2017 03 27 IABta Qa�tra
GEM of the DESERT —
NOTICE OF SPECIAL MEETING
OF THE LA QUINTA INVESTMENT ADVISORY BOARD
TO THE MEMBERS OF THE LA QUINTA INVESTMENT ADVISORY BOARD:
NOTICE IS HEREBY GIVEN that a special meeting of the La Quinta Investment
Advisory Board is hereby called to be held on Monday, March 27, at 5:00 p.m. at La
Quinta City Hall located at 78495 Calle Tampico, La Quinta, CA 92253 for the following
purpose:
CONSENT CALENDAR
1. APPROVE MINUTES OF FEBRUARY 15, 2017
BUSINESS SESSION
1. APPROVE FISCAL YEAR 2017/18 MEETING DATES
2. APPROVE FISCAL YEAR 2017/18 FINANCIAL ADVISORY COMMISSION WORK
PLAN
3. APPROVE FISCAL YEAR 2017/18 INVESTMENT POLICY
DEPARTMENT REPORTS
1. THIRD QUARTER 2016 (JULY - SEPTEMBER 2016) SALES TAX UPDATE FOR THE
CITY OF LA QUINTA
2. RULES AND PROCEDURE - COUNCIL, BOARDS, AND COMMISSION MEETINGS
3. UPDATE ON REQUEST FOR PROPOSALS OF AUDITING SERVICES
4. UPDATE ON THE INVESTMENT ADVISORY BOARD'S EXPANSION AND RENAMING
5. UPDATE ON FISCAL YEAR 2017/18 BUDGET PROCESS
Dated: March 23, 2017 /s/ CeorgeBatavick'
GEORGE BATAVICK, Chairperson
Attest:
Dlgl[dlIy signed by Jessica Delgado
DN, cn=Jessica Delgado, =City of La Qu ta.
ou=Finance Department, email=jdelgatlo@la-
oa.org,<=U5
a�ce�zon.oa.le 1z.le.oa-moo'
JESSICA DELGADO, Management Assistant
DECLARATION OF POSTING
I, Jessica Delgado, Management Assistant, do hereby declare that the foregoing
notice for the Investment Advisory Board meeting of March 27, 2017 was posted on
the outside entry to the Council Chamber at 78-495 Calle Tampico and on the bulletin
boards at 51-321 Avenida Bermudas and 78-630 Highway 111 on March 23, 2017.
Digitally signed by Jessica Delgado
DN: cn=Jessica Delgado, .—City & La Quints,
o=Finance Department, email=jdelgatlo@la-
gointa.org,c-US
Da[e'. 277]. .1. I I1.1 OT00'
Jessica Delgado, Management Assistant
INVESTMENT ADVISORY BOARD 1 MARCH 27, 2017
SPECIAL MEETING
Investment Advisory Board agendas and
staff reports are now available on the
City's web page: www.la-quinta.org
INVESTMENT ADVISORY BOARD
AGENDA
CITY HALL COUNCIL CHAMBERS
78-495 Calle Tampico, La Quinta
SPECIAL MEETING ON MONDAY, MARCH 27, 2017 AT 5:00 P.M.
CALL TO ORDER
ROLL CALL: Board Members: Mills, Rosen, Turbow, Johnson, And Chairperson Batavick
PLEDGE OF ALLEGIANCE
PUBLIC COMMENT
At this time members of the public may address the Board on any matter not listed on
the agenda. Please complete a "Request to Speak" form and limit your comments to
three minutes. The Investment Advisory Board values your comments; however in
accordance with State law, no action shall be taken on any item not appearing on the
agenda unless it is an emergency item authorized by GC 54954.2(b).
I Z I a I:7u►_11I to]P [o] y_TC14►117_1
CONSENT CALENDAR
1. APPROVE MINUTES OF FEBRUARY 15, 2017
BUSINESS SESSION
1. APPROVE FISCAL YEAR 2017/18 MEETING DATES
2. APPROVE FISCAL YEAR 2017/18 FINANCIAL ADVISORY COMMISSION WORK
PLAN
3. APPROVE FISCAL YEAR 2017/18 INVESTMENT POLICY
DEPARTMENT REPORTS
1. THIRD QUARTER 2016 (JULY - SEPTEMBER 2016) SALES TAX UPDATE FOR THE
CITY OF LA QUINTA
2. RULES OF PROCEDURE - COUNCIL, BOARDS AND COMMISSION MEETINGS
3. UPDATE ON REQUEST FOR PROPOSALS OF AUDITING SERVICES
4. UPDATE ON THE INVESTMENT ADVISORY BOARD EXPANSION AND RENAMING
INVESTMENT ADVISORY BOARD AGENDA 1 MARCH 27, 2017
SPECIAL MEETING
5. UPDATE ON FISCAL YEAR 2017/18 BUDGET PROCESS (VERBAL)
CORRESPONDENCE AND WRITTEN MATERIALS
BOARD MEMBERS' ITEMS
ADJOURNMENT
The next regular meeting of the Investment Advisory Board will be held on May 10,
2017 commencing at 4:00 p.m. at the La Quinta Council Chambers, 78-495 Calle
Tampico, La Quinta, CA 92253.
DECLARATION OF POSTING
I, Jessica Delgado, Management Assistant, of the City of La Quinta, do hereby declare
that the foregoing Agenda for the La Quinta Investment Advisory Board special
meeting was posted on the City's website, near the entrance to the Council Chamber
at 78-495 Calle Tampico, and the bulletin boards at 78-630 Highway 111, and the La
Quinta Cove Post Office at 51-321 Avenida Bermudas, on March 24, 2017.
DATED: March 24, 2017
Jessica Delgado, Management Assistant
City of La Quinta, California
Public Notices
The La Quints City Council Chamber is handicapped accessible. If special equipment is needed for the hearing impaired,
please call the City Clerk's office at 777-7103, twenty-four (24) hours in advance of the meeting and accommodations will
be made.
If special electronic equipment is needed to make presentations to the IAB, arrangements should be made in advance by
contacting the City Clerk's office at 777-7103. A one (1) week notice is required.
If background material is to be presented to the Investment Advisory Board during an Investment Advisory Board meeting,
please be advised that five (5) copies of all documents, exhibits, etc., must be supplied to the Management Assistant for
distribution. It is requested that this take place prior to the beginning of the meeting.
Any Writings or documents provided to a majority of the Investment Advisory Board regarding any item(s) on the agenda
will be made available for public inspection at the Community Development counter at City Hall located at 78-495 Calle
Tampico, La Quinta, California, 92253, during normal business hours.
INVESTMENT ADVISORY BOARD AGENDA 2 MARCH 27, 2017
SPECIAL MEETING
INVESTMENT ADVISORY BOARD
MINUTES
WEDNESDAY, February 15, 2017
CALL TO ORDER
A special meeting of the La Quinta Investment Advisory Board was called to order at
4:00 p.m. by Chairperson Batavick.
PRESENT: Board Members Mills, Rosen, Johnson, Turbow, and Chairperson
Batavick
ABSENT: None
STAFF PRESENT: Finance Director Karla Campos, Financial Services Analyst
Rosemary Hallick, and Management Assistant Jessica Delgado.
PLEDGE OF ALLEGIANCE
Board Member Johnson led the audience in the pledge of allegiance.
PUBLIC COMMENT - None.
At this time Chairperson Batavick introduced new board members Steven Rosen
and Richard Mills.
CONFIRMATION OF AGENDA - Confirmed
APPROVAL OF MINUTES
Chairperson Batavick said the year in Director's Item No. 3 on page 2 should be 2017
instead of 2016.
Motion - A motion was made and seconded by Board Members Turbow/Johnson to
approve the Minutes of November 9, 2016, as amended. Motion passed unanimously.
CONSENT CALENDAR ITEMS
1. Receive and File the 2nd Quarter Fiscal Year 2016/17 Treasury and Pooled
Money Report (Oct, Nov, and Dec 2016)
Finance Director Campos presented the staff report, which is on file in the Finance
Department.
INVESTMENT ADVISORY MINUTES 1 FEBRUARY 15, 2017
SPECIAL MEETING
Motion - A motion was made and seconded by Board Members Mills/Johnson to
receive and file the Second Quarter Fiscal Year 2016/17 Treasury and Pooled Money
Reports for October, November, and December 2016 Motion passed unanimously.
BUSINESS SESSION - None.
CORRESPONDENCE AND WRITTEN MATERIAL - None.
BOARD MEMBERS' ITEMS
1. Investment Advisory Board expanded duties update.
Finance Director Campos provided the Board with a verbal update on expanded duties.
DIRECTOR'S ITEMS
1. Finance Director Campos provide a handout and gave a verbal update on the
timeline and process of the Request for Proposals for City-wide auditing
services. Chairperson Batavick and Board Member Rosen volunteered to assist
with the review and selection process of an auditing firm.
2. Finance Director Campos gave a verbal update on the Mid -Year Budget Report
and noted a special meeting will be required in late March for an update on
Measure G oversight, audit firm selection, cash flow analysis, and Investment
Policy.
ADJOURNMENT
There being no further business, it was moved and seconded by Board Members
Turbow/Johnson to adjourn this meeting at 5:46 p.m. Motion passed unanimously.
Respectfully submitted, lk
Jessica Delgado, Management Assistant
City of La Quinta, California
INVESTMENT ADVISORY MINUTES 2 FEBRUARY 15, 2017
SPECIAL MEETING
City of La Quinta
BUSINESS SESSION ITEM NO. 1
INVESTMENT ADVISORY BOARD MEETING: March 27, 2017
STAFF REPORT
AGENDA TITLE: APPROVE FISCAL YEAR 2017/18 MEETING DATES
RECOMMENDATION
Approve of meeting schedule for the Investment Advisory Board (future Financial
Advisory Commission) for fiscal year 2017/18.
EXECUTIVE SUMMARY
Annually the Investment Advisory Board and staff discuss and select meeting dates
for the following fiscal year.
The future Financial Advisory Commission (FAC) shall meet quarterly with the ability to
schedule special meetings as needed throughout the year.
FISLAL IMPACT
The current Investment Advisory Board/future FAC members are eligible to receive $75
per member, per meeting attended. Membership is scheduled to increase from five to
seven. The proposed fiscal year budget will be $3,150 to cover four regularly scheduled
quarterly meetings plus an allowance for two special meetings per year for a seven
member Commission.
BACKGROUND/ANALYSIS
The City Ordinance as amended and entered into first reading on March 21, 2017
specified that the future Financial Advisory Commission shall meet quarterly and may
schedule additional special meetings as needed.
The meeting dates for the current fiscal year 2016/17 are as follows:
August 10, 2016
November 9, 2016
February 15, 2017 - Special meeting/time, original schedule date was February 8, 2017
March 27, 2017 - Special meeting
April 2017 - To be determined, special meeting requested
May 10, 2017
The Board may also elect to alter the starting time for meetings which is currently
4:00pm.
Sales tax information is provided to the City on a quarterly basis and staff subsequently
will provide a non -confidential update to the FAC. With the expanded duties of the FAC
the following meeting dates are suggested for consideration.
Meeting dates suggested for fiscal year 2017/18 are as follows:
August 9, 2017 - Wednesday
November 15, 2017 - Wednesday
February 12 or 13, 2018 - Monday or Tuesday
April 11, 2018 - Wednesday, proposed special meeting date
May 9, 2018 - Wednesday
June 13, 2018 - Wednesday, proposed special meeting date
FA i 0:1ZFA i l►T/:
Consideration of the proposed scheduled and direct staff to prepare a final meeting date
schedule for adoption at the next FAC meeting.
Prepared by: Karla Campos, Finance Director
City of La Quinta
BUSINESS SESSION ITEM NO. 2
INVESTMENT ADVISORY BOARD MEETING: March 27, 2017
STAFF REPORT
AGENDA TITLL APPROVE FISCAL YEAR 2017/18 FINANCIAL ADVISORY COMMISSION
WORK PLAN
RECOMMENDATION
Approve future Financial Advisory Commission's Work Plan for fiscal year 2017/18.
EXECUTIVE SUMMARY
Annually the City's Boards and Commissions review their current work plans in
order to provide an opportunity for potential modifications to the existing plans.
The proposed work plan for the future Financial Advisory Commission (FAC) reflects
the six principal functions of the Commission as set forth in the City's Municipal
Code.
FISCAL IMPACT None.
BArvr-Pt)a iNn ANALYSIS
The six principal functions of the future FAC will be as follows:
1. Review at least annually the city's investment policy and recommend appropriate
changes;
2. Review at least quarterly the treasury report and note compliance with the investment
policy as well as adequacy of cash and investments for anticipated obligations;
3. Receive and consider other reports provided by the city treasurer;
4. Meet with the independent auditor after completion of the annual audit of the city's
financial statements, and receive and consider the auditor's comments on auditing
procedures, internal controls, and findings for cash and investment activities;
5. Review at least annually the revenue derived from the one percent (1%) transactions
and use tax instituted by voters in November 2016 to ensure these funds are used to
provide services, programs and capital projects in the city of La Quinta.
6. Serve as a resource for the city treasurer on matters such as proposed investments,
internal controls, and the utilization and/or change of financial institutions, custodians,
brokers and dealers.
The FAC will report to the city council after each meeting either in person or through
correspondence at a regular city council meeting.
ALTERNATIVES
None, the work plan will be a consent calendar item at the next meeting of the FAC.
Prepared by: Karla Campos, Finance Director
BUSINESS SESSION ITEM NO: 3
City of La Quinta
INVESTMENT ADVISORY BOARD MEETING: March 27, 2017
STAFF REPORT
AGENDA TITLE: APPROVE FISCAL YEAR 2017/18 INVESTMENT POLICY
RECOMMENDATION
Approve the attached Fiscal Year 2017/18 Investment Policy, and forward to City
Council for approval by June 2017.
BACKGROUND
As part of the work plan, the Investment Advisory Board (IAB) is asked to review the
Investment Policy and make any recommendations for the City Council's
consideration by June of each year. In May 2016, the IAB approved the FY 2016/17
Investment Policy and Work Plan with the following changes:
Combine sections related to Negotiable and Non -Negotiable Certificates of
Deposits into one section and limit the overall total combined percentage of the
portfolio to 30%.
Update language related to Certificates of Deposits (both negotiable and non-
negotiable) to be consistent with state law.
Remove language referring to the Mutual Fund restriction of "$1 per share par
value" to be consistent with state law requirements.
There have been no new regulatory changes in FY 2016/17 which would require an
update to the current policy. However, staff has identified some edits as red lined in
the attachment. These edits provide consistency and further clarify to the document.
The following is a summary of the significant proposed changes:
Update buy and hold policy to include a provision allowing taking advantage of
market conditions when fiscally advantageous for the City
Remove statement under Authority section that indicates City Manager must
acknowledge in writing all purchases and sales prior to their execution.
Municipal code allows for all transactions to be executed by City Treasurer
Removed references to the Temporary Liquidity Guarantee Program. This was
an FDIC program instituted in 2008 as a result of the financial crisis and has
since ended.
Sections XVIII and XIX updated to current verbiage regarding name change
and increased duties of the former Investment Advisory Board, henceforth
known as the Financial Advisory Commission.
Appendix B removed and replaced with newly adopted Chapter 2.70 of the
Municipal Code
Appendix C edited to ensure it mirrored the Municipal Code as posted on the
City's website.
Appendix D updated with current titles of finance staff.
Appendix E updated to reflect bond re -issue of 2016.
FISCAL IMPACT None.
/_14iaRZF-AIW:
The purpose of this item is to get input from Board Members; the Board may either
approve as presented or incorporate further changes.
Prepared and Approved by: Karla Campos, Finance Director
Attachment: 1. Draft Investment Policy for FY 2017/18 (red -lined)
CITY OF LA QUINTA
Investment Policy
Fiscal Year 20176/2018-7
Table of Contents
Section
Topic
Page
Executive Summary
2
1
General Purpose
4
11
Investment Policy
4
III
Scope
4
IV
Objectives
4
► Safety of Principal
► Provide Liquidity
► Yield A Risk -Based Market Rate Of Return
V
Maximum Maturities
6
VI
Prudence
6
VII
Authority
6
VIII
Ethics and Conflicts of Interest
7
IX
Authorized Financial Dealers and Institutions
7
No. Broker/Dealers
► Financial Institutions
X
Permissible Deposits and Investments
8
XI
Investment Pools
12
XII
Payment and Custody
13
X111
Interest Earning Distribution Policy
13
XIV
Internal Controls and Independent Auditors
13
XV
Reporting Standards
14
XVI
Financial Assets and Investment Activity Not Subject to this Policy
15
XVII
Investment of Bond Proceeds
15
X111
Investment Advisory Board - City of La Quinta
15
XIX
Investment Policy Adoption
16
Appendices Topic
Page
A Summary of Permissible Deposits and Investments
17
B City of La Quinta Municipal Code Ordinance 2.70 - Investment Advisory Board
19
C City of La Quinta Municipal Code Ordinance 3.08 - Investment of Moneys and Funds20
D Segregation of Major Investment Responsibilities
22
E Listing of Approved Financial Institutions
23
F Broker/Dealer Questionnaire and Certification
24
G Request for Proposal for Professional Portfolio Management Firm
28
H Permissible Investment Chart — Professional Portfolio Management Firm
34
1 Investment Management Process and Risk
35
J Glossary
36
CITY OF LA QUINTA
Investment Policy
Fiscal Year 2016/2017
Executive Summary
The general purpose of this Investment Policy is to provide the rules and standards that must be
followed in administering the City of La Quinta's deposits and investments.
The City's Investment Policy conforms to all state and local statutes and applies to all deposits
and investments of the City of La Quinta (the"City").
It is the City's policy to deposit and invest public funds in a manner that shall provide:
► Safety of principal;
► Liquidity to meet all of the City's obligations and requirements that may be reasonably
anticipated; and
► A risk -based market rate of return.
It is the City's policy to generally hold securities and other investments until maturity. This buy -
and -hold policy shall not prevent the sale of a security to minimize loss of principal when an
issuer or backer suffers declining credit worthiness, when the liquidity needs of the portfolio
require that a security be soldl, or when a sale/repurchase is fiscally advantageous based on
market conditions and fits the needs of the portfolio.
Authority to manage the City's investment portfolio is derived from the City Municipal Code.
Management responsibility for the investment program is delegated to the City Treasurer, who
shall establish and implement written procedures for the operation of the City's investment
program consistent with the Investment Policy. The Treasurer shall establish and implement a
system of internal controls to accomplish the following objectives:
► Safeguard assets;
► Orderly and efficiently conduct its business, including adherence to all City management
policies;
► Prevent or detect errors and fraud;
► Accurately complete all accounting records; and
► Timely prepare all reliable financial information.
The System of Internal Controls developed by the City Treasurer shall be reviewed annually by the
independent auditors in connection with the annual audit of the City's financial statements.
The City Manager, City Treasurer and city employees involved in the City's banking and
investment process shall conduct the City's business in an ethical manner and refrain from any
activity or relationship that may be, or have the appearance of, a conflict of interest.
The City Treasurer maintains a listing of financial institutions which are approved for investment
purposes. All Broker/Dealers and financial institutions that provide investment services will be
subject to City Council approval.
The Treasurer will be permitted to invest only in the permissible deposits and investments
described in Section X and Appendix A up to the specified maximum allowable percentages
and/or dollar limitations and, where applicable, through the bid process requirements. Permissible
Comment [RM1]: See also page 5 item 2. 1
think both should be revised to include a
statement regarding the ability to sell before
maturity if fiscally advantageous to the city
deposits and investments include, in general:
► FDIC -Insured Checking, Savings, and Sweep Accounts;
► Collateralized Bank Deposits;
► Certificates of Deposit;
► Certificates of Deposit (Negotiable and Non -Negotiable)
► U.S. Government Agency Securities and Federal Government Securities;
► Prime Commercial Paper;
► Local Agency Investment Fund (LAIF);
► Money Market Mutual Funds;
► Corporate Notes; and
► Professionally Managed Accounts.
