Committee Purpose:

Chairperson:

Members:

Term expires June 2008: Susan Ricker

Term expires June 2009: Lark Madden

Co-treasurers: Stan Cecil and Stan Kilty

e-Mail Contact:

Last Report:

Minutes:

A meeting of the Board of Trustees of the FRSUUA was called to order at approximately 7:30 PM by Peter Cullinan (Parish Committee Chair). Also in attendance were Harold Babcock (Minister), and Trustees Lark Madden, Maura Perkins, Susan Ricker and Walter Powers (Treasurer).

The first order of business was discussion and agreement regarding the annual operating fund assessment to be approved by the Trustees for the fiscal 2007 budget. A motion was unanimously adopted that the Trustees authorize an amount not to exceed 5% of the rolling 13 quarter average balance of the permitted endowments to be paid over to the Parish Committee in support of the church's operating requirements. This level of distribution is consistent with the Board's past practice. The Treasurer will compute the trailing quarterly average as of March 31, 2006, and the distribution amount will be determined as a percentage of this figure.

The second order of business was a discussion of expenditures and income for the various accounts for the calendar year ending December 31, 2005. The Treasurer agreed to prepare a simple statement summarizing checks written, incoming donations, and other activities in the accounts to facilitate the Board's review.

The third order of business was a discussion of a proposal concerning the process of choosing a new funds manager for the endowment. It was agreed by the Board that communication regarding this process be made by the Trustees to the congregation. However, the Board also agreed that it was not advisable to invite all comers into the decision-making process. Rather, it was agreed that it is the Board's sole responsibility to make and implement the choice of manager. The Board agreed that it would first develop an investment policy statement and strategy which would be provided to prospective managers.

The fourth order of business was a discussion of the performance of the accounts. Lark agreed to contact Les Ferlazzo to attempt to obtain definitive information regarding account performance.

There was general discussion of the methodology and timing of making and implementing the choice of manager.

The next meeting of the Board was scheduled for February 9th at 7:30 p.m. at the church offices.

Attending: Susan Ricker, Stan Kilty, Walter Power, Lark Madden, Harold Babcock, Bill Heenehan and Peter Cullinan

Review of the Endowment and status of UBS reports. Concern expressed about the number, detail and routing of reports. This led to the following:

• Les Ferlazzo has submitted his resignation from the Trustees and in the past has indicated that if he were not a Trustee, he would not act as the endowment fund overseer. The Trustees authorized the Chair to write a letter of appreciation to Les for his 20 years of effort and vision.
• Filling of Les's term is required to be presented to the Parish Committee. Prospective candidates suggested were Stan Cecil and Maura Perkins.
• The need to revisit the management of the endowment resulted in a motion by Lark Madden, seconded by Susan Ricker. "Move to start process of soliciting and selection of a new endowment fund manager" Passed.
• It was proposed to create a list of Fund Managers by mid January. Discussion of parameters of search. It was suggested that we prepare an interview guide for consistency in evaluation. Fund Managers should be experienced in our type of nonprofit long term endowments.
• Goal is to secure new Fund Manager by Annual Meeting in late May.
• It was agreed that a communication to the congregation be developed to describe the endowment and its uses, need to consider the endowment in terms of planned giving and address the search for a new fund manager.

In attendance: Bill Zarakas, Chair, Stan Cecil, Co-treasurer, Harold Babcock, Minister, Maura Perkins, Co-treasurer, Lark Madden, Cecilia Healey, Incoming Chair, Susan Ricker

Absent: Les Ferlazzo

The Trustee meeting convened at 7:30 pm on May 25, 2004.

Level of Involvement. Discussion concerning the level of involvement by the Trustees in overseeing and/or managing the FRS endowment was a primary order of business for this meeting. It was observed that in the recent past the Trustees have taken a passive role in overseeing the endowment. While meeting their obligations to the FRS, much, if not all, of the oversight and management of the endowment was left to the endowment's investment manager. It was agreed that going forward the Trustees will take a more active role in the various issues associated with the endowment. Specifically, the Trustees will be actively involved in: 1) selecting the portfolio mix 2) reviewing the performance of the endowment 3) setting performance goals (such as against an index) and 4) discussing performance with the investment manager. This heightened level of involvement will be facilitated in part because of the qualifications and experience of the current Trustees.

Review of Endowment Performance. The co-Treasurers reported that the FRS receives a monthly statement from UBS (i.e., a report of the balance and activity of investments). It was agreed that these reports should be distributed to all of the Trustees. These reports may fulfill part of the information needed to fulfill the above referenced performance review responsibility. Bill relayed general performance results from Les: The FRS's investment portfolio had a YTD return of 0.99%. The reported return for the S&P 500 for the same period was 0.10%. No detailed discussion concerning the performance of the endowment was held.

Potential Conflicts. It was observed that one Trustee is both a Trustee and the endowment's investment manager, which at least conceptually may present an organizational conflict. It was also noted that such observation has been made from time to time in the past, but was dismissed as cause for alarm. The current Trustees raised this concern about organizational conflict in light of their decision to assume a higher level of accountability, periodic reporting and objective performance measurement than has been practiced in the past. Some Trustees felt that accomplishing these objectives may be difficult with one person simultaneously acting as both a Trustee and investment manager. These Trustees suggested that consideration should be given as to whether this individual should serve in one or the other capacity: either Trustee or manager, but not both It was agreed that this issue should be discussed more fully in the near future, preferably at the next meeting of the Trustees at which time (hopefully) all Trustees will be present.

Margin Loan against Endowment Shares. There was discussion of the current arrangements between UBS/Paine Webber and the FRSUU regarding the margin loan. The Trustees expressed a general concern regarding rising interest rates, and inquired as to the status of the loan, and whether progress had been made in refinancing the margin loan with a fixed rate mortgage. Maura Perkins agreed to provide additional detail to the Trustees on this matter.

Socially Responsible Investments. The issue of socially responsible investing was introduced as a possible investment guidelines and discussed in general terms. No recommendation was made and it was agreed that this issue would be included on the agenda early next year.

Trustees for 2004-05. It was noted that several changes will be made in the composition of the Trustees for next year. Maura will be stepping down as co-Treasurer and thus as Trustee. She will be replaced by Stan Kilty. Bill Zarakas has completed his year as Chair of the Parish Committee and thus as Trustee. He will be replaced by Cecilia Healey, who will also be the Chair of the Trustees. The remainder of the Trustees (Susan, Lark, Les, and Stan C.) will continue as Trustees next year.

Meeting Schedules. It was observed by the Chair that meetings of the Trustees were not held as frequently as initially anticipated during the 2003-04 church year. This is understandable because of the busy schedules of the various Trustees but, nevertheless, is regrettable. It was suggested that the 2004-05 Trustees select a schedule for meetings for the year as soon as possible. Perhaps this schedule can follow the conventions used by other committees of the FRS (e.g., the Parish Committee meets on the second Wednesday of each month). A possible schedule for meetings of the Trustees may be each quarter at an agreed upon date. It was also stressed that, owing to the active role by Trustees, attendance at these meetings should be a priority to the individual Trustees.

The Trustees agreed to meet again on Thursday June 17th.

Subsequent to the May 25 Trustee meeting: Les Ferlazzo notified the Trustees of an unanticipated conflict which will cause him to miss the scheduled June 17 meeting. The meeting was postponed.