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ACKERMAN TRUST <br />PURPOSE <br />F -16 <br />To establish City policy for the distribution of the proceeds of the income from the <br />Ackerman Property. <br />POLICY <br />Per the terms of the Carl Ackerman Family Trust, the net sales proceeds of certain <br />property in McFadden Square were divided between the University of California, <br />Irvine, and the City of Newport Beach. The proceeds were distributed as follows: <br />Sixty (60) percent of the proceeds were distributed to the University of California, <br />Irvine, to be used for scholarship funding for needy qualified students. <br />Forty (40) percent of the proceeds were to be distributed to the City of Newport Beach <br />to be used in the following manner: <br />Seventy-five (75) percent of the City's share to create a permanent <br />endowment to provide a perpetual annuity that can be used to acquire <br />high -tech library equipment. <br />Twenty-five (25) percent of the City's share to create a permanent <br />endowment to provide a perpetual annuity to fund scholarships for needy <br />qualified students. This scholarship fund shall be open to any child who <br />resides in Newport Beach, and to the children of City employees. <br />The following procedures are established to meet the terms of the Ackerman Trust. <br />The City shall deposit its share of the proceeds from the sale of Ackerman property into <br />a Permanent Fund. Within that fund, the City shall create separate permanent <br />endowment reserves to account for the principal share of both the high -tech library <br />equipment ($579,586) reserve and the scholarship reserve ($193,195). The City shall also <br />create similar reserves to track the expendable portion of each endowment. <br />To sustain the economic vitality of the designated Ackerman annuities, the City shall <br />contribute a portion of this fund's interest earnings to the permanent endowment <br />reserve. The annual contribution to the permanent endowments shall be an amount <br />equal to a five -year moving average of the Los Angeles, Riverside, and Orange County <br />1