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2009 09 09 IAB MinutesINVESTMENT ADVISORY BOARD MEETING September 9, 2009 CALL TO ORDER Regular meeting of the La Quinta Investment Advisory Board was called to order at the hour of 4:00 p.m. by Chairman Ross, followed by the Pledge of Allegiance. PRESENT: Board Members Moulin, Olander, Ross, Rassi and Park (4:12 p.m.l ABSENT: None. OTHERS PRESENT: John Falconer, Finance Director and Vianka Orrantia, Senior Secretary II. PUBLIC COMMENTS -None. III Confirmation of Agenda Ms. Orrantia requested that an amended copy of page 1 of the July 8`" minutes be added to the agenda to reflect Board Member Olander's presence at the July meeting. MOTION - It was moved by Board Members Rassi/Olander to approve the agenda as amended. Motion carried unanimously. IV CONSENT CALENDAR A. Approval of Minutes of Meeting on July 8, 2009 for the Investment Advisory Board. Board Member Moulin requested that the guests present be listed under item one and not item three. Mr. Falconer concurred. General discussion ensued amongst the Board and it was agreed upon by the Board to reflect the guests present in both Items one and three. Board Member Moulin advised that on page 5, Item D, the motion reflects Board Member Deniel, who is no longer with the Board. Chairman Ross asked staff to review the recorded minutes of July 8`h and correct the motion accordingly. Chairman Ross requested a correction be made on page 4, Item C, third paragraph, second sentence changing "wok" to "work." MOTION: It was moved Board Members Moulin/Rassi to approve the minutes of July 8, 2009 as amended. Motion carried unanimously. V BUSINESS SESSION A. Transmittal of Treasury Report for June and July 2009 Mr. Falconer presented and reviewed the staff report advising the Board that the City's annual audit has been completed. During the review of the audit, the June Treasurer's Report was reviewed and there were no GASB 31 adjustments to the fair market values to report. Mr. Falconer advised that the portfolio declined by $9 million due to the June pass-through payments. In addition, the average portfolio increased by 30 days due to recent purchase of CD's with four local banks and a fifth CD to be purchased in the month of August (which will be reflected in the August Treasurers Report). The recent purchase CD's are reflected on page 5 of the Treasurers Report, along with the activities on page 7. In response to Board Member Moulin, Mr. Falconer advised that the CD's yields were based on what was being offered by the individual bank at that time. General discussion ensued amongst the Board regarding banks and their FDIC limits. In response to Chairman Ross, Mr. Falconer advised that a portion of the audit reports are compiled based on the fiscal agent report received from the bank in addition to information received from the bond trustees, with the bank reconciliation compiled by staff. Mr. Falconer further advised that the City's petty cash is the only asset counted in-house, which was completed in the month of June; and SilverRock's inventory and cash is handled by the City's contractor Landmark Land. 2 MOTION - It was moved by Board Members Moulin/Olander to approve, receive and file the Treasury Reports for June and July 2009. Motion carried unanimously. Mr. Falconer advised the Board of his conversation with Board Member Moulin in reference to the cash flow forecast, the dilemma of the state's budget, and its impact to the City's cash flow forecast. Mr. Falconer requested that a verbal discussion be added to Work Plan items regarding this issue. B. FY 2009-2010 Work Plan In response to Board Member Moulin, Mr. Falconer advised that the City Council passed the 2009-2010 Work Plan and they were very complementary to both the Board and staff. General discussion ensued amongst the Board regarding the upcoming. fiscal year's work plan and the Board's approach to each item. In response to Board Member Moulin, Mr. Falconer stated that he had no suggestions to a particular money market fund. Mr. Falconer asked the Board for their input and/or suggestions on money market funds and pooled funds in addition to LAIF. In response to Board Member Olander, Mr. Falconer advised that the yields for money market funds will not be higher than those currently in LAIF. General discussion ensued amongst the Board regarding the upcoming LAIF conference scheduled in October. General discussion ensued amongst the Board regarding the CDAR's program and it was the conclusion of the Board to review the program at the regular scheduled meeting in January. The Board agreed to the schedule below to review the upcoming work plan items as