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1994 05 11 IAB Minutes INVESTMENT ADVISORY BOARD MINUTES MAY 11, 1994 I CALL TO ORDER 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: Richard Parzonko, Finance Director and Debbie DeRenard, Secretary II PUBLIC COMMENT - None III CONSENT CALENDAR A. Approval of Minutes from the meeting of April 13, 1994. MOTION - It was moved by Board Members Brown/Gilreath to approved the Minutes of April 13, 1994 as submitted. Motion carried unanimously. IV BUSINESS SESSION A. Transmittal of Treasurer's Report Dated March 31, 1994. Board Member Brown advised that she would like additional information for the following checks: No. # $610,000.00, No. # $200,000.00, No. # $180,000.00, 17700 $90,000.00, Ck 17740 $134,597.27, Ck 17786 $76,368.90, Ck 17800 $55,282.50, Ck 17818 $687,320.15, Ck 17830 $57,664.00, Ck 17851 $48,513.73, Ck 17863 $87,160.00, Ck 17864 $43,881.00, Ck 17865 $73,977.00, Ck 17900 $140,000.00, Ck 17910 $79,671.74, Ck 17929 $116,475.90, Ck 17942 $212,572.14, Ck 17951 $717,045.74, Ck 17953 $70,820.20, Ck 17984 $70,957.04, Ck 18027 $58,022.00. Chairman Lewis suggested that in the future the Finance Department could supply the Investment Advisory Board with information on all checks over $40,000.00. Investment Advisory Board 2 May 11, 1994 Minutes Mr. Parzonko advised that the warrant registers could be forwarded to the Investment Advisory Board. Board Member Brown advised that her reason for a thorough check is due to the change in the Administration with regards to the termination of Mr. O'Reilly and Mr. Hunt's employment. Mr. Parzonko advised that he will come back with a proposal to expedite the process of the check distribution to satisfy the Board. He further advised that there is a check and balance system in the organization and there was no fraud involved in the terminations of Mr. O'Reilly and Mr. Hunt. Board Member Sales advised that since the City has had two major changes, if there was any malfeasance, perhaps it should be shared with the Board. Mr. Parzonko advised that there was no fraud involved in either situation. MOTION - It was moved by Board Members Brown/Gilreath to accept the Treasurers Report dated March 31, 1994. Motion carried unanimously. V STUDY SESSION A. Investment Policy Review - Banking Services Mr. Parzonko advised that investment policies from City of La Quinta and the City of Encinitas were included in the Agenda packets for the Boards review. He further advised that the Investment Advisory Board policy should be approved by the City Council annually. The Board reviewed the investment policies submitted and made the necessary changes, additions and deletions. Mr. Parzonko advised that he would have the draft policy typed and mailed to each Board Member for their review before the next IAB meeting. Board Member Brown suggested that when the Board receives the Draft Policy, if there are any questions, Members should refer them to Chairman Lewis. Board Member Brown advised that it appears the previous policy has not been reviewed by Council on an annual basis. Investment Advisory Board 3 May 11, 1994 Minutes B. Investment Risk Mr. Parzonko advised the Board that the excerpt on investment risks will give the Board a perspective on the risk scale for investments. VI BOARD MEMBER COMMENTS - None VII OTHER A. Banque Audi Condemnation Mr. Parzonko advised that Board Member Brown requested information on the Banque Audi Condemnation payment of $643,926.40. The City was exercising eminent domain on the property known as the Avenue 52 Extension Project. The property owner - Banque Audi thought the property should have been appraised higher. The matter could not be resolved and litigation proceedings were initiated. B. Bond Reserve Funds Mr. Parzonko advised that he researched the City's bond issues to determine how much the City is currently yielding. There are nine outstanding issues. The City is currently refinancing 3 Redevelopment Agency Bond Issues and they have been excluded from the list enclosed in the staff report. He advised that the Bond Reserve Funds work sheet indicates the reserve amounts required by the bond indenture, arbitrage yield and the current reserve yield. Mr. Parzonko advised that he spoke with the City's Bond Counsel and a arbitrage calculation firm. The City is currently reporting negative arbitrage and the City can go well beyond the yield to make up this difference during the life of the issue. Mr. Parzonko advised that he requested a calculation that will maximize the City out over the life of the issue and still be in compliance without having to set aside monies to pay IRS. For the 91' series an Investment Agreement would be the best alternative. It basically takes risk from the Bond issue and passes it along to the individuals who are handling the investment agreement. In return the City can lock a yield on the bond reserve for the length of the issue. This option is not available for the other issues. The bond indentures that were adopted identify specific investments such as US Treasury obligations. Investment Advisory Board 4 May 11, 1994 Minutes Right now the key focus is on the 91' bond series issue. Mr. Parzonko requested input from the Board regarding the direction the City should take. Board Member Wilson suggested having an Investment Agreement firm present it to the Council. Mr. Parzonko advised that in order to expedite the process, the Board might want to delegate the authority to the Finance Director, having him draft a report at the next meeting authorizing him to move forward with an investment agreement. Board Member Brown suggested that the recommendation with regard to the investment of the Bond series along with the Investment Policy be presented at the next meeting. Mr. Parzonko advised that the City is in the Budget process currently. He advised that he would bring the Investment Policy back to the Board for approval at the June Meeting and the Investment Agreement at the July meeting. C. TRACs Newsletter Mr. Parzonko advised that if the Board was interested in receiving the TRACs Newsletter, a copy will be forwarded to each Board Member. The Board agreed that the Newsletter would be helpful. VIII ADJOURNMENT MOTION - It was moved by Board Members Wilson/Gilreath to adjourn the meeting. Motion carried unanimously.