The City's deposits and investments are generally limited to #wee five years' maximum maturity.
However, the projected amount of funds not expected to be disbursed within five years may be
invested in notes and bonds maturing between three and five years. Additionally, funds may be
invested for up to ten (10) years as further discussed in Section V.
The City's Investment Policy does not specify a single benchmark as a goal or target yield for a
rate of return on its investment portfolio. As a basis for comparison only, the Treasurer's
monthly report will display the rates of return on the three-month Bill, six-month Bill, and the one
and two-year U.S. Treasury Note, comparable -period rates for commercial paper, and the yield
for the State Treasurer's Local Agency Investment Fund (LAIF).
The Investment Policy shall be adopted by resolution of the La Quinta City Council on an annual
basis. The Investment Policy will be adopted before the end of June of each year.
This Executive Summary is only an overview of the City's Investment Policy. Reading this
summary does not constitute a complete review, which can only be accomplished by reviewing all
of the pages herein.
City of La Quinta
Statement of Investment Policy
July 1, 2-916-2017through June 30, 20172018
Adopted by the City Council on daae7,2016
GENERAL PURPOSE
The general purpose of this document is to provide the rules and standards that must be followed
in administering the City of La Quinta's deposits and investments.
INVESTMENT POLICY
It is the policy of the City of La Quinta to deposit and invest public funds in a manner that shall
provide:
► Safety of principal;
► Liquidity to meet all of the City's obligations and requirements that may be reasonably
anticipated; and
► A risk -based market rate of return.
The Investment Policy conforms to all State and local statutes governing the investment of public
funds and sets forth the permissible deposits and investments of the City's funds and the
limitations thereon.
III SCOPE
Except as further detailed in Section XVII, this Investment Policy applies to all deposits and
investments of the City of La Quinta, Successor Agency to the City of La Quinta Redevelopment
Agency and the City of La Quinta Financing and Housing Authorities (hereafter referred to in this
document as the "City"). These funds are reported in the City's Comprehensive Annual Financial
Report (CAFR) and include all funds within the following fund types:
► General
► Special Revenue
► Capital Projects
► Debt Service
► Enterprise
► Internal Service
► Trust and Agency
► Any new fund types and fund(s) that may be created.
IV OBJECTIVES
The objectives of the City's investment activity, in order of priority and importance, are:
Safety of Principal
Safety of principal is the foremost objective of the City's investment program.
Investments shall be undertaken in a manner that seeks to ensure the preservation of
principal of the overall portfolio in accordance with the permissible deposits and
investments.
4
The City shall endeavor to preserve its investment principal by making only permissible
deposits and investments, undertaken in a controlled manner to minimize the possibility of
loss or misappropriation through malfeasance or otherwise. Investments not backed by
the full faith and credit of the United States Government shall be diversified by allocating
assets between different types of permissible investments, maturities, and issuers as a
means to mitigate credit risk and interest rate risk.
Credit Risk is the risk of loss from the failure of the security issuer or backer.
Credit risk may be mitigated by:
► Limiting investments to investment grade securities as permitted in
Section X; and
► Diversifying the issuers of the securities in the investment portfolio so
that potential losses due to issuer failure or individual securities
downgrades may be minimized.
b. Interest Rate Risk is the risk that market values of securities in the portfolio will
decline due to changes in general interest rates. Interest rate risk may be mitigated
by:
► Structuring the investment portfolio so that securities mature to meet
cash requirements for ongoing operations, thereby avoiding the need to
sell securities on the open market prior to maturity; and
► Investing operating funds primarily in shorter -term securities.
Liquidity Risk is the risk that a security cannot be liquidated because of its unique
features or structure or because it is thinly traded. Liquidity risk is not a material
issue for the City's portfolio because of the permissible deposits and investments
(see Section X) and because the City maintains a buy -and -hold policy and holds
securities and other investments to maturity. A discussion of the City's investment
process and risk is presented in Appendix I.
Provide Liquidity
The investment portfolio shall remain sufficiently liquid to meet all of the City's cash needs
that may be reasonably anticipated. This is accomplished by structuring the portfolio so
that sufficient liquid funds are available to meet anticipated demands. Furthermore, since
all possible cash needs cannot be anticipated the portfolio should be diversified and
consist of securities with active secondary or resale markets.
The City's policy is to generally hold securities and other investments to maturity.
Accordingly, securities shall not be sold prior to maturity with the following exceptions:
► A security with declining credit quality can be sold early to minimize loss of
principal; and
► Unanticipated liquidity needs of the portfolio require that one or more securities be
sold.l
► When a sale/repurchase is fiscallv advantageous based on market conditions and
fits the needs of the portfolio
Yield a Risk -Based Market Rate of Return
The City's investment portfolio shall be structured with the objective of yielding a risk -
based market rate of return throughout budgetary and economic cycles. Return on
investment is less important than the safety and liquidity objectives described above.
Comment [RM2]: Add an exception that
states at finance directors discretion if clearly
advantageous to the City due to current
market rates
Formatted: Font: Bold
The City's Investment Policy does not specify a single benchmark as a goal or target yield
for a rate of return on its investment portfolio. The portfolio's rates of return will be
influenced by several factors, including actions by the Federal Reserve Board, the
marketplace, and overall economic perceptions and conditions. These factors will not
affect yield during the securities' holding period because the City's buy -and -hold policy
fixes the securities' yield at the time of purchase.
As a basis for comparison only, the Treasurer's monthly reports will display the rates of
return on the three-month Bill, six-month Bill, and one and two-year U.S. Treasury Note,
comparable -period rates for commercial paper, and the yield for the State Treasurer's
Local Agency Investment Fund (LAIF). The Treasurer may use these or any other
published rates of return that the Treasurer deems appropriate for comparison to the return
on the City's investment portfolio.
V MAXIMUM MATURITIES
It is the City's policy to hold securities and other investments until maturity, thus avoiding the risk
of market value fluctuations with overall market interest rates. This buy -and -hold policy shall not
prevent the sale of a security to minimize loss of principal when an issuer or backer suffers
declining credit worthiness or when the liquidity needs of the City require that a security be sold.
The buy -and -hold policy requires that the City's investment portfolio be structured so that
sufficient liquid funds are available from maturing investments and other sources to meet all
reasonably -anticipated cash needs. To meet anticipated cash needs, it is essential that the
Treasurer have reliable, diligently prepared cash flow projections.
Annually, the Treasurer shall project the amount of funds not expected to be disbursed within ten
years. For FY206FY 2017/18; the amount of such funds is projected to be $I20 millionl. comment [RM3]: is that still the correct
Funds up to that amount may be invested in U.S.Treasury notes and bonds, Local Agency amount?
Obligations, and California Local Agency Obligations maturing between 3 and 10 years. For all
other funds, investments are limited to five years maximum maturity.
VI PRUDENCE
The City shall follow the Uniform Prudent Investor Act as adopted by the State of California in
Probate Code Sections 16045 through 16054.
Section 16053 sets forth the terms of a prudent person which are as follows: "Investments shall
be made with judgment and care - under circumstances then prevailing - which persons of
prudence, discretion, and intelligence exercise in the professional management of their own
affairs, not for speculation, but for investment, considering the probable safety of their capital as
well as the probable income to be derived."
VII AUTHORITY
Authority to manage the City's investment portfolio is derived from section 3.08 of the City's
Municipal Code. Management responsibility for the investment program is delegated to the City
Treasurer for a period of one year pursuant to the City Council's annual adoption of the
Investment Policy.
The City Treasurer shall establish written procedures for the operation of the investment program
consistent with the Investment Policy. Procedures should include reference to safekeeping, wire
transfer agreements, banking service contracts, and collateral/depository agreements. Such
procedures shall include explicit delegation of authority to persons responsible for investment
transactions. No person may engage in an investment transaction except as provided under the
terms of this Investment Policy and the procedures established by the City Treasurer. The City
Treasurer shall be responsible for all transactions undertaken and shall establish a system of
controls to regulate the activities of subordinate officials. MTh^ City ne.,.,. geF eF h•. /heF a
Git T.
VIII ETHICS AND CONFLICTS OF INTEREST
The City Manager, City Treasurer and city employees involved in the City's banking and
investment process shall conduct the City's business in an ethical manner and refrain from any
activity or relationship that may be, or have the appearance of, a conflict of interest. Any
questionable activity or relationship shall be reported immediately and in compliance with the
procedures set forth in Section 1.40 — Conflicts of Interest and Acceptance of Gifts and other
Gratuities of the City of La Quinta Personnel Manual. Reporting must be made in accordance with
the personnel policies of the City and, until resolved, the officer or employee shall refrain from
participating in the City's business related to the matter.
The City Manager, City Treasurer and City employees may conduct personal business with banks,
brokers, and other financial institutions that are authorized to conduct business with the City
provided that the terms of the activity to the accountholder with the City are the same as those
that are available to the public in general.
IX AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS
The City Treasurer maintains a listing of financial institutions which are approved for direct
investment purposes. In addition a list will also be maintained of approved broker/dealers selected
by credit worthiness.
Broker/Dealers who desire to become bidders for direct investment transactions must
supply the City with the following:
► Current audited financial statements;
► Proof of Financial Industry Regulatory Authority (FINRA) Certification;
► Trading resolution;
► Resume of Financial broker; and
► Completion of the City of La Quinta Broker/Dealer questionnaire (see Appendix F)
which contains a certification of having read the City's Investment Policy.
The City Treasurer shall evaluate the documentation submitted by the broker/dealer and
independently verify existing reports on file for any firm and individual conducting
investment related business.
The City Treasurer will also contact the following agencies during the verification process:
Comment [11144]: Strike sentence as is.
3.08.020 allows for City Treasurer to
purchase/sell/exchange. The segregation of
responsibilities chart only states that City
Manager should "acknowledge" investment
selections, nothing about when they are
executed.
► Financial Industry Regulatory Authority (FINRA) Public Disclosure Report File (1-
800-289-9999).
► State of California Department of Corporations (1-916-445-3062).
The City Treasurer maintains a listing of financial institutions which are approved for
investment purposes. All Broker/Dealers and financial institutions that provide investment
services will be subject to City Council approval.
Each securities dealer shall provide monthly and quarterly reports filed pursuant to U.S.
Treasury Department regulations. Each mutual fund shall provide a prospectus and
statement of additional information.
Financial Institutions will be required to meet the following criteria in order to receive City
funds for deposit or investment (see Appendix E, "Listing of Approved Financial
Institutions"):
Insurance - Public Funds shall be deposited only in financial institutions having
accounts insured by the Federal Deposit Insurance Corporation (FDIC).
b. Collateral - The amount of the City's deposits or investments not insured by the
FDIC —shall be collateralized by securities with market values of 110%, or by
mortgages with market values 1 50%, of the amount of invested funds plus unpaid
interest earnings.
Disclosure - Each financial institution maintaining invested funds in excess of the
FDIC insured amount shall furnish the City a copy of the most recent Call Report.
The City shall not invest in excess of the FDIC insured amount in banking
institutions which do not disclose to the city a current listing of securities pledged
for collateral ization in public monies.
X (PERMISSIBLE DEPOSITS AND INVESTMENT
Permissible deposits and investments are summarized below. A more comprehensive list is
included in Appendix A.
City
City
Maximum
City
Permissible Deposits and Investments
Maximum
Allocation
Restrictions
Maturity
(Footnote 1)
Checking & Savings Accounts (FDIC Insured) & Sweep
85% Portfolio
Sweep Account: U.S. Treasuries and/or
CurrentlOn Demand
Accounts
GSE's
Interest bearing active bank deposits — non FDIC insured
collateralized by 110% of eligible securities
60% Portfolio
$40,000,000 per bank
Current /on Demand
Certificate of Deposit (negotiable and non-negotiable)
30 %Portfolio
<_ 000 including interest per
$250,
5 years
institution
U.0. Treasury Bills, Notes and Bonds, and Government
100 % Portfolio
<=$30,0000,000 maturing 3-5 Yrs.
35
National Mortgage Association (GNMA) securities
years
U.S. Government Agency Securities and Federal
Government Securities (except collateralized mortgage
30% of Portfolio combined
$10 million per purchase
obligations (CMO's) or structured notes which contain
embedded rate options):
- Federal National Mortgage Association (FNMA)
$20,000,000 per issuer
5 years
- Federal Home Loan Bank Notes & Bonds (FHLB)
$25,000,000 per issuer
5 years
Comment [RMS]: I think that the paragraphs
containing the details below this chart should
go in the same order as the chart.
- Federal Farm Credit Bank (FFCB)
$30,000,000 per issuer
5 years
- Federal Home Loan Mortgage Corporation (FHLMC)
$20,000,000 per issuer
5 years
Prime Commercial Paper insWding3�eraAeracy-6iquidiEy
15 % Portfolio
$5,000,000 per issuer maximum
90 days
Grantee-RrQgfan(FLF42)
Local Agency Investment Fund (LAIF)
$50,000,000
$50,000,000
Current/On Demand
per account
Mutual fund must have in excess of
M nay market mutual funds regulated by the SEC that
$500 million in assets under
Current
c sist only of US Treasury Securities or Government
Jon
20 % Portfolio
management or receive the highest
rating from at least two of the three
gn_gemand90 Days
S onsored Enterprises GSE'sl
major rating services -
II
Cdrporate Notes
10 % Portfolio
$5,000,000 max per issuer
3 years
II
AA or better rating
C rporate Notes -
20 % Portfolio
$10,000 000 max per issuer
3 years
Professionally Managed Account
10 % Portfolio
Requires Approved RFP
3 years
Local Agency Bonds/California Agency Obligations
40"30 %
<=A$30,000,0000
10 years
Long -Term Scale
S&P Al AAA, AA+, AA, AA-, A+, A
Moody's P1 Aaa, Aa1, Aa2, Aa3, Al, A2
Fitch AAA, AA+, AA, AA-, A+, A
Comment [RM6]: Are these medium term
notes? I don't see a third paragraph
explaining why the notes would be in here
twice. Also, from everything I found TLGP
expired in 2012.
Checking, Savings, and Sweep Accounts — The City will only maintain checking, savings,
and sweep accounts with FDIC insured financial institutions. As authorized by the City
Council, a U.S. Treasury and/or U.S. Agency Securities Money Market Sweep Account
with la $50,000 [target balance may be maintained in conjunction with the checking Comment [11147]: Your note says this needs
account. to be increased
In addition, the Treasurer may invest in an interest bearing active deposit account as
approved in Government Code Section 53632. The deposit account must be collateralized
with securities that are in accordance with Government Code Sections 53632.5(c). In
addition, the market value of the collateralized securities must be maintained in
accordance with 53652 (a), and be held by a custodian in accordance with the
requirements of Government Code Section 53656. The proposition of the City's share of
the deposit account shall be determined in accordance with Government Code Section
53658.
Certificates of Deposit (Negotiable and Non-negotiable) - As authorized in Government
Code Section 53601, local governments may invest up to 30% of their portfolios in
Certificates of Deposits and 30% in Negotiable Certificates of deposits. The City's policy
is to limit combined Non -Negotiable and Negotiable Certificates of Deposits to 30% of the
overall portfolio. Each CD is limited to the FDIC limit of $250,000.
U.S. Treasury Bills, Notes, and Bonds and Government National Mortqaqe Associations
(GNMA) securities — The City may invest in U.S. Treasury bills, notes, and bonds and
GNMA securities directly issued and backed by the full faith and credit of the U.S.
Government. The City's Investment Policy provides for investments in U.S. Treasury
issues and GNMA's of 100% of the portfolio.
► The City's Investment Policy does not allow investments in state indebtedness.
Local Agency Bonds and California Local Agency Obligations — The City may invest in
California local agency obligations pursuant to 56301(a) and 53301(e). 53601(a) pertains
to investing in bonds issued by a local agency, department, board, agency or authority of
the local agency. 53601 (e) pertains to investing in bonds and other defined indebtedness
of a local agency or department, board, agency or authority of the local agency within the
State of California.
The City's Investment Policy limits investments in Local Agency Bonds and California
Local Agency obligations to 30% of the portfolio with up to a ten year maximum maturity.
In addition, the Agency obligations must be invested in the long term rating of A, A2, A or
better by S&P, Moody's or Fitch.
In the case of an initial public offering, including refinancings, the Treasurer may purchase
directly from the Bond Underwriter. In the case of secondary issues, the Treasurer will
rely on the approved Broker/Dealers.
U.S. Government Agency Securities and Federal Government Securities — The City may
invest in securities issued by U.S. Government instrumentalities and agencies (commonly
referred to as government sponsored enterprises or GSE's). These securities are not
backed by the full faith and credit of the U.S. Government. Publicly owned GSE's include
Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage Corporation
(FHLMC) and Student Loan Marketing Association (SLMA). Non -publicly owned GSE's
include the Federal Home Loan Bank (FHLB), Federal Farm Credit Bank (FFCB), Federal
Land Bank (FLB) and Federal Intermediate Credit Bank (FICB).
The City's Investment Policy allows investment only in securities of FNMA, FHLMC, FHLB
and FFCB. For Fiscal Year 2015/2016, the maximum face amount per issuer is $20
million for FNMA and FHLMC, $25 million for FHLB and $30 million for FFCB. In addition,
no more than 30% of the portfolio surplus may be invested in all GSE's combined with a
maximum $10 million face amount per purchase.
Prime Commercial Paper - As authorized in Government Code Section 53601(gh), a portion
of the City's portfolio may be invested in commercial paper of the highest rating (Al or
P1) as rated by Moody's or Standard and Poor's. There are a number of other
qualifications regarding investments in commercial paper based on the financial strength of
the corporation and the size of the investment. The City's Investment Policy permits
investments in commercial paper with the following limitations:
► Maximum 15% of the portfolio;
► Maximum maturity of 90 days; and
► Maximum of $5 million per issuer.
These limitations aFe maFe FeStFffieiive than �he State eade whweh alleWs aMOHRts Of 0
.-.f the total portfolie with maturities up to 270 days with n peF issuer liFnitatiens.Per state
code, "Eligible commercial paper shall have a maximum maturity of 270 days or less. Local
agencies, other than counties or a city and county, may invest no more than 25 percent of
their moneys in eligible commercial paper. Local agencies, other than counties or city and
county, may purchase no more than 10 percent of the outstanding commercial paper of
anv sinale issuer.
Local Agency Investment Fund (LAIF) - As authorized in Government Code Section
16429.1 and by LAIF procedures, local government agencies are each authorized to invest
10
a maximum of $50 million per account in this investment program administered by the
California State Treasurer. The City Treasurer may not invest more than $50 million per
account in LAIF. The City's investment in LAIF is allowable as long as the average
maturity of its investment portfolio does not exceed two years, unless specific approval is
authorized by the City Council.
Money Market Mutual Funds - As authorized in Government Code Section 53601 (k), local
agencies are authorized to invest in shares of beneficial interest issued by diversified
management companies (mutual funds) in an amount not to exceed 20% of the agency's
portfolio. There are a number of other qualifications and restrictions regarding allowable
investments in corporate notes and shares of beneficial interest issued by mutual funds
which include (1) attaining the highest ranking or the highest letter and numerical rating
provided by not less than two of the three largest nationally recognized rating services, or
(2) having an investment advisor registered with the Securities and Exchange Commission
with not less than five years' experience investing in the securities and obligations and
with assets under management in excess of five hundred million dollars ($500,000,000).
The City's Investment Policy only allows investments in mutual funds that invest in direct
issues of the U.S. Treasury and/or US Agency Securities with an average maturity of their
portfolio not exceeding 90 days and the City limits such investments to 120% of the
portfolio.)
Corporate Notes - As authorized in Government Code Section 53601 (j), local agencies
may invest in corporate notes. The notes must be issued by corporations organized and
operating in the United States or by depository institutions licensed by the United States
or any other state and operating in the United States. The City's Investment Policy allows
investment in corporate notes authorized by the Government Code with the following
limitations:
► Maximum 10% of the portfolio
No. Maturities shall not exceed three years from date of purchase;
► Eligible notes shall be regularly quoted and traded in the marketplace;
► Eligible notes shall be rated "AA" or better; and
► The maximum aggregate investment shall not exceed $5 million face amount for
each issuer.
