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2003 11 12 IAB Minutes INVESTMENT ADVISORY BOARD Meeting November 12, 2003 I CALL TO ORDER Regular meeting of the La Quinta Investment Advisory Board was called to order at the hour of 4:00 P.M. by Board Member Moulin, followed by the Pledge of Allegiance. PRESENT: Board Members Moulin, Olander, Deniel and Chairman Lewis (4:05) ABSENT: Board Member Mahfoud OTHERS PRESENT' John Falconer, Finance Director, Amy Swan-Draper, Accounting Manager and Vianka Orrantia, Secretary II PUBLIC COMMENTS III CONFIRMATION OF AGENDA IV CONSENT CALENDAR A. Approval of Minutes of Meeting on October 8, 2003 for the Investment Advisory Board. MOTION - It was moved by Board Members Moulin/Deniel to approve the Minutes of October 8, 2003. Motion carried unanimously. V. BUSINESS SESSION A. RFP for Banking Services Interviews In response to Mr. Falconer, Chairman Lewis advised the Board of the suggested interview process. This process would give each bank ten minutes to present valued points of their proposal, after at which time the floor will be opened for questions from Board members for approximately twenty minutes. The following individuals were the primary bank representatives who made the bank's presentations and answered questions from the Board and Staff: Presentations were made by Union Bank, Jerry Rogers -4:00 -4:30 P.M., Wells Fargo, Mark Hewlitt -4:30- 5:00 P.M., Valley Independent Investment Advisory Board November 12, 2003 Minutes Bank, Sylvia Avalos - 5:00 - 5:30 P.M., Washington Mutual, Steve Johnson - 5:30 - 6:00 P.M., PFF Bank and Trust, Janet Cook - 6:00 - 6:30 P.M. and Bank of America, Mary Mendonca - 6:30 - 7:00 P.M. Investment Board Members narrowed their recommendation to Union Bank and Wells Fargo Bank. Chairman Lewis stated to the Board that Board Member Deniel brought up a good point about Union Bank fees being 20% higher then Wells Fargo Bank. Board Member Deniel suggested to the Board that Staff create a comparison matrix between Union Bank and Wells Fargo Bank. Board Member Deniel stated to the Board that if Staff was currently happy with services provided by Wells Fargo Bank, than there was no need to change, but if Union Bank offered services that Wells Fargo Bank did not, or if Union Bank could accommodate the new financial software, then there is room to negotiate with Union Bank about their pricing to match Wells Fargo Bank. Board Member Olander stated to the Board that this would be determined on Mr. Falconer's current experience with Wells Fargo Bank and if there is no significant service that Union Bank could bring to the table, there is no need to switch. Mr. Falconer advised the Board that both banks are "players" in the municipal government field and they would both do an excellent job. With all things considered and upon Staff's review of the banks, they are very satisfied with the current service provided by Wells Fargo Bank. Board Member Deniel advised the Board that from a negotiation point of view, this is the time that Staff could ask for extras, such as improvements or additional services, or free checking for employees. Mr. Falconer advised the Board that this could not be a primary consideration for selection, due to the fact that free checking is an employee benefit, not a City benefit. Board Member Deniel advised the Board that if the employees are happy and employees are getting something from the City, this is an additional compensation. Board Member Moulin advised the Board that there are some costs for this service and if there is some cost for this service, the City could possibly get some reduction in lieu of this. Board Member Moulin also advised the Board that he felt skeptical about negotiating employee benefits. Board Member Deniel advised the Board that Wells Investment Advisory Board November 12, 2003 Minutes Fargo Bank is the current Iow cost bidder and could possibly negotiate additional services if needed. Mr. Falconer reminded the Board that each bank had an opportunity to submit a proposal and include the fees that will be charged. Wells Fargo is currently doing a good job. Union Bank did not provide any significant service that would sway the City to make a change. Board Member Deniel suggested to the Board that for appropriate due diligence have both banks, Wells Fargo Bank and Union Bank, demo positive pay. Chairman Lewis reminded the Board that a recommendation needed to be made for the City Council and he felt there was no overriding reason why the City should currently switch banks at this time. In response to Board Member Moulin, Mr. Falconer stated to the Board that both banks would provide the same service. Chairman Lewis advised the Board that both positive pay and reconciliation are new services, since he has left banking, but from the interviews these services sounded as if they were the same software packages. Mr. Falconer advised the Board that a good point was brought to the Board's attention by Board Member Deniel as to how the banking software will interface with the new accounting software. The current HTE Software that the City owns should interface with Union Bank customers or with Wells Fargo Bank customers, and this is something that Staff could check into. Board Member Deniel again suggested to the Board that Staff review a demonstration, if they are not compatible it will cost the City more in the long run. Chairman Lewis stated to the Board that Union Bank did state that they would pick up a limited portion of the conversion costs. MOTION - It was moved by Board Members Olander/Deniel to approve Staff's recommendation of Wells Fargo Bank and forward to the City Council for their consideration. Motion carried unanimously. B. Transmittal of Treasury Report for September 2003 Mr. Falconer advised the Board that on page 2, the large change in cash from the previous month was the result of issuing a new Redevelopment Agency Taxable bond issue of approximately $25.4 Investment Advisory Board November 12, 2003 Minutes million in net proceeds, which was received for the SilverRock Project. After the debt service payment was made, the net change was $19.2 million for the month. Board Member Olander asked if Staff could produce a graph from the information on page 3 referring to the annualized earnings, so the Board would be able to follow the trends. Mr. Falconer replied to the Board that on page 9 is a summary which could be produced into a graph. Chairman Lewis suggested that Staff produce a graph from the information on page 9 for the Board's review for the next scheduled meeting. Mr. Falconer advised the Board that graph would be included in the next Monthly Cash End Report for review. MOTION - It was moved by Board Members M°ulin/Olander to review, receive and file the Treasurers Report for September 2003. Motion carried unanimously. VI CORRESPONDENCE AND WRITTEN MATERIAL A. Month End Cash Report - October 2003 In response to Board Member Moulin, Mr. Falconer informed the Board that the principal from the Treasury Note was reinvested and extended out two years with an approximate yield of 1.92%. Noted and Filed B. Pooled Money Investment Board Reports - August 2003 Noted and Filed VIII BOARD MEMBER ITEMS A. Meeting with Financial Advisors Chairman Lewis clarified to the Board that this suggestion was not to interview Financial Advisors but to have the advisors make a presentation Investment* Advisory Board November 12, 2003 Minutes as to what they could do for the City and at that point and time, a decision by the Board with consideration of putting an RFP together to have them come in for an interview for proposal. This should be done no later than February due to policy review and other items for review. Chairman Lewis advised the Board that he knew of a firm for consideration of presentation. Board Member Deniel advised the Board that she could extend an invitation to Capital Guardian Trust Company, which is part of Capital Group Company. Chairman Lewis asked the Board if they knew of any other firms that would be interested in a presentation. Board Member Olander advised the Board that they need to stress that these presentations are just informational. The Board will decide as to when to hold the presentations at the next scheduled meeting. B. LAIF Report - Board Member Deniel Board Member Deniel commented to the Board that she had several concerns regarding LAIF and that by attending this conference she no longer has these concerns. The only one concern is the current age of LAIF staff and their possible retirement from public service. Board Member Moulin suggested the report be distributed to the City Council Members. The Board agreed to attach the report to the November 12, 2003 minutes which would be distributed to the City Council. VIII Adjournment MOTION -It was moved by Board Members Moulin/Olander to adjourn the meeting at 7:05 p.m. Motion carried unanimously. Vianka Orrantia Secretary