2014 06 17 HAHousing Authority agendas and staff
reports are available on the City's web
site: www.la-quinta. org
HOUSING AUTHORITY
AGENDA
CITY HALL COUNCIL CHAMBERS
78-495 Calle Tampico La Quinta
SPECIAL MEETING ON TUESDAY, JUNE 17, 2014 AT 4:00 P.M.
CALL TO ORDER
ROLL CALL:
Authority Members: Adolph, Evans, Franklin, Osborne, Chairperson Henderson
VERBAL ANNOUNCEMENT — AB 23 [AUTHORIITY SECRETARY]
CLOSED SESSION — NONE
PUBLIC COMMENT ON MATTERS NOT ON THE AGENDA
At this time, members of the public may address the Housing Authority on any matter not
listed on the agenda. Please complete a "request to speak" form and limit your comments
to three minutes. The Housing Authority values your comments; however in accordance
with State law, no action shall be taken on any item not appearing on the agenda unless it
is an emergency item authorized by GC 54954.2(b).
CONFIRMATION OF AGENDA
ANNOUNCEMENTS, PRESENTATIONS, AND WRITTEN COMMUNICATIONS - NONE
CONSENT CALENDAR
NOTE: Consent Calendar items are routine in nature and can be approved by one motion.
1. ADOPT A RESOLUTION FOR THE INVESTMENT POLICY OF THE 4
CITY OF LA QUINTA FOR FISCAL YEAR 2014/2015 [RESOLUTION
HA 2014-0021
HOUSING AUTHORITY AGENDA
JUNE 17, 2014
PAGE
2. APPROVE AN AMENDMENT EXTENDING THE TERM OF THE
PROFESSIONAL SERVICES AGREEMENT WITH BECKY CAHA FOR
HOUSING COMPLIANCE AND MONITORING SERVICES
3. APPROVE AN AMENDMENT EXTENDING THE TERM OF THE 0
PROFESSIONAL SERVICES AGREEMENT WITH LA QUINTA PALMS
REALTY FOR THE LA QUINTA RENTAL HOUSING PROGRAM
4. ADOPT A RESOLUTION APPROVING THE FISCAL YEAR
2014/2015 LA QUINTA HOUSING AUTHORITY BUDGET
[RESOLUTION HA 2014-0031
BUSINESS SESSION - NONE
STUDY SESSION - NONE
REPORTS AND INFORMATIONAL ITEMS - NONE
DEPARTMENTAL REPORTS - NONE
CHAIR AND BOARD MEMBERS' ITEMS - NONE
PUBLIC HEARINGS - NONE
ADJOURNMENT
The next regular quarterly meeting of the Housing Authority will be held on July
15, 2014 at 4:00 p.m. in the City Council Chambers, 78-495 Calle Tampico,
La Quinta, CA 92253.
DECLARATION OF POSTING
I, Susan Maysels, Authority Secretary of the La Quinta Housing Authority, do
hereby declare that the foregoing agenda for the La Quinta Housing Authority was
posted near the entrance to the Council Chambers at 78-495 Calle Tampico and on
the bulletin boards at 51-321 Avenida Bermudas and 78-630 Highway 1 1 1, on
June 13, 2014
DATED: June 13, 2014
SUSAN MAYSELS, Authority Secretary
La Quinta Housing Authority
HOUSING AUTHORITY AGENDA 2
JUNE 17, 2014
Public Notices
• The La Quinta City Council Chamber is handicapped accessible. If special
equipment is needed for the hearing impaired, please call the City Clerk's office at
777-7103, twenty-four (24) hours in advance of the meeting and accommodations
will be made.
• Any writings or documents provided to a majority of the Housing Authority
regarding any item on this agenda will be made available for public inspection at the
City Clerk counter at City Hall located at 78-495 Calle Tampico, La Quinta,
California, 92253, during normal business hours.
HOUSING AUTHORITY AGENDA 3
JUNE 17, 2014
AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR: 1
STUDY SESSION:
PUBLIC HEARING:
____________________: ____
HA MEETING DATE: June 17, 2014
ITEM TITLE: ADOPT A RESOLUTION FOR THE
INVESTMENT POLICY OF THE CITY OF LA QUINTA
FOR FISCAL YEAR 2014/2015
RECOMMENDED ACTION:
Adopt a Resolution of the La Quinta Housing Authority approving the Investment
Policy for Fiscal Year 2014/2015.
BACKGROUND AND ANALYSIS:
The City has one investment policy for all entities including the Housing Authority.
Please see the City Council’s consent staff report of this item for more in depth
discussion of the Investment Policy for Fiscal Year 2014/2015.
ALTERNATIVES:
None.
Report prepared by: Rita Conrad, Finance Director
Report approved for submission by: Frank J. Spevacek, City Manager
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RESOLUTION NO. HA 2014-
A RESOLUTION OF THE LA QUINTA HOUSING
AUTHORITY OF THE CITY OF LA QUINTA APPROVING
AND ADOPTING THE AMENDED INVESTMENT POLICY
FOR FISCAL YEAR 2014/2015
WHEREAS, the general purpose of the Investment Policy is to provide the rules
and standards users must follow in investing funds of the City of La Quinta; and
WHEREAS, the primary objectives, in order of priority, of the City of La Quinta’s
investment activity shall be:
Safety of principal is the foremost objective of the investment program.
Investments of the City of La Quinta shall be undertaken in a manner that seeks
to ensure the preservation of capital in the overall portfolio.
The investment portfolio shall remain sufficiently liquid to meet all operating
requirements that may be reasonably anticipated.
The investment portfolio shall be designed with the objective of attaining a
market rate of return or yield throughout budgetary and economic cycles, taking
into account the investment risk constraints and liquidity needs; and
WHEREAS, authority to manage the City of La Quinta’s investment portfolio is
derived from the City Ordinance. Management responsibility for the investment
program is delegated to the City Treasurer, who shall establish and implement written
procedures for the operation of the City’s investment program consistent with the
Investment Policy for Fiscal Year 2014/2015; and
WHEREAS, the Investment Policy will be adopted before the end of June of
each year and amended as considered necessary.
NOW, THEREFORE, BE IT RESOLVED by the Housing Authority of the City of La
Quinta to adopt the Fiscal Year Investment Policy (Exhibit A).
PASSED, APPROVED and ADOPTED at a regular meeting of the La Quinta
Financing Authority, held on this 17th day of June, 2014 by the following vote, to wit:
5
Resolution No. HA 2014-
Investment Policy
Adopted: June 17, 2014
Page 2 of 3
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________________________
TERRY HENDERSON, Chair
La Quinta Housing Authority
ATTEST:
__________________________________________
SUSAN MAYSELS, Interim Secretary
La Quinta Housing Authority
(SEAL)
APPROVED AS TO FORM:
__________________________________________
M. KATHERINE JENSON, Authority Counsel
La Quinta Housing Authority
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Resolution No. HA 2014-
Investment Policy
Adopted: June 17, 2014
Page 3 of 3
Exhibit A
(TO BE ATTACHED)
8
2014/2015
INVESTMENT
POLICY
EXHIBIT A
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CITY OF LA QUINTA
Investment Policy
Fiscal Year 2014/2015
Table of Contents
Section Topic Page
Executive Summary 2
I General Purpose 4
II Investment Policy 4
III Scope 4
IV Objectives 4
Safety of Principal
Provide Liquidity
Yield A Risk-Based Market Rate Of Return
V Maximum Maturities 6
VI Prudence 6
VII Authority 6
VIII Ethics and Conflicts of Interest 7
IX Authorized Financial Dealers and Institutions 7
Broker/Dealers
Financial Institutions
X Permissible Deposits and Investments 8
XI Investment Pools 12
XII Payment and Custody 13
XIII Interest Earning Distribution Policy 13
XIV Internal Controls and Independent Auditors 13
XV Reporting Standards 14
XVI Financial Assets and Investment Activity Not Subject to this Policy 15
XVII Investment of Bond Proceeds 15
XIII Investment Advisory Board - City of La Quinta 16
XIX Investment Policy Adoption 16
Appendices Topic Page
A Summary of Permissible Deposits and Investments 17
B City of La Quinta Municipal Code Ordinance 2.70 - Investment Advisory Board 19
C City of La Quinta Municipal Code Ordinance 3.08 - Investment of Moneys and Funds 20
D Segregation of Major Investment Responsibilities 22
E Listing of Approved Financial Institutions 23
F Broker/Dealer Questionnaire and Certification 24
G Request for Proposal for Professional Portfolio Management Firm 28
H Permissible Investment Chart – Professional Portfolio Management Firm 34
I Investment Management Process and Risk 35
J Glossary 36
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CITY OF LA QUINTA
Investment Policy
Fiscal Year 2014/2015
Executive Summary
The general purpose of this Investment Policy is to provide the rules and standards that must be
followed in administering the City of La Quinta’s deposits and investments.
The City’s Investment Policy conforms to all state and local statutes and applies to all deposits
and investments of the City of La Quinta, Successor Agency to the City of La Quinta
Redevelopment Agency, and the City of La Quinta Financing and Housing Authorities
(the”City”).
It is the City’s policy to deposit and invest public funds in a manner that shall provide:
Safety of principal;
Liquidity to meet all of the City’s obligations and requirements that may be reasonably
anticipated; and
A risk-based market rate of return.
It is the City’s policy to hold securities and other investments until maturity. This buy-and-hold
policy shall not prevent the sale of a security to minimize loss of principal when an issuer or
backer suffers declining credit worthiness or when the liquidity needs of the portfolio require
that a security be sold.
Authority to manage the City’s investment portfolio is derived from the City Municipal Code.
Management responsibility for the investment program is delegated to the City Treasurer, who
shall establish and implement written procedures for the operation of the City’s investment
program consistent with the Investment Policy. The Treasurer shall establish and implement a
system of internal controls to accomplish the following objectives:
Safeguard assets;
Orderly and efficiently conduct its business, including adherence to all City management
policies;
Prevent or detect errors and fraud;
Accurately complete all accounting records; and
Timely prepare all reliable financial information.
The System of Internal Controls developed by the City Treasurer shall be reviewed annually by the
independent auditors in connection with the annual audit of the City’s financial statements.
The City Manager, City Treasurer and city employees involved in the City’s banking and
investment process shall conduct the City’s business in an ethical manner and refrain from any
activity or relationship that may be, or have the appearance of, a conflict of interest.
The City Treasurer maintains a listing of financial institutions which are approved for investment
purposes. All Broker/Dealers and financial institutions that provide investment services will be
subject to City Council approval.
The Treasurer will be permitted to invest only in the permissible deposits and investments
described in Section X and Appendix A up to the specified maximum allowable percentages
and/or dollar limitations and, where applicable, through the bid process requirements. Permissible
deposits and investments include, in general:
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FDIC-Insured Checking, Savings, and Sweep Accounts;
Collateralized Bank Deposits;
Certificates of Deposit;
Negotiable Certificates of Deposit;
U.S. Government Agency Securities and Federal Government Securities;
Prime Commercial Paper;
Local Agency Investment Fund (LAIF);
Money Market Mutual Funds;
Corporate Notes; and
Professionally Managed Accounts.
The City’s deposits and investments are generally limited to three years’ maximum maturity.
However, the projected amount of funds not expected to be disbursed within five years may be
invested in notes and bonds maturing between three and five years. Additionally, funds may be
invested for up to ten (10) years as further discussed in Section V.
The City’s Investment Policy does not specify a single benchmark as a goal or target yield for a
rate of return on its investment portfolio. As a basis for comparison only, the Treasurer’s
monthly report will display the rates of return on the three-month Bill, six-month Bill, and the one
and two-year U.S. Treasury Note, comparable-period rates for commercial paper, and the yield
for the State Treasurer’s Local Agency Investment Fund (LAIF).
The Investment Policy shall be adopted by resolution of the La Quinta City Council on an annual
basis. The Investment Policy will be adopted before the end of June of each year.
This Executive Summary is only an overview of the City’s Investment Policy. Reading this
summary does not constitute a complete review, which can only be accomplished by reviewing all
of the pages herein.
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City of La Quinta
Statement of Investment Policy
July 1, 2014 through June 30, 2015
Adopted by the City Council on June 17, 2014
I GENERAL PURPOSE
The general purpose of this document is to provide the rules and standards that must be followed
in administering the City of La Quinta’s deposits and investments.
II INVESTMENT POLICY
It is the policy of the City of La Quinta to deposit and invest public funds in a manner that shall
provide:
Safety of principal;
Liquidity to meet all of the City’s obligations and requirements that may be reasonably
anticipated; and
A risk-based market rate of return.
The Investment Policy conforms to all State and local statutes governing the investment of public
funds and sets forth the permissible deposits and investments of the City’s funds and the
limitations thereon.
