2006 07 12 IAB Minutes
INVESTMENT ADVISORY BOARD
Meeting
July 12, 2006
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 Chairperson Deniel, followed by the Pledge of Allegiance.
PRESENT:
Board Members Moulin, Deniel, Olander, Rassi and Egbert
ABSENT:
None
OTHERS PRESENT:
John Falconer, Finance Director and Vianka Orrantia,
Secretary
II Appointment of Officers
A. Appointment of Investment Advisory Board Chairperson
Chairperson Deniel opened nominations for Chairperson.
Board Member Moulin nominated Chairperson Deniel for Chairperson and Board
Member Olander for Vice-Chairman. With no other nominations a vote was taken.
B. Appointment of Investment Advisory Board Vice Chairperson
MOTION - It was moved by Board Members Egbert/Rassi to appoint Board Member
Deniel as Chairperson and Board Member Olander as Vice-Chairman. Motion
carried unanimously.
III PUBLIC COMMENT - (This is the time set aside for public comment on any
matter not scheduled on the agenda.)
IV CONFIRMA rlON OF AGENDA
Mr. Falconer advised the Board that the Treasurer's Commentary handout should
be included as part of the Treasurer's Report.
V CONSENT CALENDAR
A. Approval of Minutes of Meeting on June 12, 2006 for the Investment
Advisory Board.
Board Member Moulin advised the Board of two corrections, the first one on page 1,
Item IV of the Consent Calendar the date in the "Motion" reflected a duplicate 2006.
And on page 5, the adjournment should read: "It was moved by Board Members
Moulin/Egbert Rassi."
Investment Advisory Board
Minutes
July 12, 2006
MOTION - It was moved by Board Members Moulin/Olander to approve the Minutes
of June 12, 2006 as amended. Motion carried unanimously.
VI BUSINESS SESSION
A. Transmittal of Treasury Report for May 2006
Mr. Falconer advised the Board of a correction on page 4 of the Treasurer's
Report, the sweep fund currently reflects an interest rate of 4.10% and
should be at 4.30%.
General discussion ensured amongst the Board regarding Treasury Notes
and the CD purchased.
Mr. Falconer reviewed for the Board the Treasurer's Commentary which
summarizes the Cash Balances, Investment Activity, Portfolio Performance
and Future Thoughts. In response to Board Member Egbert, Mr. Falconer
clarified that Treasurer's Report reflects the activity for the month of May and
the commentary is a summary of the current month with some information
obtained from the City's broker/dealers.
General discussion ensued among the Board and Staff regarding the City's
computer backup.
MOTION - It was moved by Board Members Moulin/Egbert to approve,
receive and file the Treasury Report for May 2006. Motion carried
unanimously.
B. FY 2006/2007 Meeting Schedule
Chairperson Deniel stated that in previous years the Investment Advisory
Board agreed to go dark in the month of August and asked the Board if they
wish to continue this practice. Board concurred.
MOTION - It was moved by Board Members Egbert/Olander to continue to
meet on a monthly schedule with the Board going dark for the month of
August. Motion carried unanimously.
C. LAIF Conference
Chairperson Denielsuggested that Board Members Egbert and Rassi attend
the upcoming LAIF Conference in December. Mr. Falconer advised the
Board that Staff will submit a request for two Board me~bers to attend the
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Investment Advisory Board
Minutes
July 12, 2006
conference at the next scheduled Council meeting for Council's approval.
MOTION - None.
D. Consideration of Approval of Investment Advisory Board 2006/2007
Work Plan
In response to Chairperson Deniel, Mr. Falconer advised that Staff had not
heard from Council regarding the May 16th memo but a response might be
discussed along with the work plan at the scheduled Council meeting on
Tuesday, July 18th.
In response to Chairperson Deniel, Mr. Falconer advised that it might be in
the best interest of the Board to be in attendance at the July 18th Council
meeting during the discussion of the work plan, but it is not required.
In response to Chairperson Deniel, Mr. Falconer advised that every three
years Council approves an RFP for banking services and that the current
banking contract with Wells Fargo will expire on December 31st. Staff
anticipates the RFP process to be completed by October or November so if a
transition does occur this will give Staff time to prepare before the expiration
of the existing banking contract.
In response to Chairperson Deniel, Mr. Falconer advised that in previous
years the Board has been part of the review process.
