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1996 10 09 IAB Minutes INVESTMENT ADVISORY BOARD MINUTES October 9, 1996 I CALL T~ ) ORDER Regular meetir g of the La Quinta Investment Advisory Board was called to order at the hour of 5:30 P.IVl. by Chairwoman Brown, followed by the Pledge of Allegiance. PRESENT: Board Members Frame, Irwin, Lewis, Osborne, Rodriguez, Sales and Chairwoman Brown ABSENT: None OTHER PRESI=_NT: John Falconer, Finance Director and Debbie DeRenard, Secretary II CONFII~:MATION OF AGENDA - Confirmed III PUBLIC COMMENT- N/A IV CONSE~IT CALENDAR A. .a,pproval of Minutes of Meeting on September 11, 1996 for the I~tvestment Advisory Board. I~IOTION - It was moved by Board Members Irwin/Sales to approve the n inutes of September 11, 1996. Motion carried unanimously. V BUSlN[ SS SESSION A. 'i'ransmittal of Treasury Report for August 31, 1996 £;hairwoman Brown advised that the requested changes were very helpful. I~IOTION -It was moved by Board Members Lewis/Osborne to Accept, ~eceive and File the August 31, 1996 Treasury Report. Motion carried ~nanimously. Investment Ad'ziSory .Board October 9, 1 996 Minutes B. P~'oposed Change in Bond Trustee from Wells Fargo to First Trust In response to Board Member IrWin, Mr. Falconer advised that on Page 19 of the Investment Policy there is a listing of approved financial institutions. Tile last line states "no changes to this listing may be made without City C,~uncil approval" and since this issue is dealing with a contract and an investment issue, he felt it was appropriate to bring it before the Board b(;fore taking it to the City Council. In response to Board Member Sales, Mr. Falconer advised that First Trust will only be the Bond Trustee for the 1992 and 1995 RDA Bond issues, the third party custodian would still be with Wells Fargo. I~ response to ChairWoman Brown, Mr. Falconer advised that he will inform th ~ City Council that the Investment Advisory Board considered this at their meeting and that they did not have any questions or concerns with it. I~ response to Board Member Sales, Mr. Falconer advised that First Trust is being used for all other City bond issues. MOTION - It was moved by Board Member Lewis/Frame to recommend that the City Change Bond Trustee from Wells Fargo to First Trust. Motion c~rried unanimously. C. V~orkplan for Fiscal Year 1996/97 Mr. Falconer advised that at the September 11, 1996 meeting, the Board c ~estioned the reporting requirements to the City Council. Attached to the Staff Report is the Ordinance creating the Investment Advisory Board and t~e Boards functions. 'Board Member Sales advised that the Board needs to interpret Section 2.70.30- Board Functions, Item C. Board Member Irwin advised that this means the Board wOuld report in pgrson or through correspondence to the City Council. Chairwoman Brown stated that our correspondence to the City Council is the IVlinutes. Investment Ad' zisory Board October 9, 1996 Minutes B lard Member Irwin advised that he does not view the minutes as reporting c¢~rrespondence to the City Council. He further advised that he views c¢~rrespondence as a report, memorandum or a letter. Cl~airwoman Brown requested Staffs clarification as to whether the In'¢estment Advisory Board minutes would be considered a report to the City C~)uncil. She further questioned if the Investment AdVisory Board Minutes are sent to the City Council. M r. Falconer advised that the Investment Advisory Board minutes as well as the other Boards and Commissions have been interpreted as c~rrespondence and are submitted to the City Council under the section "F[eports and Informational Items" of the City Council :Agenda. B,~ard Member Irwin advised the Board that that's not what the statute irr~plies. B, lard Member Lewis advised that correspondence is simply written material. B,)ard Member Sales advised that he read in the ~City Council minutes c~ ~mments regarding the Investment Advisory Board minutes and how they were not understood by Council. Board Member Irwin advised that he had read those comments too. Board Member Osborne advised that he understood that the Council was g,~ing to review all the Board 'and Commission minUtes and set a policy rE~garding format. He further advised that the minutes didn't imply that this Committee had a problem with their minutes. Chairwoman Brown advised that if there are any specific problems or