March 16, 2006

March 16th, 2006 Minutes

Foundation Minutes- Board Meeting

Call to order- 3:40PM

Roll Call- Mark Rudolph (3:42), Ralph Garzia, Tim DeGhelder, Bill Zollman, Joe Krebs, Lorna Frahm, Kyle Gaines, Warlene Reed. Staff members- Bob Houck, Carl Sandstedt

Secretary's report- Minutes from meeting- January 19, 2006

Motion made by Warlene Reed to accept the minutes from the January 19, 2006.

Second-Ralph Garzia

Motion- Passed

Public comments- none

Market report on assets- Bob went over investment spreadsheet: Total asset value- $346,602.21 as of 03/16/2006. Cash in the checking account totals $2,794.28. Change of Financial Advisor will be another agenda item for this meeting.

Motion by Ralph Garzia to accept the financial report as presented. Seconded by Mark Rudolph.

Motion passed

Comments from the Foundation Board- Welcome to the board for Kyle Gaines. We welcome Kyle to the board and give him introductions.

Staff Liaison's Comments- Bob Houck

Not much to say, referred to Carl Sandstedt and director's comments.

Director’s Comments-

MK expansion is in progress. The building should have an extra 10,000 sq. ft when complete. The branch will be closed throughout the summer.

Leased signed for new Discovery Express. This includes a white box style and will need to be furnished by the library district. This will be a five year lease with a move to a full general purpose branch in the future.

Also KL is going to be expanded an additional 10,000 sq. ft. this will be done by the firm that did the first expansion.

Note: all the capital improvement projects are being complete without a tax increase. The district is proud to have high quality services for a reasonable cost.

Old Business-

06-06 Expansion of the Foundation Board-

Nomination by Tim DeGhelder to accept Kyle Gaines as a board member.

Second by Lorna Frahm

Motion passed

06-12- 2006 Trivia Night

Informational Update:

Went over some of the costs for the trivia night. This event might have to be moved in 2007. Reminded board members about the $25 donation that board members could use as promotion for business or service.

06-14-- Banking Services Financial Advisor

Bob Houck gave a handout to the board with five different options.

Memo - Banking & Investment Services

Since Midwest BankCentre will be leaving the trust services business, the Foundation has several options that it can pursue.

1. Circulate an RFP for banking and investment services and open the bid process as the Foundation has done in the past. The RFP process will take approximately three weeks to a month so the Board would consider responses at their meeting on March 16. According to Kent Reynolds, Midwest will still be staffing the Trust Department in March, so there will be time to exercise this option while the assets remain on deposit with Midwest .

2. Guarantee Trust has accepted the Foundation’s account and is willing to transfer the current assets to their Trust department as part of the agreement between themselves and Midwest Bank. We met with Steve Johnson and Kent Reynolds on January 27 to review their proposal. Guarantee will assess a base trust fee of one percent (compared to the 0.7 percent currently paid to Midwest ), provide quarterly statements (as opposed to monthly) unless the Foundation pays an additional fee for more frequent reports. There will also be fees assessed for the Trustee’s annual report to the Foundation Board, and other functions that we have previously requested or required.

3. Open an institutional account directly with Vanguard, and transfer the assets currently held in trust at Midwest BankCentre directly to that account. This would involve electronic transfers of all shares from one institution to another, and should be at minimal cost. To my way of thinking, there should be no administrative cost charged to the Foundation since Midwest is vacating its agreement with the Foundation of its own volition prior to its expiration, and I will so argue should the Board elect to go this direction. The Vanguard funds currently owned are all set up for automatic reinvestment of dividend and capital gains distributions, so continuing the DRIPs would be easy.

The transfer would likely mean that the Foundation would lose its Admiral Class eligibility for the Vanguard 500, Vanguard Small Cap, and Short-Term Bond Fund, since we don’t individually hold enough to merit the status. Admiral Class shares pay slightly higher dividends and have slightly lower costs than Investor class shares, and require a minimum investment of $100,000.00. This may be an insignificant issue since our Admiral Class is tied directly to other shares held throughout Midwest ’s Trusts services department. At the same time, other trust advisors may be able to offer Admiral classifications on the same, or a broader listing of funds.

4. Open an institutional account with Vanguard, liquidate the current holdings and roll the entire investment into Vanguard Balanced and let Vanguard’s investment managers manage the Foundation’s assets as part of their day-to-day operations. This would qualify the investment for Admiral share benefit.

5. Roll the existing securities and mutual funds into the Schwab account as primary depository, and engage independent consulting services to examine and re-balance the assets quarterly or semi-annually. This suggestion came from Kent Reynolds as an additional possibility to the ones listed above. Kent feels that the Foundation should be able to engage such consultancy for less than $1,000.00 a year in fees.

Motion was made by Mark Rudolph to go with option number 4

Second by Lorna Frahm.

Motion passed

New Business

06-18 Request for Funding - Friends of the Library

Bob discussed the letter from the Friends of the Library requesting that the Foundation underwrite a portion of the extraordinary expenses the book fair will incur because of the Convention Center’s insistence on charging attendees to park. A five dollar per car fee will be assessed each time a car enters the lot. The Friends will give each carload a coupon worth for a $5.00 discount on book purchases, thus rebating the parking cost. Joe Krebs explained the process and reported that the Friends are closely examining income and expense reporting this year to determine the benefit of holding the book fair at the Center, or finding another place. The Center has distinct advantages, but if the project does not generate commensurate revenue, the costs may not be justified. The Friends are seeking additional sponsors to help defray the parking costs.

Motion by Lorna Frahm to allocate up to $7,500 to sponsor the Friends of the Library Book Fair, less any amount that the Friends raise from other sponsors.

Seconded by Mark Rudolph.

Motion Passed.

06-19 Request for Funding -- Kathryn Linnemann Branch Expansion

Bob discussed the proposed expansion of the Linnemann Branch. The Harry Beynon Trust distributed $90,000.00 to the Foundation to support capital expansions. He recommended donating $10,000.00 in FY2006, and $15,000.00 in FY2007 pending the Foundation Board’s specific release of funds. Bill Zollmann questioned distributing that amount when the purpose of the Foundation was to grow its assets over time. Bob responded that basically the distribution would come from the earnings on the Beynon Trust distribution, and that the principle would be essentially untouched.

Motion by Lorna Frahm to donate $10,000 this year to support the Linnemann Expansion, and $15,000 in FY2007 pending the Foundation Board’s release of funds.

Ralph Garzia seconded.

Motion passed.

06-19 Strategic Plan - Fundraising

Deferred to a future meeting of the Foundation Board.

Comments for the good of the foundation: None

Mark Rudolph moved to adjourn. Joe Krebs seconded. Meeting adjourned at 5:00 p.m.

Next Meeting set for May 18th , 2006 at 3:30pm in Foundation Meeting Room. ( Administration Building )

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