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THE CITY OF _ 19 ' ' ° ' ALM CITY COUNCIL AGENDA REPORT pL£ASANTONs May 3, 2016 City Attorney City Manager TITLE: CONSIDER WHETHER THE PROCEEDS OF THE JEAN P. JONES ESTATE SHOULD BE PLACED INTO AN ENDOWMENT MANAGED AND UTILIZED BY THE AMADOR LIVERMORE VALLEY HISTORICAL SOCIETY, OR HELD AND MANAGED BY THE CITY TO PROVIDE FUNDS TO THE ALVHS TO SUPPORT MS. JONES' GOALS OF HISTORIC BUILDING PRESERVATION AND LOCAL HISTORY SUMMARY Longtime Pleasanton resident Ms. Jean P. Jones named the City as the beneficiary of her estate. The Council provided direction regarding the sale of her 309 Neal Street home, installing a plaque commemorating Ms. Jones at the home, and a display for honoring her at the Museum on Main. With estate proceeds of approximately $1,300,000, Council is asked to consider whether these funds should: (a) be placed in an endowment managed and utilized by the Amador Livermore Valley Historical Society (the ALVHS); or (b) held and managed by the City to provide funds to the ALVHS; with (a) or (b) to support Ms. Jones' goals of historic building preservation and local history. The ALVHS has proposed an endowment limiting annual distribution to 5% to be spent on "general operating expenses, educational programs, capital expenses or projects deemed appropriate within the purpose/mission of the ALVHS...". The City currently pays the ALVHS $129,343 for programming and administrative funding to underwrite staff salaries, collections management, public programs and supplies. The City's Finance Department has experience managing and investing tens of millions of dollars. While City investments earn lower yields, they are safe investments with minimal transaction fees. The City can dispense earnings from the estate proceeds, and principal from the estate with Council approval, to the ALVHS to support programs targeting historic building preservation and local history as provided in Ms. Jones' will. While the City acknowledges that earnings "may" result in higher returns on investment if privately managed, there is also inherent investment risk with this approach including significant loss of the initial investment principal and management fees. For this reason, City staff is advocating for a more conservative approach by recommending that the City hold and manage the estate assets on behalf of the Museum on Main consistent with the City's investment policies — prioritized as follows: (A) safety; (B) liquidity; and (C) yield.