c Jestions, it would not be unusual for a Council Member to contact either the :hair or Vice Chair of the Board and ask for clarification. Board Member Lewis advised that the only time he was asked for clarification was when he appeared at a City Council meeting or when the Ir ,vestment Advisory Board has a specific project and it was sent to Council f( ,r their consideration and at that time the Council took the opportunity to ask questions. Generally this Board never hears back either positive or negative from City Council on a given item. Investment Ad~,isory Board October 9, 1996 Minutes B( .ard Member Irwin advised that some of the Board has heard from Council or an informal basis. B~ ~ard Member Lewis advised that hearing from the Council on an informal b~.siS is fine, but if it's not a formal basis then it is not communication from City Council to the Board. Bc)ard Member Irwin agreed. · In response to Board Member Sales, Mr. Falconer advised that he would n~edi'to review each ordinance for each Board and Commission in order to g/e an opinion as to how each Board and Commission communicates with t~ e City Council. He further advised that as a practice the Commission and B,~ard minutes are the correspondence sent to the City Council. B~ard Member Sales advised that its very clear to him that the City Council e:cpeCts correspondence from the Board and he doesn't feel the minutes fr~)m ithe Investment Advisory Board are serving the purpose. IV r. Falconer advised that to date, the minutes have been serving as c~)rrespondence to the City Council. Board Member Sales questioned if it would be wrong to ask the'City Council. Ir relsponse to Board Member Frame, Board Member Sales advised that f( rmal correspondence would be more appropriate. E oard Member Rodriguez advised that he agrees. He referred to Section ,~1701030, Item B that lists specifically the three items that.the Investment viSory,, Board should be reporting on to the City Council. Board Member Lewis advised that the Board reviews the items stated in Item v~at,each meeting and that review is reflected in the minutes. A formal letter ould rePeat what is already stated in the minutes and the contents in a Ic.~tter would not be any different. !' ¢;hairwoman Brown recommended that the Board direct staff for clarification t,~ confirm the Boards understanding that it is the Boards interpretation that orrespondence to City Council is the Investment Advisory Board minutes rom each meeting and that if this is not sufficient, that the Board should be iven direction from the City Council. The only other alternative would be to 4 Investmenti Ad~,is ry Board October 9, 1996 Minutes I, : h~ ce the Ordinance modified to say specifically that the minutes are the cc 're,. ~pondence to the City Council. In re.~ aonse to Board Member Irwin, Chairwoman Brown clarified that this wc ul¢ be directed through Staff to the City Council. The City Council should dal ~cl us in writing if the reporting correspondence from the minutes is not ~r¢ ariate. Inre., ponse to Board Member Osborne, Mr. Falconer advised that a process is in ~,ffect regarding the Boards and Commissions Handbook and part of the H;~n¢ book will include a section on the minutes and how they should be p~ .~pl ~red. Asit stands now, the discussion has been toward minutes that are si nih ~r to the City Council minutes and format. C ~ai~ ~voman Brown stated for the record that the Boards feeling is they are ce mr ~unicating the issues that the Board is responsible for to the City C ~ur~cil. IVIOIIION -It was moved by Board Members Lewis/Frame that the Board d rec[ staff for clarification to confirm the Boards understanding that it is the BOards interpretation that the Boards correspondence to City Council are the Ir~ve~;tment Advisory Board minutes from each meeting. If this is not s Jffi(;ient, the Board should be directed immediately in writing as to an a ~pr,~priate outline. Motion carried unanimously. D. I~ ~ve ~tment Policy Update Ir.