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HomeMy WebLinkAboutMinutes - Audit Investment Finance Committee 02/08/2017 FL MINUTES �i� REGULAR MEETING OF THE PALM DESERT rem in 4 AUDIT, INVESTMENT & FINANCE COMMITTEE Tuesday, February 28, 2017 I. CALL TO ORDER Meeting was called to order at 10:01 a.m. Present Absent Lauri Aylaian, City Manager Robert Hargreaves, City Attorney Russell Campbell, Community Member Brian Holcombe, Community Member Jan Harnik, Mayor (10:03 a.m.) Robert Leo, Community Member Sabby Jonathan, Mayor Pro-Tempore Stan Sperling, Community Member Janet Moore, Chair, Director of Finance Also Present Luis Espinoza, Asst. Finance Director Anthony Hernandez, Senior Financial Analyst Thomas Metz, Deputy City Treasurer Niamh Ortega, Recording Secretary Derek White, Desert Willow Golf Resort II. ORAL COMMUNICATIONS None III. APPROVAL OF MINUTESA. MINUTES OF THE MEETING OF JANUARY 24, 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 January 24, 2017 as presented. Motion was seconded by Member Aylaian and carried by a vote of 5-0, with Aylaian, Campbell, Jonathan, Sperling and Moore voting AYE; Hargreaves, Harnik, Holcombe and Leo ABSENT. IV. NEW BUSINESS • A. CITY INVESTMENT SCHEDULE AND SUMMARY OF CASH REPORT FOR JANUARY 2017 Mr. Metz provided an overview of the report. He stated that for the month ended February 28, 2017, the book value of the City portfolio was approximately $274.8 MINUTES —Audit, Investment & Finance Committee February 28, 2017 Page 2 of 4 million. Interest earnings were approximately $209,000. Yield-to-maturity was approximately 0.94%. There was discussion about investments in Sears, and there was some concern about the recent news that Sears continues to struggle and would be closing more Sears and K-Mart stores this year. Macy's and JCPenney have also announced closures, and Mr. Metz noted the shift to online purchasing and the variety of online retailers such as Amazon as contributing factors for poor performance at these previously successful stores. Following question, Member Aylaian noted that Sears, Macy's and JCPenney all have a store located at Westfield Palm Desert, and it could be crippling if all three were to close at this location. Member Aylaian said she will follow the closures closely. MOTION was made by Member Campbell to recommend that the City Council receive and file the City Investment Schedule and Summary of Cash Report for the month ended January 31, 2017. Motion was seconded by Member Holcombe and carried by a vote of 6-0, with Aylaian, Campbell, Harnik, Jonathan, Sperling and Moore voting AYE; Hargreaves, Holcombe and Leo ABSENT. B. LOCAL AGENCY INVESTMENT POOL ACCOUNT STATEMENTS FOR JANUARY 2017 Mr. Metz provided an overview of the reports. He noted that the Housing Authority moved $14.5 million from LAIF to CAMP to take advantage of profit strategies. He noted that earnings were 0.75% with LAIF, 0.85% with CAMP, and 0.86% with the County. MOTION was made by Member Sperling to receive and file the reports for Local Agency Investment Fund (LAIF), California Asset Management Program (CAMP), and Riverside County Investment Pool for January 2017. Motion was seconded by Member Campbell and carried by a vote of 6-0, with Aylaian, Campbell, Harnik, Jonathan, Sperling and Moore voting AYE; Hargreaves, Holcombe and Leo ABSENT. C. CITY FINANCIAL REPORT FOR JANUARY 2017 Chairman Moore reviewed the report and highlighted some formatting changes and the addition of a column showing a percentage comparison to last year, and a graph reflecting revenues as they compare to prior year. Member Jonathan thanked staff for the report, noting it provided a more complete picture than the previous report. Member Jonathan asked if there was anything coming up that may impact the City's revenues and expenses that the Committee should be aware of, to which Chairman Moore replied that there is nothing out of the ordinary anticipated. TOT revenues are up, in part due to the 2% increase in the rate. Member Jonathan questioned if there was any feedback from hotels or guests relative to the increased rate, and Chairman Moore responded that there were are few questions but no major complaints. MOTION was made