Oil & Gas Investment Board

CITY OF MANISTEE OIL AND GAS INVESTMENT BOARD MEETING OF JANUARY 24, 2020 There will be a meeting of the Oil and Gas Investment Board held on Friday, January 24, 2020 at 11:00 a.m. in the Second Floor Conference Room, City Hall, 70 Maple Street, Manistee, Michigan 49660. AGENDA I. ROLL CALL. II. OLD BUSINESS. a.) Aztec Producing / 2019 Royalties: January - $5,743 May - $8,989 September - $2,747 February - $3,848 June - $6,571 October - $2,411 March - $3,632 July - $3,589 November - $0 April - $1,544 August - $3,783 December - $3,777 III. NEW BUSINESS. a.) Approval of Minutes from October 18, 2019 b.) Investment Advisor Update and Commentary c.) Annual Spending Rule Calculation d.) Annual Review of Bylaws e.) Annual Review of Member Roster f.) Other IV. PUBLIC COMMENT. VI. ADJOURN. c. Roger Zielinski, Chair Erin Martin Pontiac, Council Representative Ed Bradford, Vice-Chair Doug Parkes Jeff Reau Thad Taylor, City Manager George Saylor, City Attorney Woody Uible, Investment Advisor  OIL AND GAS INVESTMENT BOARD MINUTES OF OCTOBER 18, 2019 The City of Manistee Oil and Gas Investment Board held a regular meeting on Friday, October 18, 2019 in the Second Floor Conference Room, City Hall, 70 Maple Street, Manistee, Michigan 49660. Meeting was called to order by the Chair at 9:00 a.m. MEMBERS PRESENT: Roger Zielinski, Ed Bradford, Doug Parkes MEMBERS ABSENT: Thad Taylor, Erin Martin Pontiac, Jeff Reau OTHERS PRESENT: Kelly McColl OLD BUSINESS Aztec Well Update – Royalties for January: $5,743; February $3,848; March: $3,632; April: $1,544; May: $8,989; June: $6,571; July $3,589; August $3,783; September $2,747. NEW BUSINESS Minutes - Minutes from the July 26, 2019 meeting were reviewed. MOTION by Doug Parkes, second by Ed Bradford to accept the minutes as presented. No discussion. Voice vote – motion carried. Investment Advisor Update and Commentary – Woody Uible and Troy Snider participated via conference call to present the Investment Update as of September 30, 2019. Discussion items: ➢ Market Assessment – Does not foresee economic recession in the near term – becoming more cautious. Discussed Federal Reserve and interest rates. ➢ U.S. leading economic indicators are still favorable. ➢ U.S. manufacturing activity feeling impact of global slowdown. ➢ Borrowing costs are low globally. Discussed negative interest rates. ➢ Flatter yield curve = slower expected growth. ➢ Reviewed History of market declines. ➢ Asset Allocation reviewed. ➢ Risk Management – diversified and reliable income for the next several years. ➢ Equity Sector Allocation reviewed – heavy in health care; above S&P. ➢ Cash flow additions and distributions. ➢ Portfolio Performance reviewed. Discussed current royalties and future expectations; a decline is anticipated. OIL AND GAS BOARD MINUTES – OCTOBER 18, 2019 PAGE 1 ➢ Discussed 4% spending rule. Many organizations are starting to trend lower but no recommendations to the City at this time. Depending on rates, we might want to reduce the percentage in the future if markets turn down. Set Meeting Dates for 2020 – MOTION by Doug Parkes, second by Ed Bradford to set the meeting dates for 2020 as Friday, January 17, Friday, April 17, Friday, July 17, and Friday, October 16, 2020 at 12:00 p.m. in the Second Floor Conference Room, City Hall. Voice vote – motion carried. PUBLIC COMMENTS None. NEXT MEETING / ADJOURNMENT Next regular meeting is scheduled for Friday, January 17, 2020 at 12:00 p.m. in the Second Floor Conference Room, City Hall. Call of the Chair to adjourn at 9:38 a.m. DRAFT - cl Cynthia Lokovich, CAP, OM Executive Secretary / Recording Secretary c. Manistee City Council Board Members Thad N. Taylor, City Manager George Saylor, City Attorney OIL AND GAS BOARD MINUTES – OCTOBER 18, 2019 PAGE 2  Oil and Gas Investment Board Spending Rule Calculation as of December 31, 2019 for fiscal year budget 2019-2020 Period Ending Total Schwab City Loan Quarter # 3/31/2017 $ 9,922,202 $ 9,580,054 $ 49,788 $ 292,360 1 6/30/2017 $ 10,137,402 $ 9,794,685 $ 50,357 $ 292,360 2 9/30/2017 $ 10,066,130 $ 9,768,240 $ 5,530 $ 292,360 3 12/31/2017 $ 10,475,454 $ 10,152,570 $ 69,745 $ 253,139 4 3/31/2018 $ 10,332,851 $ 9,999,261 $ 80,451 $ 253,139 5 6/30/2018 $ 10,529,035 $ 10,187,621 $ 88,276 $ 253,139 6 9/30/2018 $ 10,802,024 $ 10,444,575 $ 104,311 $ 253,139 7 12/31/2018 $ 9,996,872 $ 9,619,325 $ 163,629 $ 213,918 8 3/31/2019 $ 10,845,103 $ 10,454,333 $ 176,852 $ 213,918 9 6/30/2019 $ 10,997,568 $ 10,764,375 $ 19,275 $ 213,918 10 9/30/2019 $ 10,900,074 $ 10,656,754 $ 29,403 $ 213,918 11 12/31/2019 $ 11,511,972 $ 11,258,968 $ 79,907 $ 173,097 12 Twelve Quarter Average $ 10,543,057 