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Home My WebLink AboutMinutes - Audit Investment Finance Committee 09/26/2017 N -**" MINUTES REGULAR MEETING OF THE PALM DESERT I € AUDIT, INVESTMENT & FINANCE COMMITTEE ba k 11 "4�� Tuesday, September 26, 2017 MAY I. CALL TO ORDER Chairman Leo called the meeting to order at 10:01 a.m. Present Absent Lauri Aylaian, City Manager Russell Campbell, Vice-Chairman Robert Hargreaves, City Attorney (10:02 a.m.) Jan Harnik, Mayor Brian Holcombe, Community Member Sabby Jonathan, Mayor Pro Tempore Robert Leo, Chairman Janet Moore, Director of Finance Stan Sperling, Community Member Also Present Jarod Burns, Desert Willow Golf Resort Luis Espinoza, Assistant Finance Director Anthony Hernandez, Senior Financial Analyst Thomas Metz, Deputy Treasurer Niamh Ortega, Recording Secretary Derek White, Desert Willow Golf Resort II. ORAL COMMUNICATIONS A. None B. None III. APPROVAL OF MINUTES A. MINUTES OF THE MEETING OF JUNE 27, 2017 MOTION was made by Member Campbell to approve the Minutes of the regular meeting of the Palm Desert Audit, Investment and Finance Committee of June 27, 2017 as presented. Motion was seconded by Member Sperling and carried by a vote of 8-0, with Aylaian, Campbell, Harnik, Holcombe, Jonathan, Moore, Sperling and Leo voting AYE; Hargreaves ABSENT. AUDIT, INVESTMENT & FINANCE COMMITTEE DRAFT MINUTES — For discussion purposes only September 26, 2017 IV. NEW BUSINESS A. FINANCIAL REPORT ON CITY INVESTMENT SCHEDULE AND SUMMARY OF CASH FOR JUNE, JULY AND AUGUST 2017 Mr. Metz provided a summary of the reports and stated that the book value for the month ended August 31, 2017 was $120.4 million, interest earnings were $86,000, and yield to maturity was 0.89%. Mr. Metz gave an overview of the new report format. The City Income Report reflects that the book value was $144.7 million, interest earnings were $152,000, and yield to maturity was 1.22%. He reported that he is working on finishing a five-year forecast for this particular report. MOTION was made by Member Hargreaves to recommend that the City Council approve the City Investment Reports for the periods ended June 30, July 31 and August 31, 2017. Motion was seconded by Member Campbell and carried by a vote of 9-0, with Aylaian, Campbell, Hargreaves, Harnik, Holcombe, Moore, Jonathan, Sperling and Leo voting AYE. B. FINANCIAL REPORT ON LOCAL AGENCY INVESTMENT POOL ACCOUNT STATEMENTS FOR JUNE, JULY AND AUGUST 2017 Mr. Metz provided the report. He indicated that there were no significant changes this month, and most transactions were routine business. MOTION was made by Member Campbell to receive and file the reports for Local Agency Investment Fund (LAIF), California Asset Management Program (CAMP) and Riverside County Investment Pool for June, July and August 2017 as presented. Motion was seconded by Member Holcombe and carried by a vote of 9-0, with Aylaian, Campbell, Hargreaves, Harnik, Holcombe, Moore, Jonathan, Sperling and Leo voting AYE. C. FINANCIAL REPORT FOR CITY OF PALM DESERT FOR JULY AND AUGUST 2017 Member Moore provided a summary of the report, and indicated that revenue is consistent with budget at this time. Expenditures include an annual payment to PERS for the City's unfunded pension liability. She provided an overview of the actuarial reporting process. Member Moore pointed out that the June report is not included in the agenda packet as revenues and expenditures continue to be recorded for the fiscal year ended June 30, 2017. Member Jonathan asked that an update on the unfunded pension liability be provided at the next Committee meeting. Member Moore responded that PERS has prepared a summary that she will provide at the next meeting. 