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1999 06 16 IAB Minutes INVESTMENT ADVISORY BOARD Meeting June 16, 1999 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 Chairperson Irwin, followed by the Pledge of Allegiance. PRESENT: Board Members Lewis, Mahfoud, Moulin, Osborne and Chairperson Irwin ABSENT: Board Member Bulgrin and 1 Vacancy OTHERS PRESENT: Thomas P. Genovese, City Manager, John Falconer, Finance Director, Dawn Honeywell, City Attorney (Via Conference Call) and Debbie DeRenard, Secretary II PUBLIC COMMENT None III CONFIRMATION OF AGENDA- Confirmed IV CONSENT CALENDAR A. Approval of Minutes of Meeting of May 12, 1999 for the Investment Advisory Board. MOTION - It was moved by Board Members Moulin/Lewis to approve the Minutes of May 12, 1999. Motion carried unanimously. V BUSINESS SESSION A. Transmittal of Treasury Report for April 1999 Board Member Moulin advised that on Page 4 of the treasurer's report in the column titled Prime Commercial Paper it lists a yield of 4.7500%. Mr. Falconer advised that this was listed' in error and will be deleted. Page 1 of 6 Investment Advisory Board June 1 6, 1 999 Minutes In response to Board Member Moulin, Mr. Falconer advised that in order to reconcile the total cash amount listed on page four, you will need to subtract the premium discount listed on the balance sheet on page nine. In response to Chairman Irwin, Mr. Falconer advised that the City did purchase commercial paper in May. It will appear on the May Treasurers Report. He further advised that the commercial paper has already matured. The yield and maturity were approximately 5.77% for 30 days. The equivalent T-Note was about 4.2%. MOTION - It was moved by Board Members Lewis/Osborne to approve, receive and file the Treasurer's Report for April 30, 1999. Motion carried unanimously. B. Fiscal Year 1999/2000 Investment Policy (At this time Mr. Falconer placed the conference call to the City Attorney.) Chairman Irwin requested comments from the City Manager and City Attorney. Dawn Honeywell, City Attorney advised that she has no comments on the proposed changes to the Investment Policy. She advised that the changes seem clear and that she has no concerns. Thomas P. Genovese, City Manager advised that he has reviewed the Investment Policy and he has no concerns regarding the proposed changes. He thanked the Investment Advisory Board Members for their work on the Board and advised that the purpose for the Investment Advisory Board is to add an extra element of professionalism, review and comment. He further advised that he personally and on behalf of the City appreciates the Board. Chairman Irwin requested individual member comments. Board Member Moulin advised that changes on page 18 were reviewed at the last meeting and the changes have not been completed. He referred to page 18 - 4th bullet, the word "Investment" is plural, eliminate Page 2 of 6 Investment Advisory Board June 16, 1999 Minutes the word "category" and add "and show yield and maturity" to the end of the sentence. He further advised that the 9th bullet should be deleted and the 8th bullet should end with the word "fund" and the "holding of cash and investments" should be deleted. Board Member Lewis advised that he has no further changes. Board Member Mahfoud advised that he is very pleased with the final format of the Policy. Board Member Osborne advised that he feels the policy reads real well and will work well for the City and Staff under the current conditions of the economy. Chairman Irwin advised that he has shared some of the reservations that Board Member Moulin had expressed regarding the Investment Policy. Particularly in respect to limiting Treasuries to a maximum of 75 percent investment limit. He advised that the City should have the ability to invest 100 percent in times of stress. MOTION - It was moved by Board Members Lewis/Mahfoud to approve the Investment Policy for 1999/2000 with the minor corrections. Motion carried with Board Member Moulin voting NO. Mr. Falconer advised the Board that the 1999/2000 Investment Policy will be presented to the City Council for their review on June 29, 1999. C. FY 1999/2000 Investment Advisory Board Workplan In response to Chairman Irwin, Mr. Falconer advised that it has been three years since internal controls over investments were developed and they have been reviewed by the Board. He further advised that a step by step synopsis can be prepared for the Board's review. Board Member Moulin advised that the title of the agenda item looks like a large pit to him and he questioned what items were wanted. Mr. Falconer advised that Staff is looking for ideas to present to the City Council on July 6th. This will give the Council an idea