Spending and Investment Policies

Spending

The Cortland Free Library Endowment Fund is the result of many gifts of varying size and levels of restriction.  When the trustees put the fund under professional management it was decided to treat the funds as one for investment purposes in order to gain the benefits of a more diversified investment portfolio.  Each individual endowment is expressed as a percentage of the whole fund.  The percentages will change as new additions are made to the endowment.  For spending purposes the income is currently allocated as follows:                

55%- Restricted to books and library materials

10%- Restricted to furniture & fixtures

35%-Unrestricted - For other operating expenses of the library

These percentages will be recalculated annually and documented in the board minutes.

The spending rule

The intention of the Board of Trustees is to prudently manage the endowed funds to provide payments of about 4% of a 4 year moving average of the endowment fund balance to support the operation of the library.  This rate of expenditure is intended to protect the endowment’s principal while still providing much-needed funds for the library’s operation.  

Amendment (passed June 11, 2008)

Ten percent of the endowment fund is to be devoted to building projects.

Investment policy

It is the policy of the Library to invest funds in a manner that will maximize the security of the principal while providing balanced growth of the principal and income to satisfy cash flow demands using methods which persons of prudence, discretion, and intelligence might exercise in the management of their own affairs in order to provide the best return.  All investments will conform to applicable laws and regulations governing the investment of public funds.

Passed on May 14, 2008

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