Excelsior Rotary Foundation Minutes of March 1, 2012
The March 1, 2012 meeting of the Excelsior Rotary Foundation Board of Trustees was called to order at 1:07 PM by Chair Don Draayer. Trustees present were: Don Draayer, Dean Friesen, Steve Frazier, Dave Peterka and Carl Zinn. No trustees were absent.
Four items were placed on the Agenda:
1. The interview of the prospective Investment Advisor.
2. Feedback and finalization of the Ranking Sheet for the Investment Advisor Candidates.
3. Meeting with President-Elect Tim Litfin on funding scholarships for prospective new members.
4. Discussion of the Draft #4 of the Policies and the Investment Policy Statement.
No Secretary’s Report or Treasurer’s Report were given at the meeting.
Old Business:
- Ann Wengronowitz and Emily Nelson from the North Star Resource Group met with the Foundation Directors as part of the interview process for the selection of a Financial Advisor. Chair Don Draayer introduced the candidate by noting that Ann Wengronowitz was the candidate that the trustees selected to interview from a list that emanated from inquiries Don had made to other Rotary Clubs who had members that were investment advisors and met the criteria of being in the top investment firms. Draayer briefly discussed the nature of the Endowment Fund and the intention of the Trustees to conservatively invest the $75,000 principal corpus from the Lee Paris bequest and any other subsequent bequests and to use a portion of the interest for charitable grants in the future.
1.1 Ann Wengronowitz indicated that she is a Certified Financial Planner and Partner at North Star Financial Group which is an independent and privately owned investment company that has offices in 19 cities in Minnesota with over 250 representatives in the company. She has been with North Star Resources since 1981. She first explained that she is a Charter Member of the Minnetonka Rotary Club and served as their fifth president. She has been active in her club and on the Advisory Board of District 5950 and had once been approached to become District Governor. Ann received her B.S. Degree from St. Cloud University in Sales and Marketing.
1.2 Emily Nelson has worked with Ann for 11 years at North Star. She is a Financial Registered Representative, a licensed Insurance Agent and attended Metropolitain State University in Business Administration and was previously a travel agent for 11 years.
1.3 Wengronowitz explained that North Star Resource Group offers securities and investment advisory services through CRI Securities and Securian Financial Services.
1.3.1 She first outlined two types of portfolios from Securian Financial Services. One being the MAPS Strategic Model Portfolio and the other being the MAPS Tactical Portfolios. In each portfolio both Income and Growth and Conservative Growth portfolios were examined. The tactical portfolio provides more investment flexibility. Both plans are fee based from 1-1.3% for Funds up to $500,000.
1.3.2 Ann then reviewed two Spectrum Proposals; one with Income and Growth and the other showing Conservative Growth. The Income and Growth Proposal appeared to be similar to the parameters of the working draft of our investment policy statement was Dean Friesen’s observation. The fee base for these portfolios 1% for the service and .72% for operational costs that is set yearly. Online quarterly reports are available to the trustees.
1.3.3 Both models of portfolios would be reported out twice a year and for rebalancing to take place upon the direction of the foundation. Ann answered many of the trustee questions and closed by saying that North Star handles some 600-700 clients and in June handled 800 million in assets. Don thanked Ann and Emily for their presentation and said that he would be in contact with them once the trustees had made their selection.
2. The second item on the agenda was the discussion about the “Candidate Ranking Sheet” to help in the process of selecting the Investment Advisor. The ranking sheet would have a total of 15 points that each of the trustee would allocate among the three candidates. There were also three narrative questions to help clarify choices about the candidates. It was agreed by consensus to use the ranking system. Chair Draayer will email a final copy to each trustee and they will in turn apply their rankings and narrative comments by email to Don by Tuesday, March 6th. Don will calculate the rankings and post the comments to the three narrative questions and return them to the trustees as soon as possible. If there is a clear consensus on a particular candidate the rankings will act as the electronic vote and the Investment Advisor will be accepted. If no clear consensus exists the trustees will review each other’s rankings and consider each other’s narrative answers and then do a second round of rankings to determine the Investment Advisor. If no clear consensus is reached after the second round of rankings a special meeting will be called to appoint the Investment Advisor.
3. The third item on the agenda was to be a meeting with President Elect Tim Liftin and his request to use foundation dollars to provide scholarship dues and meals reduction costs to new and younger members coming into the club. Unfortunately a family member’s hospitalization called him away and the trustees were not able to meet with him. The Trustees discussed his basic request and the trustees all supported his efforts
to help-out new members with dues and meal costs. However, Foundation dollars are not to be used for member benefits but rather for charitable donations and generally to non-profits. The Trustees generated many ideas of how this might occur. Carl Zinn suggested that monthly dues could be increased to defray the new member subsidy costs, increase the meal cost or even hold a fundraiser. Chair Don Draayer suggested that scholarship “Happy Bucks” could be used in this regard. By consensus it was agreed that the Chair would draft a letter to Tim Liftin with the above ideas in support of Tim’s efforts. A short discussion ensued about the member classification system and if our club is utilizing it to the best advantage of the Club and our members.
4. The final item on the agenda was to discuss the #4th draft of the Foundation Policies and particularly the Investment Policy Statement (IPS) starting on page 7. To this end consensus was reached on the Asset Allocation Guidelines Diversification guidelines on page 9. General agreement was reached on investing in bonds rated BBB or better but with flexibility upon the advice of the Investment Advisor. Consensus was also reached on Distributions on Page 12 with 50% of earning being reinvested to grow the fund and 50% to be placed in short term investments and/or available for charitable disbursements. The Donor Contribution section on page 12 was also discussed and consensus reached to honor all bequests to the Endowment Fund by listing donor’s names on the Foundation WEB Site without naming the amount of the donation, except for donations of $10,000 or more who would have the amount shown unless anonymity is requested by the donor.
4.1. Steve Frazier requested a possible change to Policy 1.1.3 to have any unspent charity allocations to go back into the Endowment Fund. General consensus was reached on the concept of the idea and Chair Draayer will include new wording in draft #5 of the Policies and IPS.
4.2. The trustees agreed that the process from here on out would be:
4.2.1. Chair Draayer will update the Policies and IPS in draft #5 and distribute it to the trustees for their review and comments and their O.K. by e-mail.
4.2.2. Chair Draayer will send out a composite of the Investment Advisor Candidate’s rankings and comments for trustee review and final selection. If no clear consensus exists Don will send out a second round of rankings after members have had an opportunity to review each other’s comments on the candidates to determine the selection of the Investment Advisor.
4.2.3. Chair Draayer will then meet with the Club Board of Directors at their April Meeting to receive their comments and recommendations on the policy and the IPS.
4.2.4. Final adoption of the policies and IPS to take place in May or June.
Adjournment:
The next meeting of the Excelsior Rotary Foundation Board of Trustees will be held on Thursday, March 22, 2012 @ 1:00 PM at the office of Carl Zinn. That meeting will be to
ratify the selection of the Investment Advisor, review draft #5of the Policies and IPS and other requests and considerations to come before the trustees.
There being no further business, it was moved by Dave Peterka and seconded by Dean Friesen to adjourn the meeting. The motion carried unanimously.
Respectfully Submitted,
____________________
Steve Frazier,
Secretary Pro Temp
Rotary Foundation Board of Trustees