2001 07 19 IAB Minutes INVESTMENT ADVISORY BOARD
Meeting
July 19, 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, Olander, Mahfoud, Moulin
and Felice
ABSENT: Board Member Mitchell
OTHERS PRESENT: Amy Swan-Draper, Accounting Manager and Vianka
Orrantia, Secretary.
II APPOINTMENT OF OFFICERS
A. Board Member Lewis nominated Board Member Mahfoud for Chairperson,
motion was seconded by Board Member Olander. Motion carried
unanimously.
B. Board Member Lewis nominated Board Member Moulin for Vice-
Chairperson, motion was seconded by Board Member Olander. Motion
carried unanimously.
III PUBLIC COMMENT - none
IV CONFIRMATION OF AGENDA
V CONSENT CALENDAR
1. Board Member Lewis/Olander moved to approve the Minutes of the June
13, 2001 Investment Advisory Board Meeting as submitted. Motion
carried unanimously.
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Investment Advisory Board July 19, 2001
Minutes
VI BUSINESS SESSION
A. Transmittal of Treasury Report for May 2001
Board Member Lewis asked if the City received property tax money in May? In
response to Board Member Lewis, Ms. Swan-Draper replied that the County
property tax monies were received on May 24=. Board Member Lewis stated
that $9 million dollars seemed like a big jump for investments. Board Member
Moulin commented on the current ending balance, at $75 million and
commented that it looks like it will continue to grow, will it be larger at the end
of June. In response to Board Member Moulin, Ms. Swan-Draper replied that
due to construction costs payments the ending June 30~ balance is estimated
to be $68 million. In response to Chairman Mahfoud, Ms. Swan-Draper stated
that she did not know the construction schedule for the Hwy 111/Washington
project. Board Member Lewis stated that Federal Board Chairman Greenspan
indicated there is a good chance of another rate cut. Chairman Mahfoud asked
if there were no other comments for a motion to accept the Treasury Report.
Board Member Lewis/Osborne moved approval of the Treasury Report for May
31, 2001. Motion was carried unanimously.
B. FY 2001/2002 Meeting Schedule
Board Member Moulin/Olander moved to accept the monthly schedule with the
exception of the August 8= date. Motion carried unanimously.
VII CORRESPONDENCE AND WRITTEN MATERIAL
A. Month End Cash Report - June 2001
Board Member Osborne asked if the changes were been made to the
Wells Fargo Bank Account on the Sweep Account for the Dreyfus Fund?
In response to Board Member Osborne, Ms. Swan-Draper replied that Mr.
Falconer is working on a staff report for the City Council to set up the
Dreyfus Sweep Account and after they will take action and then we will
be able to move forward. Discussion ensued between the Board
Members about the inverted yield curve. Board Member Moulin/Lewis
moved to receive and file the Month End Cash Report. Motion was
carried unanimously to receive and file the Month End Cash Report for,
June 2001.
Investment Advisory Board July 19, 2001
Minutes
B. Pooled Money Investment Board - May 2001
Board Member Lewis commented that the yield from May 2000 to May
2001 dropped almost a full percentage and over half of that drop was
from April to May, in 2001. Board Member Olander commented that
LAIF has moved funds from Commercial Paper into Certificates of Deposit
and asked if any Board Member knew the criteria for selecting the banks
for the time deposits and if the size of the bank had any basis for
selection? Board Member Lewis stated that his understanding that there
is no criteria and the selection process is very political in selecting time
deposits. Board Member Lewis also stated that there are "big banks"
located in the valley, but there are a lot more community banks' receiving
a great deal of money. Board Members Lewis stated that Valley
Independent Bank received $27 and a half million, he felt that was a
great deal of money for a bank of its size. Board Member Moulin stated
on page 12, where the medium term notes are listed, he pointed out that
they have yields considerably higher and have gone out in several years
of maturity. Board Member Lewis stated that he also noticed that they
had a great deal of time deposits that were taken out in May, that were
being paid considerably below market rate. Chairman Mahfoud asked if
there were any other comments. No further comments were made.
C. Distribution of Investment Policies for Fiscal Year 2001/2002
Board Member Osborne stated that on the table on Page 18 the LAIF
percentage should be updated from 15% to 20%. Ms. Swan-Draper
made a note to revise the chart. No further comments were made.
VIII BOARD MEMBER ITEMS
Chairman Mahfoud stated that he was in attendance at the June City Council
Meeting when the Investment Policy was considered, and noted that two
Council Members did not vote to approve the Investment Policy over concerns
with the LAIF percentage. Board Member Moulin read from the June Meeting
minutes excerpts of the Council Meeting regarding LAIF and said he believed
that the Council was in general support of the policy, except for two Council
Members (Perkins and Henderson) who would support 15% versus 20% for
LAIF. Chairman Mahfoud suggested that the Council Members attend an
Investment Advisory Board July 19, 2001
Minutes
Investment Advisory Board meeting to discuss their concerns in regard to LAIF
to which Board Member Olander concurred and believed that the Council
Members should be informed as to why the Investment Advisory Board came
to the decision with the increase of 20% in LAIF. Board Member Lewis
suggested that a semi-annual or annual meeting with the City Council Board to
discuss issues and/or concerns would be beneficial and informative. Ms. Swan-
Draper stated that this message will be conveyed to Mr. Falconer. Board
Member Moulin also suggested that Mr. Falconer develop the history behind the
decision of LAIF and its percentage. Board Member Olander stated that LAIF
is outperforming other instruments for investment purposes because of declining
interest rates. Board Member Lewis and Felice stated that a joint meeting is in
order. Board Member Felice stated that the City is very limited in the number
of investments it can invest in. No further comments were made.
IX. ADJOURNMENT
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MOTION - It was moved by Chairman Mahfoud to adjourn the meeting at 6:03 p.m.
Motion carried unanimously.
SUbmitted
Vianka Orrantia
Secretary