Minutes of 7-24-2012

The Excelsior Rotary Foundation Board of Trustees Meeting of July 24, 2012 at Bayview Event Center

The Meeting was called to order by Acting Chair Don Draayer at 1:05PM at the Bayview Event Center on Tuesday, July 24, 2012.  In attendance were trustees Don Draayer, Dave Peterka, Terry Roeser, Jim Olds, former Treasurer Dean Friesen and Steve Frazier. (1.0)

The proposed agenda was accepted by acclamation. (2.0)

The Foundation Organization Agenda was opened by Don Draayer and Nominations for Chairperson for the one year position was declared open and Dave Peterka nominated Don Draayer as Chair and the motion was seconded by new Trustee Terry Roeser.  There being no other nominations a unanimous vote was cast for Don Draayer as Chair. (3.1)

Chair Draayer then asked for nominations for Secretary and Dave Peterka nominated Steve Frazier for Secretary and it was seconded by Roeser.  There being no further nominations a unanimous vote was cast for Steve Frazier as Secretary. (3.2)

The next order of business was to appoint the Special Advisors to the Board of Trustees.  Treasurer Jim Olds nominated Joe Froehling and Dean Friesen as Financial Advisors and Gary Thompson as Law and Policy Advisor and was seconded by Dave Peterka.  The motion passed unanimously. (4.1 & 4.2)

The Final Organizing Agenda item was the establishment of the Meeting Dates.  Chair Draayer explained that the Club President Litfin had requested that entities of the club establish meeting dates so that members can be fully informed of meetings dates and subsequent actions taken.  Draayer proposed that the Trustees meet on the last Tuesday of every other month and that the Tuesday, October 23^rd be the Annual Report of the Foundation to discuss the relationship of the Foundation to the Club, present the financial policy overview and the introduction of Ann Wengronowitz of North Star Financial.  It was moved by Peterka and seconded by Frazier to establish the following meeting date for 2012-13 and the motion passed unanimously (5.0):

Tuesday, July 24, 2012, 1:00 pm, Bayview                                                                      Tuesday, Sept. 25, 2012, 1:00 pm, Bayview                                                                    Tuesday, October 23, 2012, 12:00 noon meeting – Annual                                   Foundation Report to Entire Rotary Club Membership                                         Tuesday, Nov. 27, 2012, 1:00 pm, Bayview                                                                Tuesday, Jan 22, 2013, 1:00 pm, Bayview                                                                                  Tuesday, March 26, 2013, 1:00 pm, Bayview                                                                      Tuesday, May 28, 2013, 1:00 pm, Bayview  

The Minutes of May 8^th Board of Trustees (Draft 2) were reviewed and Frazier moved acceptance of the Minutes and Roeser seconded the motion.  The Minutes were approved by unanimous vote.  The Trustees discussed the importance of having a repository for permanent records of the Foundation to include but limited to financial records and actions, policies, minutes, and other information deemed important for future reference by the club and its members.  Chair Draayer volunteered to draft a retention policy to reflect these sentiments.  The Board discussed the desirable practice of posting the Minutes on the Club Website and the electronic conveyance of draft Minutes to Trustees for review prior to the next meeting for acceptance.  Frazier volunteered to follow-up on website formation either on the Club site or an independent site for the Foundation with links to the Club Site and report back at the September 25^th meeting.   (6.0)

The Financial Report was given by Treasurer Jim Olds and former Treasurer Dean Friesen.  Friesen provided the Trustees with a Fund Analysis handout that delineated the expenditures from the foundation to the succession of presidents from Bob Hoebelheinrich to Tim Litfin, the General Fund allocations and the balances in the Lee Paris Fund.  Friesen pointed-out that there was a carry-over of $3,806.74 from the Love Presidency to the Litfin Presidency.  The Litfin Presidency started with a fund balance of $19,056.74 that constituted $15,250.00 from the 2011 Golf/Auction Fundraiser and a carry-over of $3,806.74 from the Love Presidency.  Payouts thus far to the Litfin Presidency have been $1,000 to Polio Plus, $2,000 to Camp Tanadoona and $2,000 to Resource West.  There remains $6,000 in commitments to Scholarships and STRIVE yet to be expended.  When those funds will have been expended the Litfin Presidency will have a balance of $8,056.74 for expenditures such as Kids Against Hunger (Approximately $1,500) and for the Area 12 Project Fund if one is selected for 2012-13.  The Trustees discussed the possible need for a Reserve Fund in the Litfin Presidency allocations that would cover such commitments as just mentioned.  Friesen noted that he will clarify those commitments in an updated Fund Analysis Report.  Chair Draayer commented on the desirability of the Fund Analysis Report and that the report should continue highlighting each president’s expenditure as due diligence on the part of the Foundation and for a visual record of each past president’s expenditures from the Foundation. 

A correction was noted in the Love Presidency expenditures noting that it is “Kids Against Hunger” and not “Feed My Starving Children” and Dean will include that in his revised Fund analysis Report.   Chair Draayer commended Dean Friesen on the incredible job he has done on behalf of the Foundation and the Club as Treasurer.