III SCOPE
Except as further detailed in Section XVII, this Investment Policy applies to all deposits and
investments of the City of La Quinta, Successor Agency to the City of La Quinta Redevelopment
Agency and the City of La Quinta Financing and Housing Authorities (hereafter referred to in this
document as the "City"). These funds are reported in the City’s Comprehensive Annual Financial
Report (CAFR) and include all funds within the following fund types:
General
Special Revenue
Capital Projects
Debt Service
Enterprise
Internal Service
Trust and Agency
Any new fund types and fund(s) that may be created.
IV OBJECTIVES
The objectives of the City's investment activity, in order of priority and importance, are:
1. Safety of Principal
Safety of principal is the foremost objective of the City’s investment program.
Investments shall be undertaken in a manner that seeks to ensure the preservation of
principal of the overall portfolio in accordance with the permissible deposits and
investments.
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The City shall endeavor to preserve its investment principal by making only permissible
deposits and investments, undertaken in a controlled manner to minimize the possibility of
loss or misappropriation through malfeasance or otherwise. Investments not backed by
the full faith and credit of the United States Government shall be diversified by allocating
assets between different types of permissible investments, maturities, and issuers as a
means to mitigate credit risk and interest rate risk.
a. Credit Risk is the risk of loss from the failure of the security issuer or backer.
Credit risk may be mitigated by:
Limiting investments to investment grade securities as permitted in
Section X;
Diversifying the issuers of the securities in the investment portfolio so
that potential losses due to issuer failure or individual securities
downgrades may be minimized.
b. Interest Rate Risk is the risk that market values of securities in the portfolio will
decline due to changes in general interest rates. Interest rate risk may be mitigated
by:
Structuring the investment portfolio so that securities mature to meet
cash requirements for ongoing operations, thereby avoiding the need to
sell securities on the open market prior to maturity; and
Investing operating funds primarily in shorter-term securities.
c. Liquidity Risk is the risk that a security cannot be liquidated because of its unique
features or structure or because it is thinly traded. Liquidity risk is not a material
issue for the City’s portfolio because of the permissible deposits and investments
(see Section X) and because the City maintains a buy-and-hold policy and holds
securities and other investments to maturity. A discussion of the City’s investment
process and risk is presented in Appendix I.
2. Provide Liquidity
The investment portfolio shall remain sufficiently liquid to meet all of the City’s cash needs
that may be reasonably anticipated. This is accomplished by structuring the portfolio so
that sufficient liquid funds are available to meet anticipated demands. Furthermore, since
all possible cash needs cannot be anticipated the portfolio should be diversified and
consist of securities with active secondary or resale markets.
The City’s policy is to hold securities and other investments to maturity. Accordingly,
securities shall not be sold prior to maturity with the following exceptions:
A security with declining credit quality can be sold early to minimize loss of
principal;
Unanticipated liquidity needs of the portfolio require that one or more securities be
sold.
3. Yield a Risk-Based Market Rate Of Return
The City’s investment portfolio shall be structured with the objective of yielding a risk-
based market rate of return throughout budgetary and economic cycles. Return on
investment is less important than the safety and liquidity objectives described above.
The City’s Investment Policy does not specify a single benchmark as a goal or target yield
for a rate of return on its investment portfolio. The portfolio’s rates of return will be
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influenced by several factors, including actions by the Federal Reserve Board, the
marketplace, and overall economic perceptions and conditions. These factors will not
affect yield during the securities’ holding period because the City’s buy-and-hold policy
fixes the securities’ yield at the time of purchase.
As a basis for comparison only, the Treasurer’s monthly reports will display the rates of
return on the three-month Bill, six-month Bill, and one and two-year U.S. Treasury Note,
comparable-period rates for commercial paper, and the yield for the State Treasurer’s
Local Agency Investment Fund (LAIF). The Treasurer may use these or any other
published rates of return that the Treasurer deems appropriate for comparison to the return
on the City’s investment portfolio.
V MAXIMUM MATURITIES
It is the City’s policy to hold securities and other investments until maturity, thus avoiding the risk
of market value fluctuations with overall market interest rates. This buy-and-hold policy shall not
prevent the sale of a security to minimize loss of principal when an issuer or backer suffers
declining credit worthiness or when the liquidity needs of the City require that a security be sold.
The buy-and-hold policy requires that the City’s investment portfolio be structured so that
sufficient liquid funds are available from maturing investments and other sources to meet all
reasonably-anticipated cash needs. To meet anticipated cash needs, it is essential that the
Treasurer have reliable, diligently prepared cash flow projections.
Annually, the Treasurer shall project the amount of funds not expected to be disbursed within ten
years. For FY2014/2015, the amount of such funds is projected to be $20 million. Funds up to
that amount may be invested in U.S.Treasury notes and bonds, Local Agency Obligations, and
California Local Agency Obligations maturing between 3 and 10 years. For all other funds,
investments are limited to five years maximum maturity.
VI PRUDENCE
The City shall follow the Uniform Prudent Investor Act as adopted by the State of California in
Probate Code Sections 16045 through 16054.
Section 16053 sets forth the terms of a prudent person which are as follows: “Investments shall
be made with judgment and care - under circumstances then prevailing - which persons of
prudence, discretion, and intelligence exercise in the professional management of their own
affairs, not for speculation, but for investment, considering the probable safety of their capital as
well as the probable income to be derived.”
VII AUTHORITY
Authority to manage the City's investment portfolio is derived from section 3.08 of the City’s
Municipal Code. Management responsibility for the investment program is delegated to the City
Treasurer for a period of one year pursuant to the City Council’s annual adoption of the
Investment Policy.
The City Treasurer shall establish written procedures for the operation of the investment program
consistent with the Investment Policy. Procedures should include reference to safekeeping, wire
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transfer agreements, banking service contracts, and collateral/depository agreements. Such
procedures shall include explicit delegation of authority to persons responsible for investment
transactions. No person may engage in an investment transaction except as provided under the
terms of this Investment Policy and the procedures established by the City Treasurer. The City
Treasurer shall be responsible for all transactions undertaken and shall establish a system of
controls to regulate the activities of subordinate officials. The City Manager or his/her designee
shall acknowledge in writing all purchases and sales of investments prior to their execution by the
City Treasurer.
VIII ETHICS AND CONFLICTS OF INTEREST
The City Manager, City Treasurer and city employees involved in the City’s banking and
investment process shall conduct the City’s business in an ethical manner and refrain from any
activity or relationship that may be, or have the appearance of, a conflict of interest. Any
questionable activity or relationship shall be reported immediately and in compliance with the
procedures set forth in Section 1.40 – Conflicts of Interest and Acceptance of Gifts and other
Gratuities of the City of La Quinta Personnel Manual. Reporting must be made in accordance with
the personnel policies of the City and, until resolved, the officer or employee shall refrain from
participating in the City’s business related to the matter.
The City Manager, City Treasurer and City employees may conduct personal business with banks,
brokers, and other financial institutions that are authorized to conduct business with the City
provided that the terms of the activity to the accountholder with the City are the same as those
that are available to the public in general.
IX AUTHORIZED FINANCIAL DEALERS AND INSTITUTIONS
The City Treasurer maintains a listing of financial institutions which are approved for direct
investment purposes. In addition a list will also be maintained of approved broker/dealers selected
by credit worthiness.
1. Broker/Dealers who desire to become bidders for direct investment transactions must
supply the City with the following:
Current audited financial statements;
Proof of Financial Industry Regulatory Authority (FINRA) Certification;
Trading resolution;
Resume of Financial broker; and
Completion of the City of La Quinta Broker/Dealer questionnaire (see Appendix F)
which contains a certification of having read the City’s Investment Policy.
The City Treasurer shall evaluate the documentation submitted by the broker/dealer and
independently verify existing reports on file for any firm and individual conducting
investment related business.
The City Treasurer will also contact the following agencies during the verification process:
Financial Industry Regulatory Authority (FINRA) Public Disclosure Report File (1-
800-289-9999).
State of California Department of Corporations (1-916-445-3062).
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The City Treasurer maintains a listing of financial institutions which are approved for
investment purposes. All Broker/Dealers and financial institutions that provide investment
services will be subject to City Council approval.
Each securities dealer shall provide monthly and quarterly reports filed pursuant to U.S.
Treasury Department regulations. Each mutual fund shall provide a prospectus and
statement of additional information.
2. Financial Institutions will be required to meet the following criteria in order to receive City
funds for deposit or investment (see Appendix E, “Listing of Approved Financial
Institutions”):
a. Insurance - Public Funds shall be deposited only in financial institutions having
accounts insured by the Federal Deposit Insurance Corporation (FDIC).
b. Collateral - The amount of the City’s deposits or investments not insured by the
FDIC shall be collateralized by securities with market values of 110%, or by
mortgages with market values 150%, of the amount of invested funds plus unpaid
interest earnings.
c. Disclosure - Each financial institution maintaining invested funds in excess of the
FDIC insured amount shall furnish the City a copy of the most recent Call Report.
The City shall not invest in excess of the FDIC insured amount in banking
institutions which do not disclose to the city a current listing of securities pledged
for collateralization in public monies.
X PERMISSIBLE DEPOSITS AND INVESTMENTS
Permissible deposits and investments are summarized below. A more comprehensive list is
included in Appendix A.
Permissible Investments and Limitations
(See Appendix A for Additional Information)
Maximum
Allocation
Maximum
Maturity Restrictions
Checking & Savings Accounts FDIC Insured & Sweep Accounts 85% of Portfolio Current /
On Demand
Sweep Account:
U.S. Treasuries
and/or GSE's
Interest bearing active bank deposits – non FDIC insured collateralized by
110% of eligible securities
60% of Portfolio Current /
On Demand
$40 million
per bank
Certificates of Deposit - FDIC Insured
60% of Portfolio 5 Years
<= $250,000,
including interest
per institution
Negotiable Certificates of Deposit – FDIC Insured 30% of Portfolio 5 Years
<= $250,000
including interest
per institution
U.S. Treasury Bills, Notes and Bonds, and Government National
Mortgage Association (GNMA) Securities
100% of Portfolio 5 Years
<=$20,000,000
maturing 3-10
Yrs.
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Permissible Investments and Limitations
(See Appendix A for Additional Information)
Maximum
Allocation
Maximum
Maturity Restrictions
Local Agency Bonds / California Local Agency Obligations 30% of Portfolio 10 Years
<=$20,000,000
maturing 3-10
Yrs.
Long term
“A, A2, A” or
better
U.S. Government Agency Securities and Federal Government Securities
(except collateralized mortgage obligations (CMO’s) or structured notes
which contain embedded rate options):
$10 million per
purchase
- Federal National Mortgage Association (FNMA) $20,000,000 5 Years 30% of Portfolio
- Federal Home Loan Bank Notes & Bonds (FHLB) $25,000,000 5 Years
- Federal Farm Credit Bank (FFCB) $30,000,000 5 Years
- Federal Home Loan Mortgage Corporation (FHLMC) $20,000,000 5 years
Prime Commercial Paper including Temporary Liquidity Guarantee
Program (TLGP) 15% of Portfolio 90 Days $5,000,000 per
issuer maximum
Local Agency Investment Fund (LAIF) 30% of Portfolio Current /
On Demand
$50 million
per account
Money market mutual funds regulated by the SEC that consist only of US
Treasury Securities or GSE's and maintain a par value of $1 per share 20% of Portfolio Current /
On Demand
Maintain $1 per
share par value
Corporate Notes 10% of Portfolio 3 Years
$5,000,000 max
per issuer AA
rated or better
Corporate Notes - Temporary Liquidity Guarantee Program (TLGP) 20% of Portfolio 3 Years
$10,000,000 max
per issuer, AA
rated or better
Professionally Managed Account 10% of Portfolio 3 Years
Requires
City Council-
Approved RFP
Long-Term Scale
S&P A1 AAA, AA+, AA, AA-, A+, A
Moody’s P1 Aaa, Aa1, Aa2, Aa3, A1, A2
Fitch AAA, AA+, AA, AA-, A+, A
Checking, Savings, and Sweep Accounts – The City will only maintain checking, savings,
and sweep accounts with FDIC insured financial institutions. As authorized by the City
Council, a U.S. Treasury and/or U.S. Agency Securities Money Market Sweep Account
with a $50,000 target balance may be maintained in conjunction with the checking
account.
In addition, the Treasurer may invest in an interest bearing active deposit account as
approved in Government Code Section 53632. The deposit account must be collateralized
with securities that are in accordance with Government Code Sections 53632.5(c). In
addition, the market value of the collateralized securities must be maintained in
accordance with 53652 (a), and be held by a custodian in accordance with the
requirements of Government Code Section 53656. The proposition of the City’s share of
the deposit account shall be determined in accordance with Government Code Section
53658.
Certificates of Deposit - As authorized in Government Code Section 53649, Certificates of
Deposit are fixed term investments which are required to be collateralized from 110% to
150% depending on the specific security pledged as collateral in accordance with
Government Code Section 53652.
