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2001 05 09 IAB Minutes INVESTMENT ADVISORY BOARD Meeting May 9, 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 Chairman Osborne followed by the Pledge of Allegiance~ PRESENT: Board Members Osborne, Lewis, Irwin, Olander, Moulin, ABSENT: Board Members Felice and Mahfoud OTHERS PRESENT: John Falconer, Finance Director and Vianka Orrantia, Secretary II PUBLIC COMMENT - None III CONFIRMATION OF AGENDA IV CONSENT CALENDAR 1. Minutes of Meeting on April 11, 2001 of the Investment Advisory Board The Minutes were unanimously approved with a motion from Board Member Moulin/Olander. V BUSINESS SESSION A. Transmittal of Treasury Report for March 2001 Investment Advisory Board May 9, 2001 Minutes Mr. Falconer stated that there was one change made to page 002 of the Treasurers Report. The change was made to clarify What note I actually refers to. Board Member Irwin asked if it was self-explanatory, referring to cash. Board Member Moulin pointed out that it also ties in with page 5. Board Member Irwin was just questioning the need for a footnote on the first line and reiterated that the totals do reconcile. Board Member Lewis asked if there was anything listed on page 5, referring to Treasury Notes? Mr. Falconer agreed that it should have been listed, and asked the Board Members to refer to page 4 where it was to be listed. Mr. Falconer pointed out that the new purchases are yielding less than maturing investments and the yields keep dropping. Board Member Lewis, referring to the Treasury Notes, asked if there was a reason that the dates purchased are listed as N/A? Mr. Falconer stated that the date of 3/15/01 should have been listed as the date purchased. Board Member Lewis suggested that on page 4, giving a blended yield to maturity for the different investment categories. Mr. Falconer did state that the information is available, and not currently reflected on the report, but the calculations are in the system located to the right of the spread sheet, and suggested that subtotals can be added to the current sheet, if that is the Boards direction. Board Member Lewis, did point out on page 4, next to the last column, yield to maturity on different investments, were listed as a line item basis but not broken down for each of the particular categories (i.e. government, securities, treasuries...) Board Member Lewis felt that if they could be listed in same column as the yield to maturity on the total. Mr. Falconer stated that the staff would work on the sheet to reflect those items. Chairman Osborne asked Mr. Falconer to refer to page 8, and went over the methodology of the cash flow worksheet. Chairman Osborne asked if the cash flow analysis forecasted the projected cash balances that will become available. In response to Chairman Osborne, Mr. Falconer stated that was the purpose of the worksheet. Board Member Osborne stated that the projected cash flow balances for the month of March are $13 million, $19 million in April, $20 million in May, $25 million in June and than goes down substantially in July and August to $7 million by the end of August. In response to Chairman Osborne about how the excess may be invested, Mr. Falconer stated the $13 million in April would consist of $8 million invested in LAIF and $5 million in Commercial Paper; for the $6 million increase in May he would lean towards short-term GSE's. Mr. Falconer continued that based upon the Board's direction regarding Investment Advisory Board May 9, 2001 Minutes GSA's (limit of'$19 million) and based upon the current GSE invested balance of $13 million the $6 million could come from GSA's. Mr. Falconer stated that the $19 million consisted of $5 million in FNMA, $5 million in Freddie Mac, $3 million in FNHLB, $3 million in Farm Credit and $3 million in Sallie Mae GSE's. Mr. Falconer stated that the $5 million for June would .probably be invested in $2 million in Commercial Paper and $3 million in short-term T-Notes. Mr. Falconer added that this is a hypothetical discussion of how he would invest the funds. Board Member Lewis stated that based on the Treasurers previous discussion, Fannie Mae and FNHLB GSE's would not be available. In response to Board Member Lewis, Mr. Falconer stated that he arrived at the $6 million GSE amount as the difference between the maximum $19 million that can be invested and the $13 million that is currently invested in GSE's. Board Member Lewis stated that we currently have the full $13 million currently locked up through May. Board Member Irwin stated that the average maturity is 121 days, and turns over rapidly. Board Member Lewis stated that he was not looking at average maturity. Mr. Falconer stated that he was looking at the difference between $19 million and $13 million, whatever the mix it would be. Board Member Irwin felt that because we were dealing with short-term portfolio the City could sell an investment a month or so in advance for liquidity purposes. Board Member Lewis stated that the policy says we will not liquidate except in extreme emergencies. Chairman Osborne asked if we sell before maturity, we would run the risk of losing money on our investment. Board Member Irwin stated we would not, we sell at market and buy at market. Board Member Lewis stated that, if there was a discount