This is more restrictive than the State code allowed amounts of 30% of the total portfolio
with maturities up to five years with no per -issuer limitations.
Professionally Managed Account(s) - The City Treasurer may place up to 10% of the
portfolio with a professional portfolio management firm ("PPMF"). The PPMF will be
approved by the City Council based upon the City Treasurer's recommendation pursuant to
completion of a request for proposal (RFP) as outlined in Appendix G. The PPMF shall
have:
► An established professional reputation for asset or investment management;
► Knowledge and working familiarity with State and Federal laws governing and
restricting the investment of public funds;
► Substantial experience providing investment management services to local public
agencies whose investment policies and portfolio size are similar to those of the
City;
► Professional liability (errors and omissions) insurance and fidelity bonding in such
amounts as are required by the City; and
No. Registration with the Securities and Exchange Commission under the Investment
11
Comment [RM8]: You have a comment here
regarding trust and custody excluded from
20% rule
Formatted: Bulleted + Level: 1 + Aligned at:
0.5" + Indent at: 0.75"
Advisers Act of 1940.
Before engagement by the City and except as may be specifically waived or revised, the
PPMF shall commit to adhere to the provisions of the City's Investment Policy with the
following exceptions:
► The PPMF may be granted the discretion to purchase and sell investment securities
in accordance with Appendix I of this Investment Policy;
► The PPMF is not required to adhere to the buy -and -hold policy of the City's
Investment Policy; and
► The PPMF does not need City Manager or City Treasurer approval to make
permissible investments as detailed in column 8 of Appendix H of this Investment
Policy.
XI INVESTMENT POOLS
There are three (3) types of investment pools:
► State -run pools (e.g., LAIF);
► Pools that are operated by a political subdivision where allowed by law and the
political subdivision is the trustee (e.g., County Pools); and
► Pools that are operated for profit by third parties.
The City's Investment Policy permits investment only in pools authorized in Section X.
XII PAYMENT AND CUSTODY
The City shall engage qualified third party custodians to act in a fiduciary capacity to maintain
appropriate evidence of the City's ownership of securities and other eligible investments. Such
custodians shall disburse funds, received from the City for a purchase, to the broker, dealer or
seller only after receiving evidence that the City has legal, record ownership of the securities.
Even though ownership is evidenced in book -entry form rather than by actual certificates, this
procedure is commonly accepted as the delivery versus payment (DVP) method for the transfer of
securities.
XIII INTEREST EARNING DISTRIBUTION POLICY
Interest earnings are generated from pooled investments and specific investments. The following
provisions apply to the calculation and distribution of interest earnings.
Pooled Investments - It is the general policy of the City to pool all available operating cash
of the City of La Quinta, Successor Agency to the City of La Quinta Redevelopment
Agency, La Quinta Financing Authority, and La Quinta Housing Authority, and to allocate
interest earnings in the following order, as follows:
Payment to the General Fund of an amount equal to the total annual bank service
charges as incurred by the general fund for all operating funds as included in the
annual operating budget.
12
b. Payment to the General Fund of a management fee equal to 5% of the annual
pooled cash fund investment earnings.
Payment to each fund of an amount based on the average computed daily cash
balance included in the common portfolio for the earning period.
Specific Investments - Specific investments purchased by a fund shall incur all earnings
and expenses to that particular fund.
XIV INTERNAL CONTROLS AND INDEPENDENT AUDITOR
The City Treasurer shall establish a system of internal controls to accomplish the following
objectives:
► Safeguard assets;
► The orderly and efficient conduct of its business, including adherence to management
policies;
► Prevention or detection of errors and fraud;
► The accuracy and completeness of accounting records; and
► Timely preparation of reliable financial information.
While no internal control system, however elaborate, can guarantee absolute assurance that the
City's assets are safeguarded, it is the intent of the City's internal control to provide a reasonable
assurance that management of the investment function meets the City's objectives.
The internal controls shall address the following:
► Control of collusion. Collusion is a situation where two or more employees are working in
conjunction to defraud their employer.
► Separation of transaction authority from accounting and record keeping. By separating the
person who authorizes or performs the transaction from the people who record or
otherwise account for the transaction, a separation of duties is achieved.
► Custodial safekeeping. Securities purchased from any bank or dealer including appropriate
collateral (as defined by State Law) shall be placed with an independent third party for
custodial safekeeping.
► Avoidance of physical delivery securities. Book entry securities are much easier to
transfer and account for since actual delivery of a document never takes place. Delivered
securities must be properly safeguarded against loss or destruction. The potential for
fraud and loss increases with physically delivered securities.
► Clear delegation of authority to subordinate staff members. Subordinate staff members
must have a clear understanding of their authority and responsibilities to avoid improper
actions. Clear delegation of authority also preserves the internal control structure that is
contingent on the various staff positions and their respective responsibilities as outlined in
the Segregation of Major Investment Responsibilities appendices.
► Written confirmation or telephone transactions for investments and wire transfers. Due to
13
the potential for error and improprieties arising from telephone transactions, all telephone
transactions shall be supported by written communications or electronic confirmations and
approved by the appropriate person. Written communications may be via fax or email if
on letterhead and the safekeeping institution has a list of authorized signatures. Fax
correspondence must be supported by evidence of verbal or written follow-up.
► Development of a wire transfer agreement with the City's bank and third party custodian.
This agreement should outline the various controls, security provisions, and delineate
responsibilities of each party making and receiving wire transfers.
The system of internal controls developed by the City, shall be reviewed annually by the
independent auditor in connection with the annual audit of the City's Financial Statements. The
independent auditor's letter on internal control over financial reporting and compliance as it
pertains to cash and investments, if any, shall be directed to the City Manager who will direct the
City Treasurer to provide a written response to the independent auditor's letter. The auditor's
letter, as it pertains, to cash and investment activities and the City Treasurer's response shall be
provided to the City's Investment Advisory Board for their consideration. Following the
completion of each annual audit, the independent auditor shall meet with the Investment Advisory
Board and discuss the auditing procedures performed and the review of internal controls for cash
and investment activities. See Appendix D, "Segregation of Major Investment Responsibilities."
XV REPORTING STANDARDS
The City Treasurer shall submit a monthly Treasurers Report to the City Council and the
Investment Advisory Board that includes all cash and investments under the authority of the
Treasurer. The Treasurer's Report shall summarize cash and investment activity and changes in
balances and include the following:
► A certification by the City Treasurer;
► A listing of purchases and sales/maturities of investments;
► Cash and Investments categorized by authorized investments, except for LAIF
which will be provided quarterly and show yield and maturity;
► Comparison of month end actual holdings to Investment Policy limitations;
► Current year and prior year monthly history of cash and investments for trend
analysis;
► Balance Sheet;
► Distribution of cash and investment balances by fund;
► A year to date historical cash flow analysis and projection for the next six months;
and
► A two-year list of historical interest rates.
XVI FINANCIAL ASSETS AND INVESTMENT ACTIVITY NOT SUBJECT TO THIS POLICY
The City's Investment Policy does not apply to the following:
► Cash and Investments raised from Conduit Debt Financing;
► Funds held in trust in the City's name in pension or other post -retirement benefit
programs;
► Cash and Investments held in lieu of retention by banks or other financial
institutions for construction projects; and
► Short or long term loans made to other entities by the City or Agency,
14
Short term (Due to/from) or long term (Advances from/to) obligations made
either between the City and its funds or between the City and Agency.
XVII INVESTMENT OF BOND PROCEEDS
The City's Investment Policy shall govern bond proceeds and bond reserve fund investments.
California Code Section 5922 (d) governs the investment of bond proceeds and reserve funds in
accordance with bond indenture provisions which shall be structured in accordance with the
City's Investment Policy.
Arbitrage Requirement - The US Tax Reform Act of 1986 requires the City to perform arbitrage
calculations as required and return excess earnings to the US Treasury from investments of
proceeds of bond issues sold after the effective date of this law. These arbitrage calculations
may be contracted with an outside source to provide the necessary technical assistance to
comply with this regulation. Investable funds subject to the 1986 Tax Reform Act will be kept
segregated from other funds and records will be kept in a fashion to facilitate the calculations.
The City's investment position relative to the new arbitrage restrictions is to continue pursuing
the maximum yield on applicable investments while ensuring the safety of capital and liquidity. It
is the City's position to continue maximization of yield and to rebate excess earnings, if
necessary.
XVIII INVESTMENT ADVISORY BOARDFINANCIAL ADVISORY COMMISSION - CITY OF LA
QUINTA
The'RvestmeRt AdvisGFY Bowel (146 Financial Advisory Commission (FAC) is a standing board
composed of five seven members from the public that are appointed by the City Council.
Background information will be requested and potential candidates must agree to a background
check and verification. On an annual basis, in conjunction with the Political Reform Act
disclosure statutes, or at any time if a change in circumstances warrants, each board member will
provide the City Council with a disclosure statement which identifies any matters that have a
bearing on the appropriateness of that member's service on the board. All board members shall
report annually every June to the City Clerk on Form 700, Statement of Economic Interests, any
activities, interests, or relationships that may be, or have the appearance of, a conflict of interest.
The IAB must meet at least quarterly, but usually Fneets monthly, to:
► Review at least annually the City's Investment Policy and recommend appropriate
changes;
► Review monthly— at least quarterly the treasury report and note compliance with the
Investment Policy ardas well as adequacy of cash and investments for anticipated
obligations;
► Receive and consider other reports provided by the City Treasurer;
► Meet with the independent auditor after completion of the annual audit of the City's
financial statements, and receive and consider the auditor's comments on auditing
procedures, internal controls and findings for cash and investment activities; and
► Review at least annually the revenue derived from the one percent (1 %) transactions and
use tax instituted by voters in November 2016 to ensure these funds are used to provide
services, programs, and capital projects in the city of LaQuinta
► Serve as a resource for the City Treasurer on matters such as proposed investments,
internal controls, and the -use or change of financial institutions, custodians, brokers and
15
dealers.
The IAA-FAC will report to the City Council after each meeting either in person or through
correspondence at a regular City Council meeting. See Appendix B: "Investment Advisory Board
Provisions."
XIX INVESTMENT POLICY ADOPTION
The City's Investment Policy will be reviewed annually by the City's '^�•,T�Pest-.,e,^ ^^^t Financial
Advisory Bearer Commission and the City Treasurer. The InvestmentFinancial Advisory BeaFd
Commission will forward the Investment Policy with any revisions to the City Manager and City
Attorney for their review and comment. A joint meeting will be held with the IRvest ent
Financial Advisory BeaFdCOMM ission, City Manager, City Attorney, and City Treasurer to review
the Investment Policy and any comments prior to submission to the City Council for their
consideration. The Investment Policy shall be adopted by resolution of the City Council annually
before the end of June of each year.
16
CITY OF LA QUINTA
SUMMARY OF PERMISSIBLE DEPOSITS AND INVESTMENTS
Appendix A
The City Treasurer will be permitted to invest in the following types of investments subject to the maximum percentage allocation limits and bid process requirements. All maturities
must be less than or equal to the maximum maturity allowed.
City
State Maximum
Maximum
Allocation
City
Bid
City
Credit
Permissible Deposits and Investments
Allocation
Maximum
Process
(Footnote
Surplus
P
Restrictions
Maturity
Quality
1)
Funds
1
Checking & Savings Accounts (FDIC Insured) & Sweep Accounts
85% Portfolio
100% Portfolio
Sweep Account: U.S. Treasuries and/or GSE's
Current/On Demand
FDIC Insured
Interest bearing active bank deposits — non FDIC insured collateralized
Non -FDIC Insured
2
by 110% of eligible securities
60% Portfolio
100% Portfolio
$40,000,000 per bank
Current /on Demand
2
Certificate of Deposit (Negotiable and Non -Negotiable)
30 % Portfolio
60 % Portfolio
<= $250,000 including interest per institution
5 years
FDIC Insured
3
U.S. Treasury Bills, Notes and Bonds, and Government National
100% Portfolio
100% Portfolio
< $30,0000,000 maturing 3-5 Yrs.
3 years
Mortgage Association (GNMA) securities
U.S. Government Agency Securities and Federal Government
3
Securities (except collateralized mortgage obligations (CMO's) or
Per issuer:
30 % Portfolio
$10,000,000 per purchase
structured notes which contain embedded rate options):
- Federal National Mortgage Association (FNMA)
$20,000,000
5 years
r-----
- Federal Home Loan Bank Notes & Bonds (FHLB)
$25,000,000
5 years
- Federal Farm Credit Bank (FFCB)
$30,000,000
5 years
- Federal Home Loan Mortgage Corporation (FHLMC)
$20,000,000
5 years
3
Prime Commercial Paper including Temporary Liquidity Guarantee
15 % Portfolio
25 % Portfolio
$5,000,000 per issuer maximum
90 days
S&P (A-1)
Program (TLGP)
270 Days
Moody's (P-1)
4
Local Agency Investment Fund (LAIF)
$50,000,000
$50,000,000
per account
Current/On Demand
Rated AAA by 2 of 3
Money market mutual funds regulated by the SEC that consist only of
Qi „,er ,
agencies;
5
US Treasury Securities or GSE's and maintain a par value of $1 per
20% Portfolio
20 % Portfolio
Mutual fund must have in excess of $500 million in
re
fA90 Days
assets> $500
share
assets under management
million; SEC reg'd
>5 Yrs.
6
Corporate Notes
10 % Portfolio
30 % Portfolio
$5,000,000 max per issuer
3 years
S & P rated AA or
better
6
Corporate Notes - Temporary Liquidity Guarantee Program (TLGP)
20 % Portfolio
30 % Portfolio
$10,000,000 max per issuer
3 years
S&P rated AA or
better.
Professionally Managed Account
10 % Portfolio
100% Portfolio
Requires Approved RFP
3 years
SEC Reg'd; E&O,
7
Fidelity Insured
8
Local Agency Bonds/California Agency Obligations
49"30%
30%
< 130,000,0000
10 years
At least long term
"A, A2, A" rating
17
Formatted Table
Bid
Process
Periodically conduct a bid process at least every four (4) years or sooner if considered necessary for banking and/or
1 custodian services. Since banking services and custodian services are so closely related it is anticipated that the bid
process would include the scope of both services.
2 The financial institutions can be either state or federally chartered and must be insured by the Federal Deposit
Insurance Corporation (FDIC).
3 At least two bids from broker/dealers that qualify under Securities and Exchange Commission Rule 15C3-1 listed on
the "Listing of Approved Financial Institutions" in the appendices.
4 City Council Approval.
5 Money Market mutual funds must comply with Government Code Section 53601(k). The fund must be registered by
the SEC and must include marking the portfolio to market daily.
6 At least two bids from broker/dealers that qualify under Securities and Exchange Commission Rule 15C3-1 listed on
the "Listing of Approved Financial Institutions" in the appendices.
The professional portfolio management firm (PPMF) will be approved by the City Council based upon the City
7 Treasurer's recommendation pursuant to completion of a request for proposal (RFP) as outli ned in the appendices.
See also Footnote 2.
6 Initial offerings the Treasurer may purchase directly from Bond Underwriter, secondary issues follow bid process
3.
Appendix A (continued)
Unauthorized Investments
The City Treasurer will not be permitted to invest in the following types of investments (see Footnote
2 and "State Code Permitted Deposits And Investments Not Authorized By The City's Investment
Policy', below).
Repurchase Agreements
Bankers Acceptances
Mutual Funds other than money market mutual funds
Preferred and Common Stock
State Indebtedness
Asset Backed Securities
Reverse Repurchase Agreements
Derivatives
The above list of unauthorized deposits and investments is not meant to be all-inclusive. Only
those deposits and investments listed in the "Permissible Deposits and Investments" section of
the Policy are permissible.
Footnote 1 The City has imposed a maximum limitation based upon the total portfolio of investments. Total portfolio investments are all cash and investments, including bond proceeds. In addition, the State has adopted limits on the
investment of surplus funds.
Footnote 2 The City may engage the services of a professional portfolio management firm which may invest in Bankers Acceptances, Mutual Funds, and Asset Backed Securities not otherwise permissible under the City's Investment
Policy.
18
Appendix B
Sections:
2.70.010 General rules regarding the investment advisory board.
2.70.020 Number of members.
2.70.030 Qualifications of members.
2.70.040 Powers and duties.
2.70.010 General rules regarding the investment advisory board.
A. Except as set out below, see Chapter 2.06 for General Provisions. (Ord. 516 § 5, 2013)
B. The Investment Advisory Board ("IAB") shall consist of five members appointed by, and
serving at the will of the city council.
C. Applicants for the board should have a background in finance, preferably with knowledge
and/or experience in markets, controls and accounting for securities. Background information will
be requested and potential candidates must agree to a background check and verification.
D. On an annual basis, in conjunction with the Political Reform Act disclosure statutes, or at
any time if a change in circumstances warrants, each board member will provide the City Council
with a disclosure statement which identifies any matters that have a bearing on the
appropriateness of that member's service on the board. Such matters may include, but are not
limited to, changes in employment, changes in residence, or changes in clients.
E. To promote continuity, the expiration of the terms of the members of the board shall be
staggered. The term of service is three years, with one or two terms expiring each year.
2.70.020 Number of members.
The investment advisory board ("IAB") shall consist of five members appointed by, and
serving at the will of the city council. (Ord. 516 § 5, 2013)
2.70.030 Qualifications of members.
A. In addition to the qualification requirements set forth in Section 2.06.040,
applicants for the IAB should have a verifiable background in finance and/or securities,
preferably with knowledge and/or experience in markets, financial controls and
accounting for securities.
B. Background information will be requested and potential candidates must agree
to a background check and verification by the city manager or designee. (Ord. 516 §
5, 2013)
2.70.040 Powers and duties.
A. The principal functions of the IAB are:
1 . Review at least annually the city's investment policy and recommend
appropriate changes;
2. Review monthly the treasury report and note compliance with the
investment policy and adequacy of cash and investments for anticipated
obligations;
3. Receive and consider other reports provided by the city treasurer;
19
4. Meet with the independent auditor after completion of the annual audit
of the city's financial statements, and receive and consider the auditor's
comments on auditing procedures, internal controls, and findings for cash and
investment activities; and
5. Serve as a resource for the city treasurer on matters such as proposed
investments, internal controls, use of change or change of financial
institutions, custodians, brokers and dealers.
B. The IAB will report to the city council after each meeting either in person or
through correspondence at a regular city council meeting. (Ord. 516 § 5, 2013)
(Chapter 2.70 FINANCIAL ADVISORY COMMISSION(
2.70.010 General rules regarding the financial advisory commission.
Except as set out below, see Chapter 2.06 for general provisions.
2.70.020 Number of members.
The financial advisory commission (FAC)("") shall initially consist of seven members
appointed by, and serving at the will of the city council. The city council may increase or
decrease the number of members from time to time but in no event shall the membership
exceed nine members or be less than five members.
2.70.030 Qualifications of members.
A. In addition to the qualification requirements set forth in Section 2.06.040 of this code, a
minimum of three of the members shall be finance professionals and shall have a verifiable
background in finance and/or securities, preferably with knowledge and/or experience in
markets, financial controls and accounting for securities.
B. For those applying for the professional position, background information will be
requested and potential candidates must agree to a background check and verification by
the city manager or designee.
2.70.040 Powers and duties.
A. The principal functions of the FAC are:
1. Review at least annually the city's investment policy and recommend appropriate
changes;
2. Review at least quarterly the treasury report and note compliance with the
investment policy and adequacy of cash and investments for anticipated obligations;
3. Receive and consider other reports provided by the city treasurer;
4. Meet with the independent auditor after completion of the annual audit of the
city's financial statements, and receive and consider the auditor's comments on auditing
procedures, internal controls, and findings for cash and investment activities;
5. Review at least annually the revenue derived from the one percent (1%)
transactions and use tax instituted by voters in November 2016 to ensure these funds are
used to provide services, programs and capital projects in the city of La Quinta.