Board Member Moulin advised that the review of the RFP is an allocation of
authority from the direction of the City Council.
In response to Board Member Egbert, Mr. Falconer advised that in previous
years there have been four to five banks that have responded to the banking
RFP, those banks included Wells Fargo, Washington Mutual, Bank of
America and a local bank. Mr. Falconer also advised that the RFP is sent to
CSMFO and CMT A sponsors.
Chairperson Deniel questioned the use of a bank consultant to review the
banking RFP and the cost to the City.
Mr. Falconer advised that a bank consultant does have the expertise in
evaluating banks and the RFP's. He further advised that the Council has not
yet been approached on the use of a consultant to review the banking RFP
and wanted input from the board first as to whether or not the use of a
banking consultant would be feasible.
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Investment Advisory Board
Minutes
July 12, 2006
Chairperson Deniel advised that she is not in favor of the use of a banking
consultant and does not feel they are worth the fee that is charged.
In response to Board Member Egbert, Mr. Falconer advised that the
estimated amount to be paid to the banking consultant is approximately
$7,500.
Both Chairperson Deniel and Board Member Moulin gave examples of
banking services presented by some of the banks but were of no interest to
the City during the previous RFP process.
In response to Chairperson Deniel, Mr. Falconer advised that the City has
never used a consultant during the RFP process for banking services,
because the City has been with Wells Fargo for some time now the
consultant might be able to give the City a different perspective as to what
they should or shouldn't be looking for during the RFP process.
In response to Board Member Rassi, Mr. Falconer advised that he spoke
with several banks and they recommended a consultant that was listed in the
CSMFO directory. He further advised that the consultant, Susan Cotton with
Money Matters, had previously been with First Interstate and is now a
banking consultant specializing in municipal reviews of banks.
General discussion continued by the Board regarding the use of a consultant
for the RFP process for banking services.
Mr. Falconer advised that his only concern with the current bank is their lack
of communication.
Board Member Moulin advised that the Board agrees to place the RFP for
banking services on the 2006/07 work plan and also agrees that the Board
will assist in the RFP process.
Chairperson Deniel advised that the next item up for discussion was the RFP
for audit services.
Mr. Falconer advised that in addition to the RFP for banking services being
added to the Board's work plan the other item he would suggest adding is
the RFP for audit services. The current auditors, Mayer Hoffman and
McCann, formerly known as Conrad and Associates have been with the City
approximately ten (10) years and the City has been very happy with the
services provided. During the ten year service, the firm rotated partners so
during one term one partner served and when awarded the second term the
other partner managed. The current contract with Mayer Hoffman and
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Investment Advisory Board
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other partner managed. The current contract with Mayer Hoffman and
McCann will expire in the upcoming fiscal year and by adding this item to the
work plan it will allow Council to consider the Board to help with RFP
process.
It was agreed by the Board to add the audit service to the Investment Board
work plan.
Chairperson Deniel advised of the next item of discussion for the upcoming
work plan was the monitoring of GSE's. It was agreed by the Board to keep
GSE's on the upcoming work plan.
Chairperson Deniel advised of the last item listed on the 2006/07 work plan,
recommending to City Council the use of a portfolio manager and amending
the municipal code.
Board Member Egbert suggested the following change to the wording of the
last item listed on the 2006/07 work plan and suggested the following:
"Recommending to City Council the use of an outside professional firm to
manage a portion of the portfolio a portf-olio manager and amending the
municipal code. This will clarify whether the manager will be an outside firm
or employed within the City.
Chairperson Deniel and Board Member Moulin suggested the replacing the
first word "Recommending" to Discussed, Work or Coordinate.
In response to Board Member Egbert, Mr. Falconer clarified that the portfolio
manager be added to the work plan for the upcoming year and not a release
of an RFP by the en.d of this year.
Mr. Falconer advised that from last years work plan recommendations the
City implemented the Sweep Account.
Board Member Olander suggested the Board read the Council meeting
minutes of June 20th adopting the Investment Policy for Fiscal Year 2006/07
and the comments that were made by Council which are parallel with what
the Investment Board has been discussing.
It was agreed upon by the Board to add the following to the 2006/07 work
plan: Review the Investment Policy of the City in light of the changes the City
has undergone and the size of its portfolio in order to utilize funds as best as
the City can.
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