or premium that was not fully amortized we might lose money. Board Member Lewis stated we do run the risk of losing money on selling for maturity. Mr. Falconer stated that we do have a "sweep" account, and we do have to forecast our cash needs, so from time to time we do use the sweep account and do use the money that's in there. Mr. Falconer also stated that we do have to manage our cash a little more wisely with the proposed changes to the policy. MOTION - It was moved by Board Member Lewis/Irwin to accept the Treasurers Report as amended, motion carried unanimously. Prior to proceeding with the next agenda item, Board Member Lewis asked if a vote on the Investment Policy would be taken at this meeting, or would the Board wait for the meeting with the City Attorney and City Manager before a vote was taken. Mr. Falconer replied that in the past the Investment Policy was voted upon after the discussion with the City Manager and City Attorney. Board Member Irwin stated that the alternative was to take a vote subject to 3 Investment Advisory Board May 9, 2001 Minutes comments from the City Manager and City Attorney. Board Member Lewis replied that the practice was a vote taken after comments from the City Manager and City Attorney. Board Member Lewis stated that in previous years an informal vote was taken. B. Consideration of Fiscal Year 2001/02 Investment Policies Chairman Osborne asked Mr. Falconer to address the recommended changes made to the Investment Policy to date. Mr. Falconer stated that the same methodology was being followed to the prior meeting with staff including in the agenda packet only the pages that changed, rather than recopy the entire policy. The changes included the recommended changes in the amounts and percentages allowed in GSE's and Treasury Notes. Mr. Falconer continued that the Staff report included a prospectus from the two Treasury Money Market Sweep Accounts, for which staff is requesting Board consideration. Board Member Irwin stated that he was comfortable with the changes, but wanted to address the revisions on page ten, -second paragraph, the five million Fannie Mae, five million Freddie Mac, three million for Sallie Mae and thought there was something in for Federal Home Bank. Board Member Lewis stated that Federal Home Bank was referenced in the previous paragraph. In response to Chairman Osborne, Mr. Falconer stated that the City had invested in Farm Credit GSE's, but had not invested in the Federal Intermediate Credit Bank or the Federal Land Bank. Chairman Osborne asked why we had not used the two aforementioned banks. Board Member Irwin stated that the two banks did not have a great deal of paper outstanding. Mr. Falconer stated that as a practical matter that he would not invest in something that he was not familiar with, and would have to research them prior to investing. Chairman Osborne stated that the GSE's will have the Federal Home Bank up to $3 million, Farm Credit Bank up to $3 million, Freddie Mac at $5 million and Fannie Mae at $5 million, and Sallie Mae at $3 million, which places a limitation on GSE's effectively at $19 million. Board Member Irwin asked Mr. Falconer if a new GSE entity arouse in the next twelve months, would the policy preclude us from investing in this entity. Mr. Falconer stated that he would interpret the City Policy to prohibit an investment in a new GSE. Board Member Lewis replied that the paragraph distinguishes between U.S. Government instrumentalities and agencies, and Federal Government sponsored enterprises. The GSE's specifically states which ones are in the U.S. Government instrumentality; it uses the language "are such issuers," which does not limit you to only those agencies, if a new agency should arise. Board Member Moulin asked if the State of California had to include that agency in the "umbrella?" Board Member Lewis replied he thought 4 Investment Advisory Board May 9, 2001 Minutes this was the language from the State. Board Member Moulin asked if the State would have to "bless" it in the code before it could be included? Board Member Lewis stated that this was the State Code. Board Member Moulin stated he was aware of this, but the new issuer would not be included. Board Member Lewis stated that "are such issuers" is generic. Mr. Falconer stated that he did not believe the State distinguished between the issuers, he thought it stated "government sponsored enterprises or institutions." Board Member Lewis believed it was also a generic term. Board Member Irwin thought that the language was addressed in the previous meeting and thought that the Board was looking just at GSE's generically and thought that some GSE's should have a higher limit than others and that is how they came to the five and three million differences. Mr. Falconer asked if he could stepout of the meeting and look up the particular State Code on GSE's to clarify the matter. Chairman Osborne asked for a brief recess and the Board unanimously agreed for Mr. Falconer to research this matter. Chairman Osborne re-convened the meeting and asked Mr. Falconer to report his findings from the review of the State Code. Mr. Falconer read from 53601 of the State Code, which lists the permitted investments for municipal governments and in a section that discusses GSE's, stated at the very end