6. Serve as a resource for the city treasurer on matters such as proposed
investments, internal controls,Juse of change or changelof financial institutions, custodians,
brokers and dealers.
20
Comment [RM9]: Copied from Susan's
attachment that went to Council
Comment [RM10]: Needs to be edited
B. The FACwill report to the city council after each meeting either in person or through
correspondence at a regular city council meeting.
2.70.050 References to the Investment Advisory Board.
If any other chapter(s) or section(s) in this code refers to the Investment Advisory Board,
that chapter(s) or section(s) shall be deemed to refer to the Financial Advisory Commission
established by the ordinance amending chapter 2.70 of this code.
21
N
Appendix C
City of La Quinta Municipal Code
Chapter 3.08
INVESTMENT OF MONEYS AND FUNDS
Sections:
3.08.010 Investment of city moneys and deposit of securities.
3.08.020 Authorized investments.
3.08.030 Sales of securities.
3.08.040 City bonds.
3.08.050 Reports.
3.08.060 Deposits of securities.
3.08.070 Trust fund administration.
3.08.010 Investment of city moneys and deposit of securities.
Pursuant to, and in accordance with, and to the extent allowed by Sections 53607 and 53608 of the California
Government Code, the authority to invest and reinvest moneys of the city, to sell or exchange securities, and
to deposit them and provide for their safekeeping, is delegated to the city treasurer, which, for purposes of this
chapter, is defined in Section 2.12.010 ofthis code. (Ord. 529 § 1, 2015; Ord. 2 § 1, 1982)
3.08.020 Authorized investments.
Pursuant to the delegation of authority in Section 3.08.010, the city treasurer is authorized to purchase, at their
original sale or after they have been issued, securities which are permissible investments under the city
council adopted city investment policy and any provision of state law relating to the investing of general city
funds, including, but not limited to, Sections 53601 and 53635 of the California Government Code, as said
sections now read or may hereafter be amended, from moneys in the city treasurer's custody which are not
required for the immediate necessities of the city and as he or she may deem wise and expedient, and to sell or
exchange for other eligible securities and reinvest the proceeds of the securities so purchased. (Ord. 529 § 1,
2015; Ord. 2 § 1, 1982)
3.08.030 Sales of Securities.
From time to time the city treasurer shall sell the securities in which city moneys have
been invested pursuant to this chapter, so that the proceeds may, as appropriate, be
applied to the purchase for which the original purchase money may have been designated
or placed in the city treasury. (Ord.2 § I (part),
3.08.040 City bonds.
Bonds issued by the city and purchased pursuant to this chapter may be cancelled
either in satisfaction of sinking fund obligations or otherwise if proper and appropriate;
provided, however, that the bonds may be held uncancelled and while so held may be
resold. (Ord. 2 § 1 (part), 1982)
3.08.050 Reports.
The city treasurer shall make a quarterly report to the city council of all investments made pursuant to the
authority delegated in this chapter and as permitted by Section 53646(b)(1) of the Government Code. (Ord.
529 § 1, 2015; Ord. 2 § 1, 1982)
3.08.050 Reports.
The eity treasurer shall Fnake a monthly report to the eity council of a'! investments
rnade pursuan! to the autherity delegated in this ehapter. (Ord. 2 § 1 (part), 19824
3.08.060 Deposits of securities.
Pursuant to the delegation of authority in Section 3.08.010, the city treasurer is authorized to deposit for
safekeeping, the securities in which city moneys have been invested pursuant to this chapter, in any institution
or depository authorized by the city council adopted investment policy and terms of any state law, including,
but not limited to, Section 53608 of the Government Code, as it now reads or may hereafter be amended. In
accordance with said section, the city treasurer shall take from the institution or depository a receipt for the
securities so deposited and shall not be responsible for the securities delivered to and receipted for by the
institution or depository until they are withdrawn therefrom by the city treasurer. (Ord. 529 § 1, 2015; Ord. 2
1 1982
3.08.070 Trust fund administration.
24
Any departmental trust fund established by the city council pursuant to Section
36523 of the Government Code shall be administered by the city treasurer in accordance
with Section 36523 and 26524 36524 of the Government code and any other applicable
provisions of law. (Ord. 2 § 1 (art-', 1982)
25
Appendix D
SEGREGATION OF MAJOR INVESTMENT RESPONSIBILITIES
Function Responsible Parties
Develop and Recommend Modifications Investment Advisory Board
to City's Formal Investment Policy and City Treasurer
Review City's Investment Policy City Manager
and Recommend City Council Action and City Attorney
Adopt Formal Investment Policy City Council
Implement Formal Investment Policy City Treasurer
Review Financial Institutions & Select Investments City Treasurer
Acknowledge Investment Selections
City Manager or his/her
designee
Execute Investment transactions
City Treasurer or City Manager
Confirm Wires (if applicable)
AeGeURtiRg ManageFSenior
Accountant or
Financial Services
A-ss+staRtAnalyst
Record Investment Transactions in City's
Aceounting ManagerSenior
Accountant or
Accounting Records
Financial SeFViees As^:s*^~•
Accountant
Investment Verification (match broker confirmation
City Treasurer and Financial
to City investment records)
Services A-ssistar.tAnalyst
Reconcile Investment Records
to Accounting Records and Bank Statements
Reconcile Investment Records
to Treasurers Report of Investments
Security of Investments at City
26
Financial Services
Assista ntAnalyst
Accountant or Financial
Services Analyst
Accountant or sveRieF
Seere ar-yManagement
Formatted: Indent: Left: 0", Hanging: 4.5'
Formatted: Left, Indent: Left: 0", Hanging:
4.5
Formatted: Indent: Left: 0", Hanging: 4.5"
Formatted, Indent: Left: 0", Hanging: 4.5"
Security of Investments outside City Third Party Custodian
Review Internal Control Procedures External Auditor
27
Appendix E
LISTING OF APPROVED FINANCIAL INSTITUTIONS
1. Banking Services - Wells Fargo Bank, Government Services,
Los Angeles, CA (Banking Services)
Rabobank N.A., Government Banking
Group, Roseville, CA (Collateralized Bank
Deposits)
2. Custodian Services - Bank of New York/Mellon/Pershing
3. Deferred Compensation International City/County Management
Association Retirement Corporation
4. Broker/Dealer Services Banek of America Securities/Merrill
Lynch
Morgan Stanley
CitiGroup
First Empire Securities
5. Government Pool - State of California Local Agency
Investment Fund
6. Bond Trustees - 1996 Lease Revenue Bonds — US Bank
1998 RDA Project Area 1 &2 — US Bank
2001 RDA Project Area 1 — US Bank
2002 RDA Project Area 1 — US Bank
2003 RDA Project Area 1 — US Bank
2004 Local Agency Rev — US Bank
2011 RDA Drojeet Area 2 US Bank
2011 1�uth Housing 1 &2 I IS B- r,L
2013 Successor Agency — US Bank
2016 Successor Agency to the LQ RDA
Assessment Districts — US Bank
Comment [RM11]: I wasn't sure how you
wanted the 2016 bonds worded
28
No Changes to this listing may be made without City Council approval
Appendix F
BROKER/DEALER QUESTIONNAIRE AND CERTIFICATION
1 . Name of Firm:
2. Address:
3. Telephone:) 1 ( 1
4. Broker's Representative to the City (attach resume):
Name:
Title:
Telephone: ( )
5. Manager/Partner-in-charge (attach resume):
Name:
Title:
Telephone:
6. List all personnel who will be trading with or quoting securities to City employees (attach
resume)
Name:
Title:
Telephone: ( ) ( )
7. Which of the above personnel have read the City's Investment Policy?
8. Which instruments are offered regularly by your local office? (Must equal 100%)
% U.S. Treasuries
% BA's
% Commercial Paper
% CD's
% Mutual Funds
% Agencies (specify):
% Repos
% Reverse Repos
% CMO's
% Derivatives
% Stocks/Equities
% Other (specify):
9. References -- Please identify your most directly comparable public sector clients in our
geographical area.
29
Entity Entity
Contact Contact
Telephone ( ) Telephone ( )
Client Since Client Since
10. Have any of your clients ever sustained a loss on a securities transaction arising from a
misunderstanding or misrepresentation of the risk characteristics of the instrument? If so,
explain.
1 1 . Has your firm or your local office ever been subject to a regulatory or state/ federal
agency investigation for alleged improper, fraudulent, disreputable or unfair activities
related to the sale of securities? Have any of your employees been so investigated? If
so, explain.
12. Has a client ever claimed in writing that you were responsible for an investment loss?
Yes No If yes, please provide action taken
Has a client ever claimed in writing that your firm was responsible for an investment
loss? Yes No If yes, please provide action taken
Do you have any current or pending complaints that are unreported to FINRA?
Yes No If yes, please provide action taken
Does your firm have any current, or pending complaints that are unreported to FINRA?
Yes No If yes, please provide action taken
13. Explain your clearing and safekeeping procedures, custody and delivery process.
Who audits these fiduciary responsibilities?
30
Latest Audit Report Date
14. How many and what percentage of your transactions failed?
Last month? % $
Last year? % $
15. Describe the method your firm would use to establish capital trading limits for the City of
La Quinta.
16. Is your firm a member in the S.I.P.C. insurance program? Yes No
If yes, explain primary and excess coverage and carriers.
17. What portfolio information, if any, do you require from your clients?
18. What reports and transaction confirmations or any other research publications will the City
receive?
19. Does your firm offer investment training to your clients? Yes No
20. Does your firm have professional liability insurance? Yes No
If yes, please provide the insurance carrier, limits and expiration date.
21
22
23
24
25
Please list your FINRA/NASD Registration Number
Do you have any relatives who work at the City of La Quinta?
Yes No If yes, Name and Department
Do you maintain an office in California? Yes No
Do you maintain an office in La Quinta or Riverside County? Yes No
Please enclose the following:
► Latest audited financial statements;
► Samples of reports, transaction confirmations and any other research/publications the
City will receive;
► Samples of research reports and/or publications that your firm regularly provides to
clients; and
► Complete schedule of fees and charges for various transactions.
31
`CERTIFICATION...
*CERTIFICATION
I hereby certify that I have personally read the Statement of Investment Policy of the City of La
Quinta, and have implemented reasonable procedures and a system of controls designed to
preclude imprudent investment activities arising out of transactions conducted between our firm
and the City of La Quinta. All sales personnel will be routinely informed of the City's investment
objectives, horizons, outlooks, strategies and risk constraints whenever we are so advised by the
City. We pledge to exercise due diligence in informing the City of La Quinta of all foreseeable
risks associated with financial transactions conducted with our firm.
By signing this document the City of La Quinta is authorized to conduct any and all background
checks.
Under penalties of perjury, the responses to this questionnaire are true and accurate to the best of
my knowledge.
Broker Representative
Date Title
Sales Manager and/or Managing Partner*_
Date Title
32
Appendix G
Request for Proposals
Professional Portfolio Management Firm
City of La Quinta, CA
The City of La Quinta, CA is soliciting Requests for Proposals (RFP) from interested firms for the
provision of a discretionary investment management services for City of La Quinta, CA. The
portfolio to be managed of the invested assets is will be approximately 10% of the City's
investment portfolio and will be invested between 0 — 3 years.
The investment of City of La Quinta, CA's funds is guided by the applicable State statutes and
the City of La Quinta, CA's investment policy. A copy of the investment policy is attached for
your information.
Questions regarding this RFP should be directed to:
Name: Rita Conrad
Title: Finance Director/Treasurer
City of: La Quinta, CA
Address: 78-495 Calle Tampico
City, State, Zip Code: La Quinta, CA 92253
Phone Number: (760)777-7150
I. CRITERIA FOR EVALUATION AND SELECTION
■ Experience of the firm in providing services to public sector entities of similar size
and with similar investment objectives;
■ Professional experience and qualifications of the individuals assigned to the
account;
■ Portfolio management resources, investment philosophy and approach;
■ Responsiveness to the RFP, communicating an understanding of the overall
program and services required;
■ Reporting capabilities;
■ Fees.
II. SELECTION TIMETABLE
A. [Month, Day and Year] Proposals due by [Time] PST.
B. [Month, Day and Year] Proposals evaluated: to be determined
C. [Month, Day and Year] [City of La Quinta, CA] [Board/Council] approves selection
and awards contract.
III. FORMAT FOR PROPOSALS
Please format your response to this RFP in the following manner:
A. Organization
33
1. Describe your organization, date founded, ownership and other business
affiliations. Provide number and location of affiliated offices. Specify the number
of years your organization has provided investment management service.
2. Describe your firm's revenue sources (e.g., investment management, institutional
research, etc.) and comment on your firm's financial condition.
3. Within the past three years, have there been any significant developments in your
organization (e.g., changes in ownership, new business ventures)? Do you expect
any changes in the near future?
4. Describe any U.S. Securities and Exchange Commission (SEC) censures or litigation
involving your organization, any officer, or employee at any time in the last ten
years.
5. Describe the firm's fiduciary liability and/or errors and omissions insurance
coverage. Include dollar amount of coverage.
B. Personnel
1 . Identify the number of professionals employed by your firm by classification.
2. Provide an organization chart showing function, positions, and titles of all the
professionals in your organization.
3. Provide biographical information on investment professionals that will be involved
in the decision -making process for our portfolio, including number of years at your
firm. Identify the person who will be the primary portfolio manager assigned to the
account.
4. Describe your firm's compensation policies for investment professionals and
address any incentive compensation programs.
C. Assets Under Management
1. Summarize your institutional investment management asset totals by category for
your latest reporting period in the following table:
Other Restrictive
Number Number of Funds
of Clients Operating Funds Clients
Governmental $ $
Governmental Pension $ N/A N/A
Non Governmental $
Pension
34
N/A N/A
Corporate $ N/A N/A
High Net Worth Client $ N/A N/A
Endowmental/Foun- $ N/A N/A
dation
2. Provide the number of separate accounts whose portfolios consist of operating
funds.
3. List in the following table the percentage by market value of aggregate assets
under all governmental accounts under management for your latest reporting
period:
Type of Asset Percent by Market
Value
U.S. Treasury securities
Federal Agency obligations
Corporate securities rated AAA -AA
Corporate securities rated A
Corporate securities rated BBB or
lower
Other
(specify )
4. Describe the procedures that your firm has in place to address the potential or
actual credit downgrade of an issuer and to disclose and advise a client of the
situation.
5. Provide data on account/asset growth over the past five years. Indicate the
number of government accounts gained and the number of government accounts
lost.
6. List your five governmental largest clients. Identify those that are exclusively
operating fund relationships and/or those that are other relationships (e.g., bond
fund, retirement fund)•
7. Provide a copy of the firm's Form ADV, Parts I and II (including all schedules)•
8. Provide proof of State of California Registration, if your firm is not eligible for SEC
registration.
9. Provide a sample contract for services.
35
D. Philosophy/Approach
1 . Describe your firm's investment philosophy for public clients, including your firm's
philosophy regarding average duration, maturity, investment types, credit quality,
and yield.
2. Describe in detail your investment process, as you would apply it to City of La
Quinta, CA's portfolio.
3. What are the primary strategies for adding value to portfolios?
4. Describe the process you would recommend for establishing the investment
objectives and constraints for this account.
5. Describe in detail your process of credit risk management, including how you
analyze credit quality, monitor credits on an ongoing basis, and report credit to
governmental accounts.
6. Describe your firm's trading methodology.
7. Describe your firm's decision -making process in terms of structure, committees,
membership, meeting frequency, responsibilities, integration of research ideas, and
portfolio management.
8. Describe your research capabilities as they would pertain to governmental
accounts. What types of analysis do you use?
9. Describe the firm's approach to managing relationships with the broker -dealer
community.
E. Portfolio Management
1 . Are portfolios managed by teams or by one individual?
2. What is the average number of accounts handled per manager?
3. Which professional staff member will be the primary client contact for City of La
Quinta, CA?
4. How frequently are you willing to meet with us?
5. Describe procedures used to ensure that portfolios comply with client investment
objectives, policies, and bond resolutions.
F. Fees Charged
1. Please include a copy of your firm's fee schedule applicable to this RFP.
2. Identify any expenses that would not be covered through this fee structure and
would be required in order to implement the firm's program.
36
3. Is there a minimum annual fee?
G. Performance Reporting
1. Please report on all accounts under $100 million.
2. Please provide performance history for governmental accounts for the last five
years.
3. Please provide risk measurements for governmental accounts for the last five
years.
4. Indicate whether your returns are calculated and compiled in accordance with
the Association for Investment Management and Research (AIMR/CFA Institute)
standards.
5. Do your reports conform to the State of California reporting standards? Are you
willing to customize your reports to meet our specifications?
6. How will you notify us of investment transactions?
7. Are confirmations of investment transactions sent directly by the broker/dealer to
the client?
8. Do your reports include rating information on investments which is required by
GASB 40?
H. References
Provide a list of at least five (5) client references in California. References should be
public agencies with portfolio size and investment objectives similar to City of La Quinta,
CA. Include length of time managing the assets, contact name, and phone number.
I. Insurance Requirements
Exhibit A defines the insurance requirements that will need to be met prior to the
[Board/Council]'s approval of any agreement for services.
J. Submittal of proposals
1. Seven (7) copies of the proposal shall be submitted in a sealed envelope bearing
the caption RFP for (City of La Quinta, CA) and addressed to:
City of La Quinta, CA
78-495 Calle Tampico
La Quinta, CA 92253
Attention: Rita Conrad, Finance Director/Treasurer
37
Proposal must be received no later than [Time] PST on [Month, Day, and Year].
Proposals should be verified before submission. The City of La Quinta, CA shall
not be responsible for errors or omissions on the part of the respondent in
preparation of a proposal. The City of La Quinta, CA reserves the right to reject
any and all proposals, to wave any irregularities, or informalities in the
proposals, and to negotiate modifications to any proposal.
Enclosures: Investment Policy
Treasurers Report
38
Appendix H
City of La Quinta
Permissible Investment Chart - Professional Portfolio Management Firm
(1) (2) (3) (4) (5) (6) (7) (8)
California
Government
Code Section
Investment Category
Maximum
Maturity
Authorized Investment
Limits (% of Portfolio)
Credit
Rating
Limits
Comments
Allowed per
City Policy
Allowed per
Professional Portfolio
Management Firm
53601(a)
Local Agency Bonds
5 Years
None
None
No
No
53601(c)
State of California Obligations
5 Years
None
None
No
No
53601(d)
CA Local Agency Obligations
5 Years
None
Multiple
No
No
53601(i)
Repurchase Agreements
1 Year
None
None
No
No
53601(i)
Reverse Repurchase Agreements
92 Days
20% of the base value of the portfolio
None
No
No
53601(i)
Securities Lending Agreements
92 Days
20% of the base value of the portfolio
None
No
No
53684
County Pooled Investments
None
None
None
No
No
53632
Interest bearing active deposits
None
None
None
Collateralized 110%
Yes
Yes
53601(f)
Bankers Acceptances
180 Days
40%
None
"AX or better
No
Yes
53601(h)
Negotiable CD's
5 Years
30 %
None
Yes
Yes
53601(k)
Mutual Funds
None
20%
Multiple
No
Yes
53601(n)
Asset Backed Securities
5 Years
20%
AA
No
Yes
Cash and Equivalents
None
None
None
Yes
Yes
16429.1
LAIF
None
None
None
Yes
No
53601(b)
US Treasuries
5 Years
None
None
Yes
Yes
53601(e)
US Agencies
5 Years
None
None
Yes
Yes
53601(g), 53635
Commercial Paper
270 Days
25% of portfolio
A-1 I P-1 I F-1
Yes
Yes
53601(k)
Medium Term Notes
5 Years
30%
A
Yes
Yes
Money Market Mutual Funds
None
20%
Multiple
Yes
Yes
53601(m)
Time Deposits
5 Years
None
None
Yes
Yes
Collateralized Bank Deposits
(including non-negotiable CD's)
5 Years
None
None
Yes
Yes
Source of Columns (1) through (5) - Investment: Investment Portfolio Reporting Practices CA Debt and Investment Advisory Commission.
