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2011 10 12 IAB MinutesINVESTMENT ADVISORY BOARD Meeting October 12, 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 Chairperson Spirtos followed by the Pledge of Allegiance. PRESENT: Board Members Mortenson, Blum, Spirtos and Donais ABSENT: Board Member Park OTHERS PRESENT: John Falconer, Finance Director and Vianka Orrantia, Senior Secretary II PUBLIC COMMENT - None Mr. Falconer advised the Board that Board Member Park, due to an out -of -town emergency, has requested an excused absence from today's meeting. Board Member Blum advised the Board that the Mr. Falconer along with the Finance staff was recognized at the October 4, 2011 City Council meeting for Financial Reporting for the 15" year in a row. Board Member Blum, along with the other Investment Advisory Board, extended his congratulations to Mr. Falconer and staff. III CONFIRMATION OF AGENDA Mr. Falconer advised the Board of the date scheduled for the joint meeting with the City Council and all Boards /Commissions for November 1, 2011. The Board is currently scheduled for 4:30 p.m. and in addition, Mr. Falconer requested that the handout for the proposed items of discussion for the scheduled joint meeting be added for the Board's consideration under VI. Item C. Board concurred. Chairman Spirtos also advised that she would like to include additional discussions derived from the October 4, 2011 City Council meeting under VI. Item C. Board concurred. IV CONSENT CALENDAR 1. Approval of Minutes of Meeting on September 14, 2011 for the Investment Advisory Board. MOTION - It was moved by Board Members Mortenson /Donais to approve the Minutes of September 14, 2011. Motion carried unanimously. V BUSINESS SESSION A. Transmittal of Treasury Report for August 2011 Mr. Falconer presented and reviewed the staff report for the month of August advising the Board. of a decrease in the cash balance of approximately $3.7 million ending the month at $182.9 million. The month end bank balance was at an unusual high due to a debt - service payment due on September 1, 2011, of $11.9 million. Mr. Falconer also advised that the Rabobank account had increased by $5 million, with an ending balance of $39 million (the maximum per the investment policy for this account is $40 million). Mr. Falconer also advised that LAW has slightly decreased ending the month at $13 million. Due to unchanged market rates in Treasuries, staff decided to invest in Federal Home Loan Bank Discount Notes for six - months at 6 basis points. In addition, with debt service reserve funds available, the reserves were invested for approximately one year at 9 %2 basis points. Mr. Falconer further advised that the decrease in the cash balance was due to the following: $2.6 million in Police service costs and $1.41 million in Capital Improvement Project costs; (Capital Improvement Projects included $338,000 towards the Adams Street Bridge, $266,000 towards the 5 -plex on Avenida La Fonda and $202,000 towards the Adams Street signal synchronization project). General conversation ensued amongst the Board and staff regarding several of the Capital Improvement Projects as well as the clarification of the acronym CMAQ, Congestion Management Air Quality. Mr. Falconer advised that the portfolio was three basis points lower than the previous month with an ending balance at .38% and the pooled yield was at .46 %. Mr. Falconer further advised that as the current investments begin to mature the yield will begin to decline. In response to Chairman Spirtos, Mr. Falconer advised that the $12 million due to mature in the next several months will be rolled back into LAIF, due to the upcoming payment to the State for the "Play to Pay" payment for the continuation of the City's Redevelopment Agency. General conversation ensued amongst the Board and staff regarding the 2 payment to continue with the Redevelopment agency in addition to the upcoming legal issues with the state regarding these payments. In response to Board Member Mortenson, Mr. Falconer stated that the state does not provide a list of cities that will have to borrow money from their low- income housing fund to pay the state for the "Play to Pay" program, and that he would gather a list of those cities and provide the list to the Board at the next scheduled board meeting. General discussion ensued amongst the Board and staff in reference to the effect of the declining interest income on LAIF employees. In response to Board Member Mortenson, Mr. Falconer clarified for the Board, the Projected Sources Use of Cash table, the Pooled Cash row on page 9. MOTION - It was moved by Board Members Blum /Donais to review, receive, and file the Treasurers Report for August 2011. Motion carried unanimously. VI CORRESPONDENCE AND WRITTEN MATERIAL A. Month End Cash Report - September 2011 Mr. Falconer presented and reviewed the staff report for the month of September advising the Board of Rabobank's balance as of September 2011 ending at $39.5 million with the Bank of New York investments down to $64 million. With the current yields, staff is considering investing in LAIF and commercial paper. In response to Board Member Mortenson, Mr. Falconer advised that previously the Board authorized staff to invest in the City's bonds, but with the uncertainty of the redevelopment agencies and other issues with public perception, it was decided by staff not to invest in the City's bonds at this time. General discussion ensued amongst the Board and staff regarding municipal bonds. Mr. Falconer advised the Board that LAIF remains at .37% basis points with Rabobank at .47% with the overall portfolio yield at .60% basis points. In response to Chairperson Spirtos, Mr. Falconer advised that staff forecasted the tax increments as a flat dollar amount for the upcoming year due to the decline in the current home values. 3 General discussion ensued amongst the Board and staff regarding future liabilities and potential retirement expenses. Noted and Filed B. Pooled Money Investment Board Reports - July 2011 Noted and Filed C. Joint City Council /IAB Meeting Chairman Spirtos commented that based on her recent attendance to the City's Planning Commission meeting, she suggested the Board might approach their discussions with City Council with a more pro- active approach (i.e. potential costs of moving power lines and /or any other expenditures in the near future). Board Member Mortenson suggested that the Board consider discussions regarding municipal bonds. In response to Board Member Blum, Chairman Spirtos clarified the purpose of the joint meetings. General discussion ensued amongst the Board regarding the upcoming joint meeting with the City Council and it was the conclusion of the Board to discuss the items suggested by staff. Board Member Mortenson requested an excused absence for the upcoming November Board meeting. Noted and Filed VII BOARD MEMBER ITEMS - None VIII ADJOURNMENT MOTION - It was moved by Board Members Mortenson /Donais to adjourn the meeting at 5:06 p.m. Motion carried unanimously. 7 t)rnit!ea D Vianka Orrantia Senior Secretary 8