2010 06 09 IAB MinutesINVESTMENT ADVISORY BOARD
Meeting
June 9, 2010
I 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 Park, Moulin, Ross and Rassi (1 vacancy)
ABSENT: None
OTHERS PRESENT: John Falconer, Finance Director, Tom Genovese, City
Manager, Kathy Jenson (via conference call) and Vianka
Orrantia, Senior Secretary
II PUBLIC COMMENT -Frank Blum, Kurt Mortenson and Andrea Spirtos -None
III CONFIRMATION OF AGENDA -
Chairman Ross requested that general comments from Board Member Moulin
and himself be added to Item VII, Board Member Items.
MOTION: It was moved by Board Members Park/Moulin to confirm the agenda
for June 9, 2010. Motion carried unanimously.
IV CONSENT CALENDAR
A. Approval of Minutes of Meeting on May 12, 2010 for the Investment Advisory
Board.
Board Member Ross requested that the following correction be made to page 2,
Section V, Item A, second paragraph, third sentence should read:
He further advised that the portfolio had decreased #fer~ 14 days [...]
MOTION - It was moved by Board Members Park/Moulin to approve the Minutes
of May 12, 2010 as amended. Motion carried unanimously.
Investment Advisory Board June 9, 2010
Minutes
V BUSINESS SESSION
A. Transmittal of Treasury Report for April 2010
Mr. Falconer presented and reviewed the staff report for the month of
April, advising the Board that the portfolio's balance ended at
5183, 441,991 million, with a decrease of 51.45 million for the month.
The decrease was due to the City's construction projects, the city yard
and the La Quinta Fire Station projects at 5566,000 and Phase 3
improvements to Highway 1 1 1 at 5200,000. Mr. Falconer also advised
that the portfolio average maturity decreased by 10 days with the
average maturity ending at 162 days, with the yields still remaining low
with a slight increase by 1 basis point ending the month at .48% and the
overall pooled investments at .52%; with the previous year's yields at
.85%. Mr. Falconer further advised that the pooled investments remain
short-term as well as the LAIF balances with the state. During the month
of April there were several maturing investments which were rolled over
for a three month term, with a maturity in the month of August to
coincide with the upcoming pass-thru payments. In addition, Mr.
Falconer reviewed for the Board page 5 of the Treasurer's report; the
comparison between the LAIF yields to the current market yields.
In response to Chairman Ross, Mr. Falconer replied that the construction
phase in question in the first paragraph of the commentary was Phase
"3" of the Highway 111 street improvements.
Mr. Falconer commented that the City currently does not invest in Fannie
Mae and Freddie Mac at this time.
General conversation ensued amongst the Board and staff regarding
Fannie Mae and Freddie Mac.
MOTION - It was moved by Board Members Moulin/Park to review,
receive and file the Treasurers Report for April 2010. Motion carried
unanimously.
B. Consideration of the Fiscal Year 2010/11 Investment Policy
Mr. Falconer gave a brief overview of the Investment Advisory Board's role and
their responsibility annually of reviewing the Investment Policy.
Mr. Falconer presented the final redlined version of the investment policy with
Investment Advisory Board
Minutes
June 9, 2010
minor changes, in addition to the Executive Summary with staff's
recommendations which included the following:
PAGE EXECUTIVE SUMMARY
2, 4, 12 Scope -Added Housing Authority
8, 17 Certificate of Deposit increased to 5250,000 for
new FDIC limit
9, 10, 17 LAIF increased account size from 540 million to
S50 million (no change in percentage maximum
of 30% of portfolio)
In response to Mrs. Jenson, Mr. Falconer clarified that the maximum
permissible investment and limitation is 550 million per account with a limit
of 30% of the portfolio. The City's portfolio size is currently at 5180 million
with 547.6 million in LAIF, which is made up 538 million in the City's
account and a portion less than 510 million in the City's RDA account.
Chairman Ross asked for the Board's comments to the proposed change
from S40 million LAIF to S50 million.
Board Member Rassi stated that he felt that the LAIF was a safe investment
and was in agreement with the proposed increase. Board Member Park
concurred.
Mr. Falconer clarified for the Board that the raise in the LAIF limitation was
from a state statute.
General discussion ensued amongst the Board and staff regarding the
investment increase in LAIF from S40 million to S50 million.
In response to Mrs. Jenson, Mr. Falconer clarified that the Housing Authority
will not have a separate account but will be included as part of the City's
"pooled account."
Board Member Moulin stated that he was in favor of keeping the current
limitation at 540 million.
In response to Mrs. Jenson, Mr. Falconer clarified that the spreadsheet used
to compare the actual and surplus funds is no longer used, therefore deleting
the bullet point on page 14 referencing the spreadsheet.
Investment Advisory Board
Minutes
June 9, 2010
In response to Mrs. Jenson, Mr. Falconer clarified that staff did a comparison
of the current California Debt and Investment Advisory Commission and
updated the current language on page 35 of the policy.
Mr. Genovese stated that he had no comments in regards to the proposed
Investment Policy and also stated he had no concerns regarding the increase
of LAIF from 540 million to 550 million.
At this time a vote was taken in favor of the increase of the LAIF from 540
million to 550 million.
Ayes: Board Members Rassi and Ross
Noes: Board Member Ross and Moulin.
Mrs. Jenson suggested that a transmittal to the City Council accompany the
proposed Investment Policy outlining the outcome of the Board's vote.
General discussion again ensued with the Board and Staff regarding the LAIF
increase.
Mr. Falconer suggested the following language be inserted on page 10,
section 6 after the first paragraph, as follows:
The City Treasurer may not invest more than S40 million per account in
LAIF.
In addition, changing pages 9 and 17 reflecting the 540 million restriction.
The Board concurred with staff's suggested changes.
MOTION - It was moved by Board Members Rassi/Moulin to approve the
Investment Policy for Fiscal Year 2010/11 as amended. Motion carried
unanimously.
VI CORRESPONDENCE AND WRITTEN MATERIAL
A. Month End Cash Report -May 2010
Mr. Falconer presented and reviewed the staff report advising that page 3
reflects the current PMIA age performance ending at .53%, the 4 week T-
Bills down at .15% and the two-year T-Notes at .75%.
Investment Advisory Board June 9, 2010
Minutes
Noted and Filed
B. Pooled Money Investment Board Reports -March 2010
Mr. Falconer advised that this report is for informational purposes only and he
had no comments at this time.
In response to Board Member Rassi, Mr. Falconer clarified that the LAIF portfolio
currently stands at 569 billion of which 520 billion is city, county and special
district funds. These funds are not subject to State loans.
Noted and Filed
VII BOARD MEMBER ITEMS -
Both Chairman Ross and Board Member Moulin gave their sentiments regarding
their years of service on the Board as well as thanking staff, City Manager and
the City Council for allowing citizens to participate in the City's government.
Along with Mr. Genovese, Board Members Park and Rassi and staff extended
their thanks to the outgoing member's for their years of service.
VIII ADJOURNMENT
MOTION - It was moved by Board Members Moulin/Park to adjourn the meeting at
5:02 p.m. Motion carried unanimously.
Submitted y,- ~
~~-
Vianka Orrantia
Senior Secretary