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1993 12 08 IAB Minutes INVESTMENT ADVISORY BOARD MINUTES DECEMBER 8, 1993 The regular meeting of the La Quinta Investment Advisory Board was called to order at the hour of 5:30 P.M. by Chairman Lewis, followed by the Pledge of Allegiance. PRESENT: Board Members Brown, Gilreath, Sales, Wilson, and Chairman Lewis ABSENT: None OTHERS PRESENT: Pam LiCalsi, Personnel & Budget Manager and Debbie DeRenard, Secretary I. PUBLIC COMMENT - None II. CONSENT CALENDAR A. Approval of the Minutes from the meeting of November 10, 1993. MOTION -It was moved by Board Members Brown/Gilreath to approve the minutes of November 10, 1993 as submitted. Motion carried unanimously. III. BUSINESS SESSION A. Transmittal of Treasurer's Report Dated October 31, 1993. In response to Chairman Lewis, Ms. LiCalsi advised that Low/Mod Funds are funds that are set-aside for iow and moderate income housing and are potentially 20% of the tax increment from the Redevelopment Agency. In response to Board Member Sales, Ms. LiCalsi advised that the checking accounts would be pooled beginning in December. MOTION - It was moved by Board Members Sales/Wilson to receive and file the Treasurers Report Dated October 31, 1993. Motion carried unanimously. Investment Advisory Board 2 December 13, 1993 Minutes B. Consideration of Recommending to the Redevelopment Agency a Proposal to Solicit Bids for Investment Agreements for RDA Bond Reserve Funds. Cynthia Bonneau of C L Bonneau & Co., outlined the structure of investment language for the bonds and reviewed the Investment Summaries regarding the following bond issues: $5,845,000 - RDA Tax Allocation Bonds 1992 Project Area No. 1, $8,700,000 RDA Tax Allocation Bonds Series-1991 Project Area No. 1, and $8,000,000 RDA Tax Allocation Bonds Series-1989 Project Area No. 1. Ms. Bonneau advised that for these three (3) bond issues she would propose an investment agreement type of vehicle be used for the investment of bond proceeds. Ms. Bonneau reviewed the "Investment Analysis of Bond Reserve Funds (Attachment A). Ms. Bonneau advised that of the nine (9) bond issues, five (5) are 1915 Bond Act Financing. The 1915 bond act permitted investment language was specific with regards to how the reserve funds could be invested, the language states that the reserve has to be invested in government obligation bonds maturing in five (5) years. Ms. Bonneau advised that with the investment agreements that she structures the following guidelines are set: the financial institutions have to be rated AA or better and investments are only invested with banks. In response to Board Member Sales, Ms. Bonneau advised that the Bond Counsel, in looking at the bond documents viewed LAIF as a acceptable investment. Board Member Brown advised that in the Staff Report, Mr. O'Reilly advised that "The three (3) remaining RDA bond issue reserves would have required (per the Bond Trustees) special amendments from Bond Counsel because a state investment pool option was not specifically mentioned in the bond documents. Bond Counsel did not feel it was prudent to go back and amend the allowable investment language because of Council's sensitivity to investment concerns". Ms. Bonneau reviewed the bond wording for acceptable investments. Investment Advisory Board 3 December 13, 1993 Minutes In response to Board Member Wilson, Ms. Bonneau advised that tax laws require that investments be done essentially on the basis of yield. Once a bidding process has been done, then bond counsel will be uncomfortable if you award a bid to someone not based on their yield. She further advised that the probability of a foreign owned bank bidding would be likely. The credit worthiness by and large is with foreign banks. There are only two (2) domestic banks that have the credit worthiness (AA or better) to bid on this investment. The foreign banks that submit bids are New York branch based. In response to Board Member Sales, Ms. Bonneau advised that Standard & Poors, Moody's and Fitch are rating services accepted for rating on long term debt. Chairman Lewis advised that he was comfortable with Standard & Poors' and Moody's rating for long term debt. Board Member Wilson advised that he would have liked to speak to other cities that have experience with investment agreements. MOTION - It was moved by Board Members Brown/Wilson to recommend to the Redevelopment Agency Board that the La Quinta Redevelopment Agency approve the proposal to solicit bids for' investment agreements for RDA bond reserve funds. Motion carried unanimously. Ms. Bonneau advised that she is available to attend the City Council meeting to answer any questions the Council may have. Ms. LiCalsi advised that this item will be scheduled for January 21st or February 1st, 1994 Council meeting. She further advised that the Investment Advisory Board would be notified prior to the Council meeting. IV STUDY SESSION - None · V OTHER Ms. LiCalsi distributed an update to the Brown Act, advising that if the Board Members have any question, they should contact staff. Investment Advisory Board 4 December 13, 1993 Minutes Ms. LiCalsi advised that in regards to the November 10, 1993 motion regarding the Investment Advisory's request to have the City Council appoint a liaison or provide a specific task outline, the City Council advised that they agreed with the Investment Advisory Board. Council indicated that a designated Board Member should attend a Council meeting and make a short presentation regarding the Investment Advisory Board's question or concerns. Board Member Wilson recommended that the Investment Advisory Board review the options in the next month and discuss this at the next meeting. Board Members concurred. In response to Board Member Brown, Ms. LiCalsi advised that Council does receive copies of the Investment Advisory Board minutes. VI ADJOURNMENT MOTION - It was moved by Board Members Wilson/Sales to adjourn the meeting. Motion carried unanimously. Investment Advisory Board 4 December 13, 1993 Minutes Ms. LiCalsi advised that in regards to the November 10, 1993 motion regarding the Investment Advisory's request to have the City Council appoint a liaison or provide a specific task outline, the City Council advised that they agreed with the Investment Advisory Board. Council indicated that a designated Board Member should attend a Council meeting and make a short presentation regarding the Investment Advisory Board's question or concerns. Board Member Wilson recommended that the Investment Advisory Board review the options in the next month and discuss this at the next meeting. Board Members concurred. In response to Board Member Brown, Ms. LiCalsi advised that Council does receive copies of the Investment Advisory Board minutes. VI ADJOURNMENT MOTION - It was moved by Board Members Wilson/Sales to adjourn the meeting. Motion carried unanimously.