~alconer advised that has proposed the changes as s r~Iated in the Staff Report: Staff following Page 10 Correct a typographical error Page 13 Correct the City Ordinance Page 15 Propose increase in Money Market Government Security Mutual funds from 15% to 20% in accordance with recently adopted State Legislation. Page 16 Correct City Ordinance Page 19 Change institution names based upon the merger and add broker/dealers Investmenti ry Board October 9, 1996 Minutes n to Board Member Sales, Mr. Falconer advised that the above have been proposed by Staff. Member Sales questioned the last sentence in Section Xll "Money m ~t mutual funds and LAIF shall also operate on a DVP basis to be ~ lered for investments," he asked what is being delivered. Member Lewis advised that the funds are invested in securities and th funds are held in a third. Party trustee. alconer advised that on Page 15, under the column Footnote 1 ms- No. 5, it would change the schedule to read "60% portfolio and Df surplus funds." C Brown advised that she does not have a problem with the p ,sed changes and she would welcome any comments from the Board. I ponse to Board Member Frame, Mr. Falconer advised that the reason change in the Money Market Government Security Mutual funds from 1 to 20% was State mandated. Brown requested the' Boards opinion regarding the LAIF ~ntages which are at 50% of the portfolio at this time. .d Member Osborne advised that the LAIF percentage is fine where it Is now. Member Irwin advised that he has said all he has to say about LAIF the Board is aware of his position on LAIF. I ~Sponse to Board Member Sales, Mr. Falconer advised that the present Stment Policy expires on June 30, 1997. · 'alconer advised that his recommendation based on the degree of the ~ges is that if the Board needs to have a joint meeting with the City er and City Attorney it could be schedule for the November meeting, he did not believe such a meeting was necessary based upon the' Dr changes and that the investment policies could be taken directly to the Investmenti Ad~ 'y Board October 9, 1996 Minutes concurred that a meeting with the City Manager and City Attorney necessary due to the minor changes on the Investment Policy. In to Board Member Irwin, Mr. Falconer advised Staff mended that after the Investment Advisory Board has considered the ~ns to the Investment Policy, a joint meeting with the City Manager and C be scheduled. He further advised that since its the Boards a joint meeting is not necessary, the policy could be forwarded to the C ;ouncil for consideration. I to Board Member Sales, Mr. Falconer advised that staff is noting cl es for the next policy update and developing investment strategies. ION - It was moved by Board Members SalesfLewis to approve the c( and updates for the Investment Policy and have the Investment P considered by the City Council without a joint meeting with the City er and City Attorney. Motion carried with Board Member Irwin voting VI CO !NCE AND WRITTEN MATERIAL A. :h End Cash Report - September 1996 ,ponse to Board Member Frame, Mr. Falconer reviewed the Treasurers ~rt and the Month End Cash Report comparing the documents to each I to Board Member Osborne, Board Member Irwin advised that t was generated to give the Board the most current balances in the major accounts. B. Surer's Office Procedures Board concurred that the letter from Ken Al-Imam regarding the surer's Office Procedures was noncommital. advised that when he spoke with Mr. Al-Imam regarding the ;urers office procedures, he indicated that the procedures were the most that he had seen. Investment Board October 9, 1996 Minutes Ch Brown advised that the letter does not sutrprise her due to the sitt ns that have affected other municipalities. She further indicated that was a disclaimer. Bo Irwin questioned if as of this date, there is any significant between [he City and the Auditors in regards to treasury Mr. Iconer advised that there 'are no differences, and when the City re~ their Internal Control letter from the Auditors the Board will receive a In to Chairwoman Brown, Board Member Irwin advised that based on e he feels that Mr. Falconer has his Office organized, and tha' procedure looks very good. concurred. VII BOARD COMMENTS In res Board Member Frame, Mr. Falconer advised that currently there is not a monl ,'ash flow that is prepared by Staff. Mr. Falcon that on a monthly basis a Revenue and Expenditures report is submitt~ the City Council. This report was presented to the Investment AdvisOry for the first year and the Board felt they did not need to review the report, In resPons the Board, Mr. Falconer advised that an annual cash fiow report is generated ADJOURNM MOTION - It w~ ~oved by Board Members Lewis/Sales to adjourn the meeting. Motion carried u~ tr mously.