2011 03 09 IAB MinutesINVESTMENT ADVISORY BOARD
MEETING
March 9, 2011
CALL TO ORDER
Regular meeting of the La Quinta Investment Advisory Board was called to
order at the hour of 4:00 by Chairman Park followed by the Pledge of
Allegiance.
PRESENT: Board Members Mortenson, Blum, Park and Spirtos
ABSENT: None
OTHERS PRESENT: John Falconer, Finance Director, Tom Genovese,
City Manager and Vianka Orrantia, Senior
Secretary
II PUBLIC COMMENT — None
III CONFIRMATION OF AGENDA — Confirmed
IV CONSENT CALENDAR
1. Approval of Minutes of Meeting on February 9, 2011 for the
Investment Advisory Board.
MOTION — It was moved by Board Members Mortenson / Spirtos to approve
the Minutes of February 9, 2011. Motion carried unanimously.
V BUSINESS SESSION
Chairman Park suggested that Section V, Item B be discussed at this time.
Board concurred.
B. Proposed Amendment to the 2010 -2011 Investment
Mr. Falconer advised that staff would like to propose an amendment to the
2010 -2011 investment policy amending the extension of the maximum
maturity from five to ten years and allowing the investment of state and
local government investments. As a result of the proposal, staff has asked
Mr. Genovese, City Manager to attend and brief the Board as to why staff is
proposing these amendments.
Mr. Genovese advised of the current economy and its impact to the City as
well as the Governor's consideration to dissolve the RDA. As a result of the
Governor's proposal, staff's decision was to transfer money from the RDA to
the City to repay outstanding loans, as well as the transferring of several
properties including SilverRock. For this reason, staff is requesting the
amendments to the 2010 -2011 Investment Policy. Mr. Genovese also
advised of staff's decision to also issue bonds at this time.
General discussion ensued amongst the Board and staff regarding bonds and
the transferring of the City's assets. In addition, general discussion was also
ensued regarding the Governor's proposal to dissolve the RDA along with
various aspects of what this will entail and the impact to the City of La
Quinta and all other local agencies.
Mr. Genovese summarized for the Board the City's RDA and the various
capital improvement projects benefiting the residents of La Quinta funded by
the RDA over the years. Therefore due to the Governor's proposal, Mr.
Genovese asked the Board to consider the recommended amendments to the
Policy to allow the Treasurer to invest in maturities up to ten years as well as
consider the new investment type, California Local Agency Obligations to be
implemented into the 2010-2011 Investment Policy.
In response to Board Member Spirtos, Mr. Falconer clarified that page 2 first
sentence, that staff is requesting the extension of maturity from 5 years to
10 years; therefore the proposed language should read:
maturing between 3 and 10 years.
In response to Board Member Mortenson, Mr. Falconer clarified the two
definitions of the local agency obligations;
1. The City's ability to invest in their own bonds (which is allowed by
the State Code) and;
2. The ability to invest in other government agency bonds.
Mr. Falconer advised the Board that staff considered investing in the City's
bond but was informed by the City's attorney's that this was not permitted
but they could possibly be purchased through a secondary market.
In response to Board Member Mortenson, Mr. Falconer advised that the
current bond ratings for the Housing Authority is "AA" and the
Redevelopment Agency's rating will be an A +, with a twenty to thirty year
maturity.
MOTION — It was moved by Board Members Blum /Park to approve the
proposed amendments to the 2010 -2011 Investment Policy. Motion carried
unanimously.
The Board thanked Mr. Genovese for his attendance to the meeting and the
additional information provided for the Board's consideration to the proposed
amendments.
A. Transmittal of Treasury Report for January 2011
Mr. Falconer presented and reviewed the staff report for the month of
January advising of the receipt of the first installment of property tax
payments received from the County increased the ending cash balance by
$20.1 million. As indicated on page 3, taxes are down by approximately $4
million which are due to Prop 8 adjustments, (the reassessed value of
homes) in comparison to the previous year.
Mr. Falconer advised that there were several short -term investments made in
commercial paper and Federal Home Loan Discount Notes. He also advised
that due to upcoming expenditures, next month's report will reflect a decline
in the cash. Also reflected is a decline in the LAIF balance, with little change
to the interest rate from the previous year.
In response to Board Member Mortenson, Mr. Falconer advised that the yield
to maturity has declined to 206 days.
Mr. Falconer advised the Board that there would be a possibility of early
liquidation of a six -month T -Bill from bond proceeds due to the relocation of
a canal located in near SilverRock. Mr. Falconer further advised that this
project is a joint effort with the Coachella Valley Water District.
General discussion ensued amongst the Board regarding the relocation of the
canal.
In response to Board Member Blum, Mr. Falconer clarified for the Board that
page 9, second block titled "Projected (Sources) Uses of Cash" is the six
month forecast for all investments therefore totaling the available cash listed
in fourth block titled "Projected Liquid Cash."
In response to Board Member Mortenson, Mr. Falconer advised that in
previous years, the CDARS program was presented to the Board as a
possible investment instrument; due to the yield at the time it was the
decision of the Board not to include the program as an investment.
Board Member Mortenson stated that he felt that staff should reconsider
investing in CDARS as a possible alternative to LAIF.
General discussion amongst the Board and staff regarding LAIF.
MOTION — It was moved by Board Members Blum / Mortenson to review,
receive, and file the Treasurers Report for January, 2011. Motion carried
unanimously.
B. Proposed Amendment to the 2010 -2011 Investment Policy — (This
item was discussed at the beginning of the board meeting.)
C. Continued Discussion of the Investment Advisory Board 2011 -2012
Work Plan and 2011 -2012 Investment Policy
Mr. Falconer advised that based upon his conversation with fellow
Treasurers, another investment tool being utilized by other cities is the
Riverside County Treasurer's Pooled Investment Fund, which is not
permissible under the City's current investment policy. He further
advised included in the agenda is a handout for the Board's review and
consideration as a possible alternative to LAIF and considered as part
of the Board's 2011-2012 Work Plan.
General discussion ensued by the Board and staff regarding the
Riverside County Treasurer's Pooled Investment Fund.
MOTION — It was moved by Board Members Spirtos / Mortenson to continue
the review of the 2011-2012 Work Plan and the 2011-2012 Investment
Policy. Motion carried unanimously.
VI Correspondence and Written Material
A. Month End Cash Report and other selected Financial Data — February
2011
Mr. Falconer commented that based on the current economic market,
LAIF's yield remains at .43% and with the City at .46 %.
Noted and Filed
B. Pooled Money Investment Board Reports — December 2010
Noted and Filed
VII Board Member Items
Board Member Spirtos informed the Board that due to schedule
conflicts, she will not be able to attend the upcoming CMTA
conference in April.
Mr. Falconer advised that if any other Board member was interested in
attending the conference, he asked that they notify staff no later than
March 15 " so that reservations could be made accordingly.
Vlll Adjournment
MOTION - It was moved by Board Members Spirtos /Mortenson to adjourn
the meeting at 5:20 p.m. Motion carried unanimously.
ubmit
Vian -Orr
antra
Senior Secretary