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2004 02 11 IAB Minutes . '!' INVESTMENT ADVISORY BOARD Meeting February 11, 2004 I CALL TO ORDER Regular meeting of the La Guinta Investment Advisory Board was called to order at the hour of 4:00 P.M. by Chairman Lewis, followed by the Pledge of Allegiance. PRESENT: Chairman Lewis; Board Members Moulin, Mahfoud and Deniel (4: 15) ABSENT: Board Member Olander OTHERS PRESENT: John Falconer, Finance Director; 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 January 14, 2004 for the Investment Advisory Board. MOTION - It was moved by Board Members Moulin/Mahfoud to approve the Minutes of January 14, 2004. Motion carried unanimously. V BUSINESS SESSION A. Transmittal of Treasury Report for December 2003 Mr. Falconer summarized for the Board the Treasurers Report for the month of December. On page 2 the report reflects $ 50 million in maturities of a $120 million portfolio. On page 6, the activities page reflects an extension of the GSE's, with the yields holding. In response to Board Lewis, Mr. Falconer advised the Board that the FHLB discount note was purchased at 1.7% and extends out to 2005. Mr. Falconer advised the Board that the overall portfolio remained the same and that several investments were extended out. . , Investment Advisory Board February 11, 2004 Minutes In response to Board Member Mahfoud, Mr. Falconer advised the Board that the tips treasuries are a long term investment with a maximum of ten years; the City's portfolio allows up to five years and from a tax standpoint would not benefit. Mr. Falconer also advised the Board that this does not fit into the City's short-term strategy. Chairman Lewis asked Staff how the current decline in interest rates on the portfolio affected the City's budget. Mr. Falconer advised the Board that Staff is currently preparing a mid-year cash report for Council's review, with the downturn in the interest rates the amount budgeted for this year was 2% with the City currently at 1.6%. At this time the City does not to have to balance their budget based on investments and earnings. Due to the growth in available balances, the City will increase the budget for the upcoming year. MOTION - It was moved by Board Members Moulin/Mahfoud t.o review, receive and file the Treasurer's Report December 2003. Motion carried unanimously. VI CORRESONDENCE AND WRITTEN MATERIAL A. Informational Investment Presentation The following individuals were the representatives who made the informational investment presentations and answered questions from the Board and Staff: Presentations were made by Capital Guardian Trust Company, John Dewey and Michael Locke - 4:00 - 4:30 P.M., RNC Capital Management, Tim Dempsey - 4:30 - 5:00 P.M. General discussion and comments were made by the Board regarding the two informational presentations.. Chairman Lewis suggested to the Board that they review the information presented and at the next scheduled meeting, and if so desired by the Board, possibly consider working this issue into the investment policy discussions. Chairman Lewis commented to the Board that this might not be a direction the City would want to take at this time, but possibly consider in the future. Board Member Deniel suggested to Staff that a three or four year projection of availability of cash for the portfolio be prepared. 2 , . Investment Advisory Board February 11, 2004 Minutes For example, LAIF has an idea of funds not of immediate need and that are available for investments. Mr. Falconer advised the Board that this analysis is prepared by Staff when the portfolio is extended beyond a two year period. Board Member Deniel suggested that this analysis be updated and reviewed at the next scheduled meeting. General discussion ensued by the Board regarding the growth of the City, the growth of the portfolio and the management of the portfolio by the Treasurer. Noted and Filed B. Month End Cash Report - January 2004 Mr. . Falconer advised the Board that in response to Board Member Moulin at the previous Investment Board meeting, on page 10 of the Month End Cash Report the budget salaries were based on three periods instead of two. Mr. Falconer informed the Board that 2003 was the best year for building permits. In response to Board Member Moulin, Mr. Falconer advised the Board that on page 10 of the Cash Report, listed under the column Ilunderspent (overspent)," the negatives and positives were switched. Noted and Filed C. Pooled Money Investment Board Report - November 2003 General discussion ensued amongst the Board regarding the Pooled Money Investment Board Report. Noted and Filed D. California Municipal Treasurers Association Conference Chairman Lewis advised the Board of the upcoming California Municipal Treasurers Association Conference to be held in South Lake Tahoe in April, the Finance Director along with two board members are budgeted to attend. Additional information will be given at the next scheduled meeting. Noted and Filed 3 . . Investment Advisory Board February 11, 2004 Minutes VII BOARD MEMBER ITEMS Board Member Deniel informed the board that she will not be in attendance at the next scheduled board meeting. VIII ADJOURNMENT MOTION - It was moved by Board Members Moulin/Olander to adjourn the meeting at 6:04 p.m. Motion carried unanimously. Vianka Orrantia Secretary 4