follows: October -Initial review of Money Market Funds Mr. Falconer and Chairman Ross volunteered to compile information regarding suggested Money Market Funds to be reviewed by the Board at the October meeting. Mr. Falconer 3 advised the Board that if they had any suggestions in regards to Money Market Funds to forward them to staff to be included in the report for the October meeting. November -LAIF December - Auditors January - CDAR's February -Review of Investment Policy In response to Board Member Moulin, Mr. Falconer advised that the audit report has not been received due to some outstanding accruals. Staff anticipates forwarding the audit report to the Board in December; the report is tentatively scheduled to be presented to the City Council in the month of November. MOTION - It was moved by Board Members Park/Olander to adopt the tentative schedule and continue the review of the 2009-2010 work plan. Motion carried unanimously. VI CORRESPONDENCE AND WRITTEN MATERIAL A. Month-End Cash Report and other selected Financial Data -August 2009 Mr. Falconer presented the month-end cash report advising that the rates continue to remain low as well as the T-Bills rates. Page 3 reflects the LAIF performance which continually decline with the current market. General discussion ensued by the Board and staff regarding the use of mutual funds in lieu of LAIF. Board Member Olander requested a verbal discussion regarding securities. It was agreed upon by the Board to discuss this issue under board member items. Noted and Filed B. Pooled Money Investment Board Reports -June 2009 Mr. Falconer advised that the portfolio size declined from June 2008 to June 2009, the June 2008 portfolio was at $72.5 billion, and the June 2009 portfolio was at 548 billion with an 4 approximate decline of S24 billion. Mr. Falconer further advised that the loan amounts are currently at 24% which are reflected on page 3. He also advised that he spoke with Pam Milliron, LAIF Administrator, and she advised him that all loans are current. General discussion ensued amongst the Board and staff regarding the decrease in the LAIF portfolio and the loans. Noted and Filed C. Joint City Council/IAB Meeting Mr. Falconer advised the Board that the annual joint meeting with the City Council is scheduled for October 27`", at 7:00 p.m. Noted and Filed General discussion ensued amongst the Board regarding the October IAB meeting. It was the conclusion of the Board to change the date of the meeting from October 14, 2009 to October 7, 2009. MOTION - It was moved by Board Members Park/Moulin to reschedule. the October 14, 2009 to October 7, 2009. Motion carried unanimously. VII BOARD MEMBER ITEMS Board Member Olander suggested that with respect to the funds believed not to be distributed within 5 years (58 million) and presently invested in 3 to 5 year treasuries that we consider extending the maturities to include the 10-year Treasury Note, which yields in the 3.2% to 3.5% range at present. Currently the 10-year inyestments offer a higher yield with the similar terms as the 3 to 5 year investments. Board Member Olander stated that he had discussed this issue with staff, and staff was not in favor of a 10-year term. In response to Chairman Ross, Mr. Falconer advised that the state code allows investments only up to 5-year, but could be allowed up to 10 years if approved liy City Council. General discussion ensued amongst the Board and staff regarding the extension of investments to 10 years. 5 Mr. Falconer advised that the issue needs to be discussed in line with the investment policy, and suggested that this issue be discussed during the review of the investment policy. It was the conclusion of the Board to discuss the 10-year investments during the review of the investment policy. In response to Board Member Moulin, Mr. Falconer advised the Board of the RDA funds being taken by the state, and the lawsuit that will be filed by the RDA regarding the state taking these RDA monies. General discussion ensued by the Board regarding the state's use of RDA monies and the lawsuit to be filed. In addition, the Board also discussed debt services payments and the City's possibility of paying a larger percentage due to other governing agencies inability to pay. Mr. Falconer advised the Board that under Prop. 1 A, the state will be borrowing 8% from all agencies' property taxes and will be paid back over a three year period; this equates approximately to 5950,000 for the City of La Quinta. VIII ADJOURNMENT MOTION - It was moved by Board Members Moulin/Park to adjourn the meeting at 5:10 p.m. Motion carried unanimously. Su rtted y, i ~d Vianka Orrantia, Senior Secretary 6