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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 1 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 2 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. 3 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 4 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 ~7