Note: The Professional Portfolio management Firm (PPMF) is not required to adhere to the City's buy and hold policy and does not need City Manager or City Treasurer approval to make permissible
deposits and investments as detailed in column (8).
39
Appendix I
Investment Management Process and Risk
Except as provided for in Section 27000.3, Government Code Section 53600.3 declares as a
trustee each person, treasurer, or governing body authorized to make investment decisions on
behalf of local agencies. As trustees are subject to the prudent investor standard. These persons
shall act with care, skill, prudence, and diligence under the circumstances then prevailing when
investing, reinvesting, purchasing, acquiring, exchanging, selling, and managing funds. Section
53600.5 further stipulates that the primary objective of any person investing public funds is to
safeguard principal; secondly, to meet liquidity needs of the depositor; and lastly, to achieve a
return or yield on invested funds (Government Code Section 27000.5 specifies the same
objectives for county treasurers and board of supervisors).
Risk is inherent throughout the investment process. There is investment risk associated with any
investment activity and opportunity risk related to inactivity. Market risk is derived from exposure
to overall changes in the general level of interest rates while credit risk is the risk of loss due to
the failure of the insurer of a security. The market value of a security varies inversely with the
level of interest rates. If an investor is required to sell an investment with a five percent yield in a
comparable seven percent rate environment, that security will be sold at a loss. The magnitude of
that loss will depend on the amount of time until maturity.
Purchasing certain allowable securities with a maturity of greater than five years requires approval
of the governing board (see Government Code Section 53601). Part of that approval process
involves assessing and disclosing the risk and possible volatility of longer -term investments
Another element of market risk is liquidity risk. Instruments with unique call features or special
structures, or those issued by little known companies, are examples of "story bonds" and are
often thinly traded. Their uniqueness often makes finding prospective buyers in a secondary
market more difficult and, consequently, the securities' marketability and price are discounted.
However, under certain market conditions, gains are also possible with these types of securities.
Default risk represents the possibility that the borrower may be unable to repay the obligation as
scheduled. Generally, securities issued by the federal government and its agencies are considered
the most secure, while securities issued by private corporations or negotiable certificates of
deposit issued by commercial banks have a greater degree of risk. Securities with additional credit
enhancements, such as bankers acceptances, collateralized repurchase agreements and
collateralized bank deposits are somewhere between the two on the risk spectrum.
The vast majority of portfolios are managed within a buy and hold policy. Investments are
purchased with the intent and capacity to hold that security until maturity. At times, market
forces or operations may dictate swapping one security for another or selling a security before
maturity. Continuous analysis and fine tuning of the investment portfolio are considered prudent
investment management.
The Government Code contains specific provisions regarding the types of investments and
practices permitted after considering the broad requirement of preserving principal and
maintaining liquidity before seeking yield. These provisions are intended to promote the use of
reliable, diverse, and safe investment instruments to better ensure a prudently managed portfolio
worthy of public trust.
Chapter II. Fund Management
Local Agency Investment Guidelines 2010 Issued by California Debt and Investment Advisory Commission
40
Appendix J
GLOSSARY
(Adopted from the Municipal Treasurers Association)
The purpose of this glossary is to provide the reader of the City of La Quinta investment
policies with a better understanding of financial terms used in municipal investing.
AGENCIES: Federal agency securities and/or
Government -sponsored enterprises.
ASKED: The price at which securities are offered
BANKERS' ACCEPTANCE (BA): A draft or bill or
exchange accepted by a bank or trust company.
The accepting institution guarantees payment of
the bill, as well as the issuer.
BID: The price offered by a buyer of securities.
(When you are selling securities, you ask for a
bid.) See Offer.
BROKER: A broker brings buyers and sellers
together for a commission.
CERTIFICATE OF DEPOSIT (CD): A time deposit
with a specific maturity evidenced by a
certificate. Large -denomination CD's are typically
negotiable.
COLLATERAL: Securities, evidence of deposit or
other property which a borrower pledges to
secure repayment of a loan. Also refers to
securities pledged by a bank to secure deposits of
public monies.
COMMERCIAL PAPER: Short-term unsecured
promissory notes issued by a corporation to raise
working capital. These negotiable instruments
are purchased at a discount to par value or at par
value with interest bearing. Commercial paper is
issued by corporations such as General Motors
Acceptance Corporation, IBM, Bank America, etc.
COMPREHENSIVE ANNUAL FINANCIAL REPORT
(CAFR): The official annual report for the City of
La Quinta. It includes five combined statements
for each individual fund and account group
prepared in conformity with GAAP. It also
includes supporting schedules necessary to
demonstrate compliance with finance -related
legal and contractual provisions, extensive
41
introductory material, and a detailed Statistical
Section.
CONDUIT FINANCING: A form of Financing in
which a government or a government agency
lends its name to a bond issue, although it is
acting only as a conduit between a specific project
and bond holders. The bond holders can look only
to the revenues from the project being financed
for repayment and not to the government or
agency whose name appears on the bond.
COUPON: (a) The annual rate of interest that a
bond's issuer promises to pay the bondholder on
the bond's face value. (b) A certificate attached
to a bond evidencing interest due on a payment
date.
DEALER: A dealer, as opposed to a broker, acts as
a principal in all transactions, buying and selling
for his own account.
DEBENTURE: A bond secured only by the general
credit of the issuer.
DELIVERY VERSUS PAYMENT: There are two
methods of delivery of securities: delivery versus
payment and delivery versus receipt. Delivery
versus payment is delivery of securities with an
exchange of money for the securities. Delivery
versus receipt is delivery of securities with an
exchange of a signed receipt for the securities.
DERIVATIVES: (1) Financial instruments whose
return profile is linked to, or derived from, the
movement of one or more underlying index or
security, and may include a leveraging factor, or
(2) financial contracts based upon notional
amounts whose value is derived from an
underlying index or security (interest rates, foreign
exchange rates, equities or commodities).
DISCOUNT: The difference between the cost price
of a security and its maturity when quoted at
lower than face value. A security selling below
original offering price shortly after sale also is
considered to be at a discount.
DISCOUNT SECURITIES: Non -interest bearing
money market instruments that are issued a
discount and redeemed at maturity for full face
value, e.g., U.S. Treasury Bills.
DIVERSIFICATION: Dividing investment funds
among a variety of securities offering
independent returns.
FEDERAL CREDIT AGENCIES: Agencies of the
Federal government set up to supply credit to
various classes of institutions and individuals,
e.g., S&L's, small business firms, students,
farmers, farm cooperatives, and exporters.
FNMAs (Federal National Mortgage
Association) - Like GNMA was chartered
under the Federal National Mortgage
Association Act in 1938. FNMA is a federal
corporation working under the auspices of the
Department of Housing and Urban
Development (HUD). It is the largest single
provider of residential mortgage funds in the
United States. Fannie Mae, as the corporation
is called, is a private stockholder -owned
corporation. The corporation's purchases
include a variety of adjustable mortgages and
second loans, in addition to fixed-rate
mortgages. FNMA's securities are also highly
liquid and are widely accepted. FNMA
assumes and guarantees that all security
holders will receive timely payment of
principal and interest.
2. FHLBs (Federal Home Loan Bank Notes and
Bonds) - Issued by the Federal Home Loan
Bank System to help finance the housing
industry. The notes and bonds provide
liquidity and home mortgage credit to savings
and loan associations, mutual savings banks,
cooperative banks, insurance companies, and
mortgage -lending institutions. They are
issued irregularly for various maturities. The
minimum denomination is $5,000. The notes
are issued with maturities of less than one
year and interest is paid at maturity.
kIK
FLBs (Federal Land Bank Bonds) - Long-term
mortgage credit provided to farmers by Federal
Land Banks. These bonds are issued at
irregular times for various maturities ranging
from a few months to ten years. The
minimum denomination is $1,000. They carry
semi-annual coupons. Interest is calculated on
a 360-day, 30 day month basis.
FFCBs (Federal Farm Credit Bank) - Debt
instruments used to finance the short and
intermediate term needs of farmers and the
national agricultural industry. They are issued
monthly with three- and six-month maturities.
The FFCB issues larger issues (one to ten
year) on a periodic basis. These issues are
highly liquid.
FICBs (Federal Intermediate Credit Bank
Debentures) - Loans to lending institutions
used to finance the short-term and
intermediate needs of farmers, such as
seasonal production. They are usually issued
monthly in minimum denominations of $3,000
with a nine -month maturity. Interest is
payable at maturity and is calculated on a 360-
day, 30-day month basis.
FHLMCs (Federal Home Loan Mortgage
Corporation) - a government sponsored entity
established in 1970 to provide a secondary
market for conventional home mortgages.
Mortgages are purchased solely from the
Federal Home Loan Bank System member
lending institutions whose deposits are insured
by agencies of the United States Government.
They are issued for various maturities and in
minimum denominations of $10,000. Principal
and interest is paid monthly. Other federal
agency issues are Small Business
Administration notes (SBA's), Government
National Mortgage Association notes
(GNMA's), Tennessee Valley Authority notes
(TVA's), and Student Loan Association notes
(SALLIE-MAE's)•
FEDERAL DEPOSIT INSURANCE
CORPORATION (FDIC): A federal agency that
insures bank deposits, currently up to
$250,000 per deposit through December 31,
2013.
FEDERAL FUNDS RATE: The rate of interest at
which Fed funds are traded. This rate is currently
pegged by the Federal Reserve through open -
market operations.
FEDERAL HOME LOAN BANKS (FHLB):
Government sponsored wholesale banks
(currently 12 regional banks) which lend funds
and provide correspondent banking services to
member commercial banks, thrift institutions,
credit unions and insurance companies. The
mission of the FHLBs is to liquefy the housing
related assets of its members who must purchase
stock in their district Bank.
FEDERAL OPEN MARKET COMMITTEE (FOMC):
Consists of seven members of the Federal
Reserve Board and five of the twelve Federal
Reserve Bank Presidents. The President of the
New York Federal Reserve Bank is a permanent
member, while the other Presidents serve on a
rotating basis. The Committee periodically meets
to set Federal Reserve guidelines regarding
purchases and sales of Government Securities in
the open market as a means of influencing the
volume of bank credit and money.
FEDERAL RESERVE SYSTEM: The central bank of
the United States created by Congress and
consisting of a seven member Board of Governors
in Washington, D.C., 12 regional banks and about
5,700 commercial banks that are members of the
system.
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION (GNMA or Ginnie Mae): Securities
influencing the volume of bank credit guaranteed
by GNMA and issued by mortgage bankers,
commercial banks, savings and loan associations,
and other institutions. Security holder is
protected by full faith and credit of the U.S.
Government. Ginnie Mae securities are backed
by the FHA, VA or FMHM mortgages. The term
"pass-throughs" is often used to describe Ginnie
Maes.
LAIF (Local Agency Investment Fund) - A special
fund in the State Treasury which local agencies
may use to deposit funds for investment. There
is no minimum investment period and the
minimum transaction is $5,000, in multiples of
$1,000 above that, with a maximum balance of
43
$50,000,000 for any agency. The City is
restricted to a maximum of ten transactions per
month. It offers high liquidity because deposits
can be converted to cash in 24 hours and no
interest is lost. All interest is distributed to those
agencies participating on a proportionate share
basis determined by the amounts deposited and
the length of time they are deposited. Interest is
paid quarterly. The State retains an amount for
reasonable costs of making the investments, not
to exceed one-half of one percent of the earnings.
LIQUIDITY: A liquid asset is one that can be
converted easily and rapidly into cash without a
substantial loss of value. In the money market, a
security is said to be liquid if the spread between
bid and asked prices is narrow and reasonable size
can be done at those quotes.
LOCAL GOVERNMENT INVESTMENT POOL (LGIP):
The aggregate of all funds from political
subdivisions that are placed in the custody of the
State Treasurer for investment and reinvestment
MARKET VALUE: The price at which a security is
trading and could presumably be purchased or
sold.
MASTER REPURCHASE AGREEMENT: A written
contract covering all future transactions between
the parties to repurchase --reverse repurchase
agreements that establishes each party's rights in
the transactions. A master agreement will often
specify, among other things, the right of the
buyer -lender to liquidate the underlying securities
in the event of default by the seller -borrower.
MATURITY: The date upon which the principal or
stated value of an investment becomes due and
payable
MONEY MARKET: The market in which short-term
debt instruments (bills, commercial paper,
bankers' acceptances, etc.) are issued and traded.
OFFER: The price asked by a seller of securities.
(When you are buying securities, you ask for an
offer.) See Asked and Bid.
OPEN MARKET OPERATIONS: Purchases and
sales of government and certain other securities in
the open market by the New York Federal Reserve
Bank as directed by the FOMC in order to
influence the volume of money and credit in the
economy. Purchases inject reserves into the
bank system and stimulate growth of money and
credit; sales have the opposite effect. Open
market operations are the Federal Reserve's most
important and most flexible monetary policy tool.
PORTFOLIO: Collection of all cash and securities
under the direction of the City Treasurer,
including Bond Proceeds.
PRIMARY DEALER: A group of government
securities dealers who submit daily reports of
market activity and positions and monthly
financial statements to the Federal Reserve Bank
of New York and are subject to its informal
oversight. Primary dealers include Securities and
Exchange Commission (SEC) -registered securities
broker -dealers, banks and a few unregulated
firms.
QUALIFIED PUBLIC DEPOSITORIES: A financial
institution which does not claim exemption from
the payment of any sales or compensating use or
ad valorem taxes under the laws of this state,
which has segregated for the benefit of the
commission eligible collateral having a value of
not less than its maximum liability and which has
been approved by the Public Deposit Protection
Commission to hold public deposits.
RATE OF RETURN: The yield obtainable on a
security based on its purchase price or its current
market price. This may be the amortized yield to
maturity on a bond the current income return.
REPURCHASE AGREEMENT (RP OR REPO): A
holder of securities sells these securities to an
investor with an agreement to repurchase them
at a fixed price on a fixed date. The security
"buyer" in effect lends the "seller" money for the
period of the agreement, and the terms of the
agreement are structured to compensate him for
this. Dealers use RP extensively to finance their
positions. Exception: When the Fed is said to be
doing RP, it is lending money that is increasing
bank reserves.
REVERSE REPURCHASE AGREEMENTS (RRP or
RevRepo) - A holder of securities sells these
securities to an investor with an agreement to
44
repurchase them at a fixed price on a fixed date.
The security"buyer" in effect lends the"seller"
money for the period of the agreement, and the
terms of the agreement are structured to
compensate him for this. Dealers use RRP
extensively to finance their positions. Exception:
When the Fed is said to be doing RRP, it is lending
money that is increasing bank reserves.
SAFEKEEPING: A service to customers rendered
by banks for a fee whereby securities and
valuables of all types and descriptions are held in
the bank's vaults for protection.
SECONDARY MARKET: A market made for the
purchase and sale of outstanding issues following
the initial distribution.
SECURITIES & EXCHANGE COMMISSION: Agency
created by Congress to protect investors in
securities transactions by administering securities
legislation.
SEC RULE 15C3-1: See Uniform Net Capital Rule.
STRUCTURED NOTES: Notes issued by
Government Sponsored Enterprises (FHLB, FNMA,
SLMA, etc.) and Corporations which have
imbedded options (e.g., call features, step-up
coupons, floating rate coupons, and derivative -
based returns) into their debt structure. Their
market performance is impacted by the fluctuation
of interest rates, the volatility of the imbedded
options and shifts in the shape of the yield curve.
SURPLUS FUNDS: Section 53601 of the California
Government Code defines surplus funds as any
money not required for immediate necessities of
the local agency. The City has defined immediate
necessities to be payment due within one week.
TREASURY BILLS: A non -interest bearing discount
security issued by the U.S. Treasury to finance the
national debt. Most bills are issued to mature in
three months, six months or one year.
TREASURY BONDS: Long-term coupon -bearing
U.S. Treasury securities issued as direct
obligations of the U.S. Government and having
initial maturities of more than 10 years.
TREASURY NOTES: Medium -term coupon -bearing
U.S. Treasury securities issued as direct
obligations of the U.S. Government and having
initial maturities from two to 10 years.
UNIFORM NET CAPITAL RULE: Securities and
Exchange Commission requirement that member
firms as well as nonmember broker -dealers in
securities maintain a maximum ratio of
indebtedness to liquid capital of 15 to 1; also
called net capital rule and net capital ratio.
Indebtedness covers all money owed to a firm,
including margin loans and commitments to
purchase securities, one reason new public issues
are spread among members of underwriting
syndicates. Liquid capital includes cash and
assets easily converted into cash.
UNIFORM PRUDENT INVESTOR ACT: The State
of California has adopted this Act. The Act
contains the following sections: duty of care,
diversification, review of assets, costs,
compliance determinations, delegation of
investments, terms of prudent investor rule, and
application.
YIELD: The rate of annual income return on an
investment, expressed as a percentage. (a)
INCOME YIELD is obtained by dividing the current
dollar income by the current market price for the
security. (b) NET YIELD or YIELD TO MATURITY
is the current income yield minus any premium
above par or plus any discount from par in
purchase price, with the adjustment spread over
the period from the date of purchase to the date
of maturity of the bond.
45
City of La Quinta
INVESTMENT ADVISORY BOARD MEETING
DEPARTMENT REPORT
TO: Honorable Chair and Investment Advisory Board Members
FROM: Karla Campos, Finance Director
DATE: March 27, 2017
SUBJECT: Third Quarter 2016 (July - September 2016) Sales Tax Update for the City
of La Quinta
The following report was prepared by HdL Companies, the City's sales tax consultant,
as the Winter 2017 update of fourth quarter sales tax receipts for third quarter sales
from July to September 2016.
Highlights
Generally all major business groups, except fuel and service stations, have
experienced an increase of sales in comparison to the third quarter of 2015.
City of La Quinta sales per capita were in line with the state and slightly higher
than the county average.
Consumer goods (such as department stores) and restaurants made up 56% of
sales tax revenue during this quarter.
Statewide the countywide use tax allocation pools contributed the largest
portion of the sales tax increase reflecting the acceleration of online shopping.
Statewide fuel and service stations had a significant drop in sales.
Industry analysts, economic think tanks, and trade associations indicate a
leveling off of sales tax growth that the state has enjoyed for the last six years.
There has been a shift in consumer preferences towards spending more on
services rather than goods, digital downloading of previously taxable products
and rising health care and housing costs will be a drag on sales of consumer
goods.
The growing strength of the dollar and recent criticisms of trade agreements
and immigrants could reduce international tourism.
The City continuously monitors local development, statewide economic conditions,
international impacts on travel and trade, as well as significant shifts in sales to non-
traditional sources (such as online purchases).
Attachment 1: City of La Quinta Sales Tax Update
City of La Quinta
Sales Tax Update
Fourth Quarter Receipts for TbirdQuarter Sales (July - September 2016)
SALES TAX BY MAJOR BUSINESS GROUP
$700,000
Restaurants Autos County Building Fuel and
and and and State and Service
Hotels Transportation Pools Construction Stations
%rco AM PM
Marshalls
3ed Bath & Beyond
Okura Robata Grill &
3est Buy
Sushi Bar
;hevrolet Cadillac of
Roadrunner Pools
La Quinta
Ross
circle K
Stater Bros
'ostco
Stein Mart
& M Oil
Synergy Information
lome Depot
Solutions
lyundai of La
Target
Quinta
Torre Nissan
n N Out Burgers
Verizon Wireless
<ohls
Village Market
_a Quinta Resort &
Walmart
Club
Supercenter
_owes
3rd Quarter 2015
■ 3rd Quarter 2016
0
Food
and
Drugs
Business
and
Industry
REVENUE COMPARISON
Two Quarters — Fiscal Year To Date
2015-16
2016-17
Point -of -Sale
$3,216,192
$3,403,265
County Pool
358,435
412,067
State Pool
1,734
1,160
Gross Receipts
$3,576,362
$3,816,492
Less Triple Flip*
$(894,090)
$0
*Reimbursed from county compensation fund
Published by HdL Companies in Winter 2017 Hd�s�
www.hdlcompanies.com 1 888.861.0220 CC 0 M P A N I E S
Statewide Results
Statewide local sales and use taxes from
transactions occurring July through
September were up 1.9% over the
same third sales quarter of 2015 after
factoring for accounting anomalies.
