2009 03 11 IAB MinutesINVESTMENT ADVISORY BOARD
MEETING
MARCH 11, 2009
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 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 -None
IV CONSENT CALENDAR
A. Approval of Minutes of Meeting on February 11, 2009 for the
Investment Advisory Board.
MOTION: It was moved Board Members Deniel/Rassi to approve
the minutes of February 1 1, 2009. Motion carried unanimously.
V BUSINESS SESSION
A. Transmittal of Treasury Report for January 2009
Mr. Falconer presented and reviewed the staff report advising the
Board that page 7 reflects the light investment activity for the
month of January with no maturing investments. Mr. Falconer
further advised that the portfolio increase was approximately S25
million, with the bulk of the monies received for the first
installment of property taxes from the County of Riverside. The
portfolio yield for the end of January was at 1 .34% for the pooled
investments, with the total yields at 1.23%, which included the
bond proceeds. The yields for the two year Treasury Bill were at
1.01 %, with the yields comparatively lower than the previous year.
Mr. Falconer also advised that upon review of the mid-year budget,
staff made an adjustment to the projected interest income, based
on the decrease in rates. In addition, with the LAIF yields still fairly
high, a large portion of the City's portfolio is currently invested in
LAIF.
Mr. Falconer advised that the last piece of Freddie Mac commercial
paper has matured. In addition, U.S. Bank corporate paper, Federal
Home Loan and Farm Credit all mature in April, and GE Capital
maturing on September 1, 2009.
Chairman Ross advised that page 3 of the Treasurers Report, third
paragraph, sixth sentence, the word "decline is missing from the
sentence and the sentence should read:
The Treasurer has several longer term investments helping to keep
yields higher as interest rates decline but they will gradually [...}
In response to the Chairman Ross, Mr. Falconer advised that the
newest product in lieu of commercial paper is the "TLGP" funds
which are FDIC guaranteed through 2009 and could possibly be
considered as a corporate note.
General discussion ensued by the Board regarding the "TLGP"
funds and whether this item would be considered an upcoming
work plan and investment tool, in addition to discussing the current
bank closures.
MOTION - It was moved by Board Members Deniel/Rassi to
approve, receive and file the Treasury Report for January 2009.
Motion carried unanimously.
B. Continued Discussion of the Investment Advisory Board 2008/09
Work Plan and 2009/10 Investment Policy
In response to Chairman Ross, Mr. Falconer advised that page 9 of
the Treasurer's report has been revised to reflect the three
additional columns comparing the forecasted to actual and
difference between the comparison. In addition, Mr. Falconer
explained the debt-service payment paid by the County in the
month of January, which was 539 million, and the "actual" 529
million received.
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General discussion ensued between the Board and staff regarding
the difference held by the County and the use of those monies.
In response to Chairman Ross, Mr. Falconer advised that the
variances are calculated by the Accounting Manager and will report
back to the board as to how she formulates these calculations.
Board Member Deniel commented on the impact of the economy on
the TOT reflected in the Treasurers Report.
Mr. Falconer advised that the TOT year-to-date is down by 10%,
equaling approximately 5200,000 for the year. Mr. Falconer
further advised that staff made a recommendation to Council to
adjust the TOT during mid-year budget review based on TOT
collected.
Board Member Deniel suggested that staff add a column,
comparing the "actual" month's numbers from the prior year to the
"actual" month's numbers of the current year. Board concurred.
General discussion ensued between the Board and staff regarding
additional data to be reported. It was the conclusion of the Board
to include the following data in the cash report; actual year-to-date
through 01 /30/09, actual forecast year-to-date through 01 /30/09,
and prior year-to-date with the monthly forecast listed below along
with the projected sources.
Mr. Falconer advised that staff would draft the suggested changes
and forward to the Board Member Deniel for review.
In response to Chairman Ross, Mr. Falconer advised the Board of
the distribution of the builder impact fees and the processing of
those fees.
General discussion ensued amongst the Board and staff in
reference to the developer impact fees.
MOTION - It was moved by Board Members Moulin/Deniel to
continue the review of the outstanding changes to page 9 of the
Treasurers Report to the next scheduled meeting. Motion carried
unanimously.
Mr. Falconer advised the Board of the outcome of the Council
meeting dated March 3, 2009 in reference to Ordinance 2.70.010,
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with a minor change requested by Councilman Henderson, adding
the word "verifiable" to Section C to read as follows:
C. Applicants for the board should have a verifiable background
i...]
In response to Board Member Deniel, Mr. Falconer advised the
Board that the Ordinance will be on the next scheduled Council
meeting fora second reading and at that time, any requested
changes and/or revisions to the ordinance can be made.
General discussion ensued by the Board regarding the word
"verifiable" and the effect the word might have on potential
candidates.
Mr. Falconer suggested staff compose a memorandum to City
Council conveying the Board's thoughts and suggestion in replacing
the word "background" with the word "experience."
It was the conclusion of the Board that putting the word
"verifiable" in the first paragraph of the ordinance, (which is part of
the ad) would be repetitive and suggested that "verifiable" be
replaced with "experience-in," with the second sentence covering
education and background. They also concurred with staff on their
recommendation to compose a memorandum conveying the
Board's suggestions.
In response to Chairman Ross, Mr. Falconer advised the ordinance
would automatically be included with the 2009/2010 investment
policy 30 days after the ordinance been accepted.
General discussion ensued amongst the Board regarding the review
of the Investment Policy.
Board Member Deniel suggested the Treasurer review Appendix A
and make any suggestions and/or changes at the next scheduled
meeting.
MOTION - It was moved by Board Members Deniel/Park to continue
the review of the investment policy with review of the policy by all
board members and make any suggestions and/or changes at the
next scheduled meeting. Motion carried unanimously.
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VI CORRESPONDENCE AND WRITTEN MATERIAL
A. Month End Cash Report and other selected Financial Data -
February 2009
Mr. Falconer advised despite the current state economic budget
issues at hand, the LAIF rate is reported at 1.77% with a 561
million pooled money balance with no decrease in the balance.
Noted and Filed
B. Pooled Money Investment Board Reports -December 2008
Mr. Falconer advised due to the current economic state, staff
would not recommend increasing the LAIF percentages at this time
based upon the amount of General Fund and AB 55 loans in the
portfolio.
Noted and Filed
VII BOARD MEMBER ITEMS
In response to Board Member Moulin and Chairman Ross, Mr. Falconer
advised the Work Plan will be presented to the City Council in July,
and suggested that the Board consider items for the work plan and
report back at the next scheduled meeting.
Board Member Moulin suggested that staff consider reviewing internal
controls and possible adding staff. Mr. Falconer advised that due to
the current economy, adding staff would not be feasible at this time.
Board Member Deniel advised if staff needed help in the budgeting
process or in any other areas of Finance, staff could possibly consider
utilizing the Investment Board on a consulting basis to help in these
areas.
Mr. Falconer advised there are several items that the Board might be
able to assist with, but it would require the City Manager's approval
before they can be discussed. Mr. Falconer also asked the Board to
individually consider items for next year's work plan which could be
discussed at the next scheduled meeting.
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VIII ADJOURNMENT
MOTION - It was moved by Board Members Moulin/Deniel to adjourn
the meeting at 5:43 p.m. Motion carried unanimously.
Sub '
Vianka Orrantia,
Senior Secretary