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2005 07 13 IAB Minutes INVESTMENT ADVISORY BOARD Meeting July 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 Olander, Moulin, Mahfoud and Deniel ABSENT: None OTHERS PRESENT: John Falconer, Finance Director, Vianka Orrantia, Secretary, Tom Genovese, City Manager and Kathy Jenson, City Attorney II APPOINTMENT OF OFFICERS A. Appointment of Investment Advisory Board Chairperson Chairman Lewis opened nominations for Chairperson. Board Member Moulin nominated Chairman Tom Lewis for Chairperson. MOTION - It was moved by Board Members Moulin/Olander to reappoint Chairman Lewis as Chairperson. Motion carried unanimously. B. Appointment of Investment Advisory Board Vice-Chairperson Chairperson Lewis opened nominations for Vice Chairperson. Board Member Moulin nominated Board Member Deniel. MOTION - It was moved by Board Members Moulin/Olander to appoint Board Member Deniel as Vice Chairperson. Motion carried unanimously. III PUBLIC COMMENTS - None. Investment Advisory Board Minutes July 13, 2005 IV CONFIRMATION OF AGENDA Mr. Falconer advised the Board of the two handouts, one of which was a change to the meeting minutes and the second was a change to the investment policy. V. CONSENT CALENDAR A. Approval of Minutes of Meeting on May 11, 2005 for the Investment Advisory Board. MOTION - It was moved by Board Members Olander/Deniel to approve the Minutes of May 11, 2005 as submitted. Motion carried unanimously. VI BUSINESS SESSION A. Transmittal of Treasury Report for April and May 2005 Mr. Falconer informed the Board that there was not much activity for the month of April. The month of May, page 16 of the Treasurer's Report reflects additional monies placed into LAIF, a rollover in Farm Credit and, the first of June $11 million was invested in commercial paper for a short period (until June 23rd). This will not be reflected in the fiscal year end; the LAIF balance was temporary as a result of the tax increment received in June. MOTION - It was moved by Board Members Mahfoud/Olander to review, receive, and file the Treasurer's Report for April and May 2005. Motion carried unanimously. B. FY 2005/06 Meeting Schedule Board Member Moulin requested the schedule be approved with the exception of the month of August, at which time the Board would go dark for the month. Board Member Deniel stated that there are two months on the upcoming schedule (February and March 2006) that both months fall on the 8th, would Staff need week to prepare for the meetings. 2 Investment Advisory Board Minutes July 13. 2005 Mr. Falconer replied that the scheduled meetings dates would no be a problem. MOTION - It was moved by Board Members Mahfoud/Olander to continue to meet on a monthly schedule with the Board going dark for the month of August. Motion carried unanimously. C. Consideration of Approval of Investment Advisory Board 2005/2006 Work Plan Chairman Lewis stated that the Board will need to find out if the City Council would like the Board to move forward with a RFP for the portfolio manager once the ordinance has been adjusted. Mr. Falconer suggested that this might be discussed at the joint meeting with Council in October. Chairman Lewis stated that LAIF has been discussed along with GSE's and commercial paper and a proposal for a money manager was developed and he asked the Board if there was any other item that needed to be discussed in upcoming year's work plan. Board Member Moulin suggested reviewing the cash projections. Mr. Falconer advised the Board that they need to remain along guidelines of the investment policy. Chairman Lewis suggested possibly tracking the money invested. Mr. Falconer stated to the Board that Staff indirectly monitors monies invested in the two to five year projections, i.e. Treasury Bills have been bumped up to $8 million. In response to Board Member Moulin, Mr. Falconer advised the Board that the current banking services set up with Wells Fargo is either a compensated balances or a sweep account. Currently, funds have switched over from the sweep account due to low rates. Board Member Olander asked Staff how they currently feel about commercial paper. Mr. Falconer replied that he is currently concerned about the current quality. Board Member Olander asked what the current yield was for commercial paper. Mr. Falconer replied it is currently at 2%. Chairman Lewis stated that the following items be added to the work plan: Commercial Paper, GSE's and LAIF, and RFP discussion with City Council. Upon Council approval, include RFP process. Board Member Moulin also suggested discussion of cash utilization. Chairman Lewis concurred. 3 Investment Advisory Board Minutes July 13. 