2010 11 10 IAB MinutesINVESTMENT ADVISORY BOARD
MEETING
November 10, 2010
CALL TO ORDER
A regular meeting of the Investment Advisory Board was called to order at
4:00 p.m. by Chairman Park followed by the Pledge of Allegiance.
PRESENT: Board Members Mortenson, Park, Spirtos and Rassi
ABSENT: Board Member Blum
STAFF PRESENT: John Falconer, Finance Director and Vianka Orrantia,
Senior Secretary
II. PUBLIC COMMENT -
III. CONFIRMATION OF AGENDA -Confirmed
IV. CONSENT CALENDAR
A. Approval of Minutes of Meeting on October 13, 2010 for the
Investment Advisory Board
Board Member Mortenson requested that the following correction be
made to page 2, tenth paragraph;
In response to Board Member Mortenson, Mr. Falconer advised that
due to the fact that the policy states that the maximum maturity
can only be extended ~ ~ three to five years, [...]
~._._
MOTION - It was moved by Board Members Spirtos/Mortenson to
approve the minutes of October 13, 2010 as amended. Motion
carried unanimously.
V. BUSINESS SESSION
A. Transmittal of Treasury Report for September 2010
Mr..Falconer presented and reviewed the staff report for the month of
September, advising the Board that the portfolio decreased by 512.18
million ending the month at 5151.34 million. The decrease in the
portfolio was due to the following: the semi annual debt service
payment of 511.2 million, the Capital Improvement payments of
51 .29 million, and the notable payments for the Adams Street Bridge
at 5374,000, the Cove Fire Station at 5287,000 and the Laguna de la
Paz Sound wall at 5154,000. Mr. Falconer further advised that page
7 reflects the reinvestment of a 510 million T-Bill with the new rate at
.19% and the old rate .18%, and a slight increase in the portfolio yield
at .55% and previous year's yield at .53%.
In response to Board Member Mortensen, Mr. Falconer advised that
page 4 VI. Correspondence and Written Material, Item A., reflects the
current yields (i.e. three month, six month, etc...).
Further discussion ensued amongst the Board and staff in reference to
the possibility of extending the yield curve out further.
In response to Board Member Spirtos, Mr. Falconer advised that on
page 3 "Cash Balances," the payments listed are recurring payments
and not final payments. He further advised that the payments
represent eight to ten bond issues with two assessments districts due
to mature in approximately five years.
Mr. Falconer advised the Board that Ambac who insured several of the
RDA bond issues declared bankruptcy. Due to the current status of
Ambac, the City will be preparing the annual disclosures to the
appropriate regulatory agencies, which is part of the City's due
diligence. This item will be presented to the City Council the second
meeting of December.
General discussion ensued amongst the Board and staff regarding
Ambac and their current lawsuit against the Internal Revenue Service.
MOTION - It was moved Board Members Mortensen/Spirtos to
review, receive, and file the Treasurers Report for September 2010.
Motion carried unanimously.
VI. CORRESPONDENCE AND WRITTEN MATERIAL
A. Month End Cash Report -October 2010
Mr. Falconer presented and reviewed the Month-End Cash Report
advising the Board of several transactions reflected on page 2 for the
2
month of October. One of the transactions involves transferring
available monies into LAIF.
Mr. Falconer summarized for the Board the process of the investments
and specific transactions. In addition, he advised the Board that due
to the reduced amount of cash in the portfolio in the month of
October, the November Treasurers Report will possibly reflect over
10% being held in medium term notes.
In response to Board Member Spirtos, Mr. Falconer advised that the
"Notes" column on page 12 stated that the gas tax was not received,
due to the states budget crisis and will be remitted later in the year.
Noted and Filed
B. Pooled Money Investment Board Reports -August 2010 and LAIF
Conference Materials
Mr. Falconer advised that LAIF's current portfolio balance is S4 billion
more than it was in the previous year with the average life remaining
the same and the yields half of what they were. Mr. Falconer
commented that it appears that the state is currently investing more in
U.S. Treasury Securities at this time.
General discussion ensued amongst the Board and staff regarding the
LAIF Conference and conference materials.
Noted and Filed
VII. BOARD MEMBER ITEMS -None
VIII. ADJOURNMENT
It was moved by Board Members Mortenson/Spirtos to adjourn the
Investment Advisory Board meeting at 4:49 p.m. Motion carried
unanimously.
Viank~a Orrantia
Senior Secretary
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