2009 01 14 IAB MinutesINVESTMENT ADVISORY BOARD
Meeting
January 14, 2009
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 Chairman Ross, followed by the Pledge of
Allegiance.
PRESENT: Board Members Moulin, Deniel, Ross, Rassi and Park
ABSENT: None.
OTHERS PRESENT: John Falconer, Finance Director and Vianka Orrantia,
Senior Secretary
II PUBLIC COMMENT -None
III CONFIRMATION OF AGENDA
Mr. Falconer advised that the handout for the joint meeting minutes of
November 25`" with City Council were included for informational
purposes only.
Board Member Deniel requested that two items be added for
discussion under Board Member Items; those items being the joint
meeting with City Council and her conversation with Mayor Adolph.
IV CONSENT CALENDAR
A. Approval of Minutes of Meeting on December 10, 2008 for the
Investment Advisory Board.
Chairman Ross advised on page 4, under the Business Session
Item that the words "motion carried unanimously" be added to
reflect the Board's vote.
Board Member Moulin made general comments on his
observation of Mr. Gruber's comments in reference to the
accrual of pension liability and GASB 45.
MOTION: It was moved by Board Members Rassi/Park to
approve the minutes of December 10, 2008 as amended.
Motion carried unanimously.
V BUSINESS SESSION
A. Transmittal of Treasury Report for November, 2009
Mr. Falconer presented and reviewed the staff report advising
the Board that the November cash balance has declined by
5600,000. Yields continue to decline with the overall yield
closing at 2.36% and the pooled investments closing at 2.38%.
The month of December will also reflect a decline in the pooled
investments due to numerous maturing investments. Mr.
Falconer also advised that staff continues to remain
conservative with the portfolio due to current market
conditions. Mr. Falconer further advised that page 7 reflects
the yields to maturity and also reflects no current investments
in commercial paper, with previous yields reflected at 2.7%,
2.8%, 2.2% and 2.1 %, and current yields at 1.2%, 1 .1 % and
less than 1 %.
Mr. Falconer stated that the headings in question on page 7
from the previous month's meeting dealing with mutual funds
were clarified with the review of the recorded minutes and are
now reflected to be the appropriate types and names.
General discussion ensued among the Board regarding the
current economy and the impact of the economy on the City's
mid-year's projections, budget and TOT tax.
MOTION - It was moved by Board Members Deniel/Moulin to
approve, receive and file the Treasury Report for November
2008. Motion carried unanimously.
B. Continued Consideration of the Fiscal Year 2008/2009 Work
Plan
Board Member Moulin advised that pages 2 and 7 of the report
do not coincide.
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It was agreed upon by the Board to list cash as a separate item
with all the actual investments subtotaled with cash added so
that pages 2 and 7 coincide.
The Board along with staff reviewed the Treasurer's Report and
made the following recommendations:
Page 8: Mr. Falconer advised that this page is not required
but is useful to staff with reconciling booked cash to the
Treasurer's Report and providing trend information on cash
balances.
It was agreed upon by the Board to remove the oldest historical
year and report two full years in addition to the current year,
with no changes to distribution of cash and investments.
Page 9: Mr. Falconer advised that page 9 is a six-month
cash flow and also supports the statement on page 2 of the
Treasurer's report, which states "I hereby certify that sufficient
investment liquidity and anticipated revenues are available to
meet the pools expenditure requirements for the next six
months."
Board Member Moulin suggested that in lieu of the year-to-date
actual, that staff compare the recent months to the actual
forecast.
It was agreed upon by the Board that based on Board Member
Moulin's request that staff provide information for comparing
forecasts to actual receipts. This would result in three
additional columns in the six-month cash flow forecast report.
Page 10: Mr. Falconer advised of the history of page 10 and
further advised that this page could be eliminated from the
Treasurer's Report.
The Board concurred with staff to eliminate page 10 from the
Treasurer's Report.
Page 11: Mr. Falconer advised that the discontinuation of
the six-month T-Bill as the City's benchmark on page 11 was
due to numerous discussions with Board Member Moulin; it was
also decided that staff would use other financial indicators
giving readers an opportunity to compare yield in the portfolio
and other financial information.
