2002 02 13 IAB Minutes INVESTMENT ADVISORY BOARD
Meeting
February 13, 2002
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 Mahfoud followed by the Pledge of Allegiance.
PRESENT: Board Members Osborne, Moulin, Olander, Lewis, Felice (via
video conferencing) and Chairman Mahfoud
OTHERS PRESENT: John Falconer, Finance Director and Vianka Orrantia,
Secretary
II PUBLIC COMMENT - None
III CONFIRMATION OF AGENDA
Mr. Falconer informed the Board that the November Pooled Money Report was
not received, but the Pooled Money Annual Report was received and has been
handed out to the Board.
Mr. Falconer advised the Board that he is currently having difficulty obtaining
commercial paper. Mr. Falconer handed out an article from Goldman Sachs in
relation to Commercial Paper and the changes proposed by the rating agencies.
Board Member Lewis suggested that the Pooled Money Annual Report be
continued to the next scheduled meeting for discussion.
Investment Advisory Board January 13, 2002
Minutes
IV CONSENT CALENDAR
1. Approval of Minutes of Meeting on January 9, 2002 for the Investment
Advisory Board.
MOTION - It was moved by Board Members Lewis/Olander to approve the Minutes of
January 9, 2002. Motion carried unanimously.
V. BUSINESS SESSION
A. Transmittal of Treasury Report for December 2001.
Board Member Moulin pointed out on page 4/5 of the Treasurer's report
that the maturities are not amortized until mid-month to the maturity
date. Mr. Falconer advised the Board that a journal entry is done each
month, to amortize investment premium/discount. Board Member Moulin
advised the Board that the maturity does not match par. Mr. Falconer
advised the Board that Staff will check into this and will get back to the
Board. (See January 31, 2002 report for change.)
Board Member Moulin advised the Board that there was one Treasury
Note that matured in January, and there was some Commercial Paper
that was rolled over. Mr. Falconer advised the Board that approximately
812 million was wired from the County just prior to month end, this
money will be placed toward the City's second installment of property
taxes.
Board Member Osborne advised the Board that on page 7 of the
Treasurer's report, in the months of May and June an additional 820
million will be coming in, and asked what will be done with this money
over a 60 day period? Mr. Falconer advised the Board that the second
installment of the City's property taxes would be due and that they will
be paid at that time. Mr. Falconer also advised the Board referring back
to the month of January as an example, that $4 to 85 million was placed
in commercial paper, $3 million in LAIF and approximately $5 million in
T-Bills. Mr. Falconer stated that he is almost at the maximum in LAIF
Investment Advisory Board January 13, 2002
Minutes
V. BUSINESS SESSION
A. Transmittal of Treasury Report for December 2001 (cont'd)
limit and the spreads between 30 day Commercial Paper and 3 month
Treasury Bills are 7 to 8 basis points. Mr. Falconer advised the Board
that he is limited to Treasuries or Commercial Paper and also commented
on the difficulty he is having in obtaining quality Commercial Paper.
Mr. Falconer also advised the Board that the average maturity is down to
44 days, and he has to do more investing on a monthly basis.
Board Member Lewis advised the Board that the Federal Reserve did not
see a need to cut rates or raise rates in the near future, because of this
Board Member Lewis stated that he felt that Mr. Falconer could pick up
Commercial Paper for at least 6 months, for an additional 50 basis
points. Chairman Mahfoud advised the Board that bonds are currently
showing a 1% increase in interest rate with 100 basis points, 6 months
from now. Chairman Mahfoud also advised the Board that productivity
is up 2Y2 % to 3%, making inflation Iow which led him to believe rates
should go higher per bond issue. Further discussion ensued regarding the
current economic market and the interest rates.
In response to Board Member Osborne, Mr. Falconer advised the Board
that the IRS allows refunding of bond issues only once, and the City has
taken advantage of these refunding opportunities, such as the 94/95
Housing Money.
MOTION - It was moved by Board Members Osborne/Olander to review,
receive and file the Treasurers Reports for December 2001. Motion
carried unanimously.
VI CORRESPONDENCE AND WRITTEN MATERIAL
A. Month End Cash Report - January 2002
Noted and Filed
Investment Advisory Board January 13, 2002
Minutes
B. Pooled Money Investment Board Reports - November 2001
Mr. Falconer reported that the November Money Investment Report was
not available for this agenda and will be included next month.
Mr. Falconer pointed out to the Board that the City did receive a Pooled
Investment Board Report and that the discussion of LAIF begins on page
17. Mr. Falconer also advised the Board that on page 21, it gives a
summary of the yields and monthly averages from 1 977 to date.
Board Member Lewis suggested that the Pooled Investment Board Report
be discussed at the March Meeting and the Board concurred.
VII BOARD MEMBER ITEMS
Chairman Mahfoud suggested to the Board that they submit
information and/or suggestions to be included in the agenda packet for
discussion or review for the March meeting, regarding the Investment
Policy.
Board Member Moulin suggested to Mr. Falconer that he also give his
thoughts/ideas as to what he would like to see in the FY 2002/2003
Investment Policy.
VIII ADJOURNMENT
MOTION - It was moved by Board Members Lewis/Olander to adjourn the meeting at
6:11 p.m. Motion carried unanimously.
Vianka Orrantia
Secretary
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