2005 04 13 IAB Minutes
INVESTMENT ADVISORY BOARD
Meeting
April 13, 2005
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 Lewis, followed by the Pledge of Allegiance.
PRESENT:
Chairman Lewis, Board Members Moulin, Mahfoud and
Deniel (5:36)
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
A. Approval of Minutes of Meeting on March 9, 2005 for the Investment
Advisory Board.
Board Member Moulin advised the Board that on page 4, first sentence
should read: for safety of principal and me return.
In the latter part of the meeting and with agreement from the Board,
Board Member Deniel requested the following correction be made to the
meeting minutes: page 4, second paragraph, second sentence: Board
Member Deniel replied that in order to performance
MOTION - It was moved by Board Members Mahfoud/Moulin to approve the
Minutes of March 9, 2005. Motion carried unanimously.
V BUSINESS SESSION
A. Transmittal of Treasury Report for February 2005
In response to Board Member Moulin, Mr. Falconer informed the Board
that based on the conversation in the previous Board meeting and the
current rates, he felt that Fannie Mae would be a good investment at
this time.
Investment Advisory Board
Minutes
April 13, 2005
General discussion ensued with the Board and Staff in reference to
LAI F and the current benchmark.
MOTION - It was moved by Board Members Moulin/Mahfoud to
review, receive and file the Treasurer's Report for February 2005.
Motion carried unanimously.
B. Request for Proposal for Portfolio Manager
Board Member Lewis stated that after reviewing the draft for the
Request for Proposal for a money manager, the Board needs to decide
what type of investments the money manager will manage. Board
Member Deniel stated that the Board will also need to decide the time
frame and the criteria for evaluating the money manager. Chairman
Lewis advised the Board if a money manager was hired under the
current investment policy that the money manager's hands would be
tied and there would be no benefit to using one.
The Board reviewed the Investment Portfolio Reporting Practices CA
Debt and Investment Advisory Commission furnished by Staff and
recommended the following to be used by the Money Manager:
Bankers Acceptance
Negotiable CD's
Asset-Backed Securities
Mutual Funds
(with II AA II credit rating or better)
(with II AA II credit rating or better)
General Board discussion ensued in reference to mutual funds. Mr.
Falconer suggested that mutual funds be addressed during the
interview process, with a possible question being IIWhat kind of
internal institutional funds do you invest in? II Chairman Lewis advised
that the investment policy states that the term "mutual fundsll entails
a few restrictions and added that there are quite a variety of criteria
that come into play, such as experience of the manager, size of the
fund, etc... Board Member Deniel suggested that mutual funds be
listed as IIpooled funds." Chairman Lewis stated that page 12 of the
investment policy references pooled funds and mutual funds, but does
not clarify lIoperable by third party."
Chairman Lewis suggested that the Reverse Repurchases and
Repurchases remain off the list with Board concurrence.
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Investment Advisory Board
Minutes
April 13, 2005
Board Member Deniel suggested to the Board that the RFP be finalized
and included as part of the investment policy. Chairman Lewis
advised the Board that the RFP was going to be included as an
appendix to the investment policy, once the final RFP and investment
policy are reviewed. In reference to Board Member Moulin, Chairman
Lewis clarified that a bullet point will be listed under IIpermissible
investment section" that referenced monies to be managed by an
investment manager, which will also be covered by the appendix. The
RFP will be listed as Appendix H and the permissible investments for
the money manager will be listed as Appendix I. Mr. Falconer stated
that the glossary would become Appendix J.
MOTION - It was moved by Board Members Mahfoud/Moulin to
continue the review of the request for proposal for portfolio manager.
Motion carried unanimously.
C. Consideration of Fiscal Year 2005/06 Investment Policies
Board Member Mahfoud advised the Board that a correction needs to
be made to page 16 of the Investment Policy: t** should be
Chairman Lewis suggested that the money manager be given a
percentage of the portfolio and a larger portion be maintained by the
City for cash needs. The Board concurred.
Mr. Falconer presented to the Board a list of cities that currently use
investment advisors and the language incorporated into their
investment policies.
Mr. Falconer suggested that the Board keep the language presented by
Board Member Moulin on page 1 6 of the investment policy and add to
it. Board Member Deniel suggested that a portion of the language
received from Laguna Niguel be incorporated into the paragraph. The
Board concurred. The paragraph will read:
With the approval of the City Council, the City may engage a professional
investment portfolio manager(s) to assist the City Treasurer in
administering the delegated authority to manage and invest the City's
Funds. The investment portfolio managers or advisors will be approved
by City Council based upon a request for proposal process. Before
engagement by the City, except as may be specifically waived or revised,
the professional manager shall commit to adhere to the provisions of the
City of La Ouinta Investment Policy. and shall documcnt that they arc
, appropriately registered and licensed by gO\t'erning bodies. Such managers
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Investment Advisory Board
Minutes
April 13, 2005
may be granted the discretion to purchase and sell investment securities
in accordance with this Investment Policy. Such managers shall have: (1)
an established professional reputation for asset or investment
management; (2) knowledge and working familiarity with State and
Federal laws governing and restricting the investment of public funds; (3)
substantial experience providing investment management services to local
public agencies whose investment policies and portfolio size are similar to
those of the City; and (4) professional liability (errors and omissions)
insurance and fidelity bonding in such amounts as are required by the
City. Such managers shall be registered under the Investment Advisers
Act of 1940.
Mr. Falconer advised the above should also be included in the Executive
Summary.
In reference to page 5, Item 2. Liquidity, Chairman Lewis asked the Board
if they would like to exempt the money manager from buy and hold
strategy. The Board concurred. The Board agreed to place a paragraph
in Appendix J that should read: IIMoney Manager is exempt from the
requirement that securities not be sold prior to maturity as found in the
investment policy." Mr. Falconer informed the Board that there will be
other areas within the policy that will also need to reference the money
manager. Staff will review the policy and will cite where necessary.
Board Member Moulin suggested adding an additional footnote to
Appendix A referencing the money manager.
Mr. Falconer advised the Board that the City ordinance needs to be
addressed. Mr. Falconer will once again contact the cities that responded
to the previous request to find out if a change was made to the ordinance
and the language used. Mr. Falconer will also contact the City Attorney
to address this same issue.
MOTION - It was moved by Board Members Mahfoud/Deniel to continue
the review of the Fiscal 2005/06 Investment Policies. Motion carried
unanimously.
VI CORRESONDENCE AND WRITTEN MATERIAL
A. Month End Cash Report - March 2005
Noted and Filed
B. Pooled Money Investment Board Report - January 2004
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Investment Advisory Board
Minutes
April 13, 2005
Noted and Filed
VII BOARD MEMBER ITEMS
Board Member Deniel requested that the June 8th meeting be rescheduled to
June 15th. Staff will make the request to the City Manager and will notify
the Board of the tentative change.
VIII ADJOURNMENT
MOTION - It was moved by Board Members Moulin/Deniel to adjourn the
meeting at 6:45 p.m. Motion carried unanimously.
subr~rit~d by, />'--",
Y~~4d~þ-t;~· .
Vianka Orrantia
Secretary
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NEXT MEETING MA Y 11, 2005
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5
INVESTMENT ADVISORY BOARD
Business Session: A
Meeting Date: May 11, 2005
ITEM TITLE:
Transmittal of Treasury Report
for March 2005
BACKGROUND:
Attached please find the Treasury Report March 2005
RECOMMENDATION:
Review, Receive and File the Treasury Report for March 2005
¡~
ohn M. Falconer, Finance Director
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