The Trustees continued to review the financial analysis of the funds and Chair Draayer questioned why in the Profit and Loss Statement for June it appeared that the Foundation expended some $3,800 more than it took in and what the reason was for that.  Friesen explained that the transition of funds do not always show the overall flow of funds in a given month because of delayed pay-ins and pay-outs often take several months to justify

Trustee Peterka moved and was seconded by Frazier to approve the three-part Fund Analysis with the above requested updates and the motion passed unanimously. (7.1 & 7.2)

Treasurer Olds gave the Investment Report noting that the fund was at $76,190.00 with $1,190 in interest earned.  Chair Draayer questioned how the interest should be report out as the Investment Policy (p.13) states that half of the interest should go to the corpus to compensate for inflation and half made available to the club for charitable giving and that clarification is needed on how fees are deducted from the fund.  Treasurer Olds will review the process and report back to the Trustees in September.

In Old Business (8.0) the Trustees first did a final review of the Excelsior Rotary Foundation Financial Policies in Draft #10 relating to #1 Investment of foundation assets; #2 Oversight of foundation assets and Accountability; #3 Structure of Foundation Funds and Associated Accounts; and #4 General Operational Rules of Foundation Board of Trustees.  Policy #5 on the Endowment Fund Investment Policy Statement (IPS) had been approved at the previous Board of Trustees meeting on June 2, 2012.  There were three areas of discussion relating to the proposed policies: 

                   Trustee Roeser raised the question relating to Policy #2 about the Official Financial Review or Audit and how it was being handled by the Foundation.  Chair Draayer explained that the Foundation trustees opted for the process of Official Financial Review which was conducted by Club members Hugh Gilmore, Jerry Brecke, and Dick Osgood.

                   Chair Draayer raised the second question about Policy #3 - The Lee Paris Endowment Fund subsection 1.3.1in the asterisk explanation box of the policy that states “Note: Articles that follow are missing.”  The Trustees decided to correct the paragraph as follows: “If EXCELSIOR ROTARY CLUB is not in existence or has been involved in a merger which was not a mere change in form at the time that this distribution is directed, this specific distribution shall lapse and shall be administered in accordance with the Articles that follow.   Note:  Lee Paris Family declined to share “the articles that follow” for reasons of family privacy.  Thus, foundation trustees on 7-24-2012 determined that, should the occasion arise wherein this specific distribution should lapse, the trustees then in office should take administrative action as deemed good and proper at the time.

                   The third clarification was to Policy #4 Section 1.0 relating to the role of the Board of Trustees  not to generate proposals for expenditures but to invite, review and act on club proposals however the policy does not preclude any Trustee acting as an individual club member from submitting ideas or proposals to the Club’s Board of Directors.

There being no further discussion Trustee Peterka moved and Roeser seconded the motion to accept Policies #1-4 and the motion passed unanimously.

Chair Draayer then moved on to New Business (9.0) and the requests for Payments:

                   Request #1 Chair Draayer moved and Peterka seconded a motion to allocate $7,634.00 from the General Fund to the Chimbote Book Project that came into the Foundation as donations from club members and other interested parties.  The motion passed unanimously.

                   The Trustees discussed the transparency of fund allocations such as the case of the Chimbote allocation and how it could be traced through the Foundation’s financial bookkeeping process and what fund it should be taken from.  To help with the transparency issue Treasurer Olds volunteered to create a spreadsheet of each fund so that all monies can be tracked.  Chair Draayer wants total transparency of Foundation funds and will include the spreadsheet in the Annual report to the members in October. 

                   Request #2 Roeser moved and seconded by Frazier to make payment for the STRIVE Scholarship of $1,000 for Laura Cisewski to North Dakota State University.  The motion passed unanimously.

Continuing with New Business the Trustees moved on to the discussion of the Overview Sheet to clarify the differences in the Clubs Major Funds and to differentiate them from the Major Funds of the Foundation and to help alleviate confusion between the two entities.  As the discussion progressed Former Treasurer Friesen suggested that the word “Account and Accounts” in the Foundation portion of the overview sheet should be changed to “Fund or Funds” to also eliminate confusion.  It was moved by Treasurer Olds and seconded by Peterka to make editorial changes from the words “Account(s)’ to “Fund(s)” and to accept the Overview of Funds Sheet as modified.  The motion passed unanimously.

The final item for discussion was what goals/outcomes should be the focus of the Excelsior Rotary Foundation in 2012-2013? 

          Chair Draayer would like to have the Trustees review any areas that might be troublesome to the IRS and/or areas of conflict of interest for the foundation and/or its Trustees.  If so, policies should be formed to rectify them and to help keep things organized and under control within the Foundation.

          Trustee Peterka would like to see the Overview Sheet of Club and Foundation Finances be laminated to use at the Annual Foundation Report and other club meetings as a reference guide for members.

          Trustee Frazier recommended that work begin on policies and procedures for members to include donations to the Endowment Found in their last will and testament.  Trustee Peterka noted the many actions and changes have been adopted by Trustees in the past 12 months and that it is important to have time to absorb them fully.  Chair Draayer suggested that the Foundation let things settle for the first half of the year to allow members to become accustomed to all of the policies that have been put into place.  Then during the second half of the year simple ideas can be promoted on how members can donate to the club and additional policies, as will benefit the Foundation and meet IRS concerns, can be taken under advisement.

          Trustee Roeser suggested that members could be informed on how funds could be donated to the Foundation’s General Fund without having to go to the Endowment Fund for general use and/or specific projects to create more involvement of members in the club.

Chair Draayer thanked everyone for their participation and ideas and entertained a motion for adjournment (10.0).  Peterka moved and Frazier seconded a motion for Adjournment until September 25, 2012 at 1:00PM at Bayview Event Center.  The motion carried unanimously. 

Respectfully submitted by Steve Frazier, Excelsior Rotary Foundation Secretary