is permissible under gift restrictions and that there is sufficient unspent payout to cover the request. Treasurer prepares request to pay out funds to Accounts Payable.

Reporting of endowment investments
5. The performance of endowment investments will be reported with the investments reports submitted each quarter to the Finance and Investment Committee. The report shall contain a summary of the following:
a. Book value, by asset class
b. Market value, by asset class
c. Performance measures
d. Benchmarks against which to measure performance, and
e. Beginning and ending market values for the quarter, with changes in market values
For details on these reports see Section 7 – “Endowment Reporting Policies”.

Critical Gift Reporting Times
1. Fiscal Year End – It is important to ensure that all gifts received on or
before June 30th of each year are reflected in the City’s financial statements

2. Calendar Year End – For income tax purposes, many donors make charitable donations on or before December 31st. It is important to be on the alert to potentially process and receipt year-end gifts for donors’ tax requirements.

Pro Forma New Accounts Required
Contra-Account
Net Asset Class Definition Type
General Operating Account
Unrestricted – undesignated
Represents receipts, gifts and funds with no donorimposed restrictions Revenue
Unrestricted - designated
Represents receipts, gifts and funds with no donorimposed restrictions but designated by the governing board (City Council) for a specific purpose Revenue
Unexpended Endowment Income
Represents restricted endowment income that has not yet
been used for the specific purposes intended Revenue
Unexpended Current Use
Gifts
Represents gifts received to support the City's general operations not used as of the current period Revenue
Construction Gifts
Represents gifts received with a donor-imposed stipulation that they be used for construction Revenue
Funds Invested in Facilities
Represents the net book value of plant assets in service and costs of plant constructions in progress Fixed Asset
Funds Invested in Equipment
Represents the net book value of plant assets in service and costs of plant constructions in progress Fixed Asset
Endowments
Endowment Funds Principal
Represents the principal balance of endowments received, classified based on donor-imposed restrictions Asset
Endowment Appreciation
Represents allocated appreciation and unrealized appreciation on investments of endowment principal Asset
Endowment Interest in
Perpetual Trust held by
Others
Represents the estimated fair value of expected future cash flows from certain perpetual trusts held and administered by others where the City is the beneficiary Asset
Life Income Funds
Life Income Funds Principal
Represents the principal balance of life income funds classified based on donor-imposed restrictions Asset
Life Income Funds
Appreciation
Represents allocated appreciation and unrealized appreciation on investment of life income fund principal Asset
Life Income Funds - liability under life agreement
Represents the liability for the net present value of future
payments due to beneficiaries of life income funds Liability
Life Income Funds - liability under CRTs
Represents the liability for obligations under Charitable
Remainder Trusts due to other institutions Liability
Life Income Funds - general
investment income distributed
Represents income earned by gift annuities during the past year from their investment in the General Investment Account Revenue

7. Endowment Reporting Policy
The reporting of endowment activity information required in Section 6
can be contained in 3 basic reports per endowment.
The Payout Roll-forward Schedule
This report tracks, by endowment, the beginning balance plus all additions and draws against all unspent payouts (a complete accounting of funds that have be authorized to be spent, but have yet to be spent) for a given fiscal year (or, to date within a fiscal year).

This report is most useful for departments that have been authorized to spend endowment payout, but have yet to completely spend it. The
City Administrator and Finance and Investment Committee will also use it to compare future funding necessary for endowment program
completion.

The Payout Drawdown Report
This report details the individual drawdown transfers and direct payout drawdowns for each individual endowment.

This report is useful for departments and the City Administrator in order to review exactly how the drawdowns are spent.

The Description, Units, Book Value, Market Value and Unspent Payout Report
This summary report tracks the general “meta” data related to each endowment. It relates the number of units for which the endowment accounts (the percentage of total invested funds), the book value of the endowment, the market value of the endowment, and the unspent payout remaining at a given point in time.

8. Appendix A - Endowment Management Start-Up
The following is an outline of tasks necessary to put into effect the Endowment Policy as presented.

Start-up Tasks
1. A Finance and Investment Committee should be formed, recommended to and approved by the City Council

2. The City Administrator shall recommend an investment advisor and investment manager for selection by the City Council Annual Tasks

3. The City Administrator shall coordinate the activities of the investment advisor and the investment manager throughout the year

4. The City Administrator and the Committee shall meet to determine the current year spending policy, asset allocation, and methods of keeping costs to a minimum (including, but not limited to (1) diligent investigation of alternative investment
candidates, (2) tough negotiation of fees, and (3) efficient management of the firms managing the City’s investments.

5. At a fall meeting (i.e., early in the fiscal year), the investment advisor shall meet with the Finance and Investment Committee to accomplish the following:

a. Present a brief summary of the policies of the City that have been in effect for the reported period
b. Present the relative market valuations of the various asset classes

c. Review the reports of the investment manager for the year ended June 30th, addressing specifically the balances maintained between the stock and bond funds. It is expected that the City’s actual results will be compared with leading performance indicators for similar funds and with the performances achieved by peer institutions

d. Make recommendations to the Committee related to long-term policies, changes in the balancing of the portfolios, and considerations related to the investment
manager

6. At a successive meeting, the investment manager shall meet with the Finance and Investment Committee to accomplish the following:
a. Make presentations to the Committee on endowment fund investment performance for the year ended June 30th

b. Present analyses of current and future market conditions