that other instruments of or issued by a Federal Agency or United States Government sponsored enterprise are permissible. As a result, Mr. Falconer's interpretation was that if a new organization came into existence in regards in Board Member Irwin's comment, it would be eligible for investment per the State Code. Board Member Irwin felt that the new entity would be a desirable investment (hypothetically speaking), and asked if the Board would give it consideration. Board Member Lewis stated that the speed at which the Federal Government creates agencies that issue debt instruments, we would probably not see one within the next twelve months. Chairman Osborne asked if there were any other comments regarding the changes that were made to the policy? Board Member Moulin wanted to address page nine, the last sentence, beginning with U.S. Treasury Bill, the last sentence states, "the City of La Quinta investment policy limits investments to U.S. Treasury to 100%." he believed it should read "does not limit investments to U.S. Treasury." Board Member Irwin suggested that it read "permits investments up to 100%." Board Member Moulin believed that we could do this, but since in our headings, it states "limitations," he suggested we add in U.S. Treasury and GNMA issues. Mr. Falconer suggested it read "limits 5 Investment Advisory Board May 9, 2001 Minutes investments and U.S. Treasury and GNMA issues to 100% portfolio", which is consistent with the other paragraphs. Board Member Moulin also wanted to point out on page ten, the second bullet, the initials to Federal Home Loan Mortgage Corporation; the "L" was omitted in both places. In response to Chairman Osborne regarding the current City Sweep Account, Mr. Falconer replied that the City loses a day's interest on the current Sweep Account. Mr. Falconer stated that Staff recommends that the two Sweep Account be looked at, which are U.S. Treasury products, and would appreciate the Board's input on any change. Board Member Moulin stated that he was surprised that Wells Fargo Bank would offer a Dreyfus product that would compete with its own; that the Dreyfus product does not offer re-purchase agreements". Mr. Falconer pointed out that it did state "Dreyfus Treasury cash management invests only in U.S. Government securities and in repurchase agreements, which would indicate they do invest in repurchase agreements. Board Member Moulin was a little concerned that they do describe seven funds and would we consider the Treasury Prime Cash Management? Mr. Falconer stated we were only interested in the Treasury option. Board Member Moulin clarified that he was interested in the Dreyfus Treasury Prime Cash Management. Chairman Osborne asked for any additional Board comments regarding the two funds. Mr. Falconer stated that in reviewing last month's data, that he was inclined in going with the Wells Fargo product; however, based upon the last couple of months' performance the Dreyfus fund was yielding more than the Wells Fargo fund. In response to Board Member Irwin, Mr. Falconer stated that either one was suitable for the City. Chairman Osborne stated that he noticed the ratio of expenses to average net assets is different between the two. The expense ratio is higher with the Wells Fargo than Dreyfus. Board Member Irwin stated the fund with higher expense ratios has to take more of a risk to cover the higher overhead and conversely, the fund with the lower ratio has to take fewer risks. Board Member Lewis suggested that we go with the Dreyfus - Dreyfus expenses are currently at 20 basis points and Wells Fargo is at 25 basis points. Board Member Irwin stated that funds could go as Iow as 15 to 17 points if the amount invested is a very large amount of money, anywhere from $50 to $80 million. Board Member Lewis stated that Wells Fargo is technically at 31 basis points in its expense basis ratio, waiving 6 basis points of it and only committed to waiving that through July .31,t of this year; there is no waiver on Dreyfus and it's 20 basis points. In response to Board Member Irwin, Mr. Falconer stated that after the Investment Policy that's adopted by the Council Investment Advisory Board May 9, 2001 Minutes in June, Staff will present to the Council a recommendation to change the sweep account and enter into an agreement with the Dreyfus Fund. Chairman Osborne asked if there were any other comments on the Sweep Account. Board Member Moulin stated that at the previous meeting Board Member Irwin raised an interesting point, keeping minimum amo .unts and putting the majority elsewhere to get a better return. The Wells Fargo Prospectus has a limitation of $5 million, minimum and asked the Board if Dreyfus does and if so does that impact our ability to invest in the Funds. Board Member Irwin stated that the Dreyfus Fund has a $10 million minimum. Board Member Lewis stated that changes the decision. Chairman Osborne asked if it had to be kept at $10 million, or if that was the initial investment and could be lowered? Board Member Moulin suggested that we get a waiver. Mr. Falconer agreed that we could probably get a waiver from the Bank if that was required. Board Member Irwin stated that in context of getting a waiver, reading the Footnote B from the Dreyfus portfolio it states that the investor must have, in