of the workplan for the Boards and Commission and the option of adding, deleting or changing any items. Page 3 of 6 Investment Advisory Board June 16, 1999 Minutes Board Member Moulin questioned whether it was an appropriate time to ask the City Manager about the Ordinance. He advised that the Investment Advisory Board has had hesitation to impose on the City Council. The Board feels that this is a serious formal matter. He further advised that he noticed previous minutes of the City Council where they had revised the Ordinance for the Planning Commission with little or no discussion. He further advised that he is trying to relate what the lAB Members might be up against when they submit changes to the City Council. The lAB has had serious discussion on recommending revision to the Ordinance pertaining to the Investment Advisory Board. At the last lAB meeting the Board agreed that the Ordinance would be discussed at the July lAB meeting. Mr. Genovese advised that Mr. Falconer has done an excellent job explaining the workp!an. With the Investment Advisory Board being more concentrated on investments, it becomes less of a challenge in reviewing with the Council. It is consistent with the City Policy to have all of the Boards and Commissions have workplans. There are some Commissions that are much different and less complicated. Those Commissions may have a number of ideas on their workplan that the City may not be able to afford or have the human resources to take care of them and this gives the City Council the options to redirect the Boards or Commissions. Chairman Irwin advised that the lAB asked the City Council to change the Ordinance approximately five years ago. The Council worked with the Board and changes were made. The Investment Advisory Board is concerned about maintaining the Board Member's credibility with the City Council. Mr. Genovese suggested having a "review of the Board functions" as an item on the workplan. This will let the City Council know that the Investment Advisory Board is working on the Ordinance. If the City Council has major concerns, this will give them the options of taking this item off of the workplan. If there are no concerns, they would leave it as a function for this fiscal year. Chairman Irwin advised that he sees the workplan as an "early warning system" and he likes it versus surprising the City Council. Page 4 of 6 Investment Advisory Board June 16, 1999 Minutes Board' Member Moulin advised that the City Manager and City Council read and approved the minutes from the Investment Advisory Board and at the last Board meeting there were five pages of discussion regarding revising the functions of the Board. He further advised that he is surprised that this would sound like it's the first time this would be discussed in a workplan. Mr. Genovese advised that the workplan is the formalization process. Boards and Commissions discuss many items, and the workplan is the format to formalize the process. Chairman Irwin advised that the Board has identified three items for the workplan and he called for a motion. MOTION - It was moved by Board Members Lewis/Moulin to approve the workplan as follows: 1. Review the Internal Controls as they relate to Investments, 2. Banking RFP, and 3. Review the Ordinance as they relate to the Board Member functions along with the regular agenda items. Motion carried unanimously. VI CORRESPONDENCE AND WRITTEN MATERIAL A. Month End Cash Report - May 1999 Noted and Filed. B. Pooled Money Investment Board Reports - March 1999 Noted and Filed. C. LAIF Answer Book Update Noted and Filed. D. Memorandum from Board Member Moulin regarding Comparison of the City Investment Policy to Three other Cities Noted and Filed. Page 5 of 6 Investment Advisory Board June 16, 1999 Minutes VII BOARD MEMBER ITEMS Board Member Moulin questioned why some section titles in the Ordinance do not have an explanation. As an example Section 2.70.010 - General Rules Regarding Appointment and Terms, the "Terms" is not part of the description paragraph. Mr. Genovese advised that he would research the Ordinance, but he believed that the Ordinance may have been changed. Mr. Falconer advised that Staff would review the Ordinance and bring the findings back to the Board. Board Member Osborne advised that the Ordinance will be reviewed in the coming fiscal year and he advised that at that time the Board may request that the City Manager come back and meet with the Board. Chairman Irwin thanked Staff for handling all the changes to the Investment Policy. VIII ADJOURNMENT MOTION - It was moved by Board Members Lewis/Osborne to adjourn the meeting at 6:23 P.M. Motion carried unanimously. Submitted by: Debbie DeRenard Finance Secretary Page 6 of 6