By Patrick Winderl/Havre Daily Newsfirstname.lastname@example.org
The Hill County museum board has decided not to postpone transferring $50,000 to the H. Earl Clack Foundation, despite losing $2,000 in interest revenue by withdrawing the money from a term investment.
The Clack Foundation has been waiting for the $50,000 to be placed in its endowment fund, four months after the museum board approved the transfer. Until Monday, it appeared possible that the delay might continue until April.
The transfer was set to happen this afternoon.
The museum board agreed Sept. 24 to use the $50,000 to bolster the foundation's endowment fund to help pay for maintenance and upkeep on the Heritage Center, which the foundation manages. The Heritage Center is the home of the H. Earl Clack Museum.
Under an agreement between the two parties, the museum board would retain ownership of the money, but would allow the foundation to use it to generate interest from investments.
Hill County Commissioner Kathy Bessette said the transfer was delayed partly because County Treasurer Carrie Dickson was not provided written authorization by the museum board to transfer the money until this week.
Dickson said this morning that she was aware the museum board had voted in September to move the money from its coffers to the foundation, but had not actually been directed to do so until this week.
Bessette described the problem as a "lack of communication."
In the meantime, the Hill County Commission raised another issue. It noted that the $50,000, an endowment willed to the museum by a member of the Clack family, is tied up in a term investment at Heritage Bank. By removing the money prior to April 15, the board would incur a small penalty and would lose $2,000 in interest, VandenBoom said.
However, by waiting until April to transfer the money, the museum board would still be obligated to contribute $500 a month to the foundation for upkeep on the Heritage Center. The board will likely decide to discontinue the payments once the transfer is complete, VandenBoom said.
During a museum board meeting Monday night, the board decided not to wait to transfer the money until April. The board also voted to contribute $500 to the Clack Foundation for the month of January.
"Hopefully, it will be the last one," VandenBoom told the board.
An immediate transfer would be more beneficial for both parties, museum board member Lou Lucke said after the meeting. The foundation will get the money it needs, and museum board will be relieved of its obligation to pay $500 a month, he said.
Dickson said she planned to make the transfer sometime today.
The agreement with the foundation is a win-win situation, VandenBoom said.
"I believe this money will mean a great deal to the stability of the Heritage Center and the museum," he said.
Once the Clack Foundation's endowment reaches $250,000, it can use 80 percent of the earned interest to fund the museum and maintain the Heritage Center. The foundation's endowment is about $210,000, foundation president Elaine Morse said, meaning that the foundation will be able to tap the interest as soon as the transfer from the county is made.
Bessette said another benefit is that the museum will be eligible for a greater number of grants. Once the Clack Foundation has more than $250,000 in its endowment fund, the foundation can apply for some grants it is not eligible for now, Bessette said.
"The penalty is worth it because you get more money through the grants," she said.
The foundation's endowment is in a managed money account with DA Davidson & Co. It includes stocks, bonds and certificates of deposits, according to a memorandum outlining the money transfer.
The memorandum has a number of stipulations dictating how the foundation can use the money from the museum board. Among them are: The museum board can specify how the money is invested, the foundation must return the money within 90 days after receiving written notice from the museum board, and the money must be returned if the foundation dissolves or goes bankrupt.
The transfer was the culmination of a number of efforts to secure funding for the Heritage Center. Last year the Clack Foundation threatened to abandon the center, citing the high cost of utilities and maintenance. The building has been plagued by a number of problems, including a leaky roof, failing boilers, and inefficient windows.
The foundation leased the Heritage Center after the city purchased it in 1996. The lease has expired and the foundation is now operating it under a tenancy-at-will agreement.
City officials said they would have to consider closing the Heritage Center if the Clack Foundation stopped managing it. Such a move would have forced the H. Earl Clack Museum to find a new home.