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Collateralization will be required for Certificates of Deposits in excess of the FDIC insured
amount. The type of collateral is limited to City authorized investments. Collateral will
always be held by an independent third party from the institution that sells the Certificates
of Deposit to the City. Evidence of compliance with State Collateralization policies must
be supplied to the City and retained by the City Treasurer as follows:
Certificates of Deposits Insured by the FDIC: The City Treasurer may waive
collateralization of a deposit that is federally insured.
Certificates of Deposit in excess of FDIC Limits: The amount not federally insured
shall be 110% collateralized securities or 150% mortgages market value of that
amount of invested funds plus unpaid interest earnings.
The City’s Investment Policy limits the percentage of Certificates of Deposit to 60% of the
portfolio.
Negotiable Certificates of Deposit - issued by a nationally or state-chartered bank, a
savings association or a federal association (as defined by Section 5102 of the Financial
Code), a state or federal credit union, or by a federally- or state- licensed branch of a
foreign bank. No more than 30% of the City’s portfolio may be invested in negotiable
CDs.
U.S. Treasury Bills, Notes, and Bonds and Government National Mortgage Associations
(GNMA) securities – The City may invest in U.S. Treasury bills, notes, and bonds and
GNMA securities directly issued and backed by the full faith and credit of the U.S.
Government. The City’s Investment Policy provides for investments in U.S. Treasury
issues and GNMA’s of 100% of the portfolio.
The City’s Investment Policy does not allow investments in state indebtedness.
Local Agency Bonds and California Local Agency Obligations – The City may invest in
California local agency obligations pursuant to 56301(a) and 53301(e). 53601(a) pertains
to investing in bonds issued by a local agency, department, board, agency or authority of
the local agency. 53601(e) pertains to investing in bonds and other defined indebtedness
of a local agency or department, board, agency or authority of the local agency within the
State of California.
The City’s Investment Policy limits investments in Local Agency Bonds and California
Local Agency obligations to 30% of the portfolio with up to a ten year maximum maturity.
In addition, the Agency obligations must be invested in the long term rating of A, A2, A or
better by S&P, Moody’s or Fitch.
In the case of an initial public offering, including refinancings, the Treasurer may purchase
directly from the Bond Underwriter. In the case of secondary issues, the Treasurer will
rely on the approved Broker/Dealers.
U.S. Government Agency Securities and Federal Government Securities – The City may
invest in securities issued by U.S. Government instrumentalities and agencies (commonly
referred to as government sponsored enterprises or GSE’s). These securities are not
backed by the full faith and credit of the U.S. Government. Publicly owned GSE’s include
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Federal National Mortgage Association (FNMA), Federal Home Loan Mortgage Corporation
(FHLMC) and Student Loan Marketing Association (SLMA). Non-publicly owned GSE’s
include the Federal Home Loan Bank (FHLB), Federal Farm Credit Bank (FFCB), Federal
Land Bank (FLB) and Federal Intermediate Credit Bank (FICB).
The City’s Investment Policy allows investment only in securities of FNMA, FHLMC, FHLB
and FFCB. For Fiscal Year 2014/2015, the maximum face amount per issuer is $20
million for FNMA and FHLMC, $25 million for FHLB and $30 million for FFCB. In addition,
no more than 30% of the portfolio surplus may be invested in all GSE’s combined with a
maximum $10 million face amount per purchase.
Prime Commercial Paper - As authorized in Government Code Section 53601(g), a portion
of the City’s portfolio may be invested in commercial paper of the highest rating (A1 or
P1) as rated by Moody’s or Standard and Poor’s. There are a number of other
qualifications regarding investments in commercial paper based on the financial strength of
the corporation and the size of the investment. The City’s Investment Policy permits
investments in commercial paper with the following limitations:
Maximum 15% of the portfolio.
Maximum maturity of 90 days.
Maximum of $5 million per issuer.
These limitations are more restrictive than the State code which allows amounts of 25%
of the total portfolio with maturities up to 270 days with no per-issuer limitations.
Local Agency Investment Fund (LAIF) - As authorized in Government Code Section
16429.1 and by LAIF procedures, local government agencies are each authorized to invest
a maximum of $50 million per account in this investment program administered by the
California State Treasurer. The City Treasurer may not invest more than $50 million per
account in LAIF. The City's investment in LAIF is allowable as long as the average
maturity of its investment portfolio does not exceed two years, unless specific approval is
authorized by the City Council. The City limits investment to 30% of the portfolio.
Money Market Mutual Funds - As authorized in Government Code Section 53601(k), local
agencies are authorized to invest in shares of beneficial interest issued by diversified
management companies (mutual funds) in an amount not to exceed 20% of the agency’s
portfolio. There are a number of other qualifications and restrictions regarding allowable
investments in corporate notes and shares of beneficial interest issued by mutual funds
which include (1) attaining the highest ranking or the highest letter and numerical rating
provided by not less than two of the three largest nationally recognized rating services, or
(2) having an investment advisor registered with the Securities and Exchange Commission
with not less than five years’ experience investing in the securities and obligations and
with assets under management in excess of five hundred million dollars ($500,000,000).
The City’s Investment Policy only allows investments in mutual funds that are money
market funds maintaining a par value of $1 per share that invest in direct issues of the
U.S. Treasury and/or US Agency Securities with an average maturity of their portfolio not
exceeding 90 days and the City limits such investments to 20% of the portfolio.
Corporate Notes - As authorized in Government Code Section 53601 (j), local agencies
may invest in corporate notes. The notes must be issued by corporations organized and
operating in the United States or by depository institutions licensed by the United States
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or any other state and operating in the United States. The City’s Investment Policy allows
investment in corporate notes authorized by the Government Code with the following
limitations:
Maturities shall not exceed three years from date of purchase;
Eligible notes shall be regularly quoted and traded in the marketplace;
Eligible notes shall be rated “AA“ or better; and
The maximum aggregate investment shall not exceed $5 million face amount for
each issuer.
This is more restrictive than the State code allowed amounts of 30% of the total portfolio
with maturities up to five years with no per-issuer limitations.
Professionally Managed Account(s) - The City Treasurer may place up to 10% of the
portfolio with a professional portfolio management firm (“PPMF”). The PPMF will be
approved by the City Council based upon the City Treasurer’s recommendation pursuant to
completion of a request for proposal (RFP) as outlined in Appendix G. The PPMF shall
have:
An established professional reputation for asset or investment management;
Knowledge and working familiarity with State and Federal laws governing and
restricting the investment of public funds;
Substantial experience providing investment management services to local public
agencies whose investment policies and portfolio size are similar to those of the
City;
Professional liability (errors and omissions) insurance and fidelity bonding in such
amounts as are required by the City; and
Registration with the Securities and Exchange Commission under the Investment
Advisers Act of 1940.
Before engagement by the City and except as may be specifically waived or revised, the
PPMF shall commit to adhere to the provisions of the City’s Investment Policy with the
following exceptions:
The PPMF may be granted the discretion to purchase and sell investment securities
in accordance with Appendix I of this Investment Policy;
The PPMF is not required to adhere to the buy-and-hold policy of the City’s
Investment Policy; and
The PPMF does not need City Manager or City Treasurer approval to make
permissible investments as detailed in column 8 of Appendix H of this Investment
Policy.
XI INVESTMENT POOLS
There are three (3) types of investment pools:
State-run pools (e.g., LAIF);
Pools that are operated by a political subdivision where allowed by law and the
political subdivision is the trustee (e.g., County Pools); and
Pools that are operated for profit by third parties.
The City’s Investment Policy permits investment only in pools authorized in Section X.
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XII PAYMENT AND CUSTODY
The City shall engage qualified third party custodians to act in a fiduciary capacity to maintain
appropriate evidence of the City’s ownership of securities and other eligible investments. Such
custodians shall disburse funds, received from the City for a purchase, to the broker, dealer or
seller only after receiving evidence that the City has legal, record ownership of the securities.
Even though ownership is evidenced in book-entry form rather than by actual certificates, this
procedure is commonly accepted as the delivery versus payment (DVP) method for the transfer of
securities.
XIII INTEREST EARNING DISTRIBUTION POLICY
Interest earnings are generated from pooled investments and specific investments. The following
provisions apply to the calculation and distribution of interest earnings.
1. Pooled Investments - It is the general policy of the City to pool all available operating cash
of the City of La Quinta, Successor Agency to the City of La Quinta Redevelopment
Agency, La Quinta Financing Authority, and La Quinta Housing Authority, and to allocate
interest earnings in the following order, as follows:
a. Payment to the General Fund of an amount equal to the total annual bank service
charges as incurred by the general fund for all operating funds as included in the
annual operating budget.
b. Payment to the General Fund of a management fee equal to 5% of the annual
pooled cash fund investment earnings.
c. Payment to each fund of an amount based on the average computed daily cash
balance included in the common portfolio for the earning period.
2. Specific Investments - Specific investments purchased by a fund shall incur all earnings
and expenses to that particular fund.
XIV INTERNAL CONTROLS AND INDEPENDENT AUDITOR
The City Treasurer shall establish a system of internal controls to accomplish the following
objectives:
Safeguard assets;
The orderly and efficient conduct of its business, including adherence to management
policies;
Prevention or detection of errors and fraud;
The accuracy and completeness of accounting records; and
Timely preparation of reliable financial information.
While no internal control system, however elaborate, can guarantee absolute assurance that the
City’s assets are safeguarded, it is the intent of the City’s internal control to provide a reasonable
assurance that management of the investment function meets the City’s objectives.
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The internal controls shall address the following:
Control of collusion. Collusion is a situation where two or more employees are working in
conjunction to defraud their employer.
Separation of transaction authority from accounting and record keeping. By separating the
person who authorizes or performs the transaction from the people who record or
otherwise account for the transaction, a separation of duties is achieved.
Custodial safekeeping. Securities purchased from any bank or dealer including appropriate
collateral (as defined by State Law) shall be placed with an independent third party for
custodial safekeeping.
Avoidance of physical delivery securities. Book entry securities are much easier to
transfer and account for since actual delivery of a document never takes place. Delivered
securities must be properly safeguarded against loss or destruction. The potential for
fraud and loss increases with physically delivered securities.
Clear delegation of authority to subordinate staff members. Subordinate staff members
must have a clear understanding of their authority and responsibilities to avoid improper
actions. Clear delegation of authority also preserves the internal control structure that is
contingent on the various staff positions and their respective responsibilities as outlined in
the Segregation of Major Investment Responsibilities appendices.
Written confirmation or telephone transactions for investments and wire transfers. Due to
the potential for error and improprieties arising from telephone transactions, all telephone
transactions shall be supported by written communications or electronic confirmations and
approved by the appropriate person. Written communications may be via fax if on
letterhead and the safekeeping institution has a list of authorized signatures. Fax
correspondence must be supported by evidence of verbal or written follow-up.
Development of a wire transfer agreement with the City’s bank and third party custodian.
This agreement should outline the various controls, security provisions, and delineate
responsibilities of each party making and receiving wire transfers.
The system of internal controls developed by the City, shall be reviewed annually by the
independent auditor in connection with the annual audit of the City’s Financial Statements. The
independent auditor’s letter on internal control over financial reporting and compliance as it
pertains to cash and investments, if any, shall be directed to the City Manager who will direct the
City Treasurer to provide a written response to the independent auditor’s letter. The auditor’s
letter, as it pertains, to cash and investment activities and the City Treasurer’s response shall be
provided to the City’s Investment Advisory Board for their consideration. Following the
completion of each annual audit, the independent auditor shall meet with the Investment Advisory
Board and discuss the auditing procedures performed and the review of internal controls for cash
and investment activities. See Appendix D, “Segregation of Major Investment Responsibilities.”
XV REPORTING STANDARDS
The City Treasurer shall submit a monthly Treasurers Report to the City Council and the
Investment Advisory Board that includes all cash and investments under the authority of the
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Treasurer. The Treasurer’s Report shall summarize cash and investment activity and changes in
balances and include the following:
A certification by the City Treasurer;
A listing of purchases and sales/maturities of investments;
Cash and Investments categorized by authorized investments, except for LAIF
which will be provided quarterly and show yield and maturity;
Comparison of month end actual holdings to Investment Policy limitations;
Current year and prior year monthly history of cash and investments for trend
analysis;
Balance Sheet;
Distribution of cash and investment balances by fund;
A year to date historical cash flow analysis and projection for the next six months;
and
A two-year list of historical interest rates.
XVI FINANCIAL ASSETS AND INVESTMENT ACTIVITY NOT SUBJECT TO THIS POLICY
The City’s Investment Policy does not apply to the following:
Cash and Investments raised from Conduit Debt Financing
Funds held in trust in the City’s name in pension or other post-retirement benefit
programs
Cash and Investments held in lieu of retention by banks or other financial
institutions for construction projects
Short or long term loans made to other entities by the City or Agency
Short term (Due to/from) or long term (Advances from/to) obligations made
either between the City and its funds or between the City and Agency
XVII INVESTMENT OF BOND PROCEEDS
The City’s Investment Policy shall govern bond proceeds and bond reserve fund investments.