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Board Member Deniel suggested that staff eliminate two years
of historical information.
Chairman Ross stated that he felt that page was useful in
helping the City Council review the last eight years of the
current interest trends and suggested that the historical
information 'remain.
It was agreed upon by the Board that staff add atwo-year rate
beginning July 2008.
In response to Chairman Ross, Mr. Falconer advised that page 4
of the Treasurer's Report was the page in question by
Councilmember Osborne concerning benchmarks.
Page 12: Mr. Falconer advised of the history of page 1 Z and
also advised that this page was not required.
It was agreed upon by the Board that staff add the two year
rate to the graph.
MOTION - It was moved by Board Members Deniel/Rassi to
approve the suggested changes and continue the discussion of
the Fiscal Year 2008/2009 Work Plan to the February meeting.
In response to Chairman Ross, Mr. Falconer advised that Board
members Rassi and Deniel's terms expire in June of 2009.
In response to Chairman Ross, Mr. Falconer advised that the
City Clerk's office will send out a request for application for
upcoming vacancies on the Board in May, and in June a special
Council meeting is scheduled to interview applicants.
Board Member Moulin advised the Board of the history of the
City's Ordinance Section 2.80 and further advised that he had
no additional changes at this time.
Board Member Deniel suggested that item be added to next
month's agenda due to time constraints.
Board Member Rassi stated that he felt the ordinance did not
require any changes and/or modifications at this time.
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Mr. Falconer advised that there was a brief discussion on the
background.
Board Member Moulin referenced his handout and the
suggested language for the Board's consideration.
Mr. Falconer advised that staff would review past agendas to
ensure the correct language previously discussed and present at
the next scheduled meeting.
Board Member Moulin stated that he had handouts from
previous meetings regarding the discussion of the ordinance
that he would bring to the next scheduled meeting.
Chairman Ross stated that to his recollection there were
previous discussions in reference to "staggering terms," the
wording for investment background, (i.e. securities background
vs. real estate investment-.
MOTION - It was moved by Board Members Deniel/Park to
continue the discussion of the Board member ordinance to the
next scheduled meeting.
VI CORRESPONDENCE AND WRITTEN MATERIAL
A. Month End Cash Report and other selected Financial Data -
December
Mr. Falconer advised that on page 9, the LAIF rate in December
ended at 2.17% with a continuing decline, with the portfolio at
562 billion and with a large percentage invested in loans, which
is further discussed in the attached commentary from the State.
General discussed ensued by the Board regarding the State's
commentary and its current financial issues.
Noted and Filed
B. Pooled Money Investment Board Reports -October 2008
Noted and Filed
VII BOARD MEMBER ITEMS
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Board Member Deniel stated that she felt during the joint meeting with
City Council that Council was disappointed with the audit report and
felt that the audit report did not contain enough substance, and there
were no specifics directed to the City of La Quinta. Board Member
Deniel advised that she contacted the audit firm to advise them of
Council's sentiments and requested that Mr. Falconer follow-up with
the management partner to reiterate Council's sentiments.
Mr. Falconer advised that he had previous conversations with the
Mayor regarding the audit report and advised him that the letter is
prescribed by the AIPCA and the firm cannot deviate from their
guidelines.
Mr. Falconer stated that he had spoken to the audit partner after the
presentation of the audited financial statements on ways to enhance
future presentations of the audit results.
General discussion ensued by the Board regarding the audit report, and
the current and previous audit firm.
Board Member Deniel advised the Board of her recent phone
conversation with Mayor Adolph and his request of the Board to help
or give some direction to help City residences avoid foreclosures.
General discussion ensued by the Board regarding help with
foreclosures. It was the conclusion of the Board that this was not
a function of the Board but if members of the Board would like to offer
services or make any suggestions to City Council or the Mayor,
it would be done outside the realm of the Investment Advisory Board.
VIII ADJOURNMENT
MOTION - It was moved by Board Members Rassi/Park to adjourn the
meeting at 6:21 p.m. Motion carried unanimously.
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Vianka Orrantia,
Senior Secretary
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