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2008 07 16 IAB MinutesINVESTMENT ADVISORY BOARD Meeting July 16, 2008 I CALL TO ORDER Regular meeting of the La Quinta Investment Advisory Board was called to order at the hour of 4:35 P.M. by Chairperson Deniel, followed by the Pledge of Allegiance. PRESENT: Board Members Moulin, Ross, Deniel, Rassi & Park ABSENT: None OTHERS PRESENT: John Falconer, Finance Director, Vianka Orrantia, Secretary, II. APPOINTMENT OF OFFICERS A. Appointment of Investment Advisory Board Chairperson Chairperson Deniel opened nominations for Chairperson. Chairperson Deniel nominated Board Member Ross for Chairman. VOTE: All Ayes MOTION - It was moved by Board Members Moulin/Park to close nominations and appoint Board Member Ross as the Chairman. Motion carried unanimously. B. Appointment of Investment Advisory Board Vice-Chairman Chairperson Deniel opened nominations for Vice-Chairman. Board Member Deniel nominated Board Member Park as Vice-Chairman. VOTE: All Ayes MOTION - It was moved by Board Members MoulinlRoss to appoint Board Member Park as Vice-Chairman. Motion carried unanimously. At this point in the meeting, Chairman Ross took over from Board Member Deniel in chairing the meeting. General comments ensued among the Board regarding the new Chairman and Vice-Chairman and the Board's hard work during the review of the investment policy. Investment Advisory Board July 16, 2008 Minutes III. PUBLIC COMMENTS - (This is the time set aside for public comment on any matter not scheduled on the agenda.) None. IV. CONFIRMATION OF AGENDA -None. Mr. Falconer advised of a hand-out from Board Member Moulin to be discussed under Board Member comments. Chairman Ross requested that under the discussion of board member items that each board member takes the time to comment on any items of interest. V. CONSENT CALENDAR (This item was discussed prior to the appomtrnerrtof officers) Approval of Minutes of Meeting on July 16, 2008 for the Investment Advisory Board. Board Member Ross advised of minor corrections on page 1; Item III-Confirmation of Agenda: First paragraph: Mr. Falconer requested that an amended copy of page 3 of the May 14`h minutes be added to the agenda fti reflect L..] Heading of Item IV -Approval of Minutes of Meeting on May 14, {AAeu4ia 2008 [...1 Board Member Ross asked, (page 2 Item V -Business Session, 5`" paragraph) for clarification as to whether or not Board Member Moulin was speaking in reference to the ordinance or the ad for recruitment of Investment Advisory Board Members. General discussion was ensued by the Board regarding the issue of the ordinance and ad; it was agreed by Board Member Moulin to leave the minutes as originally reflected. MOTION - It was moved by Board Members Rassi/Moulin to approve the minutes of July 16, 2008, as amended. Motion carried unanimously. VI. BUSINESS SESSION A. Transmittal of Treasury Report for May 2008 Mr. Falconer presented and reviewed the staff report advising the Board that the portfolio increased by 527.5 million in the month of May, due to 2 Investment Advisory Board Minutes July 16, 2008 the second installment from the County property taxes; waste hauling fees, lighting and landscaping, assessment districts and personal property taxes, with the bulk of the monies from redevelopment agency tax increments. Page 1 1 of the Treasurer's report reflects a decline in the yield of the portfolio from 3.41 % in April to 3.17% in May, due to the current economic market. Mr. Falconer further advised that there was an investment of 514 million in T-Bills to match the maturity for the upcoming debt service payment due at the end of August, which is estimated at 512 to 513 million. In addition, Staff temporarily increased the investments in commercial paper to take advantage of the short-term interest rates. In response to Board Member Moulin, Mr. Falconer advised that his choice in the purchase of commercial paper is based on the current yield and what is available. Mr. Falconer further advised that the current commercial paper he is not willing to purchase at this time is International Lease Finance due to their affiliation with AIG. In response to Board Member Ross, Mr. Falconer advised that the usual amount available to invest is 55 million per issuer per investment. In response to Board Member Ross, Mr. Falconer advised that the tax increment payments for this year were higher than the prior year but would possibly see changes in the upcoming year due to Prop 8 adjustments. MOTION - It was moved by Board Members Moulin/Park to approve, receive and file the Treasury Report for May 2008. Motion carried unanimously. B. FY 2008/2009 Meeting Schedule Mr. Falconer presented the 2008/2009 meeting schedule and commented that in the past the Board has gone dark in the month of August. Chairman Ross suggested that the Board meet in August for educational purposes and asked the Board if they had any ideas for the meeting. Board Member Moulin suggested that the Board select two areas for review for the upcoming fiscal year, one area being the City's internal controls. Board Member Deniel concurred and suggested that the Board meet earlier than the scheduled meeting time so there is no overtime incurred by the City employees. 3 Investment Advisory Board Minutes July 16, 2008 Mr. Falconer suggested running through an investment purchase. General discussion ensued among the Board regarding the topic for the August meeting and it was concurrence of the Board to meet at 4:00 p.m. in August to review internal controls. MOTION - It was moved by Board Members Moulin/Park to approve the Fiscal Year 2008/09 meeting schedule to meet monthly. Motion carried unanimously. C. Consideration of Approval of Investment Advisory Board 2008/2009 Work Plan Mr. Falconer presented the Investment Advisory Board 2008/2009 work plan and advised that the items listed, were derived from items discussed at prior meetings. Mr. Falconer further advised that also included was a handout from Board Member Moulin regarding Chapter 2.7 of the Municipal Code along with possible work plans regarding GSE's (i.e. Fannie Mae and Freddie Mac), reviewing LAIF and any other item for the Board's consideration. The work plan is scheduled to be presented to the City Council on