4.0% Spending Rule $ 421,722  Cify of Manistee OIL AND GAS INVESTMENT BOARD BYLAWS Section 1. Name and Establishment. The City of Manistee, by Ordinance duly adopted has established an Oil and Gas Investment Board for the pur ose of segregating, preserving and investing all oil, gas and related hydrocarbon royalty income to the City of Manistee. The name of this Board shall be the OIL AND GAS INVESTMENT F.iOARD of the City of Manistee. Section 2. Oil and Gas Investment Board. There iis hereby created an Oil and Gas Investment Board who is vested with the general administral:ion, management and responsibility for the investment of oil and gas revenues to the City of Man;istee. The Oil and Gas Investment Board shall consist of five members, as follows: A) Mayor - The Mayor of the City of Manistee shall autc matically be a member of and Chair of the Oil and Gas Investment Board. B) The Mayor shall, with the approval of the City Corancil, appoint two either elected or appointed officials of the City of Manistee, for two (2) year terms. C) The Mayor sha11, with the approval of the City C'ouncil, appoint two members, not elected or appointed City Officials, to four (4) year st ggered terms. D) Vacancy - Any vacancy occurring on the Oil and Ga:>Investment Board shall be filled as provided in Sections ( A), (B) and ( C) above stated. E) The City Manager shall be a non-voting Ex- Off:icio member of the Oil and Gas Investment Board. F) The City Attorney shall act as Legal Counsel for the Oil and Gas Investment Board. Section 3. Re ular Meetings. Regular meetings of the Oil and Gas Investment Board shall be held from time to time to evaluate the funds' investments. In no event sha11 there be less than four (4) meetings per year. That Regular meeting shall be held in City Hall or such place as shall be affirmatively designated by the Chair of the Oil and Gas Investment Board. Meeting times and locations shall be posted and open to the public with time set aside at each meeting to receive public comment. All actions taken by the Board shall be recorded by the Secretary and filed with the Manistee City Clerk. All meetings and Board business shall comply with th.e Open Meetings Act of the State of Michigan. Meetings can be cancelled by the Chair, if there are no agenda items, or if it is predetermined that a quorum will not be present. Section 4. Snecial Meetings. Special meetings of the Oi.l and Gas Investment Board may be called by or at the request of the Chair or any two members. Meetings shall be held after due notice to all members. Bylaws - Oil and Gas Investment Board Page 2 Section 5. uorum. A majority of the number of votin€;members shall constitute a quorum for the transaction of business at any meeting of the Oil and Gas Investment Board. The acts of the majority of the members present at the meeting at which a quorum is present shall be the act of the Oil and Gas Investment Board. Section 6. Officers, Vacancies, Removal. The Mayor is automatically the Chair. The City Finance Director is automatically the Vice- Chair, if a member of the Board. If the Finance Director is not a member of the board, then a Vice-Chair shall be selected annually from among the remaining members and shall act as Chair during absences. Recording Secretary services will be pro ided by the Executive Secretary in the City Manager' s Office. Vacancies shall be filled for unexpired terms in the same manner as original appointments. A member may be removed from office by the City Council for neglect of official duty or misconduct in office. A written statement to the member giving reasons for the recommended removal and an opportunity to be heard must be given prior t the request for Council removal. In order to maintain the maximum participation of all appointed Oil and Gas Investment Board members at all scheduled meetings, the following is the attendance guide and Board member replacement policy for " excused" or " unexcused" absences: When appointed, each Board member should state ] Zis/ her willingness and intention to attend each scheduled meeting of the Oil and Gas Inv stment Board. 2. In the event of unplanned personal matters, business trips, family vacation trips, changed job requirements, sickness, or other physical disabili ties that prohibit the Board member from attending the scheduled meeting; the Board Cha.ir or staff liaison to the Oil and Gas Investment Board should be notified as soon as possit le prior to the time of the scheduled meeting of their inability to attend. The Board memb er upon this notification will receive an" excused absence" for the involved scheduled meeting. 