California Code Section 5922 (d) governs the investment of bond proceeds and reserve funds in
accordance with bond indenture provisions which shall be structured in accordance with the
City’s Investment Policy.
Arbitrage Requirement - The US Tax Reform Act of 1986 requires the City to perform arbitrage
calculations as required and return excess earnings to the US Treasury from investments of
proceeds of bond issues sold after the effective date of this law. These arbitrage calculations
may be contracted with an outside source to provide the necessary technical assistance to
comply with this regulation. Investable funds subject to the 1986 Tax Reform Act will be kept
segregated from other funds and records will be kept in a fashion to facilitate the calculations.
The City’s investment position relative to the new arbitrage restrictions is to continue pursuing
the maximum yield on applicable investments while ensuring the safety of capital and liquidity. It
is the City's position to continue maximization of yield and to rebate excess earnings, if
necessary.
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XVIII INVESTMENT ADVISORY BOARD - CITY OF LA QUINTA
The Investment Advisory Board (IAB) is a standing board composed of five members from the
public that are appointed by the City Council. Background information will be requested and
potential candidates must agree to a background check and verification. On an annual basis, in
conjunction with the Political Reform Act disclosure statutes, or at any time if a change in
circumstances warrants, each board member will provide the City Council with a disclosure
statement which identifies any matters that have a bearing on the appropriateness of that
member’s service on the board. All board members shall report annually to the City Clerk on
Form 700, Statement of Economic Interests, any activities, interests, or relationships that may be,
or have the appearance of, a conflict of interest.
The IAB must meet at least quarterly, but usually meets monthly, to:
Review at least annually the City’s Investment Policy and recommend appropriate
changes;
Review monthly treasury report and note compliance with the Investment Policy and
adequacy of cash and investments for anticipated obligations;
Receive and consider other reports provided by the City Treasurer;
Meet with the independent auditor after completion of the annual audit of the City’s
financial statements, and receive and consider the auditor’s comments on auditing
procedures, internal controls and findings for cash and investment activities; and
Serve as a resource for the City Treasurer on matters such as proposed investments,
internal controls, use or change of financial institutions, custodians, brokers and dealers.
The IAB will report to the City Council after each meeting either in person or through
correspondence at a regular City Council meeting. See Appendix B: “Investment Advisory Board
Provisions.”
XIX INVESTMENT POLICY ADOPTION
The City’s Investment Policy will be reviewed annually by the City’s Investment Advisory Board
and the City Treasurer. The Investment Advisory Board will forward the Investment Policy with
any revisions to the City Manager and City Attorney for their review and comment. A joint
meeting will be held with the Investment Advisory Board, City Manager, City Attorney, and City
Treasurer to review the Investment Policy and any comments prior to submission to the City
Council for their consideration. The Investment Policy shall be adopted by resolution of the City
Council annually before the end of June of each year.
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CITY OF LA QUINTA Appendix A
SUMMARY OF PERMISSIBLE DEPOSITS AND INVESTMENTS
The City Treasurer will be permitted to invest in the following types of investments subject to the maximum percentage allocation limits and bid process requirements. All maturities
must be less than or equal to the maximum maturity allowed.
Bid
Process Permissible Deposits and Investments
City
Maximum
Allocation
(Footnote
1)
State Maximum
Allocation City
Restrictions
City
Maximum
Maturity
Credit
Quality Surplus
Funds
1 Checking & Savings Accounts (FDIC Insured) & Sweep Accounts 85% Portfolio 100% Portfolio Sweep Account: U.S. Treasuries and/or GSE's Current/On Demand FDIC Insured
2
Interest bearing active bank deposits – non FDIC insured collateralized
by 110% of eligible securities
60% Portfolio 100% Portfolio $40,000,000 per bank Current /on Demand Non-FDIC Insured
2 Certificate of Deposit 60% Portfolio 100% Portfolio <= $250,000 including interest per institution 5 years FDIC Insured
2 Negotiable Certificate of Deposit 30% Portfolio 100% Portfolio <= $250,000 including interest per institution 5 years FDIC Insured
3 U.S. Treasury Bills, Notes and Bonds, and Government National
Mortgage Association (GNMA) securities 100% Portfolio 100% Portfolio <=$30,0000,000 maturing 3-5 Yrs. 3 years
3
U.S. Government Agency Securities and Federal Government
Securities (except collateralized mortgage obligations (CMO's) or
structured notes which contain embedded rate options):
100% Portfolio
- Federal National Mortgage Association (FNMA) $20,000,000 5 years
- Federal Home Loan Bank Notes & Bonds (FHLB) $25,000,000 5 years
- Federal Farm Credit Bank (FFCB) $30,000,000 5 years
- Federal Home Loan Mortgage Corporation (FHLMC) $20,000,000 5 years
3 Prime Commercial Paper including Temporary Liquidity Guarantee
Program (TLGP) 15% Portfolio 25% Portfolio
270 Days $5,000,000 per issuer maximum 90 days S&P (A-1)
Moody’s (P-1)
4 Local Agency Investment Fund (LAIF) $50,000,000 30% Portfolio $50,000,000
per account Current/On Demand
5
Money market mutual funds regulated by the SEC that consist only of
US Treasury Securities or GSE's and maintain a par value of $1 per
share
20% Portfolio 20% Portfolio Maintain $1 per share par value
Current /
On Demand
Rated AAA by 2 of 3
agencies;
assets>=$500
million; SEC reg’d
>5 Yrs.
6 Corporate Notes 10% Portfolio 30% Portfolio $5,000,000 max per issuer 3 years S & P rated AA or
better
6 Corporate Notes - Temporary Liquidity Guarantee Program (TLGP) 20% Portfolio 30% Portfolio $10,000,000 max per issuer 3 years S&P rated AA or
better.
7
Professionally Managed Account
10% Portfolio
100% Portfolio Requires Approved RFP
3 years
SEC Reg’d; E&O,
Fidelity Insured
8 Local Agency Bonds/California Agency Obligations 100% 30% <=^$30,000,0000 10 years At least long term
“A, A2, A” rating
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Appendix A (continued)
Bid
Process Unauthorized Investments
1
Periodically conduct a bid process at least every four (4) years or sooner if considered necessary for banking and/or
custodian services. Since banking services and custodian services are so closely related it is anticipated that the bid
process would include the scope of both services.
The City Treasurer will not be permitted to invest in the following types of investments (see Footnote
2 and “State Code Permitted Deposits And Investments Not Authorized By The City’s Investment
Policy”, below).
- Repurchase Agreements
- Bankers Acceptances
- Mutual Funds other than money market mutual funds
- Preferred and Common Stock
- State Indebtedness
- Asset Backed Securities
- Reverse Repurchase Agreements
- Derivatives
The above list of unauthorized deposits and investments is not meant to be all-inclusive. Only
those deposits and investments listed in the “Permissible Deposits and Investments” section of
the Policy are permissible.
2 The financial institutions can be either state or federally chartered and must be insured by the Federal Deposit
Insurance Corporation (FDIC).
3 At least two bids from broker/dealers that qualify under Securities and Exchange Commission Rule 15C3-1 listed on
the “Listing of Approved Financial Institutions” in the appendices.
4 City Council Approval.
5 Money Market mutual funds must comply with Government Code Section 53601(k). The fund must be registered by
the SEC and must include marking the portfolio to market daily.
6 At least two bids from broker/dealers that qualify under Securities and Exchange Commission Rule 15C3-1 listed on
the “Listing of Approved Financial Institutions” in the appendices.
7
The professional portfolio management firm (PPMF) will be approved by the City Council based upon the City
Treasurer’s recommendation pursuant to completion of a request for proposal (RFP) as outlined in the appendices.
See also Footnote 2.
8 Initial offerings the Treasurer may purchase directly from Bond Underwriter, secondary issues follow bid process
3.
Footnote 1 The City has imposed a maximum limitation based upon the total portfolio of investments. Total portfolio investments are all cash and investments, including bond proceeds. In addition, the State has adopted limits on the
investment of surplus funds.
Footnote 2 The City may engage the services of a professional portfolio management firm which may invest in Bankers Acceptances, Mutual Funds, and Asset Backed Securities not otherwise permissible under the City’s Investment
Policy.
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Appendix B
City of La Quinta Municipal Code
Chapter 2.70
INVESTMENT ADVISORY BOARD PROVISIONS
Sections:
2.70.010 General Rules Regarding Appointment.
2.70.020 Board meetings.
2.70.030 Board functions.
2.70.010 General rules regarding appointment
A. Except as set out below, see Chapter 2.06 for General Provisions.
B. The Investment Advisory Board (the”board”) is a standing board composed of five (5)
members from the public that are appointed by city council.
C. Applicants for the board should have a background in finance, preferably with knowledge
and/or experience in markets, controls and accounting for securities. Background information will
be requested and potential candidates must agree to a background check and verification.
D. On an annual basis, in conjunction with the Political Reform Act disclosure statutes, or at
any time if a change in circumstances warrants, each board member will provide the City Council
with a disclosure statement which identifies any matters that have a bearing on the
appropriateness of that member’s service on the board. Such matters may include, but are not
limited to, changes in employment, changes in residence, or changes in clients.
E. To promote continuity, the expiration of the terms of the members of the board shall be
staggered. The term of service is three years, with one or two terms expiring each year.
2.70.020 Board meetings.
The Board usually will meet monthly, but this schedule may be extended to quarterly
meetings upon the concurrence of the Board and the City Council. The specific meeting dates will
be determined by the Board Members and meetings may be called for on an as needed basis.
2.70.030 Board functions.
A. The principal functions of the Board are: (1) review at least annually the City’s Investment
Policy and recommend appropriate changes; (2) review monthly Treasury Report and note
compliance with the Investment Policy and adequacy of cash and investments for anticipated
obligations; (3) receive and consider other reports provided by the City Treasurer; (4) meet with
the independent auditor after completion of the annual audit of the City’s financial statements, and
receive and consider the auditor’s comments on auditing procedures, internal controls, and findings
for cash and investment activities, and; (5) serve as a resource for the City Treasurer on matters
such as proposed investments, internal controls, use or change of financial institutions, custodians,
brokers and dealers.
B. The Board will report to the City Council after each meeting either in person or through
correspondence at a regular City Council meeting.
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Appendix C
City of La Quinta Municipal Code
Chapter 3.08
INVESTMENT OF MONEYS AND FUNDS
Sections:
3.08.010 Investment of city moneys and deposit of securities.
3.08.020 Authorized investments.
3.08.030 Sales of securities.
3.08.040 City bonds.
3.08.050 Reports.
3.08.060 Deposits of securities.
3.08.070 Trust fund administration.
3.08.010 Investment of city moneys and deposit of securities.
Pursuant to, and in accordance with, and to the extent allowed by, Sections
53607 and 53608 of the Government Code, the authority to invest and reinvest
moneys of the city, to sell or exchange securities, and to deposit them and provide for
their safekeeping, is delegated to the city treasurer. (Ord. 2 § 1 (part), 1982)
3.08.020 Authorized investments.
Pursuant to the delegation of authority in Section 3.08.010, the city treasurer is
authorized to purchase, at their original sale or after they have been issued, securities
which are permissible investments under any provision of state law relating to the
investing of general city funds, including but not limited to Sections 53601 and 53635 of
the Government Code, as said sections now read or may hereafter be amended, from
moneys in his custody which are not required for the immediate necessities of the city
and as he may deem wise and expedient, and to sell or exchange for other eligible
securities and reinvest the proceeds of the securities so purchased. (Ord. 2 § 1 (part),
1982)
3.08.030 Sales of Securities.
From time to time the city treasurer shall sell the securities in which city moneys have
been invested pursuant to this chapter, so that the proceeds may, as appropriate, be
applied to the purchase for which the original purchase money may have been designated
or placed in the city treasury. (Ord.2 § l (part),
3.08.040 City bonds.
Bonds issued by the city and purchased pursuant to this chapter may be cancelled
either in satisfaction of sinking fund obligations or otherwise if proper and appropriate;
provided, however, that the bonds may be held uncancelled and while so held may be
resold. (Ord. 2 § 1 (part), 1982)
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3.08.050 Reports.
The city treasurer shall make a monthly report to the city council of all investments
made pursuant to the authority delegated in this chapter. (Ord. 2 § 1 (part), 1982)
3.08.060 Deposits of securities.
Pursuant to the delegation of authority in Section 3.08.010, the city treasurer is
authorized to deposit for safekeeping, the securities in which city moneys have been
invested pursuant to this chapter, in any institution or depository authorized by the terms
of any state law, including but not limited to Section 53608 of the Government Code as
it now reads or may hereafter be amended. In accordance with said section, the city
treasurer shall take from the institution or depository a receipt for the securities so
deposited and shall not be responsible for the securities delivered to and receipted for by
the institution or depository until they are withdrawn therefrom by the city treasurer.