The countywide use tax allocation pools
contributed the largest portion of the
increase reflecting the acceleration in
online shopping where most orders are
shipped from out-of-state. Automotive
group receipts rose 5.4% over the year-
ago period although more than half of
the increase was from a specific electric
car manufacturer. Higher returns
from restaurants and sales of building/
construction materials also contributed
to the statewide gain.
The gains were significantly offset by a
14.6% drop in receipts from fuel and
service stations and a generally flat
quarter for other economic segments.
General consumer goods grew less
than 1%. Value priced clothing, pet
shops, cosmetics and dollar stores were
among the few bright spots.
Business and industrial tax revenue was
down 1.9%. Relatively healthy sales
of agricultural and medical/biotech
supplies could not overcome the decline
in new alternative energy projects and
a flat quarter for most other categories.
The Year Ahead
The consensus from dozens of industry
analysts, economic think tanks and trade
associations is for a leveling off in the rate
of sales tax growth that the state has en-
joyed for the last six years.
Manufacturer incentives are expected
to produce lower gains from new vehi-
cle purchases through the end of 2016
and it is believed that dealers are now
borrowing from 2017 sales. Vehicle sales
are expected to drop in 2017-18 but the
trend toward higher priced vehicles loaded
with options could maintain tax revenues
close to current levels.
Consumer preferences toward spending
more on services rather than goods, digital
downloading of previously taxable prod-
ucts and rising health care and housing
costs will be a drag on sales of consumer
goods.
Receipts from fuel and service stations
may be one of the largest gainers in 2017-
18. New Middle East agreements on pro-
duction caps are raising crude oil prices
while California's limited refinery capacity
and the trend toward less fuel -efficient
SUV's and trucks have analysts believing
that prices have finally leveled out and
will rise through the year.
Continuing gains from restaurants are
also expected although at lower than
previous rates because of reduced grocery
prices and the cost of eating at home. The
growing strength of the dollar and recent
criticisms of trade agreements and immi-
grants could reduce international tourism.
It usually takes up to two years for new
stimulus programs to be reflected in sales
tax receipts. As many of the coming ad-
ministration's proposals related to trade,
immigration, health services and the en-
vironment present potential issues for a
significant number of California indus-
tries, delays in major construction projects
and business/industrial investments are
expected until these are sorted out.
HdL's current forecast is for a statewide
increase of 2.5% in 2016-17 and 3.4% in
2017-18 compared to a year earlier.
$8,000
$6,000
$4, 000
$2,000
$0
Q3 Q3 03 Q3
13 14 15 16
La Quinta County California
Cons.Goods Restaurants
In thousands of dollars
La Quinta
Business Type
Q3'16`
Change
Casual Dining
135.9
28.0%
Department Stores
-CONFIDENTIAL-
Discount Dept Stores
- CONFIDENTIAL-
Electronics/Appliance Stores
81.1
4.8%
Family Apparel
35.2
7.5%
Fast -Casual Restaurants
25.7
1.3%
Fine Dining
20.9
30.9%
Grocery Stores
48.8
7.4%
Home Furnishings
41.4
19.2%
Hotels -Liquor
-CONFIDENTIAL-
Lumber/Building Materials
-CONFIDENTIAL-
New Motor Vehicle Dealers
-CONFIDENTIAL-
Quick-Service Restaurants
53.9
17.4%
Service Stations
82.1
-20.3%
Specialty Stores
32.2
7.2%
Total All Accounts
1,513.2
4.6%
County & State Pool Allocation
186.4
17.6%
Gross Receipts
1,699.5
5.9%
6% 10%
County
Change
10.9%
2.4%
-0.7%
1.5%
4.7%
7.6%
32.7%
-4.7%
0.4%
25.2%
13.5%
3.3%
12.7%
-15.1 %
-0.5%
4.1 %
17.0%
5.4%
HdL State
Change
4.5%
-2.3%
-0.4%
-1.5%
5.9%
4.9%
11.9%
-2.1 %
-0.2%
5.5%
6.9%
4.8%
8.9%
-13.8%
2.0%
0.9%
11.5%
2.2%
\utos/Trans.
13%
City of La Quinta
INVESTMENT ADVISORY BOARD MEETING
DEPARTMENT REPORT
TO: Honorable Chair and Investment Advisory Board Members
FROM: Karla Campos, Finance Director
DATE: March 27, 2017
SUBJECT: Rules of Procedure - Council, Boards and Commission Meetings
The City Clerk requested distribution of the Rules of Procedures that apply to Boards
and Commission to the Investment Advisory Board as a reference for the conduct of
meetings.
The rules were adopted by the City Council on June 2, 2015 and include procedures for
meeting minutes, adding items to the agenda, conflicts of interest, and voting
procedures. Staff is available to answer questions.
Attachment 1: Rules and Procedure (Resolution 2015-023)
ATTACHMENT 1
RESOLUTION NO. 2015 - 023
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA
QUINTA, CALIFORNIA, ADOPTING AMENDED AND
RESTATED RULES OF PROCEDURE FOR COUNCIL MEETINGS
AND RELATED FUNCTIONS AND ACTIVITIES
WHEREAS, Section 2.04.040 of the La Quinta Charter and Municipal Code and
State Government Code Section 54954(a) requires that the City Council adopt Rules of
Procedure to govern the conduct of its meetings and any of its other functions and
activities, and regulations pertaining thereto; and
WHEREAS, due to changes in law, policy and/or practice, Council Rules of
Procedure require examination and updating from time to time; and
WHEREAS, this resolution supersedes all previous City Council Resolutions
adopting Rules of Procedure,
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City'of La Quinta,
California, that the Rules of Procedure for City Council Meetings and Related Functions
and Activities attached hereto as Exhibit A are hereby adopted.
PASSED, APPROVED, and ADOPTED at a regular meeting of the La Quinta City
Council held on this 2nd day of June, 2015 by the following vote:
AYES: Council Members Franklin, Osborne, Pena, Radi, Mayor Evans
NOES: None
ABSENT: None
ABSTAIN: None
r
LINDA EVANS, Mayor
City of La Quinta, California
Resolution No. 2015-023
Amended and Restated Rules of Procedure
Adopted: June 2, 2015
Page 2
ATTEST:
SUSAN MAYSELS, City C k .
City of La Quinta, California
(CITY SEAL)
APPROVED AS TO FORM:
WILLIAM H. IHRKE, City Attorney
City of La Quinta, California
Resolution No. 2015-023
Amended and Restated Rules of Procedure
Adopted: June 2, 2015
Page 3
EXHIBIT A
AMENDED AND RESTATED
RULES OF PROCEDURE
FOR COUNCIL MEETINGS
AND RELATED FUNCTIONS AND ACTIVITIES
PURPOSE
The purpose and intent of the City Council in adopting the within rules shall be to
provide directory guidelines relating to the conduct of the public business by or on
behalf of the City Council, and in the event of any noncompliance with or violation of
any provision herein, such will not be deemed to affect the validity of any action
taken, unless otherwise specifically provided by law.
The rules of procedure set herein shall be in addition to the provisions of the Ralph M.
Brown Act and all other applicable state government codes. In the event of a
conflict between the rules set by the City Council and California Code, the provisions
of California State Code shall prevail.
APPLICABILITY
Unless otherwise provided by resolution of the City Council, a city authority, or city
agency, the rules of procedure outlined below apply to all city -established entities
including, but not limited to the following:
La Quinta City Council
La Quinta Housing Authority
La Quinta Financing Authority
Successor Agency to the La Quinta Redevelopment Agency
All City Boards, Commissions, and Committees
1. MEETINGS
1.1 REGULAR MEETINGS:
The City Council of the City of La Quinta shall hold regular meetings in the place
specified in the Municipal Code, on the first and third Tuesdays of each month. The
Resolution No. 2015-023
Amended and Restated Rules of Procedure
Adopted: June 2, 2015
Page 4
open session portion of regular meetings shall begin at 4:00 p.m. The closed session
portion of regular meetings, if needed, may begin between 3:00 p.m. and 4:00 p.m.,
or may be scheduled any time before meeting adjournment in accordance with a
duly noticed agenda. The public hearing portion of the meeting shall be the time set
forth in the published public hearing notice, or if none is required, the time set forth
in the posted agenda.
When the day for a regular meeting of the Council falls on a legal holiday, no
meeting shall be held on that day; rather, such meeting shall be held at the same
hour on the next business day unless otherwise determined by the City Council.
1.2 ADJOURNED MEETINGS:
Any meeting may be adjourned to a time, place, and date certain, but not beyond the
next regular meeting. Once adjourned, the meeting may not be reconvened.
1.3 SPECIAL MEETINGS:
Special Meetings may be called by the Mayor or majority of Councilmembers on 24-
hour notice, as set forth in Government Code Sections 3511.1(d), 36807 and
54956(b). Only matters contained in the notice may be considered and no
ordinances (other than urgency ordinances) may be adopted, nor may matters
concerning the salaries, salary schedules, stipend, bonus or compensation paid in the
form of fringe benefits, of the City Manager, any Department head, or any employee
whose position is held by an employment contract, be acted upon. Notice of special
meetings shall be posted in accordance with Section 1.4.
1.4 NOTICE OF MEETINGS. POSTING OF AGENDAS:
The City Clerk, or designee, shall post a meeting agenda in the following locations at
least 72 hours before each regular meeting of the City Council, to wit: (1) the public
bulletin board located outside the Village Post Office at 51321 Avenida Bermudas, (2)
the public bulletin board located outside Stater Brothers Supermarket at 78-630
Highway 111 and, (3) the City's internet web site.. The City Council finds and
determines that all locations are freely accessible to the public and the Council
further finds and determines that the City is legally required to post an agenda in
only one freely accessible location and on the City's web site. This direction to post
in all locations is directory only and not mandatory. Other locations may be added
as deemed appropriate. Following posting of said agenda, the City Clerk or
designee, shall sign a declaration of the date and place of the posting of the said
agenda and shall retain said declaration of posting as a public record as part of the
Council meeting record to which the posting relates. The provisions of this section as
to place of posting and declaration of posting shall also apply to the special meeting
Resolution No. 2015-023
Amended and Restated Rules of Procedure
Adopted: June 2, 2015
Page 5
posting requirements of Government Code. 54956: To the extent not required by
State law, the provisions hereof are directory only.
1.5 QUORUM:
Unless otherwise provided for in the Municipal Code, a majority of the Council shall
be sufficient to do business and motions may be passed 2-1 if only 3 attend. The
following matters, however, require three affirmative votes: (a) adoption of
ordinances and resolutions, (b) orders for payment of money, and (c) adoption or
amendment of a specific or general plan.
If a majority of the Council shall be disqualified to vote on a matter by reason of
actual or apparent conflict of interest, the Council shall select by lot or other means
of random selection, or by such other impartial and equitable means as the Council
shall determine, that number of its disqualified members which, when added to the
members eligible to vote, shall constitute a quorum.
1.6 MEETINGS TO BE PUBLIC:
Study Sessions and all regular, adjourned or special meetings of the City Council shall
be open to the public, provided, however, the Council may hold closed sessions
from which the public may be excluded, which closed sessions shall only be held in
accordance with the provisions of the Brown Act (Government Code 54950 etc.).
1.7 MEETING ATTENDANCE VIA TELECONFERENCE:
(a) The use of teleconferencing for a Councilmember to attend a City Council
meeting is permitted subject to compliance with the provisions of Government Code
Section 54953, as amended.
(b) All provisions of the Ralph M. Brown Act shall apply to the teleconferenced
meeting location including agenda posting, public accessibility, ADA compliance,
opportunity for the public to address Council directly, and availability of agendas.
(c) All votes taken during a teleconferenced meeting shall be by roll call.
(d) So that the City Clerk may comply with the Ralph M. Brown Act, one week
advance written notice to the City Clerk must be given by the Councilmember who
wishes to attend via teleconference; the notice must include the location name and
address, which must specifically include the room/suite number, at which the
teleconferenced meeting will occur, who is to initiate the telephone call to establish
Resolution No. 2015-023
Amended and Restated Rules of Procedure
Adopted: June 2, 2015
Page 6
the teleconference connection, and the telephone number of the teleconference
location (the telephone number... Will not be made public).
(e) The Councilmember attending by teleconference shall (1) provide the City
Clerk with a photograph showing the agenda posted at the teleconference location,
or a written statement that the agenda has been posted, which the City Clerk shall
retain with the original agenda packet materials, and (2) identify him/herself and
acknowledge whether or not members of the public are in attendance at the
teleconference location.
(f) Only one Councilmember per meeting may attend by teleconferencing.
(g) Each Councilmember may attend a regular City Council meeting via
teleconference a maximum of twice per calendar year.
(h) Upon receipt of notification of intent to attend via teleconference from one
Councilmember, the City Clerk shall forward the notice to all Councilmembers.
1.8 CLOSED SESSION MINUTES:
Pursuant to Section 54957.2 of the California Government Code, the City Clerk of the
City of La Quinta may be required to attend closed session of the City Council, and
keep and enter in a minute book a record of topics discussed and decisions made at
each meeting. Closed Session minutes, if produced, shall not be a public record
subject to inspection pursuant to the California Public Records Act, and shall be kept
confidential pursuant to the Government Code.
2. AGENDA
2.1 ORDER OF BUSINESS:
Except as otherwise provided by law, no action or discussion shall be undertaken on
any item not appearing on the posted agenda, except that Councilmembers or staff
may, on their own initiative .or in response to public comments, briefly respond to
statements made or questions posed during the public comment period, ask
questions for clarification, make a brief announcement, make a brief report on his/her
own activities, provide a reference to staff, request staff to report back to the Council
at a subsequent meeting, or take action to direct staff to place a matter on a future
agenda.
The order of business of each meeting shall be as contained in the Agenda prepared
by the City Clerk and shall contain the following category headings:
Resolution No. 2015-023
Amended and Restated Rules of Procedure
Adopted: June 2, 2015
Page 7
CALL TO ORDER
ROLL CALL
*PUBLIC COMMENT ON MATTERS NOT ON THE AGENDA (place before closed session)
CLOSED SESSION (may be taken up before, after or during breaks in the open portion of the meeting)
*PLEDGE OF ALLEGIANCE
*PUBLIC COMMENT ON MATTERS NOT ON THE AGENDA
CONFIRMATION OF AGENDA
*ANNOUNCEMENTS, PRESENTATIONS, AND WRITTEN COMMUNICATIONS
CONSENT CALENDAR (will include Minutes)
BUSINESS SESSION
*STUDY SESSION
*DEPARTMENTAL REPORTS
*REPORTS AND INFORMATIONAL ITEMS
*MAYOR AND COUNCILMEMBERS ITEMS
*PUBLIC COMMENT (only needed if there is a Public Hearing(s) on the agenda)
*PRESENTATIONS (only needed if there is a late presentation item)
PUBLIC HEARINGS
ADJOURNMENT
The Presiding Officer may change the order of business to accommodate participants,
councilmembers, staff, or consultants; expedite the meeting; or meet public hearing
notice times.
*These portions of the agenda shall be used for discussion and direction to
staff; no formal actions are to be taken.
2.2 DELIVERY OF AGENDA:
Barring insurmountable difficulties, the agenda packet shall ordinarily be delivered to
Councilmembers each Thursday preceding the Tuesday meeting to which it pertains.
The agenda packet shall also be available to the public at the time it is delivered to
the City Council.
2.3 ROLL CALL:
Before proceeding with the business of the Council, the City Clerk shall call the roll of
the Councilmembers and the names of those present shall be entered in the
minutes. The order of roll call shall be alphabetical with the Mayor called last.
Resolution No. 2015-023
Amended and Restated Rules of Procedure
Adopted: June 2, 2015
Page 8
2.4 APPROVAL OF MINUTES:
Action minutes shall be prepared after every meeting. Unless requested by a
majority of the City Council, minutes of the previous meeting may be approved as a
Consent Calendar item without public reading if the City Clerk has previously
furnished each Councilmember with a copy thereof.
2.5 PUBLIC HEARINGS:
Generally, public hearings shall be conducted in the following order:
• Staff presentation
• Questions of Staff by Council
• Public hearing opened by Presiding Officer
• Public testimony
• Public hearing closed by Presiding Officer
• Questions by Council
• Discussion by Council
• Action by Council
Questions or comments from the public shall be limited to the subject under
consideration. Depending upon the extent of the agenda, and the number of
persons desiring to speak on an issue, the Presiding Officer may, at the beginning of
the hearing, limit testimony, but in no event to less than 3 minutes per individual.
Any person may speak for a longer period of time, upon approval of the City Council,
when this is deemed necessary in such cases as when a person is speaking as a
representative of a group or has graphic or slide presentations requiring more time.
Quasi-judicial hearings shall be conducted in accordance with the principles of due
process, and the City Attorney shall advise the City Council in this regard.
2.6 PUBLIC COMMENT:
Pursuant to Government Code 54954.3, each agenda for a regular meeting shall
provide an item entitled "Public Comment". The purpose of such item shall be to
provide an opportunity for members of the public to directly address the City Council
on items of interest to the public that are within the subject matter jurisdiction of the
City Council. In order to assure that the intent of Government Code 54954.3 is
carried out, three (3) minutes is the amount of time allocated for each individual
speaker. At any time, before or after the oral communication is commenced, the
Presiding Officer may, if s/he deems it preferable, direct that the communication be
made instead either to the City Manager or other appropriate staff member during
regular business hours, or in writing for subsequent submittal to Councilmembers.
Resolution No. 2015-023
Amended and Restated Rules of Procedure
Adopted: June 2, 2015
Page 9
On items of public comment or discussion, any matter raised by the public which
does not specifically appear on the agenda may be added to a future agenda in
accordance with Section 2.9. It is hereby determined that such requests or direction
by a Councilmember shall not be considered action taken by the Council on said item
raised by the public. Further, Council discussion of the matter shall not be
considered action taken.
2.7 CONSENT AGENDA:
Items of routine nature, and non -controversial, shall be placed on the consent
agenda. All items may be approved by one blanket motion upon unanimous
consent. Any Councilmember may request that any item be withdrawn from the
consent agenda for separate consideration.
2.8 MAYOR AND COUNCILMEMBER ITEMS:
The Mayor and Councilmembers shall provide brief reports on meetings attended at
the expense of the local agency at the next regular meeting of the Council.
2.9 ADDING ITEMS TO A FUTURE AGENDA:
An item may be placed on a future agenda by any of the following methods:
(a) Items for discussion only, no action, no staff report - a Councilmember may
request that a matter requiring significant discussion be placed on a future
agenda under the MAYOR AND COUNCILMEMBER ITEMS section either during a
Council meeting or by contacting the City Manager with the item title and
desired meeting date. At the requesting Councilmember's option, s/he may
prepare a short report to be included in the agenda packet provided s/he meets
the agenda production deadlines. : .
(b) Items for discussion and/or' vote requiring a staff report - a Councilmember
who wishes to place a matter on a future agenda that requires staff research,
analysis and/or report(s) or a vote to commit City resources shall first bring the
matter to Council as noted in (a) above and obtain Council consensus to direct
staff to move forward and place the item on a future agenda. Council shall not
take action on the matter itself.
