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1996 06 12 IAB Minutes INVESTMENT ADVISORY BOARD MINUTES June 12, 1996 I CALL TO ORDER F{egular meeting of the La Quinta Investment Advisory Board waS Called to order at the I'~our of 5'30 P.M. by Vice Chair Brown, followed by the Pledge of AJIlegi~nce. F~RESENT: Board Members Brown, Frame, Irwin, Osberne, Sales and I I . Chairman Lewis (5:37) i ' I ,~,BSENT: Board Member Rodriguez (:)THER PRESENT: Thomas P. Genovese, City Manager, Jo[ n F~ Iconer, Finance Director, Dawn Honeywell, City Att)rne and Debbie '~ DeRenard, Secretary II CONFIRMATION OF AGENDA - Confirmed III PUBLIC COMMENT- None IV CONSENT CALENDAR A. Approval of Minutes of Meeting on April 10, 1996 for the Investment Advisory Board. In response to Board Member Irwin, Mr. Genoves.= advised that the Investment Advisory Board can agendize the minutes a.~ a business session item at any time. He further advised that the City C0 Jncil will consider a comprehensive package that will address a standard f0~'mat for the minutes at their July 20, 1996 meeting. MOTION -It was moved by Board Members Sales/Osb ~rne to approve the Minutes of April 10, 1996 as submitted. Motion Carriec~ Unanimously. B. Approval of Minutes of Meeting of May 8, 1996 for the Investment Advisory Board. MOTION -It was moved by Board Members Brown/S;lles to approve the minutes of May 8, 1996 as submitted. Motion carried unanimously. investment Advisory Board June 1 2, 1 996 [ I~/linutes~' BUSINESS SESSION A. Transmittal of Treasury Report for April 30, 1996. Board Member Frame suggested that a column be inserted in the Treasurers Reports next to the investment percentage that indicates the type of investment. MOTION -It was moved by Board Members Lewis/Frame to accept, receive and file the Treasury Report for April 30, 1996. Motion carried unanimously. B. Consideration of approval of Investment Policy for the City of La Quinta. Mr. Falconer advised that the City Manager, Thomas Genovese and the City Attorney, Dawn Honeywell are present at the meeting as part of the Investment Policy adoption process, as stated in Section XX of the Investment Policy Adoption. He further advised that if the Investment Policy is approved, it will be submitted to the City Council for their consideration. Mr. Falconer advised the Board that he has met with the City Manager and City Attorney regarding the Investment Policy. He indicated that on Page 15 of the policy there are clarification changes in the Footnote 1 section. Mr. Genovese advised that staff has been following the Investment Advisory Board and is aware that one of the major issues is diversification of investments. He advised that a large amount has been diversified. One of the other issues that is being reviewed is the management of the portfolio. The current budget that will be transmitted to the City Council has a request that if approved will upgrade one of the Account Technicians position to a Financial Services Assistant position. The intent of the position is to be consistent with the diversification of the portfolio. As the City enters into instruments that need more monitoring, this position will have that requirement to assist the Finance Director with this process. This position will enable the City to diversify more in the coming year. Mr. Genovese advised that the LAIF percentage is currently at 48% and it is the City's intent to lower the percent to 20 to 30% and use LAIF as a clearing account. The City will always need a place to temporarily place funds, such as LAIF and because LAIF is an on-demand account it is wise to use them in some cases. In the long term it would be wise to invest less in LAIF as an nvestment Advisory Board June 1 2, 1 996 Vlinutes investment and more in Treasuries consistent to wha~ the City had done in the last two months. In the future the maximum perce~ to invest in LAIF can be reduced, but at this point in time without authoriza~tion of the position, it would not be wise to reduce LAIF. In response to Board Member Irwin, Mr. Genovese ~dvised that staff can eXplain the intent to reduce LAIF to 20 to 30% in the ~taff Report. Chairman Lewis advised that the policy states 50% maximum of it's portfolio can be invested in LAIF. The staff report cannot ovE:rride the Investment POlicy. In i response to Board Member Irwin, Mr. Genovese advised that staff can exPress the intent to reduce LAIF if it's the Boards desire to do that. Chairman Lewis advised that at this point in time the majority of the Board hals expressed the desire to reduce the investment ir~ LAIF to 50% of the portfolio. If the Board feels it's appropriate to lower the percentage in the future, the Board will communicate that to the City Council. BOard Member Sales advised that the next order of business is to develop an investment plan. Reducing LAIF would be part of the plan. Ms. Honeywell advised that the basic definition of surplus funds is those monies that the City has in the treasury that is not required for immediate need. The reference in the policy minus the bond proceeds was an attempt to include Section L of the 53601 overall restrictions. By just saying "bond proceeds" it would under-include fiscal instruments that don't need to follow all of the prior rules and in other instances it's over-inclusive. MOTION-It was moved by Board Members Osborne/Frame to approve the InVestment Policy as amended. Motion carried with Board Member Irwin voting NO. In response to Board Member Irwin, Mr. Genovese advised that if its the consensus of the Investment Advisory Board to allow a minority report, one can be included with the Staff Report. After requesting the opinion of the Board, Chairman Lewis advised that the InVestment Advisory Board Members have no problem with Board Member I~in filing a minority report to be attached with the Staff Report. 'nvestment Advisory Board June 1 2, 1 996 Vlinutes M~'. Genovese advised Board Member Irwin that he would need to have the mlnority report delivered to the Finance Department by June 13, 1996 at 5:00 ~tl BOARD ~EMBER COMMENTS - None INFORMATIONAL ITEMS A. Inl:ormation regarding Sweep Bank Account The Board concurred to continued this item until the November 1996 mE~eting. B. la.IF Pooled Money Investment Board Report - March 31, 1996 Received and filed. C. Di~,ersification of Portfolio Re ;eived and filed. ADJOURI~IMENT MOTION It was moved by Board Member Brown/Sales to adjourn the meeting. Motion ca ried unanimously.