2006 10 11 IAB Minutes
INVESTMENT ADVISORY BOARD
Meeting
October 11, 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:
ABSENT:
OTHERS PRESENT:
Board Members Moulin, Deniel, Olander, and Rassi
Board Member Egbert
John Falconer, Finance Director, and Vianka Orrantia,
Secretary
II PUBLIC COMMENTS - Rob Schein and Rick Blanke of Morgan Stanley
Mr. Schein and Mr. Blanke advised the Board of the services Morgan Stanley could offer
the City in reference to the portfolio, either in a consulting capacity, management capacity
or both, if and when the City decides to hire a portfolio manager.
Chairperson Deniel advised Mr. Schein and Mr. Blanke that at this time, the structure of the
portfolio to be managed has not been decided, nor has an agreement to hire a portfolio
manager within the Board or the City Council has been made.
In response to Board Member Rassi, Mr. Schein advised that one of Morgan Stanley's
current clients in the valley is the City of Coachella.
General discussion ensued amongst the Board in regards to Mr. Schein and Mr. Blanke,
and how Morgan Stanley compared to previous firms presented to the Board.
Mr. Falconer advised that Morgan Stanley is currently one of the City's broker/dealers out
of the San Rafael office, and could not see them fulfilling the role of a broker/dealer at this
time.
III CONFIRMATION OF AGENDA - (This is the time set aside for public comment
on any matter not scheduled on the agenda.)
Chairperson Deniel asked to discuss Board Member Egbert's current situation
under board member items.
IV CONSENT CALENDAR
A. Approval of Minutes of Meeting on September 13, 2006 for the Investment
Advisory Board.
Investment Advisory Board
Minutes
October 11, 2006
MOTION - It was moved by Board Members Olander/Moulin to approve the
minutes of September 13, 2006. Motion carried unanimously.
V BUSINESS SESSION
A. Transmittal of Treasury Report for August 2006
Mr. Falconer reiterated to the Board the difficulty he has had in obtaining
Farm Credit paper. The Farm Credit he has been able to obtain has been
short-term issues. The report reflects the City's bond debt service payment
which was due at the end of August; the approximate amount paid was $10.8
million. The LAIF balances currently reflect a draw down, which is the lowest
it has been in the past couple of years.
Mr. Falconer advised the Board that the portfolio performance has finally met
its benchmark; this is a comparison to the six month treasury at 4.97%. The
benchmark is expected to be exceeded within the next couple of months due
to a drop in the six month treasury. He also advised that due to the drop in
the yield curve, he might extend the average maturity out further.
In response to Board Member Moulin, Mr. Falconer advised that the indicator
for the declining yields were in several publications he had read and it may
be advised to invest in longer maturing investments.
MOTION - It was moved by Board Members Olander/Moulin to approve,
receive and file the Treasury Report for August 2006. Motion carried
unanimously.
B. Continued Consideration of the Fiscal Year 2006/07 Work Plan - Review
of Investment Policy
It was agreed by the Board to retain the current buy and hold restriction in
the policy.
In response to Board Member Olander, Mr. Falconer advised the Board that
based on the current yields; it would not be feasible to extend the two year
restriction to three years.
Chairperson Deniel stated that the Board will advise Council, at the joint
meeting, that the Board is discussing the possibility of allowing a longer
maturity on a portion of the portfolio.
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Investment Advisory Board
Minutes
October 11, 2006
General discussion was ensued by the Board regarding the investing of
GSE's and their current market status.
Mr. Falconer advised that Staffs preference for GSE's in lieu of the current
dollar limitation would be percentages, due to the flexibility they give towards
investments as the portfolio size changes.
It was agreed upon by the Board to continue discussions of GSE's at the
November board meeting.
MOTION - It was moved by Board Members Moulin/Olander to continue the
discussion of the 2006/07 Investment Policy to the November meeting.
Motion carried unanimously.
VI CORRESPONDENCE AND WRITTEN MATERIAL
A. Month End Cash Report - September 2006
Noted and Filed
B. . Pooled Money Investment Board Reports - July 2006
General comments were made by the Board in regards to the July PMIA
report.
In response to Board Member Moulin, Mr. Falconer advised that the RFP for
auditors is forthcoming. The City's current auditors have been scheduled for
a presentation at the end of November with the City Council and a
presentation with the Board will be scheduled in the future.
Noted and Filed
VII BOARD MEMBER ITEMS
Chairperson Deniel advised that Board Member Egbert is currently working out of
state, which has attributed to his most recent absences from the past few board
meetings. Chairperson Deniel conveyed Board Member Egbert's commitment to the
Investment Board and his willingness to continue to serve on the Board.
In response to Chairperson Deniel, Mr. Falconer advised that if a resignation is to
be made, he would recommend that the Mayor receive the resignation letter, due to
the fact that this is an appointed seat. In response to Chairperson Deniel, Mr.
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Investment Advisory Board
Minutes
October 11, 2006
Falconer stated that the City Manager or City Clerk could also receive a resignation
letter. Chairperson Deniel stated that she felt that if a resignation is submitted, it
should be addressed to the Investment Advisory Board.
It was the consensus of the Board to allow Board Member Egbert to continue with
his term if he is able to attend the scheduled monthly meetings.
If Board Member Egbert is unable commit to the monthly meetings as scheduled,
then the Board will accept his resignation.
Chairperson Deniel will follow up with Board Member Egbert and report back to the
board at the November meeting.
VIII Adjournment
MOTION -It was moved by Board Members Moulin/Olander to adjourn the meeting
at 6:40 p.m. Motion carried unanimously.
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Vianka Orrantia,
Secretary
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