Minutes of the Trustees Finance and Audit Committee Meeting
May 5, 2011 Johnson Trustees Room 8am to 9am
Chairman Evelyn Arana-Ortiz
A meeting of the Trustees Finance and Audit Committee was held at the Boston Public Library, Trustees Room, Johnson Building, 700 Boylston Street, Boston, MA 02116 on Thursday, January 5, 2012 at 8:00 a.m.
Present at the meeting were: Chairman Evelyn Arana-Ortiz; Trustees Byron Rushing and Donna DePrisco; Boston Public Library staff: Sean Nelson, Chief Financial Officer; Edward Maheigan, Budget and Procurement Manager; Sean Monahan, Supervisor of Accounting; Mary Frances O’Brien, Central Library Services Manager; and Nancy Grilk, Clerk of the Board; plus Michael Black and Chris Klapinsky, New England Pension Consultants, LLC; and from the public: David Vieira of the Citywide Friends.
The Chair noted that she received apologies from Trustee Zamawa Arenas, Mr. Ray Sullivan and Mr. Anthony Jordan who were unable to attend due to prior commitments.
Ms. Arana-Ortiz, Chairman of the Trustees Finance and Audit Committee (Committee) presiding.
The Chair reviewed the agenda.
The Chair addressed the first item of business, pertaining to the Minutes of the Trustees Finance and Audit Committee Meeting held on Thursday, December 13, 2011. On a motion made and duly seconded, the Minutes of the Trustees Finance and Audit Committee meeting held on December 13, 2011 were approved and subsequently posted on the Boston Public Library’s web site.
The Chair called on Mr. Black and Mr. Klapinsky of New England Pension Consultants (NEPC) to review the Draft December 2011 amended Trustees of the Public Library of the City of Boston Investment Policy Statement (investment policy). NEPC used the City of Boston investment policy as a template and customized that to align with the BPL Trustee’s draft investment policy. NEPC underscored that the goals in creating the investment policy are to demonstrate prudent fiduciary processes and procedures, to clearly delineate responsibilities, and to provide a framework for investment decision-making which encompasses socially responsible investment decision-making. The Committee reviewed and discussed the proposed draft language and identified areas which differ from the current policy including social screens and asset allocation. The new asset allocation would be overseen by three new managers who would be selected through an NEPC initiated search of their netted and embedded managers. NEPC would present four or five managers to the Committee along with their recommendation. NEPC reported that the fee for the portfolio may change slightly. NEPC reviewed the similarities in this draft BPL policy allocation and the existing City of Boston allocation, noting slight variations in the asset allocation classes. The Committee agreed to amend the investment policy to identify The Trustees of the Public Library of the City of Boston as Trustees, and the Trustees Finance and Audit Committee as the Committee. The Committee further clarified that the policy include the Committee’s the authority to instruct a fund manager to move investments within asset classes in order to react to market conditions and to re-balance the Fund to make sure investments stay within the threshold; any changes to the target ranges would require full Board of Trustees approval. The Committee agreed that the Investment Guidelines section detailing investments in certain asset classes be based on social screens adopted by the Committee. The Committee agreed to amend the proxy voting policy in the Other Guidelines section to provide the default vote to the managers and while providing flexibility for the Committee to intervene if it so choses. NEPC stated that there is nothing in this policy that substantially differs from the City of Boston’s policy. NEPC will make the changes outlined by the Committee to the draft investment policy. The new draft investment policy will be sent to the Committee members and then to the Trustees. The next Trustees Board meeting is scheduled for May 10, 2012. Pending the changes made today, on a motion duly made and seconded, it was
VOTED; that, the Trustees Finance and Audit Committee recommend adoption of the amended Draft Investment Policy Statement to the Trustees of the Public Library of the City of Boston.
The Chair addressed the next agenda item pertaining to the Norwood Collection Relocation to the City of Boston Archives (COBAC) Contract. Ed Maheigan outlined the process. The Charlestown collection was moved to a cleaning facility, processed, and then moved to COBAC. The Charlestown facility has been sold. Next is the relocation from the Norwood facility to COABC. Approximately $2 million in City of Boston funds will be allocated for this, pending the Trustees vote to approve the contract. Mary Frances O’Brien described the archiving process, and public access to archived materials. The Committee suggested that public usage be reported to the Trustees in one year’s time. Mr. Maheigan estimated the relocation would take about fifteen months. This contract will cover a large portion, but not the complete relocation of materials. Weeding out materials will continue, lessening the amount of materials to be relocated. Discussion followed. Additional funding will be sought in the FY 2013 City of Boston Capital Budget to complete the move. This will be brought before the Committee and the Trustees for discussion and approval. Ms. O’Brien added that materials that receive high usage at COBAC may be moved to the Central Library in Copley Square (Central Library) and conversely less requested materials at the Central Library may be moved to COBAC. The Committee recommended a visit by the Trustees to COBAC be scheduled.
On a motion duly made and seconded, it was
VOTED: that, the Trustees Finance and Audit Committee recommend that the Trustees of the Public Library of the City of Boston approve a contract for the relocation of materials from the Norwood Storage Facility to the City of Boston Archives Center for an amount of $1,951.324.24.
The next agenda item for discussion is The Catered Affair Amended Contract. Sean Nelson provided an a summary outlining the City of Boston’s FY 2011 assessed real estate taxes for the food service space at the Central Library which is managed by The Catered Affair (TCA), a for-profit company, under a contract with the Boston Public Library that expires on May 1, 2014. The City of Boston recently began to exercise their statutory authority to assess taxes to for-profit entities doing business on public property. Discussion followed on this policy. The first proposed change to the TCA contract would insert language that places the responsibility with TCA to pay the real estate taxes on this space within the BPL to the City of Boston for the duration of the contract. The second proposed change to the TCA contract addresses TCA’s interest in pursuing a liquor license for their business operation at the BPL. The change would exclude any commission paid to the BPL on alcohol sales and would increase the commission rate on the sale of food. The change is expected to be revenue-neutral, based on the last two years commissions. This would eliminate any conflict of interest of Trustees realizing income from the sale of alcohol and ameliorate the need for board members to provide personal information on a TCA liquor license application to the City of Boston Licensing Board. On a motion duly made and seconded, it was
VOTED: that, the Trustees Finance and Audit Committee recommend that the Trustees of the Public Library of the City of Boston approve amendments to The Catered Affair Contract.
The Committee approved the next meeting date of Thursday, February 9, 2012 at 8:00 a.m. in the Johnson Trustees Room.
There being no further business, the Trustees Finance and Audit Committee adjourned at 9:05 a.m.
Clerk of the Board