(Ord. 2 § 1 (part), 1982
3.08.070 Trust fund administration.
Any departmental trust fund established by the city council pursuant to Section
36523 of the Government Code shall be administered by the city treasurer in accordance
with Section 36523 and 26524 of the Government code and any other applicable
provisions of law. (Ord. 2 § 1 (part), 1982)
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Appendix D
SEGREGATION OF MAJOR INVESTMENT RESPONSIBILITIES
Function Responsible Parties
Develop and Recommend Modifications Investment Advisory Board
to City’s Formal Investment Policy and City Treasurer
Review City’s Investment Policy City Manager
and Recommend City Council Action and City Attorney
Adopt Formal Investment Policy City Council
Implement Formal Investment Policy City Treasurer
Review Financial Institutions & Select Investments City Treasurer
Acknowledge Investment Selections City Manager or his/her
designee
Execute Investment transactions City Treasurer or City Manager
Confirm Wires (if applicable) Accounting Manager or
Financial Services Assistant
Record Investment Transactions in City’s Accounting Manager or
Accounting Records Financial Services Assistant
Investment Verification (match broker confirmation City Treasurer and Financial
to City investment records) Services Assistant
Reconcile Investment Records
to Accounting Records and Bank Statements Financial Services Assistant
Reconcile Investment Records
to Treasurers Report of Investments Accounting Manager
Security of Investments at City Accounting Manager or Senior
Secretary
Security of Investments outside City Third Party Custodian
Review Internal Control Procedures External Auditor
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Appendix E
LISTING OF APPROVED FINANCIAL INSTITUTIONS
1. Banking Services - Wells Fargo Bank, Government Services,
Los Angeles, CA (Banking Services)
Rabobank N.A., Government Banking
Group, Roseville, CA (Collateralized Bank
Deposits)
2. Custodian Services - Bank of New York/Mellon
3. Deferred Compensation - International City/County Management
Association Retirement Corporation
4. Broker/Dealer Services - Banc of America Securities/Merrill Lynch
Morgan Stanley
CitiGroup
First Empire Securities
5. Government Pool - State of California Local Agency
Investment Fund
6. Bond Trustees - 1996 Lease Revenue Bonds – US Bank
1998 RDA Project Area 1&2 – US Bank
2001 RDA Project Area 1 – US Bank
2002 RDA Project Area 1 – US Bank
2003 RDA Project Area 1 – US Bank
2004 Local Agency Rev – US Bank
2011 RDA Project Area 2 – US Bank
2011 Fin Auth Housing 1&2 – US Bank
2013 Successor Agency – US Bank
Assessment Districts – US Bank
No Changes to this listing may be made without City Council approval
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Appendix F
BROKER/DEALER QUESTIONNAIRE AND CERTIFICATION
1. Name of Firm:________________________________________________________________________
2. Address:___________________________________________________________________________
3. Telephone: (___) ________________ (___ )____________________________________________
4. Broker's Representative to the City (attach resume):
Name:_____________________________________________________________________________
Title:_______________________________________________________________________________
Telephone: (___)____________________________________________________________________
5. Manager/Partner-in-charge (attach resume):
Name:_____________________________________________________________________________
Title:_______________________________________________________________________________
Telephone:_________________________________________________________________________
6. List all personnel who will be trading with or quoting securities to City employees (attach
resume)
Name:____________________________________________________________________________
Title:______________________________________________________________________________
Telephone: (___)__________________ (___)______________________________________________
7. Which of the above personnel have read the City's Investment Policy?
____________________________________________________________________________________
8. Which instruments are offered regularly by your local office? (Must equal 100%)
_____% U.S. Treasuries _____% Repos
_____% BA's _____% Reverse Repos
_____% Commercial Paper _____% CMO’s
_____% CD’s _____% Derivatives
_____% Mutual Funds _____% Stocks/Equities
_____% Agencies (specify): _____% Other (specify):
_____________________________ __________________________
_____________________________ __________________________
_____________________________ __________________________
_____________________________ __________________________
9. References -- Please identify your most directly comparable public sector clients in our
geographical area.
Entity _______________________ Entity _______________________
Contact _____________________ Contact _____________________
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Telephone (____)____________ Telephone (___)_____________
Client Since___________________ Client Since __________________
10. Have any of your clients ever sustained a loss on a securities transaction arising from a
misunderstanding or misrepresentation of the risk characteristics of the instrument? If so,
explain.
___________________________________________________________________________________
____________________________________________________________________________________
___________________________________________________________________________________
____________________________________________________________________________________
11. Has your firm or your local office ever been subject to a regulatory or state/ federal
agency investigation for alleged improper, fraudulent, disreputable or unfair activities
related to the sale of securities? Have any of your employees been so investigated? If
so, explain.
__________________________________________________________________________________
___________________________________________________________________________________
____________________________________________________________________________________
___________________________________________________________________________________
12. Has a client ever claimed in writing that you were responsible for an investment loss?
Yes_________ No_________ If yes, please provide action taken________________________
___________________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
Has a client ever claimed in writing that your firm was responsible for an investment
loss? Yes_________ No_________ If yes, please provide action taken_________________
____________________________________________________________________________________
___________________________________________________________________________________
____________________________________________________________________________________
Do you have any current or pending complaints that are unreported to FINRA?
Yes_________ No_________ If yes, please provide action taken__________________________
___________________________________________________________________________________
___________________________________________________________________________________
Does your firm have any current, or pending complaints that are unreported to FINRA?
Yes_________ No_________ If yes, please provide action taken___________________________
___________________________________________________________________________________
____________________________________________________________________________________
13. Explain your clearing and safekeeping procedures, custody and delivery process.
____________________________________________________________________________________
_____________________________________________________________________________________
Who audits these fiduciary responsibilities?____________________________________________
Latest Audit Report Date_____________________________________________________________
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14. How many and what percentage of your transactions failed?
Last month? _______% $__________
Last year? _______% $__________
15. Describe the method your firm would use to establish capital trading limits for the City of
La Quinta.__________________________________________________________________________
____________________________________________________________________________________
____________________________________________________________________________________
16. Is your firm a member in the S.I.P.C. insurance program? Yes_______ No_______
If yes, explain primary and excess coverage and carriers.________________________________
___________________________________________________________________________________
____________________________________________________________________________________
17. What portfolio information, if any, do you require from your clients?_____________________
____________________________________________________________________________________
____________________________________________________________________________________
___________________________________________________________________________________
18. What reports and transaction confirmations or any other research publications will the City
receive?____________________________________________________________________________
____________________________________________________________________________________
19. Does your firm offer investment training to your clients? Yes_______ No________
20. Does your firm have professional liability insurance? Yes_________ No_________
If yes, please provide the insurance carrier, limits and expiration date.__________________
___________________________________________________________________________________
____________________________________________________________________________________
21. Please list your FINRA/NASD Registration Number______________________________________
22. Do you have any relatives who work at the City of La Quinta?
Yes______ No_______ If yes, Name and Department____________________________________
23. Do you maintain an office in California? Yes_______ No_________
24. Do you maintain an office in La Quinta or Riverside County? Yes_______ No_________
25. Please enclose the following:
Latest audited financial statements;
Samples of reports, transaction confirmations and any other research/publications the
City will receive;
Samples of research reports and/or publications that your firm regularly provides to
clients; and
Complete schedule of fees and charges for various transactions.
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***CERTIFICATION***
I hereby certify that I have personally read the Statement of Investment Policy of the City of La
Quinta, and have implemented reasonable procedures and a system of controls designed to
preclude imprudent investment activities arising out of transactions conducted between our firm
and the City of La Quinta. All sales personnel will be routinely informed of the City’s investment
objectives, horizons, outlooks, strategies and risk constraints whenever we are so advised by the
City. We pledge to exercise due diligence in informing the City of La Quinta of all foreseeable
risks associated with financial transactions conducted with our firm.
By signing this document the City of La Quinta is authorized to conduct any and all background
checks.
Under penalties of perjury, the responses to this questionnaire are true and accurate to the best of
my knowledge.
Broker Representative____________________________________________________________________
Date______________________________ Title__________________________________________________
Sales Manager and/or Managing Partner*__________________________________________________
Date_______________________________ Title_________________________________________________
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Appendix G
Request for Proposals
Professional Portfolio Management Firm
City of La Quinta, CA
The City of La Quinta, CA is soliciting Requests for Proposals (RFP) from interested firms for the
provision of a discretionary investment management services for City of La Quinta, CA. The
portfolio to be managed of the invested assets is will be approximately 10% of the City’s
investment portfolio and will be invested between 0 – 3 years.
The investment of City of La Quinta, CA’s funds is guided by the applicable State statutes and
the City of La Quinta, CA’s investment policy. A copy of the investment policy is attached for
your information.
Questions regarding this RFP should be directed to:
Name: Rita Conrad
Title: Finance Director/Treasurer
City of: La Quinta, CA
Address: 78-495 Calle Tampico
City, State, Zip Code: La Quinta, CA 92253
Phone Number: (760)777-7150
I. CRITERIA FOR EVALUATION AND SELECTION
Experience of the firm in providing services to public sector entities of similar size
and with similar investment objectives;
Professional experience and qualifications of the individuals assigned to the
account;
Portfolio management resources, investment philosophy and approach;
Responsiveness to the RFP, communicating an understanding of the overall
program and services required;
Reporting capabilities;
Fees.
II. SELECTION TIMETABLE
A. [Month, Day and Year] Proposals due by [Time] PST.
B. [Month, Day and Year] Proposals evaluated: to be determined
C. [Month, Day and Year] [City of La Quinta, CA] [Board/Council] approves selection
and awards contract.
III. FORMAT FOR PROPOSALS
Please format your response to this RFP in the following manner:
A. Organization
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1. Describe your organization, date founded, ownership and other business
affiliations. Provide number and location of affiliated offices. Specify the number
of years your organization has provided investment management service.
2. Describe your firm’s revenue sources (e.g., investment management, institutional
research, etc.) and comment on your firm’s financial condition.
3. Within the past three years, have there been any significant developments in your
organization (e.g., changes in ownership, new business ventures)? Do you expect
any changes in the near future?
4. Describe any U.S. Securities and Exchange Commission (SEC) censures or litigation
involving your organization, any officer, or employee at any time in the last ten
years.
5. Describe the firm’s fiduciary liability and/or errors and omissions insurance
coverage. Include dollar amount of coverage.
B. Personnel
1. Identify the number of professionals employed by your firm by classification.
2. Provide an organization chart showing function, positions, and titles of all the
professionals in your organization.
3. Provide biographical information on investment professionals that will be involved
in the decision-making process for our portfolio, including number of years at your
firm. Identify the person who will be the primary portfolio manager assigned to the
account.
4. Describe your firm’s compensation policies for investment professionals and
address any incentive compensation programs.
C. Assets Under Management
1. Summarize your institutional investment management asset totals by category for
your latest reporting period in the following table:
Number
of Clients Operating Funds Number of
Clients
Other Restrictive
Funds
Governmental _________ $_______________ _________ $_______________
Governmental Pension _________ $_______________ N/A N/A
Non Governmental
Pension _________ $_______________ N/A
N/A
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Corporate _________ $_______________ N/A N/A
High Net Worth Client _________ $_______________ N/A N/A
Endowmental/Foun-
dation _________ $_______________ N/A N/A
2. Provide the number of separate accounts whose portfolios consist of operating
funds.
3. List in the following table the percentage by market value of aggregate assets
under all governmental accounts under management for your latest reporting
period:
Type of Asset Percent by Market
Value
U.S. Treasury securities
Federal Agency obligations
Corporate securities rated AAA-AA
Corporate securities rated A
Corporate securities rated BBB or
lower
Other
(specify_______________________)
4. Describe the procedures that your firm has in place to address the potential or
actual credit downgrade of an issuer and to disclose and advise a client of the
situation.
5. Provide data on account/asset growth over the past five years. Indicate the
number of government accounts gained and the number of government accounts
lost.
6. List your five governmental largest clients. Identify those that are exclusively
operating fund relationships and/or those that are other relationships (e.g., bond
fund, retirement fund).
7. Provide a copy of the firm’s Form ADV, Parts I and II (including all schedules).
8. Provide proof of State of California Registration, if your firm is not eligible for SEC
registration.
9. Provide a sample contract for services.
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D. Philosophy/Approach
1. Describe your firm’s investment philosophy for public clients, including your firm’s
philosophy regarding average duration, maturity, investment types, credit quality,
and yield.
2. Describe in detail your investment process, as you would apply it to City of La
Quinta, CA’s portfolio.
3. What are the primary strategies for adding value to portfolios?
4. Describe the process you would recommend for establishing the investment
objectives and constraints for this account.
5. Describe in detail your process of credit risk management, including how you
analyze credit quality, monitor credits on an ongoing basis, and report credit to
governmental accounts.
6. Describe your firm’s trading methodology.
7. Describe your firm’s decision-making process in terms of structure, committees,
membership, meeting frequency, responsibilities, integration of research ideas, and
portfolio management.