(c) By the Mayor, City Manager or City Attorney
Resolution No. 2015-023
Amended and Restated Rules of Procedure
Adopted: June 2, 2015
Page 10
3. PRESIDING OFFICER
3.1 PRESIDING OFFICER:
The Mayor shall be the Presiding Officer at all meetings of the Council. In the
absence of the Mayor, the Mayor Pro Tempore shall preside. In the absence of both
the Mayor and the Mayor Pro Tempore, the senior Councilmember shall preside. If
there are two Councilmembers with equal seniority, then the one who received the
highest number of votes in the election shall be the Presiding Officer.
3.2 MAYOR PRO TEMPORE:
In accordance with Government Code Section 36801, the Council shall choose one of
its members as Mayor Pro Tempore at the meeting at which the declaration of the
election results for a general municipal election is made. During odd numbered
years, the Council shall choose one of its members as Mayor Pro Tempore during a
regular meeting in the last calendar quarter of the year. Each selection shall be by
three or more affirmative votes, and a failure to achieve such total of affirmative
votes, shall be deemed a selection of the incumbent to remain in office. Each person
so selected shall serve until a successor is chosen (at any time) by three or more
affirmative votes.
3.3 CALL TO ORDER:
The meeting of the City Council shall be called to order by the Presiding Officer.
3.4 PARTICIPATION OF PRESIDING OFFICER:
The Presiding Officer may move, second, and debate from the Chair, subject only to
such limitations of debate as are imposed on all Councilmembers, and s/he shall not
be deprived of any of the rights and privileges of a Councilmember by reason of acting
as Presiding Officer. However, the Presiding Officer is primarily responsible for the
conduct of the meeting. If s/he desires to personally engage in extended debate on
questions before the Council, s/he should consider turning the Chair over to the Mayor
Pro Tempore.
3.5 QUESTION TO BE STATED:
The Presiding Officer shall verbally restate each question immediately prior to calling
for the vote. Following the vote, either the Presiding Officer or the City Clerk shall
verbally announce the result in accordance with Section 7.1. The Presiding Officer
may publicly state the effect of the vote for the benefit of the audience before
proceeding to the next item of business.
Resolution No. 2015-023
Amended and Restated Rules of Procedure
Adopted: June 2, 2015
Page 11
3.6 SIGNING OF ORDINANCES AND RESOLUTIONS:
The Presiding Officer shall sign ordinances and resolutions adopted by the City
Council. The City Clerk, or Deputy City Clerk, shall attest to the signature of the
Presiding Officer.
3.7 MAINTENANCE OF ORDER:
The Presiding Officer is responsible for the maintenance of order and decorum at all
times. No person is allowed to speak who has not first been recognized by the
Presiding Officer. All questions and remarks shall be addressed to the Presiding
Officer.
3.8 CITY CLERK POSITION:
In accordance with Government Code Section 36804, if the City Clerk is absent, the
Deputy City Clerk shall act. If there is none, the Presiding Officer shall appoint one of
the Councilmembers as City Clerk Pro Tempore.
4. RULES. DECORUM, AND ORDER
4.1 POINTS OF ORDER:
The Presiding Officer shall determine all Points of Order subject to the right of any
member to appeal to the Council. If any appeal is taken, the question shall be, "Shall
the decision of the Presiding Officer be sustained?" in which event a majority vote
shall govern and conclusively determine such question of order.
4.2 DECORUM AND ORDER - COUNCIL MEMBERS:
(a) Any Councilmember desiring to speak shall address the Presiding Officer and,
upon recognition by the Presiding Officer, shall confine him/herself to the question
under debate.
(b) A Councilmember, once recognized, shall not be interrupted while speaking
unless called to order by the Presiding Officer; unless a Point of Order is raised by
another Councilmember; or unless the speaker chooses to yield to questions from
another Councilmember.
(c) Any Councilmember called to order while s/he is speaking shall cease speaking
immediately until the question of order is determined. If ruled to be in order, s/he
shall be permitted to proceed. If ruled to be not in order, s/he shall remain silent or
shall alter his/her remarks so as to comply with rules of the Council.
Resolution No. 2015-023
Amended and Restated Rules of Procedure
Adopted: June 2, 2015
Page 12
(d) Councilmembers shall accord the utmost- courtesy to each other, to city
employees, and to the public appearing before the Council and shall refrain at all
times from rude and derogatory remarks, reflections as to integrity, abusive
comments, and statements as to motives and personalities.
(e) Any Councilmember may move to require the Presiding Officer to enforce the
rules and the affirmative vote of a majority of the Council shall require the Presiding
Officer to so act.
(fl Except where specifically authorized by City Council action or for purely
ceremonial purposes, no Councilmember attending a City commission or committee
meeting shall make any statement or give the appearance or indicate in any way that
s/he is representing the City. When making a comment at such a meeting, the
Councilmember should make it clear that s/he is speaking solely as an individual.
Unless officially appointed to participate on a committee, Councilmembers should
make an effort not to insert themselves into or take positions on matters which will or
are likely to be the subject of public hearings or will be decided upon by the City
Council after considering the entire issue.
4.3 DECORUM AND ORDER - EMPLOYEES:
City Employees and Contractors shall observe the same rules of procedure and
decorum applicable to members of the Council. The City Manager shall ensure that all
City employees observe such decorum. Any staff members, including the City
Manager, desiring to address the Council or members of the public shall first be
recognized by the Presiding Officer. All remarks shall be addressed to the Presiding
Officer and not to any one individual Councilmember or member of the public.
4.4 DECORUM AND ORDER - PUBLIC:
Members of the public attending Council meetings shall observe the same rules of
order and decorum applicable to the Council. Any person making impertinent and
slanderous remarks or who becomes boisterous while addressing the Council or while
attending the Council meeting shall be removed from the room if the sergeant -of -
arms is so directed by the Presiding Officer, and such person may be barred from
further audience before the Council. Unauthorized remarks from the audience,
stamping of feet, whistles, yells and similar demonstrations shall not be permitted by
the Presiding Officer, who may direct the sergeant -of -arms to remove such offenders
from the room. Aggravated cases shall be prosecuted on appropriate complaint
signed by the Presiding Officer.
Resolution No. 2015-023
Amended and Restated Rules of Procedure
Adopted: June 2, 2015
Page 13
4.5 ENFORCEMENT OF DECORUM:
The head of the City's police agency or designee shall be ex-officio sergeant -of -arms
of the Council. S/he shall carry out all orders and instructions given by the Presiding
Officer for the purpose of maintaining order and decorum in the Council Chambers.
Upon instructions from the Presiding Officer, it shall be the duty of the sergeant -of -
arms or his/her representative to eject any person from the Council Chambers or place
him/her under arrest or both.
As set forth in Government Code Section 54957.9, in the event that any meeting is
willfully interrupted by a group or groups of persons so as to render the orderly
conduct of such meeting unfeasible and order cannot be restored by the removal of
individuals who are willfully interrupting the meeting, the members of the Council may
order the meeting room cleared and continue in session. Only matters appearing on
the agenda may be considered in such a session. Duly accredited representatives of
the press or other news media, except those participating in the disturbance, shall be
allowed to attend any session held pursuant to this section. Nothing in this section
shall prohibit the Council from establishing a procedure for readmitting an individual
or individuals not responsible for willfully disturbing the orderly conduct of the
meeting.
4.6 PERSONAL PRIVILEGE:
The right of a member to interrupt a meeting and address the Council on a question of
personal privilege shall be limited to cases in which his/her integrity, character, or
motives are assailed, questioned, or impugned.
4.7 CONFLICT OF INTEREST:
All Councilmembers are subject to the provisions of California Law, such as Chapter 7,
Title 9, of the California Government Code, relative to conflicts of interest, and to
conflicts of interest codes adopted by the Council. Any Councilmember disqualified
from voting because of a conflict of interest shall do all of the following: (1) publicly
identify the financial interest in detail sufficient to be understood by the public, (2)
recuse him/herself from discussing and voting on the matter, and (3) leave the dais
until after the discussion, vote, and any other disposition of the matter is concluded,
unless the matter has been placed on the Consent Calendar. Any Councilmember
disqualified from voting due to a conflict of interest -may speak on the issue from the
public podium during the time that the general public speaks on the issue. The
Councilmember disqualified from voting due to a conflict of interest shall be marked
absent from the vote for the item on the minutes, unless the item is on the Consent
Resolution No. 2015-023
Amended and Restated Rules of Procedure
Adopted: June 2, 2015
Page 14
Calendar, in which case, the Councilmember will be marked as having abstained.
4.8 LIMITATION OF DEBATE:
Councilmembers should speak only once upon any one subject until every other
member choosing to speak thereon has spoken. No member shall speak for a longer
time than five minutes each time s/he has the floor, without approval of a majority
vote of the Council.
4.9 DISSENTS AND PROTESTS:
Any member shall have the right to express dissent from or protest to any action of
the Council and have the reason entered in the minutes. If such dissent or protest is
desired to be entered in the minutes, this should be made clear by language such as,
"I would like the minutes to show that I am opposed to this action for the following
reason ..."
4.10 PROCEDURES IN ABSENCE OF RULES:
In the absence of a rule herein to govern a point or procedure, Robert's Rules of Order,
Newly Revised, shall be used as a guide.
4.11 RULINGS OF PRESIDING OFFICER FINAL UNLESS OVERRULED:
In presiding over Council meetings, the Presiding Officer shall decide all questions of
interpretation of these rules, points of order or other questions of procedure requiring
rulings. Any such decision or ruling shall be final unless overridden or suspended by a.
majority vote of the Councilmembers present and voting.
5. ADDRESSING THE COUNCIL
5.1 MANNER OF ADDRESSING THE COUNCIL:
Any member of the public desiring to address the Council shall proceed to the podium
and wait to be recognized by the Presiding Officer. After being recognized, s/he shall
state his/her name and/or the party s/he is representing (unless otherwise determined
by the city attorney to be unnecessary), the subject s/he wishes to discuss, and city of
residence.
All remarks and questions shall be addressed to the Presiding Officer and not to any
individual Councilmember, staff member or other person. The Presiding Officer shall
be addressed at all times as Madam/Mister [title], e.g. Madam Mayor, Mr. Mayor Pro
Tem. Councilmembers shall be addressed as Councilmember [last name]. The Council
Resolution No. 2015-023
Amended and Restated Rules of Procedure
Adopted: June 2, 2015
Page 15
as a body shall be addressed: Madam/Mister Mayor and Members of the City Council
The Presiding Officer shall not permit any communication, oral or written, to be made
or read where it. is not within the subject matter jurisdiction of the City Council. During
a public hearing, all remarks shall be limited to the subject under consideration. No
person shall enter into any discussion without being recognized by the Presiding
Officer.
5.2 TIME LIMITATION:
For time limitation applicable to public hearings and public comment, see Sections 2.5
and 2.6.
5.3 ADDRESSING THE COUNCIL AFTER MOTION IS MADE:
After a motion has been made, or after a public hearing has been closed, no member
of the public shall address the Council without first securing permission by a majority
vote of the Council.
5.4 PERSONS AUTHORIZED TO BE WITHIN PLATFORM:
No person except City Officials shall be permitted behind the City Council dais without
permission or consent of the Presiding Officer.
6. MOTIONS
6.1 PROCESSING OF MOTIONS:
When a motion is made and seconded,
before debate. A motion so stated shall
consent of the person seconding it.
6.2 MOTIONS OUT OF ORDER:
it shall be stated by the Presiding Officer
not be withdrawn by the mover without the
The Presiding Officer may at any time, by majority consent of the Council, permit a
Councilmember to introduce an ordinance, resolution, or motion out of the regular
agenda order.
6.3 DIVISION OF QUESTION:
If the question contains two or more divisional propositions, the Presiding Officer may,
and upon request of a member shall (unless appealed), divide the same.
6.4 PROCEDURE OF MOTIONS:
When a motion is before the Council, no motion shall be entertained except the
Resolution No. 2015-023
Amended and Restated Rules of Procedure
Adopted: June 2, 2015
Page 16
following, which shall have precedence in the. following order:
(a) Adjourn
(b) Fix hour of adjournment
(c) Table
(d) Limit or terminate discussion
(e) Amend
(D Postpone
6.5 MOTION TO ADJOURN: (not debatable)
A motion to adjourn shall be in order at any time, except as follows:
(a) When repeated without intervening business or discussion.
(b) When made as an interruption of a member while speaking.
(c) When discussion has been ended, and vote on motion is pending, and
(d) While a vote is being taken.
6.6 MOTION TO FIX HOUR OF ADJOURNMENT:
Such a motion shall be to set a definite time at which to adjourn and shall be
debatable and shall be amendable by unanimous vote.
6.7 MOTION TO TABLE:
A motion to table shall be used to temporarily by-pass the subject. A motion to table
shall be undebatable and shall preclude all amendments or debate of the subject
under consideration. If the motion shall prevail, the matter may be "taken from the
table" at any time prior to the end of the next regular meeting.
6.8 MOTION TO LIMIT OR TERMINATE DISCUSSION:
Such a motion shall be used to limit or close debate on, or further amendment to, the
main motion and shall be undebatable. If the motion fails, debate shall be reopened;
if the motion passes, a vote shall be taken on the main motion.
6.9 MOTION TO AMEND:
A motion to amend shall be discussed only as to the amendment. A motion to amend
an amendment is possible but no additional motions to further amendments may be
made. Any amendment shall relate to the original motion and not introduce a
different matter. Amendments shall be voted first, then the main motion as
amended. Alternatively, the original maker of the main motion may agree to revise
the original motion and if the second agrees to second the revised motion, the Council
may vote on the main motion as revised.
Resolution No. 2015-023
Amended and Restated Rules of Procedure
Adopted: June 2, 2015
Page 17
7. VOTING PROCEDURE
7.1 VOTING PROCEDURE:
In acting upon every motion, the vote shall be taken by electronic voting and the
Presiding Officer or the City Clerk shall verbally announce (1) whether the question
carried or was defeated, (2) the vote tally, and (3) the vote of each Councilmember. In
the event the electronic voting machine is not functioning, the vote shall be taken by
roll call. The vote on each motion shall then be entered in full upon the record. The
order of voting shall be alphabetical with the Mayor voting last. The City Clerk shall
call the names of all members seated when a roll call vote is ordered or required.
Members shall respond 'aye', 'no' or 'abstain'.
Every ordinance and resolution, orders for franchises or payments of money, or
adoption or amendment of a specific or general plan require three .affirmative votes.
Any member may change his/her vote before the next order of business.
1.2 ABSTENTIONS AND FAILURE TO VOTE:
A Councilmember who abstains due to reasons of conflict shall, for purpose of the
item under consideration, be considered as if absent. A Councilmember abstaining for
reasons other than conflict shall be counted as present for purposes of a quorum and
such abstentions are counted with the majority. A Councilmember who leaves the
dais solely to avoid participating in a specific item shall, in absence of a conflict, be
counted as if they were present but abstaining and such abstentions are also counted
with the majority.
7.3 RECONSIDERATION:
Any Councilmember who voted with the majority may move a reconsideration of any
action at the same meeting or, within seven (7) calendar days, request in writing to
the City Manager or City Clerk that it be agendized for consideration at the following
meeting. If the seventh calendar day falls on a holiday, then the deadline shall be the
next business day. In the event that the subject of the reconsideration is a motion
that failed as the result of a tie vote, any Councilmember who voted against the
earlier motion may move for reconsideration within the same seven (7) calendar day
period. If the motion to reconsider passes, then the original item may be reconsidered
at that time or agendized for the next meeting that meets any applicable noticing
requirements. After a motion for reconsideration has once been acted upon, no other
motion for reconsideration thereof shall be made without unanimous consent of the
Council.
Resolution No. 2015-023
Amended and Restated Rules of Procedure
Adopted: June 2, 2015
Page 18
7.4 TIE VOTES:
Tie votes shall be lost motions unless an additional motion is made which obtains a
majority vote to break the tie. When all Councilmembers are present, a tie vote on
whether to grant an appeal from official action shall be considered a denial of such
appeal. If a tie vote results at a time when less than all members of the Council are
present, the matter shall automatically be continued to the agenda of the next
regular meeting of the Council, unless otherwise ordered by the Council.
Notwithstanding the above, if a tie vote results at a time when one or more
Councilmember(s) are abstaining for reasons other than conflict of interest then, in
that instance, the abstention vote shall be counted in favor of the motion thereby
breaking the tie vote.
8. RESOLUTIONS
8.1 DEFINITIONS:
As a rule of thumb, it can be said that legislative acts of the City Council (usually a rule
of public conduct for long-term application) are taken by ordinance, whereas more
routine business and administrative matters (usually more temporary and transitory
in nature) are accomplished by "resolutions". The term "resolution" in its general
sense will denote any action taken affirmatively via a vote of the Council, other than
one taken by ordinance. As used in this City, however, two terms are in general use to
denote such (non -ordinance) actions: "resolution" and "motion" (thereafter recorded
by minute entry). Technically, both are equally as legally effective and binding; they
just vary in the formality of respective memo rialization. The most formal is referred to
locally as a "resolution". This, in addition to being referenced in the minutes, will be
recorded by a separate document, numbered in sequence, and preserved in a
separate set of books. Such "resolutions" are used in this City for various reasons,
such as when specifically required by law, when needed as a separate evidentiary
document to be transmitted to another governmental agency, or where the frequency
of future reference back to its contents warrants a separate document (with the
additional "whereas" explanatory material it often recites) to facilitate such future
reference and research.
A "motion" as used locally denotes a Council action which is recorded simply by an
item entry in the minutes of the meeting at which it was accomplished, and no
separate document is made to memorialize it unless it is a motion to adopt an
ordinance or resolution.
Resolution No. 2015-023
Amended and Restated Rules of Procedure
Adopted: June 2, 2015
Page 19
8.2 RESOLUTIONS PREPARED IN ADVANCE:
Where a resolution has been prepared in advance, the procedure shall be: motion,
second, discussion, vote pursuant to methods prescribed in Section 7.1, and result
declared. It shall not be necessary to read a resolution in full or by title except to
identify it. Any member may require that the resolution be read in full.
8.3 RESOLUTIONS NOT PREPARED IN ADVANCE:
Where a resolution has not been prepared in advance, the procedure shall be to
instruct the City Manager or the City Attorney to prepare a resolution for presentation
at the next Council meeting.
8.4 URGENCY RESOLUTIONS:
In matters of urgency, a resolution may be presented verbally in motion form together
with instructions for written preparation for later execution. After the resolution has
been verbally stated, the voting procedure in 8.2 above shall be followed.
9. ORDINANCES
9.1 INTRODUCTION AND ADOPTION OF ORDINANCES:
Ordinances shall not be passed within five days of their introduction, nor at other than
a regular meeting or at an adjourned regular meeting. However, an urgency
ordinance may be passed immediately upon introduction and either at a regular or
special meeting. When ordinances, other than urgency ordinances, are altered after
introduction, they shall be passed only at a regular or at an adjourned regular meeting
held at least five days after alteration. Corrections of typographical or clerical errors
are not alterations within the meaning of this section.
9.2 EFFECTIVE DATE:
Except as provided otherwise by law, all ordinances shall take effect 30 days after
their final passage but may be made operative at such later date as may be
designated in the ordinance.
9.3 PUBLISHING:
It shall be the.duty of the City Clerk to post or publish all ordinances in accordance
with Section 36933 of the Government Code within 15 days after adoption.
Resolution No. 2015-023
Amended and Restated Rules of Procedure
Adopted: June 2, 2015
Page 20
10. POLITICAL ACTIVITIES
(A) Councilmembers shall not use, or attempt to use, 'their position, office or
authority to influence, aid or obstruct any City employee from securing any position,
nomination, confirmation or promotion, or change in compensation or position in the
City upon consideration or condition that the vote or political influence or action of
such person or another shall be given or used in behalf of, or withheld from, any
candidate, officer, or party, or upon any other corrupt condition or consideration.
This prohibition shall apply to urging or discouraging the individual employee's action.
