2008 04 09 IAB MinutesINVESTMENT ADVISORY BOARD
Meeting
April 9, 2008
CALL TO ORDER
Regular meeting of the La Quinta Investment Advisory Board was called to order at the
hour of 4:30 P.M. by Vice Chairman Rassi, followed by the Pledge of Allegiance.
PRESENT: Board Members Ross, Moulin, Park, Rassi and Deniel (4:45)
ABSENT: None
OTHERS PRESENT: John Falconer, Finance Director and 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.) None.
IV CONSENT CALENDAR
Board Member Ross advised that on page 8, fourth paragraph second sentence
should read: Board Member Ross asked if the comparatives could #~iis-Ret be
speNed excluded from eat within the policy and only included within is the
reports generated by the Treasurer.
MOTION - It was moved by Board Members Moulin/Ross to approve the minutes
of March 12, 2008, as amended. Motion carried unanimously.
Noted and Filed.
V BUSINESS SESSION
A. Transmittal of Treasury Report for February 2008
In response to Board Member Moulin, Mr. Falconer summarized the Staff
report advising that the portfolio for the month of February declined by
51 1.6 million, and ended the month at $191.1 million, with the largest
portion of the decline due to the pass-through payments. Page 7 reflects
the activity for the month of February, with the yields rolling off at 4.6%,
4.4%, 5.2% and 2.7%, ending with a reinvestment of the portfolio at
2.1 %, 2.7% and 2.8%. In addition, page 1 1 reflects the annualized
earnings with the overall earnings at 3.85%, which was substantially less
then the previous month at 4.22%, with the portfolio still above the
City's benchmark.
Investment Advisory Board
Minutes
April 9, 2008
Mr. Falconer further advised that he is still actively investing in LAIF,
taking advantage of LAIF's current yields, and investing in short
maturities.
In response to Board Member Park, Mr. Falconer advised that during the
discussion of the policy, Staff was going to recommend increasing the
LAIF percentage from 25% to 35%.
In response to Board Member Ross, Mr. Falconer advised that at this time
he was not investing in as much commercial paper, due to the economic
market.
MOTION - It was moved by Board Members Moulin/Ross to approve,
receive and file the Treasury Report for February 2008. Motion carried
unanimously.
B. Consideration of the Fiscal Year 2008/09 Investment Policy
The Board reviewed the edited portions of the policy and recommended
the following changes/additions/deletions.
Board Member Ross' handout:
Section II -INVESTMENT POLICY
- Safety of principal
The Investment Policy aw11 conforms to all State and Local statues
governing the investment of public funds
Section III -SCOPE
This Investment Policy applies to all sash _ , ,__ and investments,
Section IV -OBJECTIVES
1. Safety of Principal
Safety of principal is the foremost objective of the City's investment
program. Investments of the City of La Quinta shall be undertaken in a
manner that seeks to ensure the preservation of capital r_ ._ meth
in the overall portfolio in accordance with the permitted
investments.
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Investment Advisory Board
Minutes
April 9, 2008
The City shall endeavor to preserve its sap+tal-faflds jny t pri
by making only permissible deposits and investments, undertaken in a
controlled manner to minimize the possibility of loss or misappropriation
through malfeasance or otherwise. Investments not backed by the full
faith and credit of the United States Government shall be diversified by
allocatin assets between different t es of ermissible investments,'
and issuers as a means.- to mitigate credit
risk and interest rate risk.
A. Credit Risk is the risk of loss from the failure of security issuer or
backer. Credit risk may be mitigated by:
- Limiting investments to the °~{~°* «.,..e,. „s ..,......:«:,.,. ~~ _ttxten~
securities;
3. Yield aRisk-Based Market Rate of Return
(Third Paragraph)
As bases for comparison only, the Treasurer's monthly report will display
the rates of return on the three-months six-month, and one-year U.S.
Treasury Bill, comparable-period rates for commercial paper' ,and
the yield for the State Treasurer's Local Agency Investment Fund (LAIF-.
Section V -MAXIMUM MATURITIES
(Third Paragraph)
Annually, the Treasurer shall project the amount of funds not expected to
be disbursed within five years. For FY 200~/0~ the amount of such
funds was 5*8 million. (*Treasurer to report dollar amount of funds to
be used at the next scheduled meeting.)
Section VII -AUTHORITY
(Second Paragraph, Last Sentence)
he City Manager or Assistant City Manager
shall apprsue acknowledge in writing all purchases and sales of
investments prior to their execution by the City Treasurer.
Section X - PERMISSA~BLE DEPOSITS AND
INVESTMENTS
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Investment Advisory Board April 9, 2008
Minutes
Board Member Park's handout:
Section XVI -REPORTING STANDARDS
(First Paragraph) DELETE PARAGRAPH
SeseR~er~'~~`-and-daae~9~' .
F
General discussion ensued by the Board regarding the issue of whether or
not the Board should be included as part of section VIII -Conflict of
Interest. This issue was referred to the City Attorney and she concurred
with Board Member Rassi's recommendation to include the Board in this
section of the policy. Board Member Moulin was not in agreement with
inclusion of the Board in this section.
Board Member Moulin advised that this section applies to "employees" of
the City purchasing securities.
Board Member Rassi advised that the current section of the policy does
not read "employees only," this section includes those employees listed.
Board Member Rassi further advised that Board does make
recommendations as well as giving input; therefore he felt this was
justification to include the Board within this section.
Board Members Deniel and Ross gave scenarios as to what they felt this
section of the policy was implying.
Chairwoman Deniel advised that the City Attorney is contracted by the
City therefore she suggested that the Board refrain from seeking legal
counsel to help avoid incurring costs to the City.
Board Member Moulin read the first sentence of section VIII and
suggested changing the title and removing the introductory sentence.
Board Member Rassi again reiterated his opinion about including the
Board within this section.
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Investment Advisory Board
Minutes
April 9, 2008
Mr. Falconer suggested that this issue, along with Board Members Moulin
and Rassi's suggested drafts of this section, be discussed with the City
Attorney during her attendance at the regular scheduled meeting in June.
MOTION - It was moved by Board Members Moulin/Ross to continue the
discussion of the Fiscal Year 2008/09 Investment Policy to the May
meeting.
Chairwoman summarized for the Board the tasks to be completed prior to
the next scheduled meeting, they were as follows:
Board Members Ross &Deniel: To review and complete section XX,
along with the table, definitions and
appendices of all state permissible
activities not permitted in the City of La
Quinta.
Board Member Moulin: Suggested draft of Section VIII.
Senior Secretary: Upon receipt from Board Member Ross,
compile draft of policy for Board's
review.
VI CORRESPONDENCE AND WRITTEN MATERIAL
A . Month End Cash Report
Mr. Falconer advised that page 6 reflects a decline in the T-Bill rate
ending at 1 %%.
In response to Chairwoman Deniel, Mr. Falconer advised that he is at
the maximum to invest in Federal Home Loan Bonds, with approximately
55 million available to invest in Federal Farm Credit Bonds.
Noted and Filed
C. Pooled Money Investment Board Report
Mr. Falconer advised that page 1 reflects security transactions from
January to January with the total portfolio increasing from 553.4 billion
to 563.7 billion.
Noted and Filed
VII BOARD MEMBER ITEMS -None
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Investment Advisory Board
Minutes
VIII Adjournment
April 9, 2008
MOTION - It was moved by Board Members Park/Moulin to adjourn the meeting
at 6:45 p.m. Motion carried unanimously.
Su fitted by
Vianka Orrantia,
Senior Secretary
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