8. Describe your research capabilities as they would pertain to governmental
accounts. What types of analysis do you use?
9. Describe the firm’s approach to managing relationships with the broker-dealer
community.
E. Portfolio Management
1. Are portfolios managed by teams or by one individual?
2. What is the average number of accounts handled per manager?
3. Which professional staff member will be the primary client contact for City of La
Quinta, CA?
4. How frequently are you willing to meet with us?
5. Describe procedures used to ensure that portfolios comply with client investment
objectives, policies, and bond resolutions.
F. Fees Charged
1. Please include a copy of your firm’s fee schedule applicable to this RFP.
2. Identify any expenses that would not be covered through this fee structure and
would be required in order to implement the firm’s program.
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3. Is there a minimum annual fee?
G. Performance Reporting
1. Please report on all accounts under $100 million.
2. Please provide performance history for governmental accounts for the last five
years.
3. Please provide risk measurements for governmental accounts for the last five
years.
4. Indicate whether your returns are calculated and compiled in accordance with
the Association for Investment Management and Research (AIMR/CFA Institute)
standards.
5. Do your reports conform to the State of California reporting standards? Are you
willing to customize your reports to meet our specifications?
6. How will you notify us of investment transactions?
7. Are confirmations of investment transactions sent directly by the broker/dealer to
the client?
8. Do your reports include rating information on investments which is required by
GASB 40?
H. References
Provide a list of at least five (5) client references in California. References should be
public agencies with portfolio size and investment objectives similar to City of La Quinta,
CA. Include length of time managing the assets, contact name, and phone number.
I. Insurance Requirements
Exhibit A defines the insurance requirements that will need to be met prior to the
[Board/Council]’s approval of any agreement for services.
J. Submittal of proposals
1. Seven (7) copies of the proposal shall be submitted in a sealed envelope bearing
the caption RFP for (City of La Quinta, CA) and addressed to:
City of La Quinta, CA
78-495 Calle Tampico
La Quinta, CA 92253
Attention: Rita Conrad, Finance Director/Treasurer
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2. Proposal must be received no later than [Time] PST on [Month, Day, and Year].
3. Proposals should be verified before submission. The City of La Quinta, CA shall
not be responsible for errors or omissions on the part of the respondent in
preparation of a proposal. The City of La Quinta, CA reserves the right to reject
any and all proposals, to wave any irregularities, or informalities in the
proposals, and to negotiate modifications to any proposal.
Enclosures: Investment Policy
Treasurers Report
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Appendix H
City of La Quinta
Permissible Investment Chart – Professional Portfolio Management Firm
(1) (2) (3) (4) (5) (6) (7) (8)
California
Government
Code Section
Investment Category Maximum
Maturity
Authorized Investment
Limits (% of Portfolio)
Credit
Rating
Limits
Comments Allowed per
City Policy
Allowed per
Professional Portfolio
Management Firm
53601(a) Local Agency Bonds 5 Years None None No No
53601(c) State of California Obligations 5 Years None None No No
53601(d) CA Local Agency Obligations 5 Years None Multiple No No
53601(i) Repurchase Agreements 1 Year None None No No
53601(i) Reverse Repurchase Agreements 92 Days 20% of the base value of the portfolio None No No
53601(i) Securities Lending Agreements 92 Days 20% of the base value of the portfolio None No No
53684 County Pooled Investments None None None No No
53632 Interest bearing active deposits None None None Collateralized 110% Yes Yes
53601(f) Bankers Acceptances 180 Days 40% None “AA” or better No Yes
53601(h) Negotiable CD’s 5 Years 30% None Yes Yes
53601(k) Mutual Funds None 20% Multiple No Yes
53601(n) Asset Backed Securities 5 Years 20% AA No Yes
Cash and Equivalents None None None Yes Yes
16429.1 LAIF None None None Yes No
53601(b) US Treasuries 5 Years None None Yes Yes
53601(e) US Agencies 5 Years None None Yes Yes
53601(g), 53635 Commercial Paper 270 Days 25% of portfolio A-1 / P-1 / F-1 Yes Yes
53601(k) Medium Term Notes 5 Years 30% A Yes Yes
Money Market Mutual Funds None 20% Multiple Yes Yes
53601(m) Time Deposits 5 Years None None Yes Yes
Collateralized Bank Deposits
(including non-negotiable CD’s) 5 Years None None Yes Yes
Source of Columns (1) through (5) - Investment: Investment Portfolio Reporting Practices CA Debt and Investment Advisory Commission.
Note: The Professional Portfolio management Firm (PPMF) is not required to adhere to the City’s buy and hold policy and does not need City Manager or City Treasurer approval to make permissible
deposits and investments as detailed in column (8).
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Appendix I
Investment Management Process and Risk
Except as provided for in Section 27000.3, Government Code Section 53600.3 declares as a trustee
each person, treasurer, or governing body authorized to make investment decisions on behalf of local
agencies. As trustees are subject to the prudent investor standard. These persons shall act with care,
skill, prudence, and diligence under the circumstances then prevailing when investing, reinvesting,
purchasing, acquiring, exchanging, selling, and managing funds. Section 53600.5 further stipulates
that the primary objective of any person investing public funds is to safeguard principal; secondly, to
meet liquidity needs of the depositor; and lastly, to achieve a return or yield on invested funds
(Government Code Section 27000.5 specifies the same objectives for county treasurers and board of
supervisors).
Risk is inherent throughout the investment process. There is investment risk associated with any
investment activity and opportunity risk related to inactivity. Market risk is derived from exposure to
overall changes in the general level of interest rates while credit risk is the risk of loss due to the failure
of the insurer of a security. The market value of a security varies inversely with the level of interest
rates. If an investor is required to sell an investment with a five percent yield in a comparable seven
percent rate environment, that security will be sold at a loss. The magnitude of that loss will depend on
the amount of time until maturity.
Purchasing certain allowable securities with a maturity of greater than five years requires approval of
the governing board (see Government Code Section 53601). Part of that approval process involves
assessing and disclosing the risk and possible volatility of longer-term investments
Another element of market risk is liquidity risk. Instruments with unique call features or special
structures, or those issued by little known companies, are examples of “story bonds” and are often
thinly traded. Their uniqueness often makes finding prospective buyers in a secondary market more
difficult and, consequently, the securities' marketability and price are discounted. However, under
certain market conditions, gains are also possible with these types of securities.
Default risk represents the possibility that the borrower may be unable to repay the obligation as
scheduled. Generally, securities issued by the federal government and its agencies are considered the
most secure, while securities issued by private corporations or negotiable certificates of deposit issued
by commercial banks have a greater degree of risk. Securities with additional credit enhancements,
such as bankers acceptances, collateralized repurchase agreements and collateralized bank deposits are
somewhere between the two on the risk spectrum.
The vast majority of portfolios are managed within a buy and hold policy. Investments are purchased
with the intent and capacity to hold that security until maturity. At times, market forces or operations
may dictate swapping one security for another or selling a security before maturity. Continuous analysis
and fine tuning of the investment portfolio are considered prudent investment management.
The Government Code contains specific provisions regarding the types of investments and practices
permitted after considering the broad requirement of preserving principal and maintaining liquidity before
seeking yield. These provisions are intended to promote the use of reliable, diverse, and safe investment
instruments to better ensure a prudently managed portfolio worthy of public trust.
Chapter II. Fund Management
Local Agency Investment Guidelines 2010 Issued by California Debt and Investment Advisory Commission
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Appendix J
GLOSSARY
(Adopted from the Municipal Treasurers Association)
The purpose of this glossary is to provide the reader of the City of La Quinta investment
policies with a better understanding of financial terms used in municipal investing.
AGENCIES: Federal agency securities and/or
Government-sponsored enterprises.
ASKED: The price at which securities are offered.
BANKERS’ ACCEPTANCE (BA): A draft or bill or
exchange accepted by a bank or trust company.
The accepting institution guarantees payment of
the bill, as well as the issuer.
BID: The price offered by a buyer of securities.
(When you are selling securities, you ask for a
bid.) See Offer.
BROKER: A broker brings buyers and sellers
together for a commission.
CERTIFICATE OF DEPOSIT (CD): A time deposit
with a specific maturity evidenced by a
certificate. Large-denomination CD’s are typically
negotiable.
COLLATERAL: Securities, evidence of deposit or
other property which a borrower pledges to
secure repayment of a loan. Also refers to
securities pledged by a bank to secure deposits of
public monies.
COMMERCIAL PAPER: Short-term unsecured
promissory notes issued by a corporation to raise
working capital. These negotiable instruments
are purchased at a discount to par value or at par
value with interest bearing. Commercial paper is
issued by corporations such as General Motors
Acceptance Corporation, IBM, Bank America, etc.
COMPREHENSIVE ANNUAL FINANCIAL REPORT
(CAFR): The official annual report for the City of
La Quinta. It includes five combined statements
for each individual fund and account group
prepared in conformity with GAAP. It also
includes supporting schedules necessary to
demonstrate compliance with finance-related
legal and contractual provisions, extensive
introductory material, and a detailed Statistical
Section.
CONDUIT FINANCING: A form of Financing in
which a government or a government agency
lends its name to a bond issue, although it is
acting only as a conduit between a specific project
and bond holders. The bond holders can look only
to the revenues from the project being financed
for repayment and not to the government or
agency whose name appears on the bond.
COUPON: (a) The annual rate of interest that a
bond’s issuer promises to pay the bondholder on
the bond’s face value. (b) A certificate attached
to a bond evidencing interest due on a payment
date.
DEALER: A dealer, as opposed to a broker, acts as
a principal in all transactions, buying and selling
for his own account.
DEBENTURE: A bond secured only by the general
credit of the issuer.
DELIVERY VERSUS PAYMENT: There are two
methods of delivery of securities: delivery versus
payment and delivery versus receipt. Delivery
versus payment is delivery of securities with an
exchange of money for the securities. Delivery
versus receipt is delivery of securities with an
exchange of a signed receipt for the securities.
DERIVATIVES: (1) Financial instruments whose
return profile is linked to, or derived from, the
movement of one or more underlying index or
security, and may include a leveraging factor, or
(2) financial contracts based upon notional
amounts whose value is derived from an
underlying index or security (interest rates, foreign
exchange rates, equities or commodities).
DISCOUNT: The difference between the cost price
of a security and its maturity when quoted at
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lower than face value. A security selling below
original offering price shortly after sale also is
considered to be at a discount.
DISCOUNT SECURITIES: Non-interest bearing
money market instruments that are issued a
discount and redeemed at maturity for full face
value, e.g., U.S. Treasury Bills.
DIVERSIFICATION: Dividing investment funds
among a variety of securities offering
independent returns.
FEDERAL CREDIT AGENCIES: Agencies of the
Federal government set up to supply credit to
various classes of institutions and individuals,
e.g., S&L’s, small business firms, students,
farmers, farm cooperatives, and exporters.
1. FNMAs (Federal National Mortgage
Association) - Like GNMA was chartered
under the Federal National Mortgage
Association Act in 1938. FNMA is a federal
corporation working under the auspices of the
Department of Housing and Urban
Development (HUD). It is the largest single
provider of residential mortgage funds in the
United States. Fannie Mae, as the corporation
is called, is a private stockholder-owned
corporation. The corporation’s purchases
include a variety of adjustable mortgages and
second loans, in addition to fixed-rate
mortgages. FNMA’s securities are also highly
liquid and are widely accepted. FNMA
assumes and guarantees that all security
holders will receive timely payment of
principal and interest.
2. FHLBs (Federal Home Loan Bank Notes and
Bonds) - Issued by the Federal Home Loan
Bank System to help finance the housing
industry. The notes and bonds provide
liquidity and home mortgage credit to savings
and loan associations, mutual savings banks,
cooperative banks, insurance companies, and
mortgage-lending institutions. They are
issued irregularly for various maturities. The
minimum denomination is $5,000. The notes
are issued with maturities of less than one
year and interest is paid at maturity.
3. FLBs (Federal Land Bank Bonds) - Long-term
mortgage credit provided to farmers by Federal
Land Banks. These bonds are issued at
irregular times for various maturities ranging
from a few months to ten years. The
minimum denomination is $1,000. They carry
semi-annual coupons. Interest is calculated on
a 360-day, 30 day month basis.
4. FFCBs (Federal Farm Credit Bank) - Debt
instruments used to finance the short and
intermediate term needs of farmers and the
national agricultural industry. They are issued
monthly with three- and six-month maturities.
The FFCB issues larger issues (one to ten
year) on a periodic basis. These issues are
highly liquid.
5. FICBs (Federal Intermediate Credit Bank
Debentures) - Loans to lending institutions
used to finance the short-term and
intermediate needs of farmers, such as
seasonal production. They are usually issued
monthly in minimum denominations of $3,000
with a nine-month maturity. Interest is
payable at maturity and is calculated on a 360-
day, 30-day month basis.
6. FHLMCs (Federal Home Loan Mortgage
Corporation) - a government sponsored entity
established in 1970 to provide a secondary
market for conventional home mortgages.
