2009 10 07 IAB MinutesADJOURNED
INVESTMENT ADVISORY BOARD MEETING
October 7, 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 Olander, Moulin, Ross and Park
ABSENT: Board Member Rassi
OTHERS PRESENT: John Falconer, Finance Director and Vianka Orrantia,
Senior Secretary
II PUBLIC COMMENT - (This is the time set aside for public comment on any matter not
scheduled on the agenda.l- None
111 CONFIRMATION OF AGENDA -Confirmed
IV CONSENT CALENDAR
Approval of Minutes of Meeting on September 9, 2009 for the
Investment Advisory Board
Board Member Olander requested that for further clarification the first
sentence under board member items of page 5 read as follows:
Board Member Olander suggested that with respect to the funds
believed not to be distributed within 5 years (S8 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.
Board Member Moulin requested that the following correction be made
to page 2, last paragraph, second sentence:
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 afa cash [...].
Chairman Ross requested that the following correction be made to
page 2, last paragraph, first sentence:
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.
Chairman Ross requested the following corrections be made:
Page 1, under "Consent Calendar" last sentence:
Board member Moulin advised that tine on [...]
Page 3, under "FY 2009-2010 Work Plan" sixth paragraph:
General discussion ensued amongst the Board regarding the CDAR's
program and the Board concluded to t#e review [...]
MOTION: It was moved Board Members Moulin/Olander to approve
the minutes of September 9, 2009 as amended. Motion carried
unanimously:
V Business Session
A. Transmittal of Treasury Report for August 2009
Mr. Falconer presented and reviewed the staff report advising the
Board of the decline in cash by 51.7 million ending the month slightly
under 5188 million. The portfolio yields also declined with pooled
cash ending the rate at .64%, the bonds proceeds at .30% and the
overall rate at .61 %. Mr. Falconer also advised that page 7 reflects
the investment activity for the month of August, with the report
reflecting a purchase of a CD from First Bank in addition to purchases
in LAIF, due to the maturity of several investments. Page 5 reflects
the Wells Fargo Sweep Account balance at 510.5 million; the unusual
large account balance was due to the semi-annual bond debt-service
payment which was due September 151
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Due to the current market, investment percentages in LAIF remain
high, with the overall LAIF balance declining slightly in September, due
to cash needs.
Mr. Falconer advised that the portfolio yields of .61 % compared
favorably to the one year Treasury bill at .46%, the two year bill at
1 % and LAIF at 3%, with the yields remaining depressed with the
current market.
General discussion ensued amongst the Board regarding the current
market yields.
In response to Board Member Moulin, Mr. Falconer advised that the
TLGP Goldman Sachs Note referenced on page 4 did not carry over to
page 5 and staff would make the necessary correction accordingly.
Mr. Falconer advised that the GE Capital Corporate Note reflected on
page 4 matured on September 15`, a S5 million GE Capital (TLGP
issued note) was purchased with a December 201 1 maturity.
General discussion ensued amongst the Board regarding the purchase
of TLGP pieces and its comparison to other commercial paper
currently on the market. Also discussed was the affects of short-term
paper on the U.S. market but also its affect on the global markets, in
addition to a discussion pertaining to the current market and its affect
on commercial real estate.
MOTION - It was moved by Board Members Moulin/Park to approve,
receive and file the Treasury Reports for August 2009. Motion carried
unanimously.
B. Continued Discussion of the Investment Advisory Board 2009-
2070 Work Plan
Mr. Falconer advised that as a result of previous discussions and
growing concerns about California's current economic state, staff and
Chairman Ross investigated other possible alternatives to LAIF. Mr.
Falconer further advised that currently in place is the City's Wells
Fargo Sweep account. Mr. Falconer presented several alternatives to
the Board for their consideration. The first alternative was a new
investment vehicle to the market, CaITRUST a joint powers agency
run by counties and water districts and managed by Wells Fargo, with
the same day dollar-in, dollar-out portfolio (similar to LAIF). Also
presented was the California Asset Management Program (CAMP- a
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joint powers agency whose portfolio is managed by Public Finance
Management, also with the same day dollar-in dollar-out feature. The
last alternative was a list of Money Market Mutual Funds submitted by
Chairman Ross.
In response to Chairman Ross, Mr. Falconer advised that the current
money market fund currently used by Wells Fargo is a Treasury Money
Market Sweep Account.
Chairman Ross advised that the handout included in the agenda
packet is a list of Lipper Institutional US Government Money Market
Funds Index and Institutional US Treasury Money Market Funds, with
all funds institutional class shares. The list was submitted to
familiarize the Board and staff with the current money market and
U.S. treasury funds.
General discussion ensued amongst the Board regarding the list of
Lipper funds, current City invested funds, current investment policy
requirements, in addition to continued discussion of alternate
investments in lieu of LAIF. Discussion continued with Mr. Falconer
suggesting to the Board that he investigate other alternatives with
Wells Fargo in lieu of the current sweep account besides the current
sweep account.
In response to Chairman Ross, Mr. Falconer advised that the
information regarding CaITRUST was obtained via their website and he
would contact them for any additional information they could supply
for the Board's review. Board concurred.
Mr. Falconer advised that a presentation could be scheduled if there
were any particular products that were of interest to the Board.
MOTION - It was moved by Board Members Olander/Moulin to
continue the discussion of the 2009-2010 work plan. Motion carried
unanimously.
C. IAB Scheduled Meeting of November 11 -City Holiday
Due to the scheduled holiday in the month of November, it was the
Board's recommendation to reschedule the November 11`" meeting to
November 4`", 2009.
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MOTION - It was moved by Board Members Moulin/Olander to
advance the November 11`h, 2009 meeting to November 4`h 2009.
Motion carried unanimously.
VI CORRESPONDENCE AND WRITTEN MATERIAL
A. Month End Cash Report -September 2009
Mr. Falconer presented and reviewed the month-end cash report
advising that the large large sum for the month of September balance
in the Wells Fargo Sweep account was due to the payment of the City
Hall bond issues and an early payment to PERS (which will result in a
savings of $600,0001. Mr. Falconer further advised of the continual
decline in the LAIF rate, with the current rate at .72%.
Noted and Filed
B. Pooled Money Investment Board Report -July 2009
Mr. Falconer advised that the average life for the pool stands at 180
days. Mr. Falconer also advised that he was not familiar with the
NOW account reflected in the report and would follow-up at the LAIF
conference to obtain information about the account.
In response to Board Member Olander, Mr. Falconer advised that LAIF
has an approved list of commercial paper from which they buy from
and a large portion is invested in asset back commercial paper.
Noted and Filed
VII BOARD MEMBER ITEMS -None
VIII ADJOURNMENT
MOTION - It was moved by Board Members Olander/Park to adjourn
the meeting at 5:05 p.m. Motion carried unanimously.
by
Vitc~rrantia,
Senior Secretary
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