the opinion of Dreyfus, adequate intent and availability of assets to reach a future level investment of $10 million among the funds named above and asked if the City had that intention. Board Member Lewis stated because of the way the fund is offered, it could possibly be that the funds are designed for institutional investors, they could be aggregating all the funds that Wells Fargo account holders are doing in Dreyfus for the $10 million. Mr. Falconer stated that the prospectus refers to an institution that may be considered Wells Fargo and not the City of La Quinta. Board Member Lewis agreed and stated that we're not the institution investing, the institution is the bank acting in a fiduciary responsibility. Mr. Falconer stated that he would contact Wells Fargo to clarify this issue and report back his findings at the next Board Meeting. Chairman Osborne stated he had some comments and concerns in reference to the policy and the effects it has on short-term liquidity and the interest rates the City is earning. Specifically, Chairman Osborne stated that by limiting our GSE's to $19 million and LAIF to 15% of the portfolio, and the State limitations on Money Market investments, his concern is the short-term cash liquidity. Chairman Osborne stated that the City has changed its position on Commercial Paper to give the City more flexibility as outlined by Mr. Falconer in discussing the City's cashflow for the next six months. Chairman Osborne stated that based upon the size of the City portfolio and the percentage allowable of 20%, the City of La Quinta commercial paper investments could rise to $15 million. which is quite a substantial leap. Chairman Osborne believed the direction the Investment Board is heading with it choice of Investments limits the options of ? Investment Advisory Board May 9, 2001 Minutes the Treasurer to short-term investments - US Treasuries. Chairman Osborne believed this would make a dramatic impact on lowering our rate of return; he projected that based upon last year's activities and looking at Where our City is going over the next twelve months, it's estimated that there is $10 million in additional cash the Treasurer will have to place in investments. Chairman Osborne stated that if these policies are adopted and looking at the current LAIF interest rate, which is one-point higher than US Treasuries he calculated the City would learn $100,000 less in interest income. Chairman Osborne continued that on an average, short-term treasury notes, three month, or shorter are at least one point lower than LAIF, than our average where the City has been as a whole over the last twelve months; one point may not sound like a lot of money, but looking at one point on $10 million, there is a $100,000 in investment revenue would be given away to change to the new policy. Chairman Osborne recommended an increase in LAIF to 25% and asked for the Board's comments. Board Member Irwin stated that he was strongly opposed to any change to LAIF and did not believe the matter should be discussed. Chairman Osborne stated that last year the Board had agreed on the LAIF percentage in May at 20% and that it was discussed and changed in June to 15%. Board Member Osborne stated that he was supportive of 20% in June but that he had a choice of 15% or 25% and he could not support 25% so he voted for 15%. Board Member Irwin again stated his disapproval of raising the LAIF limit to 20%. Chairman Osborne stated that the policy as it is presently handcuffs the Treasurer to short term investments that earn less interest than it could. Board Member Irwin stated that he believed the policy should put some handcuffs on short-term investments and does not believe LAIF is a safe investment. Chairman Osborne asked Board Member Irwin whether it was safer to place $15 million in Commercial Paper or LAIF? Board Member Irwin stated that this was not necessary. Board Member Olander asked the Mr. Falconer whether he believed Commercial Paper or LAIF was safer? Mr. Falconer first wanted to clarify an earlier statement made by Chairman Osborne regarding the amount of LAIF time deposits - he may have stated $4 million, it's closer to $4 billion. Mr. Falconer stated he was more comfortable with a higher limit of LAIF than 15%, the staff at one point suggested going up to 35%, than 25%, to 15% and back to 20%. Mr. Falconer stated that the percentage could be higher than 15% and that he is not as comfortable with LAIF as he was, based upon the investment in time deposits and the investment philosophy of the current Treasurer who spoke at the recent Treasurer's Conference in Riverside, CA. Mr. Falconer stated in terms of commercial paper the City will be fine with this investment as long as we stay with the big names and the short maturities we have. Mr. Falconer stated that with LAIF we will be spreading the risk out over Investment Advisory Board May 9, 2001 Minutes a large portfolio; if there is a loss it will be spread over a $45 billion portfolio versus what the County of Riverside experienced with their investment with Commercial Paper in Pacific Gas & Electric. Mr. Falconer stated that he understood the County did receive their principal back, but was not sure about the earnings and that there is more risk in investing in a single issuer as opposed to a