(B) A Councilmember or candidate shall not, directly or indirectly, solicit political
funds or contributions, knowingly, from other officers or employees of the local
agency or from persons on an employment list of the City, with the knowledge that
the person from whom the contribution is solicited is an officer or employee of the
City. This section shall not prohibit the Councilmember from requesting political
contributions from officers or employees of the City if the solicitation is part of a
solicitation made to a significant segment of the public, which may include officers or
employees of the City.
(C) No Councilmember or candidate shall engage in political activity during working
hours in City offices or work areas where such activity would disrupt the workplace.
For purposes of this section, City offices, or work areas includes the areas behind the
public counters, but excludes the Council Chambers and Councilmember offices.
11. AUTHORITY TO BIND THE CITY
No Councilmember, officer,. official, employee, agent or consultant of the City, without
the majority vote of the Council, or unless otherwise provided in these Rules of
Procedure or by resolution of the Council, shall have any power or authority to bind
the City by any contract, to pledge its credits, or to render it liable for any purpose in
any amount.
12. EXECUTION OF CONTRACTS, DEEDS, AND OTHER DOCUMENTS
Except as otherwise authorized by resolution of the City Council, either the Mayor or
City Manager, or in the absence of both, such person as the City Manager may
designate in writing pursuant to Municipal Code section 2.08.050 and 2.08.060, shall
sign all contracts, deeds and other written instruments on behalf of the City when
such have been approved by the City Council. The City Clerk shall attest to the
Resolution No. 2015-023
Amended and Restated Rules of Procedure
Adopted: June 2, 2015
Page 21
signature of the signer, unless attestation is not required.
13.RULES DIRECTORY
To the extent not required by State laws, these rules of procedure shall be considered
directory only; and compliance herewith shall not be considered mandatory or
jurisdictional.
City of La Quinta
DEPARTMENT ITEM NO. 3
INVESTMENT ADVISORY BOARD MEETING: March 27, 2017
STAFF REPORT
AGENDA TITLE: UPDATE ON REQUEST FOR PROPOSALS OF AUDITING SERVICES
RECOMMENDATION
Provide an update on request for proposals of auditing services.
EXECUTIVE SUMMARY
The Investment Advisory Board (IAB) reviewed a draft request for proposals (RFP)
for professional auditing services.
An RFP was issued by the City on January 25, 2017 with a deadline for submittal of
March 1, 2017.
Nine professional auditing firms responded to the RFP.
FISCAL IMPACT
Annual auditing services for the City have averaged approximately $55,000 for each of
the last two fiscal years. The top three firms selected for an interview and further
consideration have submitted proposed annual costs ranging from $64,000 to $73,000.
BACKGROUND/ANALYSIS
City staff identified the need to issue an RFP for auditing services in the summer of 2016.
A draft RFP was presented to the IAB for overview and consideration on November 15,
2016. Based on feedback received the RFP was amended and subsequently issued on
January 25, 2017 with a submission deadline of March 1, 2017.
On February 15, 2017 during an IAB meeting an update was provided to the Board. Two
members from the IAB, Chairman George Batavick and Board Member Steve Rosen,
volunteered to be on the review and selection committee for auditing services.
Nine qualified auditing firms responded to the City's RFP. The Financial Services Analyst
and Finance Director reviewed the RFP's to ensure minimum qualifications were met and
placed firms into three categories:
1. Recommended for an interview
2. Intermediate or marginal
3. Not recommended to proceed further
One hour interviews for the top three firms are scheduled for April 5, 2017. The three
firms have confirmed their attendance in person. These interviews are not public
meetings; however, the review and selection committee will included a summary report
to be included with the final recommendation to City Council on April 18, 2017.
ALTERNATIVES - None.
Prepared by: Karla Campos, Finance Director
Attachments: 1. Request for Proposals Timeline
Request for Proposals - Auditing Services
PROJECT START
DRAFT RFP PREPARED
1 Nov 1 Dec
DRAFT UPDATED
DRAFT STAFF REPORT
DISTRIBUTE RFP'S TO PANEL COMBINED SCORING
RFP ANNOUNCED SELECT TOP 3 OR 4 FIRMS CITY COUNCIL
•
1 Jan 1 Feb 1 Mar 1 Apr
RFP DEADLINE
COMPARING RATINGS
FIRM INTERVIEWS
FINALIZE STAFF REPORT
PROJECT DETAILS
11/1/2016
Project Start
11/15/2016
Draft RFP prepared
12/ 15/2016
Draft Updated
1/25/2017
RFP Announced
3/1/2017
RFP Deadline
3/3/2017
Reviewed RFP's for Qualifications
3/15/2017
Compared Ratings & Qualifications
3/17/2017
Selected Top 3 Firms
4/5/2017
Audit Firm Interviews
4/5/2017
Combine RFP and Interview Scores
4/7/2017
Draft Staff Report
4/12/2017
Finalize Staff Report
4/18/2017
City Council Approval
Draft shared with IAB
City's Website, CSMFO, individual emails
Done by Finance Staff
Scheduled and confirmed
City Council may want panelist to attend for confirmatoin of selection
DEPARTMENT REPORT ITEM NO.
City of La Quinta
INVESTMENT ADVISORY BOARD MEETING: March 27, 2017
STAFF REPORT
AGENDA TITLE: UPDATE ON THE INVESTMENT ADVISORY BOARD EXPANSION AND
RENAMING
RECOMMENDATION
Provide an update on the expansion and renaming of the Investment Advisory Board.
EXECUTIVE SUMMARY
La Quinta voters approved Measure G (Ordinance No. 540) imposing a one percent
transactions and use tax (1% tax) at the November 8, 2016 general election.
Ordinance No. 540 required a citizen oversight committee be established to review
revenue generated by the 1% tax and expenditures made from the 1% tax revenue.
At the March 7, 2017 Council meeting, Council directed staff to revise the Municipal
Code to provide for a citizen oversight committee as detailed below.
The ordinance was adopted by the City Council for first reading on March 21" with a
second reading April 4, 2017, ads and notices for additional citizen oversight
committee members would be included in the annual cycle of board/commission
solicitations with interviews and appointments scheduled for the June 6, 2017 Council
meeting.
FISCAL IMPACT
The current Investment Advisory Board Members are eligible to receive $75 per member,
per meeting attended. With membership increased from five to seven, an additional
$900 will be budgeted to cover two new Members for four quarterly meetings plus an
allowance for two special meetings per year.
BAC.KGKUUND/ANALYSIS
Based on one of the recommendations contained in the Final Report submitted in January
2016 by the 14-member resident Advisory Committee, the City Council adopted
Ordinance No. 540 on May 17, 2016 imposing a city -based one percent transactions and
use tax, a general tax, to be included on the November ballot as Measure G. Measure G
passed with 54.73% voter approval during a high -voter -turnout election. The State will
commence imposing the additional 1% tax on April 1, 2017, with its resulting revenue
transferred to the City.
Both the ballot question and Ordinance No. 540 provide for citizen oversight of the
additional revenue generated by the 1% tax. Section 2 of Ordinance No. 540 reads:
CITIZEN OVERSIGHT. After this Ordinance becomes effective, the City Council for the
City of La Quinta, at an open and public regular or special meeting, shall adopt a
resolution that establishes a process to ensure that the revenue received by the one
percent (1 %) transactions and use tax imposed under this Ordinance will be subject
to annual review by an independent citizen oversight committee, and will remain
used for the provision of services, programs and capital projects in the City of La
Quinta.
The ballot question reads:
"Shall an ordinance providing revenue, which the State cannot take, to be used
locally for police protection; projects such as parks, streets, landscaping and flood
control, programs attracting businesses, youth/senior services, sports/recreation
programs; preserving property values and quality of life, by setting a permanent 1 %
transactions (sales) and use tax, subject to citizen oversight, raising six million
dollars annually (estimated), with all funds dedicated to general City services,
programs and projects, be adopted?"
During a study session at the March 7, 2017 Council meeting, the formation of the citizen
oversight committee was discussed. Council directed staff to revise the Municipal Code
[Chapter 2.70 Investment Advisory Board (IAB)] to incorporate the following:
1. Change the definition of the entity from a "board" to a ""commission";
2. Combine the responsibilities of the IAB and the 1% tax oversight committee;
3. Change the name of the IAB to reflect its added powers and duties;
4. Expand membership from five to seven members;
5. Retain existing IAB members for their existing terms and solicit new members for
interviews and appointment by Council to complete a full seven -member commission;
6. Retain the existing IAB qualification requirements for a minimum of three members;
7. Add the responsibility to review, at least annually, the revenue and expenditures
associated with the 1% tax to ensure these funds are used to provide the services,
programs and capital projects outlined in the ballot question; and
8. The commission shall meet quarterly and may schedule additional special meetings
as needed.
Councilmembers discussed the pros and cons of the commission size, so to allow for
flexibility, staff has written the "Number of Members" section of the Code as follows:
The Financial Advisory Commission shall initially consist of seven members
appointed by, and serving at the will of the city council. The city council may
increase or decrease the number of members from time to time but in no event shall
the membership exceed nine members or be less than five members.
Exhibit A of the attached Ordinance is a red -line of all proposed changes to Municipal
Code Chapter 2.70.
This Ordinance was approved at first reading on March 215t, the solicitation of members
for this Commission will be combined with the annual process for all City Boards and
Commissions. The schedule is as follows:
March 22 ads on website and social media
April
ad to The Gem for May edition
May
ad to the Desert Sun newspaper
May 24
application submission deadline
June 6
interviews and appointments by the City Council
There are no alternative suggested. The proposed changes to the Municipal Code Chapter
2.70 were approved for first reading as submitted to the City Council on March 21, 2017.
Prepared and Approved as to form by: Karla Campos, Finance Director
RESOLUTION NO. 2017 -
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA
QUINTA, CALIFORNIA, CALLING FOR AN ORDINANCE TO
AMEND CHAPTER 2.70 OF THE MUNICIPAL CODE TO
EXPAND THE MEMBERSHIP AND DUTIES AND CHANGE THE
NAME OF THE INVESTMENT ADVISORY BOARD TO THE
FINANCIAL ADVISORY COMMISSION IN ORDER TO
FULFILL THE CITIZEN OVERSIGHT DUTIES SET FORTH IN
MEASURE G AND ORDINANCE 540
WHEREAS, Measure G, imposing a one percent transactions and use tax as set
forth in Ordinance No. 540, was passed by the La Quinta voters at the November 8,
2017 general municipal election; and
WHEREAS, Ordinance No. 540 Section 2 states: "CITIZEN OVERSIGHT. After this
Ordinance [No. 540] becomes effective, the City Council for the City of La Quinta, at an
open and public regular or special meeting, shall adopt a resolution that establishes a
process to ensure that the revenue received by the one percent (1%) transactions and
use tax imposed under this Ordinance will be subject to annual review by an
independent citizen oversight committee, and will remain used for the provision of
services, programs and capital projects in the City of La Quinta";
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of La Quinta,
California, as follows:
Pursuant to Ordinance 540, Section 2, an ordinance shall be placed before the
City Council to amend Chapter 2.70 of the La Quinta Municipal Code to change the
name of the Investment Advisory Board to the Financial Advisory Commission and
expand the board membership, among other provisions, as instructed by the City
Council at the March 7, 2017 Study Session.
PASSED, APPROVED, and ADOPTED at a regular meeting of the La Quinta City
Council held on this 21st day of March 2017 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Resolution No. 2017-
Citizen Oversight of 1% Tax Approved by Measure G
Adopted: March 21, 2017
Page 2 of 2
LINDA EVANS, Mayor
City of La Quinta, California
ATTEST:
SUSAN MAYSELS, City Clerk
City of La Quinta, California
(CITY SEAL)
APPROVED AS TO FORM:
WILLIAM H. IHRKE, City Attorney
City of La Quinta, California
ORDINANCE NO.
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF
LA QUINTA, CALIFORNIA, AMENDING CHAPTER 2.70 OF
THE MUNICIPAL CODE TO EXPAND THE MEMBERSHIP AND
DUTIES AND CHANGE THE NAME OF THE INVESTMENT
ADVISORY BOARD TO THE FINANCIAL ADVISORY
COMMISSION IN ORDER TO FULFILL THE CITIZEN
OVERSIGHT DUTIES SET FORTH IN MEASURE G AND
ORDINANCE 540
WHEREAS, in June 2015, the City Council appointed 14 resident volunteers to
an Advisory Committee to evaluate the City's current and long-term financial position;
and
WHEREAS, in January 2016, the Advisory Committee submitted its Final Report,
determining the City's current 10-year planning period projection shows a $50 million
deficit; and
WHEREAS, the Advisory Committee in its Final Report recommended, among
other items, a City -based 1% sales tax increase, subject to voter approval and if
approved, subject to review by a citizen oversight committee; and
WHEREAS, the Advisory Committee recommended the sales tax be a "general
tax" to be used to fund general City services, programs, and projects; and
WHEREAS, on May 17, 2016, the City Council adopted Ordinance No. 540
imposing a one percent transactions and use tax ("1% tax"), and called for the
measure (Measure G) to be placed on November 8, 2016 general election ballot asking
the City's qualified electors to approve the 1% tax; and
WHEREAS, at the November 8, 2016 general election, Measure G was passed
with 54.73% voter approval (8,233 of 15,042 voted yes); and
WHEREAS, Ordinance 540 establishing the 1% tax went into effect December
16, 2016 - ten days after the City Council certified the official canvass of election
results for the General Municipal Election held November 8, 2016; and
WHEREAS, implementation of the 1% tax will begin April 1, 2017 by the State
Board of Equalization with associated revenues transferred to the City quarterly
thereafter; and
WHEREAS, Ordinance No. 540, Section 2 states: "CITIZEN OVERSIGHT. After this
Ordinance [No. 540] becomes effective, the City Council for the City of La Quinta, at an
open and public regular or special meeting, shall adopt a resolution that establishes a
Ordinance No.
Municipal Code Chapter 2.70 revisions
Adopted: April_, 2017
Page 2 of 4
process to ensure that the revenue received by the one percent (1%) transactions and
use tax imposed under this Ordinance will be subject to annual review by an
independent citizen oversight committee, and will remain used for the provision of
services, programs and capital projects in the City of La Quinta"; and
WHEREAS, the ballot question placed on the November 8, 2016 ballot before
voters was: "Shall an ordinance providing revenue, which the State cannot take, to be
used locally for police protection; projects such as parks, streets, landscaping and
flood control; programs attracting businesses; youth/senior services; sports/recreation
programs; preserving property values and quality of life, by setting a permanent 1%
transactions (sales) and use tax, subject to citizen oversight, raising six million dollars
annually (estimated), with all funds dedicated to general City services, programs and
projects, be adopted?"; and
WHEREAS, during a study session at the March 7, 2017 City Council meeting,
the Council discussed the formation of a citizen oversight committee and provided
direction for its parameters;
WHEREAS, the City finds that it is in the best interests of its citizens to expand
the size and duties of the Investment Advisory Board to include 1% tax oversight
responsibilities, and to change the name to the Financial Advisory Commission;
NOW, THEREFORE, the City Council of the City of La Quinta does ordain as
follows:
SECTION 1. Adoption. Chapter 2.70 of the Code entitled INVESTMENT ADVISORY
BOARD is deleted in its entirety and replaced with revised Chapter 2.70 attached
hereto as "Exhibit A".
SECTION 2. Severability. If any section, subsection, subdivision, sentence, clause,
phrase, or portion of this Ordinance is, for any reason, held to be invalid or
unconstitutional by the decision of any court of competent jurisdiction, such decision
shall not affect the validity of the remaining portions of this Ordinance. The City
Council hereby declares that it would have adopted this Ordinance and each and
every section, subsection, subdivision, sentence, clause, phrase, or portion thereof,
irrespective of the fact that any one or more section, subsections, subdivisions,
sentences, clauses, phrases, or portions thereof be declared unconstitutional.
SECTION 3. Effective Date: This Ordinance shall be in full force and effect thirty (30)
days after its adoption.
SECTION 4. Posting: The City Clerk shall, within 15 days after passage of this
Ordinance, cause it to be posted in at least three public places designated by
resolution of the City Council, shall certify to the adoption and posting of this
Ordinance, and shall cause this Ordinance and its certification, together with proof of
Ordinance No.
Municipal Code Chapter 2.70 revisions
Adopted: April , 2017
Page 3 of 4
posting to be entered into the permanent record of Ordinances of the City of La
Quinta.
PASSED, APPROVED and ADOPTED, at a regular meeting of the La Quinta City
Council held this day of April 2017 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
LINDA EVANS, Mayor
City of La Quinta, California
ATTEST:
SUSAN MAYSELS, City Clerk
City of La Quinta, California
(CITY SEAL)
APPROVED AS TO FORM:
WILLIAM H. IHRKE, City Attorney
City of La Quinta, California
Ordinance No.
Municipal Code Chapter 2.70 revisions
Adopted: April_, 2017
Page 4 of 4
STATE OF CALIFORNIA ►
COUNTY OF RIVERSIDE ) ss.
CITY OF LA QUINTA )
I, SUSAN MAYSELS, City Clerk of the City of La Quinta, California, do hereby
certify the foregoing to be a full, true, and correct copy of Ordinance No. (enter
number) which was introduced at a regular meeting on the (date) day of (month),
2017, and was adopted at a regular meeting held on the (date) day of (month),
(year), not being less than 5 days after the date of introduction thereof.
I further certify that the foregoing Ordinance was posted in three places within the
City of La Quinta as specified in the Rules of Procedure adopted by City Council
Resolution No. 2014-013.
SUSAN MAYSELS, City Clerk
City of La Quinta, California
DECLARATION OF POSTING
I, SUSAN MAYSELS, City Clerk of the City of La Quinta, California, do hereby
certify that the foregoing ordinance was posted on pursuant to
Council Resolution.
SUSAN MAYSELS, City Clerk
City of La Quinta, California
EXHIBIT A
Chapter 2.70 IA =STN4FENIT ADVISORY -BOARD FINANCIAL ADVISORY
COMMISSION
2.70.010 General rules regarding the_ —financial advisory commissioni^��,.o�tmen
advisory Erd.
Except as set out below, see Chapter 2.06 for general provisions.
2.70.020 Number of members.
The financial advisory commission (FAC)invPrtrntznt advisor„ heard ("JAB") shall
initially consist of fiv-eseven members appointed by, and serving at the will of the city
council. The city council may increase or decrease the number of members from time
to time but in no event shall the membership exceed nine members or be less than
five members.
2.70.030 Qualifications of members.
A. In addition to the qualification requirements set forth in Section 2.06.040 of this
code, a minimum of three of the members shall be finance professionals and shall
GpPlOGGRtS, for the -TAB should have a verifiable background in finance and/or securities,
preferably with knowledge and/or experience in markets, financial controls and
accounting for securities.
B. For those applying for the professional position, 9background information will be
requested and potential candidates must agree to a background check and
verification by the city manager or designee.
2.70.040 Powers and duties.
A. The principal functions of the FAC '.: are:
1. Review at least annually the city's investment policy and recommend
appropriate changes;
2. Review at least quart erlym the treasury report and note compliance
with the investment policy and adequacy of cash and investments for anticipated
obligations;
3. Receive and consider other reports provided by the city treasurer;
4. Meet with the independent auditor after completion of the annual audit of
the city's financial statements, and receive and consider the auditor's comments on
auditing procedures, internal controls, and findings for cash and investment activities;
5. Review at least annually the revenue derived from the one percent (1%)
transactions +rnnci+iens and use tax instituted by voters in November 2016 to ensure
these funds are used to provide services, programs and capital projects in the Ccity of
La Quinta.
-56. Serve as a resource for the city treasurer on matters such as proposed
investments, internal controls, use of change or change of financial institutions,
custodians, brokers and dealers.
B. The FACIA -'--will report to the city council after each meeting either in person or
through correspondence at a regular city council meeting.
EXHIBIT A
2.70.050 References to the Investment Advisory Board.
If any other chapter(s) or section(s) in this code refers to the Investment Advisory
Board, that chapter(s) or section(s) shall be deemed to refer to the Financial Advisory
Commission established by the ordinance amendina chanter 2.70 of this code.