2 AUDIT, INVESTMENT & FINANCE COMMITTEE DRAFT MINUTES — For discussion purposes only September 26, 2017 Member Jonathan asked when the auditors are expected to issue their report for the fiscal year ended June 30, 2017. Mr. Hernandez responded that the City's contracted auditors, Lance, SoII & Lunghard, LLP are currently onsite performing their second week of field work, and Ms. Moore added that she expects the auditors to provide a presentation to the Committee at the January 2018 meeting. Member Jonathan asked if the adjustments the auditors recommended were based on mid-year adjustments. Ms. Moore said these are for adjustments to the year-end for FY16/17. Mid-year for the current budget will be presented in February 2018. There may be an adjustment for sales tax to reduce the budget. Mr. Jonathan asked if the anticipated revenue for short term rentals (STRs) through AirBnB was included in TOT revenue, and questioned if staff is waiting for Council direction to determine how to handle a potential revenue loss if the Council voted to ban STRs. Member Moore responded that the decision the Council makes will impact the budget, and she and Member Aylaian are looking at different avenues to make up any reductions to revenue. Member Harnik offered that additional fines might help. MOTION was made by Member Campbell to receive and file the City financial reports for July and August 2017 as presented. Motion was seconded by Member Harnik and carried by a vote of 9-0, with Aylaian, Campbell, Hargreaves, Harnik, Holcombe, Moore, Jonathan, Sperling and Leo voting AYE. D. FINANCIAL REPORT ON PARKVIEW PROFESSIONAL OFFICE BUILDINGS FOR JULY AND AUGUST 2017 Mr. Hernandez provided a summary of the report as provided. Net income is $85,884 prior to equipment replacement reserve. Member Holcombe asked why electricity was lower than budget. Mr. Hernandez reported that these are actual expenditures, and the budget is based on last year's actual plus 2 — 3% assuming costs stay the same. Member Jonathan asked where the Parkview remodel stood. Member Aylaian reported that since Rudy Acosta's departure, Public Works has assumed the project and were working on some underlying issues. Member Harnik suggested that staff begin work on the landscaping. Member Aylaian reported that staff has already been working on that and has made some improvements. She indicated that she would provide an update on the project at the next meeting. Member Harnik expressed concern regarding successor planning for upcoming retirees. Member Aylaian stated that this is something they were working on a plan and have been meeting regularly. 3 AUDIT, INVESTMENT & FINANCE COMMITTEE DRAFT MINUTES — For discussion purposes only September 26, 2017 Member Aylaian also noted that the main conference room at Parkview is in need of new chairs, adding that one recently broke during a meeting. MOTION was made by Member Harnik to receive and file the Parkview Office Building financial reports for July and August 2017 as presented. Motion was seconded by Member Campbell and carried by a vote of 9-0, with Aylaian, Campbell, Hargreaves, Harnik, Holcombe, Moore, Jonathan, Sperling and Leo voting AYE. E. FINANCIAL REPORT ON PALM DESERT RECREATIONAL FACILITIES CORPORATION FOR JULY AND AUGUST 2017 Mr. White distributed a report and provided a brief update on the June report. He indicated that it is difficult to read due to the small font size, and that the report would be e-mailed to members immediately following the meeting. Mr. White noted that operating expenses were a little above budget, but EBIDA shows that they were ahead of budget for the year. August was a hot month, and payroll was slightly under budget. Operating expenses were slightly above budget, and was expected due to the timing of the expenditures to prepare for the season. Renovations began on the Mountain View course yesterday, and staff expects it to be back online at the end of October. The Firecliff course will begin its renovations in mid-November. MOTION was made by Member Campbell to receive and file the Palm Desert Recreational Facilities Corporation financial report through August 2017 as presented. Motion was seconded by Member Sperling and carried by a vote of 9-0, with Aylaian, Campbell, Hargreaves, Harnik, Holcombe, Moore, Jonathan, Sperling and Leo voting AYE. V. CONTINUED BUSINESS - None VI. OLD BUSINESS - None VII. INFORMATIONAL ITEMS — None. VIII. ADJOURNMENT With Committee concurrence, Chairman Leo adjourned the meeting at 10:41 a.m. .10 Niamh Ortega, Recordin.4 cretary 4