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Parsons City Council votes on Harman Fund

March 20, 2013
The Inter-Mountain

By Casey Houser

Staff Writer

Parsons City Council made a decision Tuesday on the fate of the William M. Harman Fund, an endowment which provided more than $250,000 for the city in 2012.

Council members, as they did during the previous meeting, heard Tuesday from Robert Burns, executive director of the Tucker Community Foundation, which handles the Harman Fund. Council members also received advice from their legal counsel, Attorney Pat Nichols, about whether or not they should accept proposed changes to the fund.

At the previous meeting, Burns said TCF would be expecting a greater return on the Harman Fund, which is driven by investments made by Citizens Bank. He said they expect to be receiving an 8 to 9 percent growth each year.

This growth, he said Tuesday, which is an increase of several percent over previous years, is due to the addition of capital gains, which are now legally allowed to be included in the formula used to calculate the fund's return on investment.

Burns said the town should expect to receive a return of 5 percent each year. A fee of 1 percent will be going to the TCF and 2 to 3 percent will offset inflation.

Nichols advised City Council at the previous meeting that the changes in how the fund is distributed were not consistent with how legal documents said distribution should occur.

Nichols said the original wording allowed the town to receive 100 percent of the total return on investment -therefore, the town should receive the entire 8 or 9 percent each year.

However, Burns said in the previous meeting that proposed changes - along with the addition of capital gains - will be allowing the town to receive approximately $800,000 annually.

In the past, the highest payout from the Harman Fund was approximately $477,000, which occurred in 2008, TCF documents said. The lowest payout was in 2003, with only $60,000.

Burns argued that the figure of 5 percent would smooth transitions from year to year and that fluctuations would be less dramatic.

Nichols said Tuesday that he wants to see more communication between the two parties.

"I'm not comfortable with council adopting the recommendations of the foundation without more dialogue with the foundation," Nichols said.

He also wants to see council be more involved with policy changes in future years.

"We should have some say in the development of the policy," he said.

Council agreed to elect a committee to meet with TCF before accepting the changes wholesale. A payout of the Harman Fund scheduled for April will take place as scheduled, however, and City Council will see the new TCF policy reflected in that payout.

Several personnel decisions were also made at the Tuesday meeting:

- Jonathan Jones was approved to be hired as the new Parsons City Police chief.

- Donald Butch Roy Jr. has been rehired as a seasonal City of Parsons cemetery worker.

 
 

 

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