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2002 10 09 IAB Minutes INVESTMENT ADVISORY BOARD Meeting October 9, 2002 CALL TO ORDER Regular meeting of the La Quinta Investment Advisory Board was called to order at the hour of 5:30 P.M. by Chairman Mahfoud, followed by the Pledge of Allegiance. PRESENT: Board Members Moulin, Lewis, Olander, Osborne and Chairman Mahfoud ABSENT: Board Members Felice and Mortenson OTHERS PRESENT: John Falconer, Finance Director and Vianka Orrantia, Secretary II PUBLIC COMMENTS - None III CONFIRMATION OF AGENDA - (This is the time set aside for public comment on any matter not scheduled on the agenda.) IV CONSENT CALENDAR Approval of Minutes of Meeting on September lB, 2002 for the Investment Advisory Board. MOTION - It was moved by Board Members Moulin/Lewis to approve the Minutes of September 1 $, 2002. Motion carried unanimously. V BUSINESS SESSION A. Transmittal of Treasury Report for September 2002 In response to Chairman Mahfoud, Mr. Falconer informed the Board that Money Market Funds with the City's Trustee, decreased due to the debt service payments, with principal and interest on most of the City's debt issuance due as of August 31st Investment Advisory Board October 9, 2002 Minutes In response to Chairman Mahfoud, Mr. Falconer informed the Board that staff would look into the current money market yield and the current yield is less than Y2 of 1%. Mr. Falconer will report back to the Board with other sweep account options. MOTION - It was moved by Board Members Lewis/Osborne to review, receive and file the Treasurer's Report for August 2002. Motion carried unanimously. VI CORRESONDENCE AND WRITTEN MATERIAL A. Month End Cash Report - September 2002 Mr. Falconer informed the Board that there was not too much investment activity, but there were going to be some items due in the month of October and for the first six months of the business cycle staff is working off the cash balances. Staff is currently keeping a little extra on hand for emergencies and using this money for account payable. Discussion ensued regarding the current Commercial Paper and the quality that is currently available. In response to Board Member Moulin, Mr. Falconer stated to the Board that on page 11 of the month end cash report, as a general rule monthly expenditures are about 8%, which are used for salaries and other City expenditures. The actual cash numbers, referring to Transient Occupancy Tax where the actual is a negative, which was probably a reversal of an accrual. Board Member Moulin asked Mr. Falconer if the budget was based on an accrual basis and Mr. Falconer stated that it was. Noted and Filed VII BOARD MEMBER ITEMS Other Handout At the request of Board Member Osborne who was not in attendance at the September meeting, Chairman Mahfoud and Board Member Olander summarized the LAIF Conference. Staff will forward the handouts to Board Member Osborne, from the September 1 8th meeting. Mr. Falconer stated to the Board his only concern with LAIF, was the purchasing of unfamiliar portfolio names relating to mortgage backed investments. 2 Investment Advisory Board October 9, 2002 Minutes In response to Board Member Osborne, Mr. Falconer informed the Board that Governor Davis signed the legislation that Senator Battin introduced in reference to LAIF Funds not being subject to the State, that they are separate funds. Board Member Moulin advised the Board that in the previous month's Board discussions, Fannie Mae had announced a duration gap which caused quite a bit of publicity and activity in Washington; Freddie Mac was quick to announce they did not have a duration gap. Board Member Moulin advised the Board that this issue has been resolved. Board Member Moulin also advised the Board that the Congressional Committee that has oversight of this agency has increased their scrutiny, at congressional request. Recently the Fannie Mae stock has tumbled. Board Member Moulin asked when the Board would be meeting to review the audit? Mr. Falconer stated that the Board normally meets around December or January to go over the audit. Staff has reviewed the draft and it has been sent back to the auditors and the numbers will be finalized. Mr. Falconer will do the Management Discussion and Analysis and transmittal letter. Mr. Falconer advised the Board that he would like to bring the audit before the City Council on the 1 9TM of November and then schedule the Investment Advisory Board to meet with the auditors either in December or January. Mr. Falconer stated to the Board that in addition to his previous remarks about LAIF, LAIF does not invest in callable GSE's, and only buys bullets and discount notes. Board Member Olander advised the Board of the informative handout that the City mailed out to the residents of the La Quinta. VII ADJOURNMENT MOTION - It was moved by Chairman Mahfoud/Board Member Moulin to adjourn the meeting at 6:00 p.m. Motion carried unanimously. Vianka Orrantia Secretary