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currently provides for compensation of $129,343 for programming and administrative funding to underwrite staff salaries, collections management, public programs and supplies at the Museum on Main, Alviso Adobe, and public walking tours. DISCUSSION The executor of Ms. Jones' estate, Peter MacDonald, supports the use of estate proceeds to create the endowment with the ALVHS. The ALVHS is a recognized tax- exempt organization that operates the Museum on Main, a local history museum, and was specifically named in Ms. Jones' will as an organization that should be consulted. Mr. MacDonald also supports the ALVHS's Agreement regarding Historic Recognition Program with the Pleasanton Heritage Association. While the ALVHS is a tax-exempt organization that has been providing superior services to the City under contract since 2011, management of an endowment in excess of $1,000,000 requires financial expertise. The City's Finance Department staff regularly invests and manages tens of millions of dollars in the City's enterprise and other funds. While investments utilized by the City typically provide relatively low yields, the principal invested is exceptionally safe from market turbulence. In addition, transaction costs are limited to wire fees charged by the City's bank. Finally, an endowment should be in perpetuity. While it is highly likely the City will be in existence for many generations, it is possible ALVHS, a non-profit organization, will dissolve sooner as many non-profit organizations often do. The ALVHS's endowment resolution references management by "the Endowment Committee of the Board of Directors". (See Section 1.02.) While the committee may be able to achieve higher returns by using other investment options, higher returns will also pose greater risk for the principal, as well as potentially higher fees and costs. As Ms. Jones' gift to the City is a unique and generous action, staff recommends that the estate proceeds be held and managed by the City, with annual distributions to the ALVHS based on fund earnings and requests tied to specific programs — including the ALVHS' Agreement regarding Historic Recognition Program with the PHA, and as approved by the Council in future budget cycles. Alternative Recommendation: 1. Enable funds to be privately and independently managed by ALVHS, consistent with the attached endowment resolution. Submitted by: Fiscal Review: Appro id by: c -et-(A414A //IA Larissa Seto Tina Olson Nelson Fialho Assistant City Attorney Director of Finance City Manager Page 3 of 4