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Home My WebLink AboutMuseum Donation/Durow Trust Oshkosh Public Museum Durow Trust Fund Investment & Fund Management Policy Dated: May 5,2011 Executive Summary: This Investment & Fund Management Policy (IFMP) provides general direction for the following account: Market Value Account as of 02/28/2011 Oshkosh Public Museum Durow Trust Fund $2,808,695.35 Target Asset Allocation Summary Account Equity Fixed-Income Target Allocation Target Allocation Oshkosh Public Museum Durow Trust Fund 50% 50% Purpose of Investment& Fund Management Policy: • The purpose of the IFMP is to provide ongoing guidance and direction to the City of Oshkosh as to the management of Durow Trust Fund. • The City's Investment Committee will be comprised of: the Director of Finance/Treasurer,the Museum Director, and the City Attorney. This committee shall comply with the guidelines in the IFMP, and make decisions based on the spirit of the Durow Trust, and in the best interest of the Oshkosh Public Museum, and its visitors. • Donor Purpose: "The purpose of the Fund is to provide money for the acquisition of glass and ceramic ware, including steins, ewers and pitchers, and for the exhibition, care, maintenance, education, and promotional activities for this portion of the museum's collection with particular emphasis on Germanic and Bohemian ware but not excluding other areas of glass-ceramic interest to the Museum. The purpose shall include capital construction provided the spaces are named for Frederick Schattschneider Durow and Marion Hughes Durow. " 1) Duties and Responsibilities: City Manager As the Chief Executive Officer of the City of Oshkosh, the primary responsibility of the City Manager will be to review and approve the IFMP and provide oversight to the Investment Committee. 1 Museum Advisory Board By state statute and municipal code, the Museum Advisory Board has the authority to approve expenditures from Museum trust funds. The role of the Museum Advisory Board in this context is to ensure that all expenditures made from the Durow Trust Fund are consistent with the purpose of this Trust Fund and within the existing approval process. The Museum Board is also responsible to review and approve the IFMP. Investment Committee As fiduciaries, the primary responsibilities of the Investment Committee members are to: • Be responsible for preparing and recommending the IFMP for approval; • Be responsible for reviewing the IFMP annually; • Select and monitor the Investment Manager and the Custodian; • Review ongoing investment and custodial reports; • Communicate, on a regular basis, with the Museum Board and City Manager, regarding this fund; and • Avoid any conflict of interest with investment transactions. Investment Manager The Investment Manager is hired by the City of Oshkosh, and shall comply with this policy and make decisions based on the spirit of the Durow Trust, and in the best interest of the Oshkosh Public Museum, and its visitors. The primary responsibilities of the Investment Manager are to: • Manage assets according to parameters outlined in Wisconsin State Statutes, this policy, Investment Advisory Contracts, and Addendums; • Act under discretionary investment authority with respect to buying, selling, and managing assets for which the Investment Manager has been given written authority; • Communicate to the Committee any substantial changes in the account valuation, all significant changes pertaining to the Investment styles being utilized, and any significant firm changes, i.e. changes in firm ownership, organizational structure, and professional staff; • Provide written performance reports at least quarterly to Director of Finance; and • Use reasonable skill, prudence and due diligence in making investment decisions. Custodian The Custodian is hired by the City of Oshkosh, and shall comply with this policy and make decisions based on the spirit of the Durow Trust, and in the best interest of the Oshkosh Public Museum, and its visitors. The primary responsibilities of the Custodian are to: • Provide safekeeping of Durow Trust assets; 2 • Maintain separate accounts by legal registration; • Routinely(typically daily, but not less frequently than weekly) value account holdings; • Collect all income and dividends owed to Durow Trust; • Settle all transactions; and • Provide monthly custody detail reports (detailed transactions, securities held, income, and changes in value) to the Investment Manager and the Director of Finance. 