2001 02 14 IAB Minutes 'INVESTMENT ADVISORY BOARD
Meeting
February 14, 2001
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 Vice Chairman Mahfoud followed by the Pledge of
Allegiance.
PRESENT: Board Members Mahfoud, Olander, Felice and Chairman
Osborne (5:42 PM)
ABSENT: Board Members Lewis and Moulin
OTHERS PRESENT: John Falconer, Finance Director and Secretary
II PUBLIC COMMENT - None
III CONFIRMATION OF AGENDA- No changes were noted.
IV CONSENT CALENDAR
1. Approval of Minutes of Meeting on December 13, 2000 for the Investment
Advisory Board.
MOTION - It was moved by Board Members Irwin/Olander to approve the
Minutes of December 13, 2000. Motion carried unanimously, with Board
Member Olander expressing his thanks to staff for a unqualified audit opinion.
V BUSINESS SESSION
A. Transmittal of Treasury Report for December 2001
In response to Board Member Olander, Mr. Falconer advised that he was
not aware of any financial repercussions from the State of California
energy crisis. Mr. Falconer stated that the only information he had was
included in the other financial data (Information Item A) in which LAIF
stated that they had no investments with Pacific Gas & Electric and
Southern California Edison.
In response to Board Member Irwin, IVlr. Falconer advised that the City
currently had $5 million in Commercial Paper. In the past, the City has
increased its position in Commercial Paper from $2 million to $5 million
for the months of January and IVlay. However, based on larger cash
balances, the current interest rate environment, and the spreads
between 30 day Treasury Bills and Commercial Paper (45-50 basis
points), the Treasurer was considering maintaining the $5 million
position in Commercial Paper.
Board Member Irwin commented that the spreads between Government
Sponsored Enterprises (GSE's) and Treasury Notes was narrowing from
30-35 basis points to 20-25 basis points.
In response to Board Member Irwin, IVIr. Falconer stated that the
Commercial Paper was limited to 82 million per entity, an Al/P1 rating
and 30 to 45 days maturity.
In response to Board Member Mahfoud, IVir. Falconer stated that the
Money Market Sweep Account yield for December was 4.9%. The
money market account is with Wells Fargo and invests in U.S.
Treasuries. The sweep account is tied to our bank checking account.
Mr. Falconer stated that we made the Treasury sweep option decision
several years ago and could discuss this issue again during the review
of the Investment Policies.
In response to Board Member Irwin, Mr. Falconer stated that the Bank
does offer a Commercial Paper Sweep option and that it would be
classified under money market funds as opposed to Commercial Paper.
Investment Advisory Board February 14, 2001
Minutes
In response to Board Member Irwin, the City Investment Policy allows
investment in Treasury and/or U.S. Agency Securities Money Market
Account.
In response to Board Member Mahfoud, Mr. Falconer stated that the
only money market account the City uses is in conjunction with the
checking account. The City could open other money market accounts
subject to the 20% portfolio limitation set forth by the State.
MOTION - It was moved by Board Members Irwin/Mahfoud to review,
receive and file the Treasurers Reports for December 2000. Motion
carried unanimously.
VI CORRESPONDENCE AND WRITTEN MATERIAL
A. Month End Cash Report and Other Selected Financial Data - January 2001
IVir. Falconer reported that the analysis between several of the budget to actual
variances in the January report was not available and would be provided in the
March agenda packet.
General discussion between Board Members ensued that interest rates will
continue to decrease.
In response to Board Member Osborne, IVIr. Falconer reported that his current
investment strategy is to stay as short as possible.
Noted and Filed
B. · Pooled Money Investment Board Reports - November 2001
Board Member Irwin commented that the Pooled Money investment Account
average maturity from November to last month had not changed.
Noted and Filed
Investment Advisory Board January 10, 2001
Minutes
VII BOARD MEMBER ITEMS - None
VIII ADJOURNMENT
MOTION - It was moved by Board Members Olander/Irwin to adjourn the meeting at
5'52 p.m. Motion carried unanimously.
John M. Falcocler
Finance Director