HomeMy WebLinkAbout(2004, 04/13) - F-16 - AmendedACKERMAN TRUST
PURPOSE
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To establish City policy for the distribution of the proceeds of the income from the
Ackerman Property.
POLICY
Per the terms of the Carl Ackerman Family Trust, the net sales proceeds of certain
property in McFadden Square were divided between the University of California,
Irvine, and the City of Newport Beach. The proceeds were distributed as follows:
Sixty (60) percent of the proceeds were distributed to the University of California,
Irvine, to be used for scholarship funding for needy qualified students.
Forty (40) percent of the proceeds were to be distributed to the City of Newport Beach
to be used in the following manner:
Seventy-five (75) percent of the City's share to create a permanent
endowment to provide a perpetual annuity that can be used to acquire
high -tech library equipment.
Twenty-five (25) percent of the City's share to create a permanent
endowment to provide a perpetual annuity to fund scholarships for needy
qualified students. This scholarship fund shall be open to any child who
resides in Newport Beach, and to the children of City employees.
The following procedures are established to meet the terms of the Ackerman Trust.
The City shall deposit its share of the proceeds from the sale of Ackerman property into
a Permanent Fund. Within that fund, the City shall create separate permanent
endowment reserves to account for the principal share of both the high -tech library
equipment ($579,586) reserve and the scholarship reserve ($193,195). The City shall also
create similar reserves to track the expendable portion of each endowment.
To sustain the economic vitality of the designated Ackerman annuities, the City shall
contribute a portion of this fund's interest earnings to the permanent endowment
reserve. The annual contribution to the permanent endowments shall be an amount
equal to a five -year moving average of the Los Angeles, Riverside, and Orange County
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consumer price index (CPI) for December multiplied times the current permanent
endowment balance. However, the City shall not be obligated to make contributions to
permanent endowments in excess of the annual recorded investment earnings of that
fund.
During the budget process each year, the Administrative Services Director will
recommend to the City Manager the maximum amount that can appropriated for the
coming budget year considering the minimum permanent endowment levels and future
economic vitality of the program. In order to reduce the impact that market
fluctuations might have on the available annuity, the maximum amount for
appropriation will be calculated by multiplying the unspent resources (expendable and
nonexpendable) in each category by a the five -year moving average of previous years'
investment returns, less CPI.
The City Manager may recommend an expenditure appropriation above or below the
maximum annual appropriation (e.g. saving several years worth of allocations for a
large capital purchase) but in no case shall the City expend any component of the
permanent endowment.
It shall be at the City's discretion what high tech library equipment to acquire, and how •
to award the scholarship funds to needy qualified students.
Adopted - January 24,1994
Amended - May 8, 2001
Amended - April 13, 2004
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