2) Asset Allocation Guidelines,Performance Benchmarks,and Rebalancing The Investment Committee understands that different asset classes carry different levels of risk, i.e. small cap stocks are generally more risky than large cap stocks, and long-term bonds are generally more risky than short-term bonds. The Investment Committee has reviewed the overall risk and reward relationship associated with the following Asset Allocation Guidelines. Oshkosh Public Museum Durow Trust Target Asset Allocation: 50% Equity, 50% Fixed-Income Spending/Investment Objective: 1. To provide regular, annual distributions of up to 5% of the trailing 3-year average Fund Balance to support the Donor's purpose. Additional approved expenditures of up to another 5% may be made annually for supplementary needs as approved by the Museum Board. 2. To provide for long-term capital needs by providing for up to 20% of the trailing 3-year average of the Fund Balance to be used in any one year for approved capital improvements. 3. To provide long-term growth of the Fund Balance. No more than up to 25% of the Fund Balance may be distributed during any given budget year for approved expenditures. The amount to be used as the basis for distribution will be calculated as an average of the 12/31 Fund Balance in each of the previous three years; for periods before a 3-year history is available, an average of all completed calendar quarters will be used. The timing of distributions will be coordinated with the Investment Manager to ensure appropriate liquidity. Prohibited Investment & Transactions: Commodities and futures contracts, private placements, options (except for covered-call writing), limited partnerships, real estate properties, CMG's, short selling, and margin transactions. Permitted Equity Investments: Diversified mutual funds organized under the investment company act of 1940 and Equity securities traded on the New York Stock Exchange (NYSE); American Stock Exchange (AMEX); or NASDAQ, including American Depository Receipts (ADR's), and Exchange Traded Funds (ETFs). Equity Benchmark: 65% S&P 500® Index, 15% S&P 600® Index, and 20% EAFE Index. Permitted Fixed-Income Investments: Cash and Cash Equivalents, i.e. U.S. Treasury securities, Al/P1 rated commercial paper by at least one of the rating agencies, repurchase agreements, bankers 3 acceptances certificates of deposit (CD's) money market funds, U.S. Government&U.S. Government Agency securities, and Investment-Grade Corporate Bonds. Fixed-Income Benchmark: 90%Merrill Lynch 1-10 Year Government/Credit Index and 10% Lipper Money Market Index. Rebalancing: All accounts will be reviewed on at least a quarterly basis to determine if rebalancing to the Target Asset Allocation is necessary. Mandatory rebalancing shall occur when an account is outside of+/- 10% of the target asset allocations. 3) Investment Manager/Custodian Selection The Investment Committee shall follow due-diligence criteria in selecting a separate Investment Manager and Custodian. The criteria shall include: • The Investment Manager must be a registered investment advisor, regulated bank, or a registered investment company (Form ADV required). • Investment style historical performance should be reviewed relative to the benchmark for the most-recent 1, 3, 5, and 10 year periods. • Investment Manager expense ratios and fees should be fully-disclosed by the investment manager, and be deemed competitive. • The Custodian must be a registered bank. 4) Investment Manager/Custodian Monitoring • The Investment Manager shall submit performance reports no less than quarterly to the Director of Finance. • The Investment Manager must conduct an on-site Annual Review with the Investment Committee and the Museum Board. This review is subject to the timing of City meetings, and must be conducted within a four month window following the end of the City's fiscal year. • The Custodian shall submit balance reports no less than monthly to the Director of Finance. 5) Investment Manager and Custodian Fees and Expenses On an annual basis, the Investment Committee shall review a summary of the following investment- related fees: • Investment Advisory Fees • Trading and Brokerage Fees • ETF Fees • Mutual Fund Fees • Custodial Fees 4 Approved by Museum Board on May 5, 2011: -- 74 6 /-2 0/..L. City 4- eii-el,a City of Oshkosh Date ` 1 ♦ I. / ,2 67 z Muse y ' oard President, City of Oshkosh l ate 6 Acknowledged By: A . iaA_ ,—,-) 4,,,,,,... id A6,/,, Museum Director, ity of Oshkosh Date ( '7/ ��' �. ,2 Cn // Director o i nc , City of Oshkosh Date A 'trney, City • Os 'ish [,ate 'if,. / / z 20 001 Z_ Investment Manager D to 47/ - ' i 01-3- 2/01 Custodia oo ate J 5