2008 08 13 IAB MinutesREPORT/INFORMATIONAL ITEM: /
INVESTMENT ADVISORY BOARD
Meeting
August 13, 2008
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 Chairman Ross, followed by the Pledge of Allegiance.
PRESENT: Board Members Daniel, Ross, Rassi, Park and Moulin (4:20)
ABSENT: None
OTHERS PRESENT: John Falconer, Finance Director, Louise West, Accounting
Manager, Diane Martin, Financial Services Assistant and
Vianka Orrantia, Senior Secretary
11 PUBLIC COMMENTS — None.
III CONFIRMATION OF AGENDA
Presentation: Finance Internal Controls
Mr. Falconer presented and reviewed for the Investment Advisory Board the
internal financial controls for investments. Ms. Louise West and Ms. Diane
Martin, along with'Mr. Falconer of the City Finance Department�were available
to answer Board member questions.
The Board thanked Mrs. West and Mrs. Martin for their attendance.
IV CONSENT CALENDAR
Approval of Minutes of Meeting on July 16, 2008 for the Investment Advisory
Board.
Chairman Ross advised the following corrections;
Page 2: The following sentence should be listed as part of Item III - Public
Comments title not IV — Confirmation of Agenda;
(This is the time set aside for public comment on any matter not scheduled on
the agenda.)
Page 7: Item VII — Board Member Items — sixth sentence, should read;
Board Member x advised of an error in the Investment Policy on page 22,
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MOTION - It was moved by Board Members Deniel/Moulin to approve the
minutes of July 16, 2008, as amended. Motion carried unanimously.
V BUSINESS SESSION
A. Transmittal of Treasury Report for June 2008
Mr. Falconer presented and reviewed a draft treasury report. A draft
report was presented to the Board due to information not yet available for
the six-month cash flow and the final accruals for the year -ending
2007/2008. Mr. Falconer further advised that page 8 cash balances will
change due to budgeted entries for negative balances. The final
Treasurers report will be presented at the next scheduled board meeting.
Mr. Falconer advised that there was a decrease in the portfolio by $11
million due to pass -through payments. Mr. Falconer further advised that
the Treasury benchmark increased to 2.14%, with a decrease in the
portfolio yield to 2.88% and the pooled cash investments slightly over by
3.09% with the overall portfolio currently exceeding the current
benchmark.
In response to Board Member Moulin, Mr. Falconer advised that the City
currently holds some Freddie Mac paper with a portion to mature in
September. Mr. Falconer further advised that he will not roll over this
investment and would possibly invest in Federal Home Loan Paper and
LAIF. Board Member Moulin concurred.
MOTION - It was moved by Board Members Moulin/Deniel to approve,
receive and file the Treasury Report June motion carried unanimously.
B. Investment Advisory Board 2008/2009 Work Plan
Mr. Falconer advised that City Council adopted the Investment Advisory
Board's work plan for 2008/2009 on August 5, 2008 with Board
Members Ross, Daniel and Moulin present. Mr. Falconer further advised
of the handout forwarded to him by Board Member Moulin on his
thoughts for next year's work plan.
Board Member Moulin commented on the written staff report presented to
the City Council.
Board Member Daniel also commented on the staff report and suggested
that the staff report be expanded in the future.
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August 13, 2008
Both Board Members Moulin and Daniel complemented Mr. Falconer on
his oral presentation and also thanked Chairman Ross for his comments
during the presentation of the work plan.
Board Member Moulin suggested that the Board review the content and
presentation of the monthly Treasurers report and also suggested forming
a sub -committee for the review of the report.
Board Member Daniel suggested that all three items be continued to the
next scheduled meeting with Chairman Ross concurring.
MOTION - It was moved by Board Members Park/Bassi to continue the
discussion of the Fiscal Year 2008/2009 Work Plan Investment Policy to
the September meeting.
VI CORRESPONDENCE AND WRITTEN MATERIAL
A . Month End Cash Report
Mr. Falconer advised that page 3 reflects a state wide daily yield of
2.78%, with the six-month T-Bill at 2,12%, with the six-month bill at a
discount of 1.88% as of August 1 st.
Noted and Filed
C. Pooled Money Investment Board Report
Mr. Falconer advised that Staff was directed by the Board at the previous
Board meeting to contact LAIF and get their feedback regarding Freddie
Mac. Mr. Falconer further advised that he spoke with Dan Dowell and
Mr. Dowell stated that he was comfortable in investing in Fannie Mae and
Freddie Mac on a short-term basis and if he wanted to invest further out
on the yield curve he would invest in Federal Home Loan paper for long-
term investments.
In response to Board Member Denial, Mr. Falconer advised that the $1
billion reflected in the report were REMIC's, which Mr. Falconer stated he
was not familiar with. Board Member Daniel advised that these were
real estate backed securities.
Mr. Falconer stated that he also provided the web site page for the Board
regarding LAIF's position on Fannie Mae and Freddie Mac investments.
Noted and Filed
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VII BOARD MEMBER ITEMS
In response to Chairman Ross, Mr. Falconer advised that the handouts from
Staff were for informational purposes only, and the information is also utilized
by the auditors for internal controls.
Board Member Moulin summarized for the Board his handout and felt that the
information provided could possibly be helpful to the Treasurer and helpful in
cash forecasting.
Chairman Ross suggested, as a business session item, that each Board member
review the monthly Treasurers report and report back at the next scheduled
meeting, any information and or comments regarding the Treasurers report.
Mr. Falconer informed on the history of the Treasurers Report and advised the
Board that this report has evolved over the last 13 years. Mr. Falconer further
advised that the report is completed on a monthly basis and is finalized with his
signature and than presented to Council.
Mr. Falconer suggested that Staff go through each page of the report and report
back those pages that are mandated only by the state code.
Board Member Daniel advised Staff that they are merely trying to review the
report for improvement and/or deletion of reports that are no longer needed.
Mr. Falconer stated that he respects the Board for their efforts but reiterated
that he is responsible for the Treasurer's Report because it is under his signature
and must adhere to State Code.
Board Member Rassi stated that he felt that this was the most logical way to
proceed.
Board Member Park requested that Staff forward the report to the Board prior to
the mailing of the investment packets.
Board Member Moulin advised that the Treasurer includes a monthly report of
scheduled investments and suggested the report be redesigned and include the
report within the investment policy. Board Member Daniel concurred.
Vlll Adjournment
MOTION - It was moved by Board Members Moulin/Ross to adjourn the meeting
at 5:40 p.m. Motion carried unanimously.
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Sub ed b
Vianka Orrantia,
Senior Secretary
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