August 5`". Board Member Moulin stated that he didn't feel that item 1 needed to be listed on the work plan. Mr. Falconer advised that the review of the Treasurer's Report is the previous history of investments and continued review of item 1 on the work plan would allow the Board and Staff to monitor GSE's, LAIF and Commercial Paper. In response to Board Member Park, Mr. Falconer advised that this item could be added to the monthly agenda as a Board Member item. Mr. Falconer further advised that placing this item on the work plan would inform Council that the Board is keeping an eye on these items due to their recent publicity. Board Member Deniel suggested possibly placing on a bi-monthly basis on the agenda, so the review of item 1 does not become routine. Board Member Deniel further suggested an annual review of LAIF with a report written by those Board members that attend the annual LAIF conference. General discussion ensued among Board regarding item 1 of the recommended work plan. 4 Investment Advisory Board Minutes July 16, 2008 Board Member Moulin suggested a review of the monthly Treasurers Report. In response to Board Member Rassi, Mr. Falconer advised that the spread sheets for the report are routinely prepared. Mr. Falconer further advised that the reconciliation of cash is completed usually by the 10`h day of each month with the monthly Treasurers Report completed by the 15"' of each month, with the report completed on a timely basis. Board Member Moulin advised that the Treasurer submits a quarterly report of investments for Council's review and this report might be one that the Board could review versus the Treasurers report. Mr. Falconer advised that the current Treasurers Report does not meet State code due to the fact that it is not submitted within 30 days; therefore Staff devised along with the auditors, the statement of quarterly investments and is presented to Council on a quarterly basis. General discussion ensued among the Board regarding the Treasurers Report and the wording for items listed on the 2008/2009 Work Plan. It was the concurrence of the Board to list the following items to the 2008/2009 Work Plan: 1) Review of Government Sponsored Enterprises (GSE's) and LAIF annually 2) Revise Chapter 2.70 of the Municipal Code 3) Review the provided information of content and presentation of the monthly Treasurers Report Board Member Moulin suggested that the Board consider a seven member Board versus a five member Board. Mr. Falconer advised that the City Council is supportive of five member Boards and or Committees. In response to Chairman Ross, Mr. Falconer advised that there is one Board/Committee that recently expanded from a five members to seven members. MOTION - It was moved by Board Members Deniel/Moulin to approve the Fiscal Year 2008/09 Investment Policy with the recommended changes and forward to the City Council. Motion carried unanimously. 5 Investment Advisory Board July 16, 2008 Minutes D. LAIF Conference Mr. Falconer advised of the upcoming annual LAIF Conference in October and further advised that this item is being presented to Council the first ' meeting in August for approval of travel for one Staff member along with two Board members to attend. General discussion ensued among the Board regarding the LAIF conference and previous attendees. Board Member Park suggested that Board Member Ross attend this year's LAIF Conference. Mr. Falconer advised the Board that any other member wishing to attend, notify staff as soon as possible to make the necessary travel arrangements. MOTION - It was moved by Board Members Deniel/Moulin to authorize Board Member Ross and one other member of the Board to attend the LAIF conference. Motion carried unanimously. VI CORRESPONDENCE AND WRITTEN MATERIAL A . Month End Cash Report Mr. Falconer reviewed and presented the June Month End Cash Report and advised that this report is for informational purposes only. In response to Board Member Moulin, Mr. Falconer advised that LAIF's interest rates have declined slightly below 3%, with the quarterly allocations at 3.13%. In response to Chairman Ross, Mr. Falconer stated that he feels the interest rates will remain the same through the first of next year. General discussion ensued among the Board and Staff regarding interest rates, investments and commercial paper. Noted and Filed B. Pooled Money Investment Board Report -April 2008 Mr. Falconer advised that the portfolio continues to grow and further 6 Investment Advisory Board Minutes July 16, 2008 advised that he would like to contact LAIF and get their input on Freddie Mac and Fannie Mae. Noted and Filed C. Distribution of Investment Policies for Fiscal Year 2008/2009 Noted and Filed VII BOARD MEMBER ITEMS Board Member Moulin advised of the background of his handout regarding Steven Wymer and further advised that this article from the Internet was for informational purposes only. General discussion ensued among the Board regarding the article, the history and the impact on several desert cities. Chairman Ross asked each Board Member to state how they came to serve on the Board, what they like to see happen and any ideas to share with the Board. At this time each Board member summarized how they came to serve on the Board and a little of their background history. Board Member Moulin requested a new Investment Advisory Board Roster with all Board members addresses, phone numbers, fax numbers and email addresses. Board Member Moulin advised of an error in the Investment Policy on page 22, which currently reads: Record Investment Transactions in City's Accounting Manager or (SPACE SHOULD BE DELETED) Accounting Records Financial Services Assistant Board Member Moulin suggested keeping a log of continuing items of discussion. Board Member Deniel volunteered to log and track items of discussion. Board concurred. The Board thanked Board Member Deniel on her previous service as Chairperson and Board Member Rassi as Vice-Chair, and also congratulated the new Chair, Chairman Ross and the new Vice-Chair, Board Member Park. 7 Investment Advisory Board Minutes VIII Adjournment July 16, 2008 MOTION - It was moved by Board Members Park/Rassi to adjourn the meeting at 6:05 p.m. Motion carried unanimously. Sub ted by, Vianka Orrantia, Senior Secretary 8