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1996 03 13 IAB Minutes INVESTMENT ADVISORY BOARD MINUTES March 13, 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, Frame, Irwin, Roddguez, and Chairman Lewis ABSENT: Board Member Osborne and Sales OTHERS PRESENT: John Falconer, Finance Director and Debbie DeRenard, Secretary II CONFIRMATION OF AGFNnA Mr. Falconer advised that he would like to add an item to the Business Session as Item E, titled First Interstate and Wells Fargo Merger and add supplemental information to Business Session Item D - Review of Investment Policy. MOTION- It was moved by Board Members Irwin/Rodriguez to add First Interstate and Wells Fargo Merger and Business Session Item E and add supplemental information to Business Session Item D. Motion carried unanimously. III PUBLIC COMMENT- None IV CONSI=NT CAI ENnAR A. Approval of Minutes of February 14, 1996 Investment Advisory Board Meeting. MOTION - It was moved by Board Members Frame/Irwin to approve the minutes of the February 14, 1996 Investment Advisory Board as submitted. Motion carried unanimously. Investment Advisory Board March 13, 1996 Minutes V BUSINESS SESSION A. Transmittal of Draft Treasury Report for January 31, 1996. MOTION -It was moved by Board Members Irwin/Brown to accept, receive and file the Treasury Report for January 31, 1996. Motion carried unanimously. B. Selection of Two Board Members for Travel to CMTA Conference April 23 - 27, 1996. MOTION - It was moved by Board Members Irwin/Frame to appoint Board Member Osborne and Chairman Lewis as representatives of the Investment Advisory Board to attend the CMTA conference April 23 - 27, 1996. Motion Carried Unanimously. C. Selection of Broker/Dealer. Mr. Falconer presented the Staff Report and advised that staff sent broker/dealer questionnaires to Dean Witter, Newport Beach and Paine Webber, Indian Wells. Dean Witter met the requirements and Paine Webber has not responded. Mr, Falconer advised that it is staff recommendation that Earnest Marchowski of Dean Witter, Newport Beach be placed as broker/dealer of the Listing of Financial Institutions for the City of La Quinta. · MOTION - It was moved by Board Members Brown/Irwin that Ernest Marchowski of Dean Witter, Newport Beach is placed as broker/dealer of the Listing of financial Institutions for the City of La Quinta. Motion carried unanimously. Mr. Falconer advised that he would like the motion from the February 14, 1996 meeting selecting Merrill Lynch as broker/dealer to be amended to include Mr. Ronald Meraz and Mr. Alfredo Sandoval. Motion carried unanimously. Investment Advisory Board March 13, 1996 Minutes MOTION -It was moved by Board Members Brown/Frame to appoint-Mr. Ronald Meraz and Mr. Alfredo Sandoval, Merrill Lynch, Indian Wells be placed as broker/dealer of the Listing of Financial Institutions for the City of La Quinta. Motion carried unanimously. D. Review of Investment Policy The Investment Advisory Board reviewed the Investment Policy and the following changes were made to the draft policy: (Shaded Items will be deleted and Bolded Items will be added) ! General Purpose No Changes II Investment Policy Change wording to: It is the policy of the City of La Quinta to invest public funds in a manner which will provide a diversified portfolio with ~ p~W~:~i safety of .principal and the highest investment return while meeting daily cash flow demands. In addition, the Investment Policy will cOnform to all State and local statutes governing the investment of public funds. III Scope No Changes IV Objectives 1. Safety Safety of principal is the foremost objective of the investment program. Investments of the City of La Quinta shall be undertaken in a manner that seeks to ensure the .preservation of capital in the overall portfolio in accordance with the permitted investments. The objective will be a mitigated credit risk and interest rate risk. Investment Advisory Board March 13, 1996 Minutes 3. Yield Securities shall not be sold prior to maturity with the following exceptions: V Prudence cimumstan~s~::~ them Pmden~ inla~rda ~and ntPoti~ and an:.: indNidaat, s~u~s cred~.i:dsk~'or~: manet p~:~:~anges~:~ provided deviations?,:from expectations, am..repo~ed;~::in a::.timeN:: fashion and appmpriate~actionjs;,taken to, contml~; and adverse developments, The City shall follow the Uniform Prudent Investor Act as adopted by the State of California in Probate Code Sections 16045 through 16054_ Section 16053 sets forth the terms of a prudent person which are as follows: Investments shall be made with judgment and care - under circumstances then prevailing - which persons of prudence, discretion, and intelligence exercise in the professional management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived. Investment Advisory Board March 13, 1996 Minutes .' VI Deleaation of Authority The City Manager or Assistant City Manager shall approve in writing all purchases and sales of investments prior to their execution by the City Treasurer. VII Conflict of Interest Therefore, 'the City Manager or ~ Assistant City Manager, and the City Treasurer shall adhere to the State of California Code of Economic Interest and to the following: AIl'pemo~$ The City Manager, Assistant City Manager, and the City Treasurer shall not personally or through a close relative maintain any accounts, interest, or private dealings with any firm with the City places' investments, with the exception of regular savings, checking and money market accounts, or other similar transactions that are offered on a non-negotiable basis to the general public. XI Collaterali-ation Collateralization will be required for i~..~ ~;~!~:~i n~ Certificates of Deposits.The type of collateral is limited to City authorized investments. Xll Safekeepina and Custody All security transactions di ~!:~lOw of the City of La Quinta shall be conducted on a delivery- versus - payment (DVP) basis. Securities will be held at a third party custodian as listed on the approved financial institution listing designated by the City Treasurer and evidenced by safekeeping receipts. Investment Advisory Board March 13, 1996 Minutes Deleted 1. RepumhaseAgmment;~ig than 14 days.-. The C~must':taked ~:;'of~e,'se~~i as tistedi~ in the autho~zed~:::inve~ents:andi: ifi~fion, section, or account ior~t~at:thei~Pedeml~Rese~e Bank; Deleted 2. as liS~in~ea~e~i~i ~ and divemification bmker:i~:ina,~des~ ; de nt: XlII Interest Earning Distribution Policy No change Glossary Add: Uniform Prudent Investor Act The state of California has adopted this Act. The Act contains the following sections, duty of Trustee, Standard of care, diversification, · review of assets, costs, compliance determinations, delegation of investments, terms of prudent investor rule, application. MOTION - It was moved by Board Members Brown/Frame to continue the Review of the Investment Policy to March 28, 1996 (Special Meeting). Motion carried unanimously. E. First Interstate and Wells Fargo Merger MOTION '- It was moved by Board Member Brown/Irwin to have the City of La Quinta select Bank of America LAIF Account Number 0148515800 to receive future.deposits and when available, notify LAIF of the new Wells Fargo Accounts and delete First Interstate Accounts on .the LAIF Card. Motion carried unanimously. Investment Advisory Board March 13, 1996 Minutes VI BOARD MEMm=R COMMENTS - None VII INFORMATIONAl ITEMS A. California Society of Municipal Finance Officers Awards. Noted. VlI ADJOURNMFNT MOTION - It was moved by Board Members Irwin/Frame to adjourn the meeting. Motion carried unanimously.