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1996 01 10 IAB Minutes INVESTMENT ADVISORY BOARD MINUTES January 10, 1996 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, Irwin, Osborne, Sales and Chairman Lewis ABSENT: Board Members Frame and Rodriguez OTHERS PRESENT: John Falconer, Finance Director, John Risley, Accounting Supervisor and Debbie DeRenard, Secretary II CONFIRMATION OF AGENDA - Confirmed III PUBLIC COMMENT- None IV CONSENT CALENDAR A. Approval of Minutes of December, 13, 1995 Investment Advisory Board Meeting. Chairman Lewis advised that the December 13, 1995 meeting started at 4:30 P.M., not 5:30 P.M. as indicated on the minutes. MOTION -It was moved by Board Members Irwin/Osborne to approve the minutes of the December 13, 1995 Investment Advisory Board as corrected. Motion carried, unanimously. Investment Advisory Board January 10, 1996 Minutes V BUSINESS SESSION A. Transmittal of Draft Treasury Report for November 30, 1995. MOTION -It was moved by Board Members Sales/Irwin to accept, receive and file the Treasury Report for November 30, 1995. Motion carried unanimously. B. Fiscal Year.1994195 Management Letter comments. Mr. Falconer presented the staff report and advised that one of the purposes of the Investment Advisory Board is to review the Fiscal Year Management Letter comments. There are two types of management letters. One type is the kind that deals with reportable conditions. These are more serious in nature and the others are non-reportable conditions. The differences between the two are who receives the comments. If they are non-reportable conditions, they go to the City Manager. If they are reportable conditions, they are more serious in nature and they are directed to the City Council. Mr. Falconer advised that the comments were non-reportable conditions and were being forwarded to the Investment Advisory Board for their review and inquiry. Staff has provided our response to these non-reportable conditions. Chairman Lewis advised that he agrees with most of the recommendations regarding policy. In response to Board Member Irwin, Chairman Lewis advised that it would be easier to have Staff incorporate the changes regarding policy into the Investment Policy. Board Member Irwin questioned if Staff should make the changes to the current investment policy, or draft a new policy. Chairman Lewis stated that the City has a comprehensive policy now that just needs some fine tuning. Board Member Irwin advised that he leans toward drafting a new policy, rather than taking existing policy and updating it. The policy can be done in the context of 2 or 3 pages. Investment Advisory Board January 10, 1996 Minutes Chairman Lewis advised that the lAB is trying to advised City Council on a policy that is designed to protect public funds. While being brief and concise is a very good goal, you can end up being too brief and concise and end up with loop holes. Board Member Osborne advised that most of the items addressed in the management letter are minor. There are a few items that will change the current policy. If Staff changes the entire investment policy document and submits it for approval, the Investment Advisory Board might end up with several changes in different areas. Board Member Irwin advised that he is for starting over and creating a new investment policy. In response to the Board, Mr. Falconer advised that he could bring a draft investment policy back to February Board meeting for the Boards approval. Chairman Lewis advised that he recommends that the Finance Director submit a draft investment policy at the next Board meeting. Mr. Falconer advised that in addition to our current City policies, he has received the Municipal Finance Treasurers Association standards for Investment Policies. He further advised that he has investment policies from several other cities. Board Member Sales advised that the current investment policy has been approved by City Council and the City Attorney. It would be simple to revise the current policy and move on. Board Member Irwin stated that he is not happy with the current investment policy. MOTION -It was moved by Board Members Brown/Sales to have staff prepare the investment policy and bring it back to the Investment Advis°ry Board at the February 14, 1996 meeting. Board Member Irwin adVised that he concurs with most of the motion with the exception of the part referring to the management letter. InveStment Advisory Board January 10, 1996 Minutes DiscusSion ensued with the Chairman Lewis calling for a vote. Motion failed. MOTION- It was moved by Board Member Irwin/Sales that the Investment Advisory Board has reviewed and accepts the Auditors Management Letter and have Staff amend the current investment policy and draft a new investment policy for the Board consideration at the February meeting. Motion carried unanimously. VI BOARD MEMBER COMMENTS - None In response to Board Member Osborne, Mr. Falconer advised that the cash flow report will be presented to Council in February in Closed Session. VII INFORMATIONAL ITEMS A. Comprehensive Annual Financial Report- Questions Mr. Falconer and Mr. Risley presented the Comprehensive Annual financial Report and answered questions from the Board Members. In response to Board Member Osborne, Mr. Falconer advised that he would report back to the Board regarding a Miscellaneous Revenue amount in the CAFR. B. LAIF Report on Mark to Market Policy Noted and filed. C. Status of Broker/Dealer Selection. Mr. Falconer advised that he has completed the background check and is in the process of getting the agreement for Merrill Lynch reviewed by the City Attorney. He further advised that he wants to visit the site of each of the Broker/Dealers. Investment Advisory Board January 10, 1996 Minutes D. Legislative Action for 1995 pertaining to Investments In response to Board Member Irwin, Mr. Falconer advised that he would bring back information to the Board regarding the Prudent Investors Act and the liability of the Board in regards to the Act. VII ADJOURNMENT MOTION - It was moved by Board Members Irwin/Sales to adjourn the meeting. Motion carried unanimously.