pool. Mr. Falconer stated that he would lean more towards LAIF more than commercial paper based upon the diversification. Mr. Falconer stated that last year staff proposed 25% and the Board recommended 15% which staff was comfortable with; staff will work with 25% or 15% or whatever the ultimate percentage that the Board recommends. Board Member Lewis stated by comparing LAIF and Commercial Paper in the old Treasurers Reports, the City is giving up 100 basis points in yield. Board Member Lewis continued to state that if the Chairman's numbers are correct if you have $10 million dollars to invest at 100 basis points, that's $100,000, which could fund an additional police officer in the City or fund public works in the City. Board Member Lewis stated that he has been a vocal critic of LAIF and is not in favor of doing what some municipalities do which is to invest 100% in LAIF. Board Member Lewis stated that LAIF is a diversified portfolio and has investments that he does not personally agreed with and that the City does not allow; however, the people running the investments in LAIF are not trying to juggle the job of running the investments of the City. Board Member Lewis stated that the LAIF investments are not disallowed because they are illegal;, there are people that use them successfully every day of the year. Mr. Falconer stated that the Council feels comfortable with the LAIF percentage as it is now and there would be question as to why the Board would want to raise the percentage. Board Member Lewis stated that perhaps the Board went too far last year in lowering the rate to 15%. Board Member Moulin stated that he wanted to refresh the Board's memory of what occurred in the prior year's vote for the LAIF percentage. Board Member Moulin stated that in attendance were Board Member Olander, Board Member Irwin, Board Member Lewis, Board Member Mahfoud and himself. At that meeting there was a discussion about lowering the amount that was talked about at the previous meeting, which was below 20%. Board Member Moulin stated at that meeting he and Board Member Olander were satisfied with 20%, Board Member Lewis and Board Member Irwin were not satisfied with 20% and stated they wanted 15%; Board Member Mahfoud voted in favor of the 15% which broke the tie, and that is how the change came about last year. Board Member Moulin stated that he did not have a problem on the way things were done last year. Board Member Moulin stated that he asked the Treasurer last year if he was comfortable with the 15% and he was. Board Member Moulin stated that looking at GSE's and LAIF, it's sort Investment Advisory Board May 9, 2001 Minutes of an implied authority of support. Board Member Moulin stated that he would be comfortable with 20% and that 25% would be too much. Board Member Moulin stated that he did not want to stir things up, but wanted to describe how the 15% came about. Board Member Irwin stated that things were stirred up. Mr. Falconer stated that a 5% difference in LAIF would result in a potential increase of $3.5 million and that the LAIF percentage would have to increase to 30% to arrive at the $10 million short term surplus mentioned by the Chairman. Board Member Chairman Osborne stated that he would not like to go over 25%, because of the feelings of the Board Members. Chairman Osborne stated the five years he has served on the Board, and the concerns about LAIF, the LAIF portfolio has consistently grown in those five years. Chairman Osborne stated when he first came on the Board LAIF was a $24 billion dollar fund and has grown to over $40 billion. Chairman Osborne stated the rate of return has stayed very consistent from 5Y2 to 6~ % over that five- year period and the liquidity on the fund has always been within a twenty-day period of 180 days to 200 days. Chairman Osborne stated that the concerns that have been raised over the last number of years regarding LAIF have not resulted in any stressful positions. Chairman Osborne stated that he understands that 25% is a jump from the current position of 15% and does not believe that the Board needs to go any higher than 25%. Chairman Osborne stated that he does not want to see a situation in six months where the City is investing in 30 to 90 day Treasuries earning 4 to 4~ %, while LAIF is earning 5Y2 to 6~. Chairman Osborne believed the Board was giving away too much in interest earnings due to the concerns about LAIF. Board Member Moulin stated that the past is not often a good indicator of the future and in the last five years LAIF has done well, but the state's financial condition is drastically changing, with the energy crisis, layoffs and the softening of the real estate market. Board Member Lewis stated, that the LAIF investments are not invested in the State of California and that the LAIF investments are invested in other things and reiterated that the economic state of California will not affect the return of investment in LAIF. Mr. Falconer stated that directly Board Member Lewis was correct but indirectly if members needed their money they would pull it out which may create a run on the fund. Board Member Lewis agreed and again stated that the State of California having economic hard times would not affect the safety or liquidity of LAIF. Board Member Lewis stated that he did not remember