HomeMy Public PortalAboutFewson Fund PolicyPage 1 of 3
CITY OF PARKVILLE, MISSOURI
Policy Title: Fewson Fund Policy
Policy Number: 100-03 Policy Category: Board
Effective Date: December 3, 2013
Resolution No. 12-01-13 Updates:
INTRODUCTION
In 1998, Parkville resident George W. Fewson left a portion of his estate in trust to the City of
Parkville for the purpose of establishing a project fund. The will stipulated that earnings from the
fund were to be distributed so that one-half of the earnings would be given to the City for
“general projects of the City,” which the City has interpreted to mean projects of a capital
improvements nature. The remaining one-half was to be returned to the project fund principal.
In 2010, in order to reduce administrative fees and eliminate income taxes on the fund’s
earnings, the trust was dissolved and the City assumed responsibility for the Fewson Fund as a
governmental special revenue fund (Ord. No. 2534). The Fewson Fund funds or finances capital
projects of the City of Parkville. The estimated value of the fund as of December 1, 2013, is
$572,935.
POLICIES:
1. General Polices
a. The Board of Aldermen desires to respect the wishes of George W. Fewson by
operating the Fund as outlined in this policy.
b. The fund’s accounting period shall correspond with the City’s accounting period,
which is currently January 1 to December 31.
c. The assets of the fund shall never be intentionally reduced to less than $525,000
plus accumulated earnings.
2. Fund Manager
a. A committee comprised of the Mayor, Chair of the Finance Committee, and the
City Treasurer are designated as the Fund Manager.
b. The Fund Manager shall oversee the day-to-day operations through concurrence
of a majority of the members of the Fund Manager.
c. The Fund Manager shall act in an advisory capacity to the Board of Aldermen.
d. Any single transaction that reduces the principal value of the Fund by more than
20 percent, and any loans made to the City or other disbursements for qualified
Fewson Projects as described in Section 7, shall be approved by the Board of
Aldermen upon recommendation of the Fund Manager.
Page 2 of 3
e. An annual financial statement and report shall be prepared in February by the
Fund Manager for the preceding year and shall include the fund balance at the
beginning of the year; the increase or decrease in the fund assets during the
year; the fund balance at the end of the year; the simple rate of return for that
year based on the beginning fund balance; and an investment strategy for the
coming year.
3. Earnings Distribution
a. In February of each year the Fund Manager will determine the earnings of the
fund for the preceding year, and divide them as follows: (1) 50% of the earnings
will be transferred to the City for capital projects and (2) 50% of the earnings will
be retained by the fund for additional investment.
b. The City may only use its portion of earnings for acceptable projects as
described in section 7, subject to approval by the Board of Aldermen.
4. Approved Investments
a. The booklet titled Investment Guidelines for Missouri Political Subdivisions,
written by the State Treasurer’s Office in 1998, and including any later editions of
this booklet shall be the sole source of guidelines for determining what
investments are appropriate for the Fund.
b. In addition to the investments found in those guidelines, the fund may loan
money to the City in accordance with guidelines set forth in section 5.
5. Loans to the City of Parkville
a. The fund may make loans to the City in an aggregate amount not to exceed 67%
of the fair market value of the fund. The proceeds of such loans shall be used
exclusively for acceptable projects as described in Section 7.
b. The maximum term of any original loan shall be 48 months. Loans may be
extended for one additional 24 month period. A fee of one-half of one percent of
the loan balance at the time of extension shall be paid by the City to the Fewson
Fund to purchase the 24 month extension.
c. The principal of the loan shall be repaid to the Fewson Fund in an amount equal
to at least 5% of the original loan amount each quarter along with accrued
interest. All remaining principal and accrued interest shall be payable to the
Fewson Fund after 48 months, or 72 months if an extension has been
purchased.
d. The interest rate that the City shall pay on such loans shall be equal to the Prime
Lending Rate as published in the Wall Street Journal. Interest shall be accrued at
this annual rate on the unpaid balance of the loan, and paid to the Fund each
quarter along with principal as described above.
Page 3 of 3
e. Rate adjustments shall be made annually on each loan on the anniversary date
of the origination of the loan or extension. The adjustment will re-compute the
annual interest rate as described above, which will then be the interest rate for
the next four quarters of the loan.
f. Depending on the complexity of the project or financing, the Fund Manager may
seek guidance from the City’s bond counsel before recommending a loan to the
Board of Aldermen.
6. Rate of Return Computation
a. Both realized and unrealized gains and losses shall be included when computing
the rate of return of the fund for any calendar year.
7. Fewson Projects
a. A Fewson Project is an improvement in Parkville on public land, easements,
rights-of-way, or private land that is leased for public use. A Fewson Project has
an expected life of at least 10 years before substantial repairs or overhaul is
anticipated. It is at least 50% funded through the earnings of the Fewson Fund
that have been distributed to the City, or at least 50% funded through a loan to
the City.
b. Proceeds from the Fewson Fund may only be used for construction, design,
acquisition of land, or other purchases that are permanent to the Fewson Project.
Equipment or materials that may be related to the Fewson Project but are not for
the exclusive use of the Project are not appropriate for Fewson Fund proceeds.
c. If allowed by the Federal Emergency Management Agency (FEMA) or the U. S.
Army Corps of Engineers (USACE), Fewson Projects can be built in floodways
and floodplains.
d. A Fewson Project and its funding mechanism must be recommended for
approval to the Board of Aldermen by the Fund Manager then approved by a
majority vote of the Board of Aldermen. The Fund Manager should have the
recommendation of Community Land and Recreation Board (CLARB) when
appropriate
e. A Fewson Project is limited to the following types of projects: acquisition of
parkland, improvements to parks, urban trees in City rights-of-way, memorials,
statues, and projects that improve the efficiency of city operations or quality of life
for citizens.