2009 02 11 IAB MinutesINVESTMENT ADVISORY BOARD
Meeting
February 11, 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 and Rassi
ABSENT: Board Member Park
OTHERS PRESENT: John Falconer, Finance Director and Vianka Orrantia,
Senior Secretary
II PUBLIC COMMENT -None
III CONFIRMATION OF AGENDA
Board Member Moulin requested a verbal discussion be added to Board
Member items in reference to investments.
IV CONSENT CALENDAR
A. Approval of Minutes of Meeting on January 74, 2009 for the
Investment Advisory Board.
MOTION: It was moved by Board Members Deniel/Moulin to
approve the minutes of January 14, 2009. Motion carried
unanimously.
V BUSINESS SESSION
A. Transmittal of Treasury Report for December, 2008
Mr. Falconer presented and reviewed the staff report advising
the Board that the December portfolio as indicated on page 2
had slightly increased by approximately S2 million. Page 3 of
the report reflects several changes with a 54.2 million deposit
from the County for the new Avenue 52 fire station, which will
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not be recognized as revenue until the commencement of
construction.
Mr. Falconer further advised that the City purchased land near
Dune Palms Road for a secondary access connecting into
Costco. Page 7 of the report reflects maturing investments
ranging from 2% to 5%; these investments were reinvested at
.65 %.
In response to Board Member Deniel, Mr. Falconer commented
that the investments listed at 18 basis points were bond
proceeds and had no impact on the pool portfolio, but would
result in less interest for redevelopment agency project areas.
Mr. Falconer advised that there are no current investments in
commercial paper at this time and that page 4 reflects the two
outstanding Corporate Notes with U.S. Bank and GE Capital.
U.S. Bank is due to mature in April and GE Capital is due to
mature in September.
In response to Board Member Deniel, Mr. Falconer advised that
the coupon rate for U.S. Bank is currently at 5.3% with a yield
to maturity at 5.11 % and G.E. Capital coupon rate is at 4.15%
with a yield to maturity slightly over 5%.
In response to Board Member Deniel, Mr. Falconer advised that
the current year's interest rate assumptions were budgeted at
3%, with the average rate at 2.6% for the first six months.
General discussion ensued amongst the board regarding the
City's budgeted interest rate assumptions.
MOTION - It was moved by Board Members Moulin/Deniel to
approve, receive and file the Treasury Report for December
2008. Motion carried unanimously.
B. Continued Consideration of the Fiscal Year 2008/2009 Work
Plan
Mr. Falconer advised that as indicated at the last Investment
Advisory Board meeting, it was the direction of the Board that
staff modify the six-month forecast and present the proposed
revisions. Due to time constraints, staff was unable to modify
those revisions and will present the revisions at the next
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scheduled meeting. Mr. Falconer further advised that the
revisions to the City ordinance proposed by Board Member
Moulin was the second item carried over for discussion from the
February meeting.
Chairman Ross requested that the minutes reflect one
outstanding proposal by staff to be presented at the next
scheduled board meeting. Board concurred.
MOTION - It was moved by Board Members Deniel/Moulin to
continue the Treasurer's Report discussion in its final
presentation to the March meeting. Motion carried
unanimously.
Mr. Falconer advised that staff researched previous board
minutes and included handouts pertaining to suggested changes
to the ordinance previously received from Board Member
Moulin.
Board Member Moulin clarified that the Board cannot change
the ordinance but can recommend a change to City Council.
Board Member Moulin advised of the qualifications history of
Ordinance 2.70.010 Item C, and his current suggested changes
to Item C.
Discussion ensued by the Board regarding the suggested
changes to Item C of Ordinance 2.70.010. It was the
conclusion of the board to submit the following change to City
Council for approval:
Proposed C.: Applicants for the board should have a
background in finance and/or securities, preferably with
knowledge and/or experience in markets, financial controls and
accounting for securities.
MOTION - It was moved by Board Members MoulinlDeniel to
change the language of the qualifications of the members of the
board. Motion carried unanimously.
Board Member Moulin advised of the term history of Ordinance
2.70.010, and suggested creating a new paragraph creating an
"E" section.
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Discussion ensued by the Board regarding the suggested New
"E" of Ordinance 2.70.010; it was the conclusion of the board
to submit the following language to City Council for approval:
Proposed E.: To promote continuity, the expiration of the terms
of the members of the board shall be staggered. The term of
service is three years, with the terms of one or two members
expiring each year.
Mr. Falconer advised that if the portion of the term section is
approved by City Council, an adjustment will need to be made
to an existing board member term.
MOTION - It was moved by Board Members Deniel/Moulin to
request that the Finance Director submit the changes to the
ordinance to the City Council that address the Investment
Advisory Board: 1) qualifications of the applicants; 2) the
continuity of the terms of service. Motion carried unanimously.
General discussion ensued by the Board regarding the number
of members on the board.
C. CMTA Conference -Palm Springs, California, April 22 - 24,
2009
Mr. Falconer advised that due to this year's location of the
CMTA conference, the budget will allow all five members of the
board to attend this year's conference.
Board Member Rassi advised that due to his sustaining
membership to the CMTA, that there is no charge for him to
attend the conference.
MOTION - It was moved by Board Members Deniel/Rassi
to approve five members of the Board to attend the CMTA
Conference in Palm Springs, California on April 22 -24, 2009.
Motion carried unanimously.
VI CORRESPONDENCE AND WRITTEN MATERIAL
A. Month End Cash Report and other selected Financial Data -
January
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Mr. Falconer advised that the LAIF balance as of January 27th
has declined below 2%.
Noted & Filed
B. Pooled Money Investment Board Reports -November 2008
In response to Chairman Ross, Mr. Falconer advised that there
was a concern by staff regarding state mandated furloughs and
the impact it might have on being able to withdraw LAIF funds.
Staff phoned the State Treasurer's office and there was
someone there to help with withdrawals if needed.
Mr. Falconer advised that due to the upcoming pass-through
payments and debt service payments, staff is currently
maintaining funds in the Wells Fargo overnight Money Market
Fund to meet these commitments.
Noted & Filed
VII BOARD MEMBER ITEMS
Board.Member Moulin commented on Municipal Bonds, their current
interest rates and the possibility of the City buying back its bonds.
After conversation with staff and the Board, that the bonds are
invested, this did not appear to be feasible for the City to do.
General discussion ensued by the board regarding municipal bonds and
appropriation payments to the state.
VIII ADJOURNMENT
MOTION - It was moved by Board Members Deniel/Moulin to adjourn
the meeting at 5:43 p.m. Motion carried unanimously.
S mitted b
Vianka Orrantia,
Senior Secretary
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