last year's meeting to the detail Board Member Moulin did and it was possible that 15% was an overreaction. Board Member 0lander stated that he supported increasing the LAIF percentage to 20% and believed LAIF is preferable to Commercial Paper. Board Member Olander stated that there have been concerns by the Board about LAIF over the last few years, and more Investment Advisory Board May 9, 2001 Minutes specifically over the last twelve months, LAIF has been putting large amounts of sums in community banks throughout the State of California. Chairman Osborne commented on the $20 million invested in Valley Independent Bank as an example of the $4 billion invested in Community Banks which on average are only six months before maturity and that LAIF has been looked at in the respect of its investments and compared to the Investment Policy of the City. Chairman Osborne stated that between 85% to 90% of LAIF's investments are within our own investment policy. Chairman Osborne stated that one of the areas outside the City Investment policy which has been discussed are the loans LAIF makes to the State of California which are short-term, for thirty day time periods. Chairman Osborne stated that he wanted to bring LAIF up to 25%, and hear some of the Board's ideas in this matter. Board Member Irwin stated strongly his opposition to the increase of LAIF as which has not changed from previous years. Chairman Osborne stated that he felt that we needed to readdress the 15% for short-term vehicles that we're able to use for the City of La Quinta. Board Member Irwin did not feel that a 25% increase in LAIF was needed. Board Member Olander suggested that the Board return to the 20%, and that it was preferable to Commercial Paper in today's environment, and that he agreed with Chairman Osborne, and noted that the Board recognizes certain weaknesses in LAIF. Board Member Olander specifically pointed out that he was disturbed by Mr. Falconer's comments about the State Treasurer looking upon the portfolio from such a social stand point. Board Member Olander stated that perhaps the Board went too much on the 15% and that he would personally feel comfortable with the 20% in LAIF as preferable over 20% in Commercial Paper. Board Member Olander stated that his opinion of Commercial Paper has diminished due to the PG&E bankruptcy and comments made by our President and Vice President which leads him to believe that the economy is still on shaky ground nationally. Board Member Irwin again reiterated his strong opposition against the increase in LAIF. Chairman Osborne asked Board Member Irwin if he would be against 20% in LAIF and Board Member Irwin opposed the increase. Board Member Irwin stated that there was not a points difference, and on a short-term basis we were looking at 35 basis points which he felt was chasing yield. Board Member Osborne stated that it was not a difference of I point. Board Member Lewis stated that U.S. Treasury Notes with a 61 days maturity yield 4.5% yield while LAIF was yielding 5.97% with the actual difference 150 basis points and not 35 basis points. Board Member Irwin stated his strong opposition against the increase in LAIF. Chairman Osborne stated that LAIF needed to be increased to give Mr. Falconer some room. Board Member Olander stated that the Board did give the Treasurer the ability to invest 100% in US Treasuries on an emergency situation and which Investment Advisory Boa~' May 9, 2001 Minutes . / ~ ~~ J- ~Vas designed to 'st~he City in the event of a serious dilemma. Board Member Olande~,~stated that in the discussion with LAIF we are giving the Treasurer a little opportunity to slightly increase yield. Chairman Osborne asked to poll the Board Members to increase LAIF from 15% to 20%. Chairman Osborne and Board Members Lewis, Moulin and Olander approved of an increase from 15% to 20% with Board Member Irwin opposed. Board Member Lewis asked that this issue be continued to the next meeting. A motion was made by Chairman Osborne to continue to the next scheduled meeting. Board Member Moulin/Olander seconded this motion. VI CORRESPONDENCE AND WRITTEN MATERIAL A. Month End Cash Report and Other Selected Financial Data - April 2001 Mr. Falconer stated that he and Board Member Moulin attended a session on GSE's at the CMTA Conference in Riverside. GSE representatives included Fannie Mae, Freddie Mac, Sallie Mae, the Federal Farm Credit Bureau and the Federal National Home Loan Bank. Both Board Member Moulin and Mr. Falconer stated that they were impressed by the presentation of the FNHLB. Board Member Moulin directed the Boards attention to page 12, which listed a $7 million change in budgeted actuals, in the month of March, therefore placing the revenues $3 million higher. Mr. Falconer stated that this amount was for the nine months from July I Noted and filed. B. Pooled Money Investment Board Reports - February 2001 Board Member Lewis stated that going reviewing the month end, the LAIF information indicates in the report the rates dropping to % percent, from February to the end of April. Noted and filed. VII BOARD MEMBER ITEMS Investment Advisory Board April 11, 2001 Minutes VIII ADJOURNMENT MOTION - It was moved by Chairman Osborne to adjourn the meeting at 6:42 p.m. Motion carried unanimously. Vianka Orrantia Secretary