Mortgages are purchased solely from the
Federal Home Loan Bank System member
lending institutions whose deposits are insured
by agencies of the United States Government.
They are issued for various maturities and in
minimum denominations of $10,000. Principal
and interest is paid monthly. Other federal
agency issues are Small Business
Administration notes (SBA’s), Government
National Mortgage Association notes
(GNMA’s), Tennessee Valley Authority notes
(TVA’s), and Student Loan Association notes
(SALLIE-MAE’s).
FEDERAL DEPOSIT INSURANCE CORPORATION
(FDIC): A federal agency that insures bank
deposits, currently up to $250,000 per deposit
through December 31, 2013.
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FEDERAL FUNDS RATE: The rate of interest at
which Fed funds are traded. This rate is currently
pegged by the Federal Reserve through open-
market operations.
FEDERAL HOME LOAN BANKS (FHLB):
Government sponsored wholesale banks
(currently 12 regional banks) which lend funds
and provide correspondent banking services to
member commercial banks, thrift institutions,
credit unions and insurance companies. The
mission of the FHLBs is to liquefy the housing
related assets of its members who must purchase
stock in their district Bank.
FEDERAL OPEN MARKET COMMITTEE (FOMC):
Consists of seven members of the Federal
Reserve Board and five of the twelve Federal
Reserve Bank Presidents. The President of the
New York Federal Reserve Bank is a permanent
member, while the other Presidents serve on a
rotating basis. The Committee periodically meets
to set Federal Reserve guidelines regarding
purchases and sales of Government Securities in
the open market as a means of influencing the
volume of bank credit and money.
FEDERAL RESERVE SYSTEM: The central bank of
the United States created by Congress and
consisting of a seven member Board of Governors
in Washington, D.C., 12 regional banks and about
5,700 commercial banks that are members of the
system.
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION (GNMA or Ginnie Mae): Securities
influencing the volume of bank credit guaranteed
by GNMA and issued by mortgage bankers,
commercial banks, savings and loan associations,
and other institutions. Security holder is
protected by full faith and credit of the U.S.
Government. Ginnie Mae securities are backed
by the FHA, VA or FMHM mortgages. The term
“pass-throughs” is often used to describe Ginnie
Maes.
LAIF (Local Agency Investment Fund) - A special
fund in the State Treasury which local agencies
may use to deposit funds for investment. There
is no minimum investment period and the
minimum transaction is $5,000, in multiples of
$1,000 above that, with a maximum balance of
$50,000,000 for any agency. The City is
restricted to a maximum of ten transactions per
month. It offers high liquidity because deposits
can be converted to cash in 24 hours and no
interest is lost. All interest is distributed to those
agencies participating on a proportionate share
basis determined by the amounts deposited and
the length of time they are deposited. Interest is
paid quarterly. The State retains an amount for
reasonable costs of making the investments, not
to exceed one-half of one percent of the earnings.
LIQUIDITY: A liquid asset is one that can be
converted easily and rapidly into cash without a
substantial loss of value. In the money market, a
security is said to be liquid if the spread between
bid and asked prices is narrow and reasonable size
can be done at those quotes.
LOCAL GOVERNMENT INVESTMENT POOL (LGIP):
The aggregate of all funds from political
subdivisions that are placed in the custody of the
State Treasurer for investment and reinvestment
MARKET VALUE: The price at which a security is
trading and could presumably be purchased or
sold.
MASTER REPURCHASE AGREEMENT: A written
contract covering all future transactions between
the parties to repurchase--reverse repurchase
agreements that establishes each party’s rights in
the transactions. A master agreement will often
specify, among other things, the right of the
buyer-lender to liquidate the underlying securities
in the event of default by the seller-borrower.
MATURITY: The date upon which the principal or
stated value of an investment becomes due and
payable
MONEY MARKET: The market in which short-term
debt instruments (bills, commercial paper,
bankers’ acceptances, etc.) are issued and traded.
OFFER: The price asked by a seller of securities.
(When you are buying securities, you ask for an
offer.) See Asked and Bid.
OPEN MARKET OPERATIONS: Purchases and
sales of government and certain other securities in
the open market by the New York Federal Reserve
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Bank as directed by the FOMC in order to
influence the volume of money and credit in the
economy. Purchases inject reserves into the
bank system and stimulate growth of money and
credit; sales have the opposite effect. Open
market operations are the Federal Reserve’s most
important and most flexible monetary policy tool.
PORTFOLIO: Collection of all cash and securities
under the direction of the City Treasurer,
including Bond Proceeds.
PRIMARY DEALER: A group of government
securities dealers who submit daily reports of
market activity and positions and monthly
financial statements to the Federal Reserve Bank
of New York and are subject to its informal
oversight. Primary dealers include Securities and
Exchange Commission (SEC)-registered securities
broker-dealers, banks and a few unregulated
firms.
QUALIFIED PUBLIC DEPOSITORIES: A financial
institution which does not claim exemption from
the payment of any sales or compensating use or
ad valorem taxes under the laws of this state,
which has segregated for the benefit of the
commission eligible collateral having a value of
not less than its maximum liability and which has
been approved by the Public Deposit Protection
Commission to hold public deposits.
RATE OF RETURN: The yield obtainable on a
security based on its purchase price or its current
market price. This may be the amortized yield to
maturity on a bond the current income return.
REPURCHASE AGREEMENT (RP OR REPO): A
holder of securities sells these securities to an
investor with an agreement to repurchase them
at a fixed price on a fixed date. The security
“buyer” in effect lends the “seller” money for the
period of the agreement, and the terms of the
agreement are structured to compensate him for
this. Dealers use RP extensively to finance their
positions. Exception: When the Fed is said to be
doing RP, it is lending money that is increasing
bank reserves.
REVERSE REPURCHASE AGREEMENTS (RRP or
RevRepo) - A holder of securities sells these
securities to an investor with an agreement to
repurchase them at a fixed price on a fixed date.
The security”buyer” in effect lends the”seller”
money for the period of the agreement, and the
terms of the agreement are structured to
compensate him for this. Dealers use RRP
extensively to finance their positions. Exception:
When the Fed is said to be doing RRP, it is lending
money that is increasing bank reserves.
SAFEKEEPING: A service to customers rendered
by banks for a fee whereby securities and
valuables of all types and descriptions are held in
the bank's vaults for protection.
SECONDARY MARKET: A market made for the
purchase and sale of outstanding issues following
the initial distribution.
SECURITIES & EXCHANGE COMMISSION: Agency
created by Congress to protect investors in
securities transactions by administering securities
legislation.
SEC RULE 15C3-1: See Uniform Net Capital Rule.
STRUCTURED NOTES: Notes issued by
Government Sponsored Enterprises (FHLB, FNMA,
SLMA, etc.) and Corporations which have
imbedded options (e.g., call features, step-up
coupons, floating rate coupons, and derivative-
based returns) into their debt structure. Their
market performance is impacted by the fluctuation
of interest rates, the volatility of the imbedded
options and shifts in the shape of the yield curve.
SURPLUS FUNDS: Section 53601 of the California
Government Code defines surplus funds as any
money not required for immediate necessities of
the local agency. The City has defined immediate
necessities to be payment due within one week.
TREASURY BILLS: A non-interest bearing discount
security issued by the U.S. Treasury to finance the
national debt. Most bills are issued to mature in
three months, six months or one year.
TREASURY BONDS: Long-term coupon-bearing
U.S. Treasury securities issued as direct
obligations of the U.S. Government and having
initial maturities of more than 10 years.
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TREASURY NOTES: Medium-term coupon-bearing
U.S. Treasury securities issued as direct
obligations of the U.S. Government and having
initial maturities from two to 10 years.
UNIFORM NET CAPITAL RULE: Securities and
Exchange Commission requirement that member
firms as well as nonmember broker-dealers in
securities maintain a maximum ratio of
indebtedness to liquid capital of 15 to 1; also
called net capital rule and net capital ratio.
Indebtedness covers all money owed to a firm,
including margin loans and commitments to
purchase securities, one reason new public issues
are spread among members of underwriting
syndicates. Liquid capital includes cash and
assets easily converted into cash.
UNIFORM PRUDENT INVESTOR ACT: The State
of California has adopted this Act. The Act
contains the following sections: duty of care,
diversification, review of assets, costs,
compliance determinations, delegation of
investments, terms of prudent investor rule, and
application.
YIELD: The rate of annual income return on an
investment, expressed as a percentage. (a)
INCOME YIELD is obtained by dividing the current
dollar income by the current market price for the
security. (b) NET YIELD or YIELD TO MATURITY
is the current income yield minus any premium
above par or plus any discount from par in
purchase price, with the adjustment spread over
the period from the date of purchase to the date
of maturity of the bond.
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AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR: 2
STUDY SESSION:
PUBLIC HEARING:
____________________:
HA MEETING DATE: June 17, 2014
ITEM TITLE: APPROVE AN AMENDMENT EXTENDING
THE TERM OF THE PROFESSIONAL SERVICES
AGREEMENT WITH BECKY CAHA FOR HOUSING
COMPLIANCE AND MONITORING SERVICES
RECOMMENDED ACTION:
Approve an Amendment extending the term of the Professional Services
Agreement with Becky Caha for housing compliance and monitoring services and
authorize the Executive Director to execute said Amendment.
EXECUTIVE SUMMARY:
· Becky Caha currently provides housing and compliance monitoring services.
· The existing Professional Services Agreement (PSA) with Ms. Caha provides
a one-year term with the option to extend for three additional years.
· The Amendment to the PSA would eliminate the option to extend and a five-
year term would be established.
FISCAL IMPACT:
The Authority budget allocates $60,000 annually for contract housing and
compliance services. The Amendment to the PSA identifies a cost not to exceed
$276,375 during the five-year term or $55,275 annually.
BACKGROUND/ANALYSIS:
On June 18, 2013, City Council awarded a contract to Becky Caha for a one-year
term with the option to extend for three additional years. The existing PSA with
Becky Caha provides monthly monitoring and annual compliance assistance for the
La Quinta Housing Authority’s (“Authority”) 410 silent second trust deeds, 73
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sewer subsidy loans, 28 single-family rentals, 864 multi-family units, and 2
residential rehabilitation loans. Services provided by Becky Caha generally include
the following:
· Review and qualify potential homebuyers for any re-sales under the City’s
Second Trust Deed Program.
· Review and approve refinance transaction requests and prepare
subordination documents under the City’s Second Trust Deed Program and
Sewer Subsidy Program.
· Annual compliance verification of the Authority’s multi-family rental
properties; verification of income level of tenants and rental amounts to
verify each project is in compliance.
· Annual compliance verification of the Authority’s Housing Program
participants; verification of income level of property owners and residency.
· Loan repayment processing.
The proposed contract amendment will provide technical expertise as well as
consistent, reliable and cost effective housing compliance and monitoring services
benefiting City Staff, residents, and affordable housing program participants. Staff
has also surveyed costs for like services and determined that the Authority could
not secure a lower cost vendor with the experience Ms. Caha has. Based on Ms.
Caha’s past performance, familiarity with the City’s Housing Programs, and 20-plus
years of experience, staff recommends approval of the Amendment to the PSA.
ALTERNATIVES:
City Council may elect to delay, modify, or reject the Amendment of the PSA and
direct staff accordingly.
Report prepared by: Carla Triplett, Housing Coordinator
Report approved for submission by: Les Johnson, Community Development
Director
Attachments: 1. PSA Amendment
2. Original executed PSA dated July 1, 2013
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AMENDMENT NO. 1 TO PROFESSIONAL SERVICES AGREEMENT
WITH BECKY CAHA
This Amendment No. 1 to Professional Services Agreement with Becky Caha
("Amendment No. 1") is made and entered into as of the 1st day of July, 2014
("Effective Date") by and between the CITY OF LA QUINTA ("City"), a California
municipal corporation and Becky Caha (“Consultant”).
RECITALS
WHEREAS, on or about July 1st, 2013, the City and Consultant entered into
a Professional Services Agreement to provide Housing Compliance and Monitoring
services for the City. The term of the Agreement expires on June 30th, 2014; and
WHEREAS, changes are indicated to the term (i.e., Scope of Work; Contract
Sum; Compensation Schedule, etc.) in the Professional Services Agreement; and
WHEREAS, the City is utilizing Consultant for Housing Compliance and
Monitoring services;
NOW THEREFORE, in consideration of the mutual covenant herein contained,
the parties agree as follows:
AMENDMENT
In consideration of the foregoing Recitals and the covenants and promises
hereinafter contained, and for good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the parties hereto agree as follows:
1. Section 3.4 is amended to read as follows:
Section 3.4 – Term. Unless earlier terminated in accordance with Sections 8.7 or
8.8 of this Agreement, the term of this agreement shall commence on July 1, 2014
and terminate on June 30, 2019.
In all other respects, the Original Agreement shall remain in effect.