2005 Mr. Falconer advised the Board that from a procurement standpoint, once the Board has met with City Council and the direction is to go forward, a staff report is prepared to City Council stating that the City is moving forward with the RFP and would like Council to suggest who will be on the RFP Committee (i.e. Investment Advisory Board and City Council). The Council may direct the Board to act on their behalf. MOTION - It was moved by Board Members Olander/Mahfoud to approve the 2005/2006 Work Plan. Motion carried unanimously. D. LAIF Conference Chairman Lewis advised Staff that he would be unable to attend this year's conference. MOTION - It was moved by Chairman Olander/Deniel to authorize two Board Members, (to be named at a later date), to attend the conference subject to Council approval. Motion carried unanimously. VII CORRESPONDENCE AND WRITTEN MATERIAL A. Month End Cash Report - June 2005 Noted and Filed B. Pooled Money Investment Board Reports - April 2005 Noted and Filed C. Distribution of Investment Policies for Fiscal Year 2005/2006 Chairman Lewis advised the Board that the Investment Policy has been approved by the City Council. Mr. Genovese advised the Board that the Investment Policy should have been listed as a business item, not correspondence. 'Mr. Genovese suggested that this item be continued to the next scheduled meeting so that the policy could be formally approved by the Board. 4 Investment Advisory Board Minutes July 13, 2005 Ms. Jenson suggested that this could be set up as a ratification item at the next scheduled meeting. Board Member Oeniel asked Staff if this could be modified and added to the current meeting. Mr. Genovese clarified for the Board that the former body has already adopted the policy. Ms. Jenson also clarified that in order to add an item to the current agenda, there needs to be a special finding, (i.e. not aware of a particular item). If an item came up after the posting of the agenda and/or an emergency that came up prior to the next scheduled meeting, then the item can be added during that particular scheduled meeting. Board Member Moulin stated that he thought the change to the ordinance was going to be added to the agenda for the current meeting. Mr. Falconer replied that this item was going to be discussed under the work plan. Board Member Moulin also stated that Mr. Falconer had a letter of transmittal, wherein page three states that the ordinance has to be changed and/or modified. Ms. Jenson advised the Board that an ordinance has to be prepared in advance of the RFP process, to clarify that the portfolio manager is authorized and specific languages will also be worked on so that the City Council remains liable for decisions. Chairman Lewis commented that it would be hard for City Council to give up liability. Ms. Jenson referred back to the Attorney General's opinion and the end opinion states that the Finance Director has to remain involved and is ultimately liable for decisions made. Currently, the Finance Director has authority given by the City Council and Council modifies the delegation to the Finance Director. This will be indicated both in the procedures and codes. Board Member Moulin asked Staff if the Investment Policy could be discussed at the current time. Chairman Lewis replied that this item could be listed as a discussion item. Board Member Moulin advised the Board that Appendix I seems to be misleading (referring to Column 7, Investments that are allowed by the City). The City imposes limitations on certain investments. Board Member Deniel stated that this was previously discussed and that the City policy was initially designed to not include a portfolio manager and now the policy was expanded to include a portfolio manager. Chairman Lewis stated that if someone other than the Board reads the policy without knowing the background they would assume the portfolio manager does not have 5 Investment Advisory Board Minutes July 13, 2005 the authority to invest in particular investments listed in Appendix I. Ms. Jenson suggested that this be clarified so that it is not inconsistent with the policy. This can be made as part of the formal action to be made at the next scheduled meeting. Chairman Lewis suggested that the Board work on wording and will come to a consensus at the next scheduled meeting. Chairman Lewis asked if Ms. Jenson was going to work on the wording for the ordinance. Ms. Jenson stated that she will be working on the ordinance and felt that there will only be minor changes. The contract will spell out exactly what the Finance Director's regulation will be over the portfolio manager. Board Member Moulin stated to Staff that he had drafted a sample ordinance that could be reviewed by Ms. Jenson. VIII BOARD MEMBER ITEMS IX ADJOURNMENT MOTION - It was moved by Board Members Mahfoud/Moulin to adjourn the meeting at 6:25 p.m. Motion carried unanimously. 6