The band's immediate financial outlook is fine, a Packard trustee said.
By AMANDA C. DAVIS
VINDICATOR TRUMBULL STAFF
WARREN -- A fickle economy has taken a toll on Packard Band's trust fund, but a financial expert is cautioning officials to think long term.
The $5.7 million trust was worth $6.2 million a year ago but is expected to bounce back, said Richard Buffet, vice president of Victory Capital Management Co. in Cleveland, a subsidiary of Key Corp., which administers the trust.
The Packard family set aside $150,000 in 1955 to ensure Packard Band would have a future.
About $305,000 was available to the band this year in "draw down" money, income taken from the principal for yearly operations.
Buffet estimates that $286,000 will be available for the band in 2002.
Economic factors: Linda Metzendorf, a Packard band trustee, said slashed interest rates and the economy as a whole are main factors in the decrease in available funds.
The board agreed Thursday to request that Key Corp. give the band an amount equal to the three-year average of income from the trust for next year's operations.
"That should give us about $300,000," Metzendorf said, explaining that will give the band plenty of money to cover its estimated $204,000 budget for next year.
She added that extra money in the budget is always used for capital projects.
Buffet explained the trust is invested in a diversified, charitable multiasset fund that's heavily traded and benefits institutions.
Wall Street: Though the market is volatile, Buffet said, it's not a good idea to watch it closely every day.
"That's why I'm losing my hair," he joked.
Metzendorf agreed, adding, "That will make you a nervous wreck."
She told Buffet she thought the annual return on the trust should have been higher when the economy was stable.
He told her it's better for returns to increase slowly and steadily than to fluctuate in the short term.
The board also heard from Jim Olsavsky of Olsavsky Jaminet Architects in Youngstown, the firm hired by the board to draw up plans for capital projects.
Drawings for a box office are almost done, he said, explaining that work will include removing a wall, asbestos abatement, putting in new windows and electrical wiring.
Construction, technology and asbestos bids should be opened after the first of the year.