by Member Campbell to receive and file the City financial report through January 2017 as presented. Motion was seconded by Member Sperling 2 MINUTES —Audit, Investment & Finance Committee February 28, 2017 Page 3 of 4 and carried by a vote of 6-0, with Aylaian, Campbell, Harnik, Jonathan, Sperling and Moore voting AYE; Hargreaves, Holcombe and Leo ABSENT. D. PARKVIEW PROFESSIONAL OFFICE BUILDINGS FINANCIAL REPORT FOR JANUARY 2017 Mr. Hernandez reviewed the report and noted that year to date revenue was $535,000, expenses were $278,000, and operating income was $257,000. It was announced that the RAP Foundation had purchased a building to house a center aimed at assisting other non-profit organizations. It was expected that after tenant improvements were complete, RAP would vacate their office at the Parkview complex. Since the intent of the non-profit center is to also provide office space to other organizations, it is possible that other Parkview suites could be vacated. Member Harnik suggested that staff should contact RAP to determine what their plan is, and also requested that lease expiration dates be added to the Parkview report. During the discussion, questions arose regarding the entities that rent at Parkview and if keeping the building as a City-owned facility was in the City's best interest. Mr. Hernandez responded that priority is given first to quasi- government tenants, then non-profit agencies before private enterprise. Chairman Moore pointed out that revenues generated by the Parkview buildings help to offset the cost of the Civic Center park maintenance. Member Harnik stated that since the buildings generate revenue it would not be the best option to sell at this time, but going forward it may be worth considering. Member Jonathan suggested that staff keep space in mind for a potential relocation of the Chamber of Commerce. MOTION was made by Member Sperling to receive and file the Parkview Professional Office Buildings financial report through January 2017 as presented. Motion —was-seconded-by-Member-Campbett and carried by a vote-of 6=0, with Aytaian, Campbell; Harnik, Jonathan, Sperling and Moore voting AYE; Hargreaves, Holcombe and Leo ABSENT. E. PALM DESERT RECREATIONAL FACILITIES CORPORATION FINANCIAL REPORTS FOR JANUARY 2017 Mr. White reported that rainy weather ended up costing five or six days of play at a cost of approximately $55,000. The upside is that the course is much greener than usual for this time of year. He reviewed the revenues and expenses as shown in the agenda packet, and pointed out that there was a minimum wage increase in January which affects payroll costs. Despite the rain, February was really good, and almost in line with last year. He informed the Committee that the weather forecast affects reservations as much as, if not more than, the actual weather, as people will choose not to book if there is a potential for rain, even if it does not materialize. 3 MINUTES —Audit, Investment & Finance Committee February 28, 2017 Page 4 of 4 MOTION was made by Member Sperling to receive and file the Palm Desert Golf Course Facilities Corporation financial reports through January 2017 as presented. Motion was seconded by Member Campbell and carried by a vote of 6-0, with Aylaian, Campbell, Harnik, Jonathan, Sperling and Moore voting AYE; Hargreaves, Holcombe and Leo ABSENT. V. CONTINUED BUSINESS None. VI. OLD BUSINESS None. VII. INFORMATIONAL ITEMS Mr. Espinoza informed the Committee that staff was working on a Request for Proposals (RFP) for Professional Auditing Services. He asked if any Committee members were interested in serving on a subcommittee to review the proposals when they are received. Member Jonathan suggested that Member Holcombe may wish to serve, as may Member Leo. Member Jonathan recommended that they be asked to serve, adding that he would also offer his services if needed and that Mr. White also has expertise that may be valuable. Mr. Espinoza thanked Member Jonathan for the recommendations and said that staff would contact Members Holcombe and Leo to determine their interest. VIII. ADJOURNMENT With-Committee concurrence, Chairman-Moore adjourned the meeting at 11:t0-a:m: Niamh Ortega, Recording 4