IN WITNESS WHEREOF, the City and Consultant have executed this
Amendment No. 1 to the Professional Services Agreement on the respective dates
set forth below.
CITY OF LA QUINTA a California municipal corporation
Dated:
Frank J. Spevacek, City Manager
ATTACHMENT 1
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ATTEST:
Susan Maysels, City Clerk
APPROVED AS TO FORM:
M. Katherine Jenson, City Attorney
CONSULTANT: __________________________
By: Dated:
Name:
Title:
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ATTACHMENT 2
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AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR: 3
STUDY SESSION:
PUBLIC HEARING:
____________________:
HA MEETING DATE: June 17, 2014
ITEM TITLE: APPROVE AN AMENDMENT EXTENDING
THE TERM OF THE PROFESSIONL SERVICES
AGREEMENT WITH LA QUINTA PALMS REALTY FOR
THE LA QUINTA RENTAL HOUSING PROGRAM
RECOMMENDED ACTION:
Approve Amendment No. 4 to the Professional Services Agreement for property
management services, with La Quinta Palms Realty and authorize the Executive
Director to execute said Amendment.
EXECUTIVE SUMMARY:
· La Quinta Palms Realty (LQPR) provides property management services to
the Housing Authority’s 28 affordable rental homes in the La Quinta Cove.
· The City’s Professional Services Agreement (PSA) with LQPR expires
February 28, 2015.
· This Amendment would extend the term of the PSA through February 28,
2020.
· If approved, the total contract amount shall not exceed $193,200 during the
five year term or $38,640 annually.
FISCAL IMPACT:
Rental income from the La Quinta Housing Authority’s (“Authority’s”) Rental
Housing Program sufficiently covers property management and operating expenses
of $38,640 ($115 per house, per month for the 28 homes).
BACKGROUND/ANALYSIS:
The Authority currently owns 28 affordable rental homes in the Cove area, which
are rented to very-low and low-income households. Property management and
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maintenance services have been provided by LQPR since 2002. Since the original
two-year contract established in 2002, multiple extensions have been granted with
the latest extension expiring in February 2015. The existing PSA identifies the
following services to be provided:
· Property maintenance of Authority’s rental homes
· Marketing and advertising of Authority’s vacant rental homes
· Tenant screening, monthly rent collection and property inspections
· Day-to-day operations of Authority’s rental homes
· Financial record keeping and reporting for Authority’s rental homes
The contract amendment is proposed to provide efficient, consistent, and cost
effective property management services to the Authority’s 28 affordable rental
homes. City Staff does not have the property management experience or
knowledge needed to manage the Authority’s affordable rental homes. Over the
past several years, LQPR has consistently demonstrated expertise in the property
management field, familiarity with State and Section 8 rental regulations,
competitive rental pricing, and professionalism in their communications with
tenants, City staff and residents. Additionally, with LQPR’s office being located in
the Village, tenants and City staff benefit from having a property management
provider with a local presence. Staff believes it is in the best interest of the
Authority to approve a long-term contract with LQPR, a highly skilled and
knowledgeable property management firm with a proven performance record.
ALTERNATIVES:
The Authority could prepare a Request for Proposals for property management
services and possibly hire another property management agency. However, due to
the consistent exemplary service provided by LQPR over the past several years,
staff does not recommend this alternative.
Report prepared by: Carla Triplett, Housing Coordinator
Report approved for submission by: Les Johnson, Community Development
Director
Attachments: 1. PSA Amendment
2. Executed PSA dated February 23, 2009, with Amendments 1-3
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AMENDMENT NO. 4 TO PROFESSIONAL SERVICES AGREEMENT
WITH LA QUINTA PALMS REALTY
This Amendment No. 4 to Professional Services Agreement with La Quinta
Palms Realty ("Amendment No. 4") is made and entered into as of the 17th day of
July, 2014 ("Effective Date") by and between the La Quinta Housing Authority
("Authority"), a California municipal corporation and La Quinta Palms Realty
(“Consultant”).
RECITALS
WHEREAS, on or about February 23, 2009, the La Quinta Redevelopment
Agency (“Agency”) and Consultant entered into a Professional Services Agreement
to provide Property Management services for the Authority (“Original Agreement”),
pursuant to which the Agency and Consultant agreed to the terms and conditions
to provide those services related to residential property management and sales for
Agency owned properties (“Properties”). The term of the Agreement expires on
February 23, 2011; and
WHEREAS, on or about December 21, 2009, the Agency and Consultant
entered into Amendment No. 1 to the Original Agreement (“Amendment No. 1”),
Amendment No. 1 provides that Consultant shall serve as the Agency’s Real Estate
Agent and handle the transactions necessary to acquire individual units (All
commissions and/or compensation to be paid by the sellers of the units) to become
part of this portion of the Agency’s Affordable Housing Program and increased the
per unit management fee from $110 to $125.
WHEREAS, on or about March 17, 2010, the Agency and Consultant entered
into that certain Amendment No. 2 to Agreement for Contract Services
(“Amendment No. 2”). Amendment No. 2 increased the scope of services to
include services for the Agency’s Foreclosure Home Purchase and Rehabilitation
Program, including acting as the Agency’s purchase/sales agent including a
monthly management fee for the management of each foreclosed unit at $75 per
unit.
WHEREAS, on or about January 9, 2013, the Agency and Consultant
entered into that certain Amendment No. 3 to the Agreement for Contract Services
(“Amendment No. 3”). Amendment No. 3 decreased the monthly per unit fee from
$125 to $115, updated the property list, and extended the term of the Agreement
for two (2) additional years. The term of the Agreement expires on February 28,
2015.
WHEREAS, the Original Agreement, as modified by Amendment No. 1,
Amendment No. 2, and Amendment No. 3, is hereinafter referred to as the
“Agreement”.
ATTACHMENT 1
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WHEREAS, pursuant to Assembly Bill 26 from the 2011/12 First
Extraordinary Session of the California Legislature, which was signed by the
Governor on June 28, 2011 (“ABx1 26), all redevelopment agency activities,
except continued performance of “enforceable obligations”, were immediately
suspended. A lawsuit was filed, challenging the constitutionality of ABx1 26 and
companion bill ABx1 27 (which would have allowed redevelopment agencies to
remain in existence and continue redevelopment, if the legislative bodies that
established the agencies elected to participate in a “voluntary alternative
redevelopment program” and make certain remittance payments.) The California
Supreme Court upheld the constitutionality of ABx1 26, revising the effective dates
of certain provisions, and struck down as unconstitutional ABx1 27. (California
Redevelopment Assn. v. Matosantos (2011) 53 Cal. 4th 231. ABx1 26 is Chapter
5, Statutes 2012, First Extraordinary Session, which added Part 1.8 (suspension
provisions) and Part 1.85 (dissolution provisions) (”Part 1.85”) of Division 24 of
the Health and Safety Code. Pursuant to Health and Safety Code Section 34171(j),
added by Part 1.85, the City of La Quinta (“City”) is the “successor agency” to the
Agency. On January 3, 2012, the La Quinta City Council adopted Resolution No.
2012-002, pursuant to which the City elected (a) to be the “successor agency” to
the Agency, and (b) to have the Authority be the “housing successor” to the
Agency. On January 17, 2012, the Authority adopted HA Resolution No. 2012-
002, affirmatively electing to be the “housing successor” to the Agency.
Pursuant to the Health and Safety Code Section 34176(b), added by Part 1.85, all
of the housing assets and functions of the Agency were transferred to the
Authority. The Agreement is a function of the Agency that was transferred to the
Authority.
WHEREAS, changes are indicated to the term (i.e., Scope of Work;
Contract Sum; Compensation Schedule, etc.) in the Professional Services
Agreement; and
WHEREAS, the City is utilizing Consultant for Property Management
Services and Agency’s Real Estate Agent;
NOW THEREFORE, in consideration of the mutual covenant herein contained,
the parties agree as follows:
AMENDMENT
In consideration of the foregoing Recitals and the covenants and promises
hereinafter contained, and for good and valuable consideration, the sufficiency and
receipt of which are hereby acknowledged, the parties hereto agree as follows:
1. Section 3.4 is amended to read as follows:
Section 3.4 – Term. Unless earlier terminated in accordance with Sections 7.7 or
7.8, this Agreement shall continue in full force and effect until February 28, 2020.
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2. Section 1 of Exhibit “D” (Schedule of Performance) of the Agreement is
amended to read as follows:
Section 1 – Exhibit D (“Schedule of Performance”). Term of Agreement-
Contractor shall provide the stated services throughout the term of the Agreement,
pursuant to the terms of Section 3.4 of the Agreement.
In all other respects, the Original Agreement shall remain in effect.
IN WITNESS WHEREOF, the City and Consultant have executed this
Amendment No. 1 to the Professional Services Agreement on the respective dates
set forth below.
CITY OF LA QUINTA a California municipal corporation
Dated:
Frank J. Spevacek, City Manager
ATTEST:
Susan Maysels, City Clerk
APPROVED AS TO FORM:
M. Katherine Jenson, City Attorney
CONSULTANT: __________________________
By: Dated:
Name:
Title:
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ATTACHMENT 2
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AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR: 4
STUDY SESSION:
PUBLIC HEARING:
_________________:
HA MEETING DATE: June 17, 2014
ITEM TITLE: ADOPT RESOLUTION TO APPROVE
FISCAL YEAR 2014/2015 BUDGET
RECOMMENDATION:
Adopt a Resolution of the La Quinta Housing Authority approving the Fiscal Year
2014/2015.
EXECUTIVE SUMMARY:
The Fiscal Year (FY) 2014/2015 proposed budget includes the La Quinta Housing
Authority administrative and operational budgets.
FISCAL IMPACT:
All FY 2014/2015 revenues and expenditures are included in the Proposed FY
2014/2015 Budget. Revenues and expenditures are $870,550 and $915,416
respectively. The difference in expenditures and revenues of $44,866 will come
from the Housing Authority fund balance.
BACKGROUND ANALYSIS
Annually, a budget is prepared and submitted to the La Quinta Housing Authority
Board for review and approval. At the Housing Authority meeting of May 20,
2014, the Housing Authority’s Proposed Budget was submitted for review. There
have been no changes to the Housing Authority’s FY 2014-2015 budget since the
May 20, 2014 presentation.
ALTERNATIVES
The Board may further adjust the various appropriations.
Report prepared by: Rita Conrad, Finance Director
Report approved for submission by: Frank J. Spevacek, Executive Director
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RESOLUTION NO. HA 2014-
A RESOLUTION OF THE LA QUINTA HOUSING
AUTHORITY APPROVING A BUDGET FOR FISCAL
YEAR 2014/2015
WHEREAS, each year the La Quinta Housing Authority adopts a Budget for
Revenues and Expenditures for the upcoming Fiscal Year; and
WHEREAS, the Housing Authority desires to make provisions for a level of
services commensurate with the needs of the City; and
WHEREAS, the Housing Authority has reviewed said budget and has had several
public meetings to receive public input; and
WHEREAS, the Housing Authority has, after due deliberation and consideration,
made such amendments in the proposed budget as it considers desirable; and
NOW, THEREFORE, BE IT RESOLVED by the La Quinta Housing Authority to
adopt, as follows:
SECTION 1. The Fiscal Year 2014/2015 Budget which is on file with the La
Quinta Housing Authority Secretary is hereby approved.
SECTION 2. Continuing Appropriations which remain unspent and were
authorized by Council in Fiscal Year 2013/2014 are approved in the Fiscal Year
2014/2015 Budget in an amount not to exceed $15,365 (Exhibit A).
SECTION 3. Budget adjustment procedures are approved as follows:
A. Additional appropriations and the transfer of cash or
unappropriated fund balance from one fund to another shall be
made only upon Housing Authority approval.
B. Transfers of budgeted appropriations between divisions or capital
projects shall be made only upon Housing Authority approval.
C. Transfers of budgeted appropriations between accounts within a
division or capital project may be made with the approval of the
Executive Director or his designee.
D. Prior year budget continuing Appropriations and Encumbrances for
unexpended capital project appropriations remaining from
uncompleted prior year capital projects shall be made with
Executive Director approval. These carry-over appropriations are
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Resolution No. HA 2014-
Budget Approval FY 2014/2015
Adopted: June 17, 2014
Page 2
for prior year Housing Authority approved capital projects and shall
not exceed the approved project budget.
SECTION 4. The Executive Director shall render a monthly report to the Housing
Authority on the status of City operations as it relates to the approved budget and any
amendments thereto.
PASSED, APPROVED, and ADOPTED at a regular meeting of the La Quinta Housing
Authority held on this 17th day of June, 2014, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
_______________________________
TERRY HENDERSON, Chairperson
La Quinta Housing Authority
ATTEST:
__________________________________
SUSAN MAYSELS, Secretary
La Quinta Housing Authority
(AUTHORITY SEAL)
APPROVED AS TO FORM:
________________________________
M. KATHERINE JENSON, Attorney
La Quinta Housing Authority
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