2012 01 11 IAB MinutesINVESTMENT ADVISORY BOARD
Meeting
January 11, 2012
I CALL TO ORDER
Regular meeting of the La Quinta Investment Advisory Board was called to order at the
hour of 4:00 p.m. by Chairperson SPirtos followed by the Pledge of Allegiance.
PRESENT: Board Members Mortenson, Blum, Spirtos, Park and Donais
ABSENT: None
OTHERS PRESENT: John Falconer, Finance Director and Vianka Orrantia, Senior
Secretary
11 PUBLIC COMMENT - None
III CONFIRMATION OF AGENDA - Confirmed
IV CONSENT CALENDAR
Approval of Minutes of Meeting on December 14, 2011 for the Investment
Advisory Board.
MOTION - It was moved by Board Members Blum/Park to approve the Minutes
of December 14, 2011. Motion carried unanimously.
V BUSINESS SESSION
A. Transmittal of Treasury Report for November 2011
Mr. Falconer presented and reviewed the staff report for the month of
November advising the Board of a decrease in the portfolio of approximately
$3.4 million ending the month slightly under $163 million. A large portion of
the decrease was due to cash needs. Mr. Falconer further advised that page 3
summarizes the cash decrease as follows: $363,000 was spent on the "Am
Street extension Project, $127,000 on Phase 2 Washington Street Drainage
Project, $493,000 on the Adams Street Bridge, in addition during the month of
the November $1.7 million was paid toward the County of Riverside Sheriff
contact which equated to two months of contract service costs. Mr. Falconer
also advised that the average maturity for the month of November decreased
just slightly less than 100 days, with the portfolio performance increasing by
two basis points ending the month at .37% and the pooled cash investments at
.52%, as compared to the previous month's investments at .50%.
Mr. Falconer informed the Board that in the month of November the LAW
balance had increased to the $40 million maximum. In addition, he informed the
Board of the maturity of several investments which will be reinvested into
commercial paper.
Mr. Falconer advised the Board that due to the State Supreme Court ruling the
City will not be making the tentative scheduled payment of $18 million that was
due mid -January. Mr. Falconer also advised that due to the ruling, the City's
RDA will expire as of February 1, 2012.
Chairperson Spirtos commented that she had asked that the Supreme Court's
ruling abolishing the RDA be further discussed under Board Member items.
Mr. Falconer advised that in spite of the ruling the City is scheduled to receive
the January tax increment revenues and will make the pass -through payments.
Mr. Falconer also advised that staff is diligently making every effort to
safeguard the City's assets.
Mr. Falconer stated that page 4 reflects the summary of permissible deposits
and investments as we 11 as the diversity of those deposits and investments.
In response to Board Member Blum, Mr. Falconer advised that on behalf of t he
City the Treasurer conducts all investments as well as establishing all CD's. Mr.
Falconer summarized for the Board the CD purchase process.
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Board Member Blum shared his concern regarding the Treasurer's resignation
and the continuity of a[ I investments upon his departure.
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General discussion ensued amongst the Board and staff regarding the continual
safeguard of the City's investments during the recruitment and replacement of
the Finance Director/Treasurer.
Mr. Falconer suggested lthat staff give an update as to the status of the Finance
Director/Treasurer replacement at the April board meeting. Board concurred.
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Board Member Mortenson reiterated the purpose of the Board and . the City's
investment policy and the check balances that are in place to protect all City
investments. I
Mr. Falconer stated that staff currently maintains a "conservative" investment
policy; the new Finance Director/Treasurer could change how investments are
made.
In response to Board Member Mortenson, Mr. Falconer advised that as a result
of the elimination of the RDA and the uncertainty of the tax increments
payments, the 94 day average maturity gives the City ample flexibility for
liquidity for unexpected cash needs.
In response to Board Member Mortenson, Mr. Falconer advised that at the
December Board meeting staff was recommending a draw -down of monies out
of the Rabobank account but due to the current interest environment and same
day liquidity option, it was decided by staff to maintain the current balance in
the Rabobank account. Mr. Falconer suggested that the Board consider
increasing either LAW or Rabobank at the review of the 2012/2013 investment
policy.
In response to Chairperson Spritos, Mr. Falconer clarified the following:
Page 2: column. titled "Other" is an amortization of Discount Notes and is
reported as interest income.
Page 8: table titled City; "Revenue Fundsff in the amount of $774,127 is a
grouping of various funds.
Mr. ' Falconer suggested that staff breakdown the funds that compile the
.revenue funds" and report back to the Board at the next scheduled meeting.
In response to Chairperson Spirtos, Mr. Falconer advised that the Information
Technology Fund (also listed within the City table) is a fund which pays for the
City's Information Technology Specialist as well as the City's servers,
equipment and internet. Mr. Falconer further advised that Council has
considered televising City Council meetings but due to the current economy,
they do not feel they should impose a fee to the residents of La Quinta to
televise the meetings at this time.
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MOTION — It was moved by Board Members Mortenson/Donais to review,
receive, and file the Treasurers Report for November 2011. Motion carried
unanimously.
VI CORRESPONDENCE AND WRITTEN MATERIAL
A. Month End Cash Report — December 2011
Mr. Falconer presented and reviewed the month end cash report for the month
of December advising the Board that page 2 of the report reflects an increase in
LAIF in addition to a decline in the Bank of New York investments. LAIF still
remains at 38 basis points with thirteen week Treasury rates at .025% and a
one-year at 11 basis points. Mr. Falconer further advised that page 5 reflects
the note activity, with the two-year note currently at a .24 yield and the three-
year at .35 basis points.
Mr. Falconer commented to the Board that the short-term commercial paper
investment in Ricoh Financial yielded .25 basis points; due to the short-term
rate staff will consider commercial paper for any future investments.
In response to Board Member Mortenson, Mr. Falconer advised that average
money market balances are held in two sweep accounts, one account averaged
a balance of approximately $150,000 for any golf course expenses and
emergency checks; the second account held bond proceeds from Money Market
Mutual funds with a current balance of $16 million and was used for the City's
cash needs. Due to the abolishment of the RDA the bond proceeds account at
this time will remain suspended.
Board Member Mortenson advised that with the current money market
regulatory issues, that staff consider other alternatives in lieu of money market
funds. Chairperson Spirtos requested that the literature advising of the issues
with the money market funds be made available at the next scheduled meeting.
Noted and Filed
B. Pooled Money Investment Board Reports — October 2011 and November 2011
Noted and Filed
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V11 BOARD MEMBER ITEMS
Chairperson Spirtos requested that the State Supreme Court's decision to
abolish all "Redevelopment Agencies" be discussed at this time.
General discussion ensued amongst the Board and staff regarding the State
Supreme Court's decision to abolish all redevelopment agencies, the impact this
decision has on the City and the steps staff is taking to ensure the City is in
compliance with the State's ruling.
Chairperson Spirtos advised the Board that the City will be honoring Pillars of
the Community at 11:00 a.m. on January 12, 2012; this year's honorees will
include Tom Genovese and Stan Sniff. Chairperson Spirtos further advised that
she will not be in attendance at the February board meeting.
VIII ADJOURNMENT
MOTION - It was moved by Board Members Park/Blum to adjourn the meeting at 4:59
p.m. Motion carried -unanimously.
Vianka Orrantia
Senior Secretary
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