3. If any Board member is absent from three ( 3) conseciztive scheduled meetings without an excused absence" for any of the three ( 3) meetings, the Board member shall be reported in writing to the City Manager. The City Manager will contact the Board member in writing and question his/her continued ability or interE st in being on the Board, giving the member a chance to rectify the attendance issue or submit a resignation. 4. There will be no limit on the number of consecutive " excused absences" for any Board member. However, if the Board member is repeate;dly absent for at least 50% of the yearly scheduled meetings, that member will also be reported in writing to the City Manager. The City Manager will contact the Board member in writing and question the member' s continued ability or interest to be on the Board. The Board member will be considered for appointment nullification when the absences total six in the calendar year. 5. The appointment nullification action would be initiated by the City Manager and forwarded on to the City Council for official action. Bylaws - Oil and Gas Investment Board Page 3 Section 7. Compensation. Members of the Oil anci Gas Investment Board may be reimbursed for their actual expenditures made on behalf of the Oil and Gas Investment Board and properly submitted in due form to the Chair of the Oil and Gas Investment Board. Section 8. Powers of the Oil and Gas Investment Board. A) The Oil and Gas Investment Board shall be charged with the duty of investing the funds of the Oil and Gas Fund according to the City Invest ient Policy. B) The Oil and Gas Investment Board shall appoint a Trustee for investment purposes as prescribed by Ordinance. C) The Trustee named shall have no authority except to carry out the directions of the Oil and Gas Investment Board as transmitted to him by a duly appointed representative of the Board. D) The Finance Director shall report to the Oil and G as Investment Board at its regular meetings, the current status of the principal and income of the Investment Fund. E) The Oil and Gas Investment Board may employ suclh professional and clerical services, including investment advisors, as are required to achieve the goals of the Oil and Gas Fund. Section 9. Conflict of Interest.In the event that busin ess being carried out by the Board may have a personal or financial impact on a member of the Board or their immediate family, or any corporation or business of which a Board Member is an officer or director, the member must disclose the conflict of interest and refrain from voting on that particular business. If any question of whether or not a conflict exists cannot be determined by the Board, then the matter of the question shall immediately be referred in writing tc the Manistee City Attorney for consultation and recommendation. Section 10. Parliamentarv Procedure. Parliamentary procedure in meetings, when needed, shall be governed by Robert' s Rules of Order. Section 11. Amendment. Bylaws shall be reviewed annually during the first meeting of the year. All changes or amendments to the Bylaws must be ap roved by the majority of the Board. Such changes or amendments must be presented to the Boardl in writing for consideration. Upon approval by the Board, the Bylaws, showing the proposed arnendment, shall be submitted to the Manistee City Council for final approval. The foregoing Bylaws were duly adopted at a regular mee ting of the Oil and Gas Investment Board held December 7, 1981; amended January 21, 1988j amended July 25, 1990; amended June 17, 2002; amended February 1 S, 2006; amended Apr•il 17, 2007; amended January 19, 2010; amended April 19, 2011. Bylaws - Oil and Gas Investment Board Page 4 l!/ Cy thia J. Lo vich, Secretary Dated Oil and Gas Investment Board Approved by the Ma istee City Council:  Oil and Gas Investment Board Roster NAME PHONE ADDRESS TERM E-MAIL Roger Zielinski 989-329-3081 (m) 529 First Street Mayor rzielinski@manisteemi.gov Chair / Mayor Manistee MI 49660 12/19 Erin Martin Pontiac 231-510-3457 (m) 1003 Engelmann Street 12/19 epontiac@manisteemi.gov Council Representative Manistee MI 49660 Ed Bradford 398-2804 (w) City Hall 12/19 ebradford@manisteemi.gov Vice-Chair / Trustee Jeff Reau 723-3533 (w) 294 River Street 6/30/22 jreaufa@gmail.com 231-878-0540 (h) Manistee MI 49660 Doug Parkes 690-2225 (m) 724 Harbor Drive 6/30/20 dougaparkes@hotmail.com 723-8687 (h) Manistee MI 49660 Thad Taylor, City Manager 398-2801 (w) City Hall ttaylor@manisteemi.gov Ex-Officio (Non-Voting) George Saylor 723-8333 414 Water Street GSaylor@mikameyers.com City Attorney Manistee MI 49660 Kelly McColl 398-2801 City Hall kmccoll@manisteemi.gov Recording Secretary Updated: December 2019