2011 04 13 IAB MinutesINVESTMENT ADVISORY BOARD
MEETING
April 13, 2011
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 Vice -Chair Spirtos followed by the Pledge
of Allegiance.
PRESENT: Board Members Mortenson, Blum and Spirtos
ABSENT: Board Member Park
OTHERS PRESENT: John Falconer, Finance Director and Vianka
Orrantia, Senior Secretary
II PUBLIC COMMENT — None
III CONFIRMATION OF AGENDA — Confirmed
IV CONSENT CALENDAR —
A. Approval of Minutes on March 9, 2011, for the Investment Advisory
Board.
Board Member Mortenson requested the following correction be made
to page 4, IV. Correspondence and Written Material, Item A:
Mr. Falconer commented that based on the current economic market,
LAIF's yield remains at 4.3% 3:01 and with the City at 4.r% 4ONO.
Board Member Spirtos requested that the minutes reflect the Board's
appreciation of Mr. Genovese's attendance and also reflect his
departure prior to the continuation of review of the agenda. Board
concurred.
MOTION — It was moved by Board Member Mortenson /Blum to
approve the Minutes of March 9, 2011 as amended. Motion carried
unanimously.
V BUSINESS SESSION
A. Transmittal of Treasury Report for February 2011
Mr. Falconer presented and reviewed the staff report for the month of
February advising of a $3 million decline in cash as a result of various
capital improvement projects reflected on page three of the report.
Those projects include approximately $350,000 spent on the Coral
Mountain Apartment project to be located near Costco Shopping
Center and $278,000 on improvements to the La Quinta Sports
Complex.
General discussion ensued amongst the Board and staff regarding the
Coral Mountain Apartment project and the dedication of the new
sports complex.
Mr. Falconer also advised of the investment activity for the month of
February which included a purchase of a $4 million investment in
commercial paper and a $20 million purchase of a Federal Home Loan
Bank Discount Note. Mr. Falconer further advised of the portfolio
performance which increased slightly by 3 basis points ending the
month at .46% and the pooled cash investments ending at .55 %.
Mr. Falconer updated the Board on the status of the RDA close outs,
reducing the RDA's balance to zero until the Governor's budget
proposal is finaled. Mr. Falconer informed the Board of a proposal by
the League of California Cities to the governor allowing the RDA's to
make a direct payment to the schools based on set formula (the
formula would be based on housing funds and non - housing funds), in
return of this proposal it would allow the RDA's to extend their life
thus allowing collection of increments in the future.
General discussion ensued amongst the Board and staff regarding the
League's proposal and the impact to the City of the proposed
elimination of the RDA.
As a general note, Mr. Falconer advised the Board of the reported
decline to the population of the City from 42,000 to 37,000 resulting
in a future decrease in the gas tax received from the state.
P
Board Member Blum commented that based on conversation with
Council Member Franklin; there was a possible error in the census of
the City.
Mr. Falconer advised, as previously stated at the March meeting, the
City is working in conjunction with the Coachella Valley Water District
to realign a canal near SilverRock. If approved the City would have to
sell a $10 million T -Bill (which currently matures in June), to pay for a
portion of the realignment. Mr. Falconer further advised that page 6
reflects the 2002 CIP T -Bill to be used as payment, with the current
yield of maturity at .18% and the market at .10 %.
In response to Board Member Blum, Mr. Falconer advised that the
selling of the T -Bill would give the City a slight gain and overall
positive affect to the yield.
General discussion ensued amongst the Board and staff regarding the
realignment of the canal.
MOTION — It was moved by Board Members Mortenson /Blum to
review, receive, and file the Treasurers Report for February 2011.
Motion carried unanimously.
B. Continued Consideration of Fiscal Year 2011 -2012 Investment Policies
& 2011 -2012 Work Plan Items
Mr. Falconer advised that staff has been investigating other
alternatives to LAIF. At the March meeting, staff presented the Board
with the Riverside County Treasurer's Pooled Investment Fund as a
possible alternative, since then staff has come across another possible
alternative offered by Rabobank. Mr. Falconer informed the Board that
staff would present a verbal update on the program, due to the fact
that staff will be attending the upcoming CMTA conference; if there
were any other alternatives suggested by other entities at the
conference, staff would present them all at the next scheduled board
meeting. Mr. Falconer advised that Rabobank has a collateralized
program, the bank will collateralize up to 110% of an investment with
them. The bank currently buys treasuries, which include Muni's and
GSE's held in trust by Union Bank, with a guarantee of 15% with
same day liquidity, which is 15 basis points over the current LAIF rate.
Mr. Falconer further advised that if this program was approved, it
would have to be incorporated into the investment policy.
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General discussion ensued amongst the Board and staff regarding the
solidity of Rabobank and its rating, which currently stands at a "triple
A" rating, as well as allowable investments.
In response to Board Member Spirtos, Mr. Falconer advised that the
conferences attended by the Board and staff for fiscal year 2011 -2012
will not be included in the budget.
Board Member Mortenson commented on the level of definition within
the policy such as a risked based rate of return and felt that levels
could be higher within the policy.
Mr. Falconer replied to Board Member Mortenson's comment and
summarized for the Board the history of the current definitions within
the policy.
MOTION — It was moved by Board Members Mortenson /Blum 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 — March
2012
Mr. Falconer presented and reviewed the Month End Cash Report for
the month of March advising the Board that page 2 reflects a slight
increase in the LAIF balance. Mr. Falconer also advised the Board on
LAIF's performance with a decrease from February at .55% ending the
month of March at .44 %.
In response to Board Member Blum, Mr. Falconer advised that page 3
reflects 8.85% state loans.
In conclusion, Mr. Falconer advised that page 4 reflects a decline in
the yields.
Noted and Filed
B. Pooled Money Investment Board Reports — January 2012
Noted and Filed
VII BOARD MEMBER ITEMS - None
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Board Member Spirtos advised the Board of the upcoming City events
scheduled for April 15 and April 30 1h .
VIII ADJOURNMENT
Motion — It was moved by Board Members Blum /Mortenson to adjourn the
meeting at " -p..m. Motion carried unanimously.
r Submit dy,
Vianka Orrantia
Senior Secretary
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