Loading...
HomeMy WebLinkAboutMinutes - Audit Investment Finance Committee 06/28/2016MINUTES REGULAR MEETING OF THE PALM DESERT AUDIT, INVESTMENT & FINANCE COMMITTEE Tuesday, June 28, 2016 — 10:00 a.m. CALL TO ORDER Madam Chairman Moore called the meeting to order at 10:00 a.m. II. ROLL CALL Present: Absent: Russ Campbell, Community Member Justin McCarthy, Interim City Manager Janet Moore, Chair/Finance Director Robert Hargreaves, City Attorney Jan Harnik, Mayor Pro Tempore (10:07 a.m.) Robert Leo, Community Member Stanley Sperling, Committee Member Robert Spiegel, Mayor (10:03 a.m.) Also Present: Anthony Hernandez, Senior Financial Analyst Thomas Metz, Deputy City Treasurer Casey Negrete, Desert Willow Golf Resort Niamh Ortega, Recording Secretary Derek White, Desert Willow Golf Resort III. ORAL COMMUNICATIONS None. IV. APPROVAL OF MINUTES A. MINUTES OF THE MEETING OF MAY 24, 2016 MOTION was made by Member Campbell to approve as presented the Minutes of the regular meeting of the Palm Desert Audit, Investment and Finance Committee held on May 24, 2016. Motion was seconded by Member Leo and carried by a 5-0 vote, with Campbell, Hargreaves, Leo, Moore and Sperling voting AYE; Harnik, McCarthy and Spiegel ABSENT. INVESTMENT & FINANCE COMMITTEE MINUTES V. NEW BUSINESS June 28, 2016 A. CITY INVESTMENT SCHEDULE AND SUMMARY OF CASH REPORT FOR MAY 2016 Mr. Metz reported that the book value of the City portfolio for the period ended May 31, 2016 was approximately $197.2 million. Interest earnings were approximately $124,000. Yield -to -maturity was approximately 0.80%. He highlighted various areas of the report. 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 May 2016. Motion was seconded by Member Leo and carried by a 5-0 vote, with Campbell, Hargreaves, Leo, Moore, and Sperling voting AYE; Harnik and McCarthy ABSENT; Spiegel ABSTAIN. B. LOCAL AGENCY INVESTMENT POOL ACCOUNT STATEMENT FOR MAY 2016 Mr. Metz provided an overview of the various reports. MOTION was made by Member Spiegel to receive and file the reports for Local Agency Investment Fund (LAIF), California Asset Management Program (CAMP), and Riverside County Investment Pool for May 2016. Motion was seconded by Member Campbell and carried by a 6-0 vote, with Campbell, Hargreaves, Leo, Moore, Sperling and Spiegel voting AYE; Harnik and McCarthy ABSENT. C. CITY FINANCIAL REPORT FOR MAY 2016 Madam Chairman Moore provided an overview of the report and highlighted the activity for the month of May 2016. MOTION was made by Member Leo to receive and file the City financial report for May 2016 as presented. Motion was seconded by Member Campbell and carried by a 6-0 vote, with Campbell, Hargreaves, Leo, Moore, Sperling and Spiegel voting AYE; Harnik and McCarthy ABSENT. D. PARKVIEW PROFESSIONAL OFFICE BUILDINGS FINANCIAL REPORT FOR MAY 2016 Mr. Hernandez provided an overview of the reports, and indicated the occupancy rate is 94%. A survey of Parkview tenants was recently conducted relative to potential tenant improvements, and what they consider to be necessary improvements to both the building and surrounding landscape. There was discussion about the rooftop artwork, as a few of the responses indicated that the artwork looked dangerous. Mr. Hernandez reported that an alternate location is being considered. MOTION was made by Member Sperling to receive and file the Parkview Professional Office Buildings financial report for May 2016 as presented. 2 INVESTMENT & FINANCE COMMITTEE MINUTES June 28, 2016 Motion was seconded by Member Leo and carried by a 7-0 vote, with Campbell, Hargreaves, Harnik, Leo, Moore, Sperling and Spiegel voting AYE; McCarthy ABSENT. E. PALM DESERT GOLF COURSE FACILITIES CORPORATION FINANCIAL REPORTS FOR MAY 2016 Mr. White reported that the course made budget for May and June. He summarized the financial report, and highlighted various factors for change in revenue and expenditures. Several positions were made seasonal, which has resulted in significant savings in labor. Mr. White also noted that the course has suffered from the decline in Canadian traffic. Additionally, significant revenue was lost over the time of course renovation. However, the Greater Palm Springs Convention and Visitors Bureau has started to put marketing dollars towards footgolf advertising and other events. There was discussion about the recent Council decision to raise the resident rate from $49 to $50, and Member Harnik mentioned that there were 20,000 rounds subsidized by the City. With each round costing approximately $108, the City subsidizes $58 per round so that residents can play at the significantly reduced rate. Mr. White furthered that for rounds played between October and April, the opportunity cost is approximately $800,000. It was noted that this is what the City gives up in revenue in order to provide the resident rate to Palm Desert citizens. Member Harnik expressed her concern as Palm Desert moves forward, indicating that they would need to look at this very closely. A large percentage of Desert Willow staff earn minimum wage, which is increasing from $10 to $15 over the next few years. She said that in a couple of years, this will become a real issue and it needs to be addressed soon before it gets out of hand. Mr. Leo concurred, indicating his HOA had recently met to discuss their projections, and it is overwhelming when considering expenses. He shared that 40% of their business is Canadian, so their revenue is down significantly. Member Sperling added that $50 is a fantastic rate for winter golf in the desert. He said that residents can't get that rate anywhere else, and for a course like Desert Willow it is a great bargain. Upon question, Mr. White reported that there are about 4,000 resident cards issued, which is less than 8% of Palm Desert's population. Only a handful of those 4,000 residents use their card on a regular basis, with many just using a few times a year. However, there is not a system in place that tracks how many rounds are played by a specific individual, nor is there a mechanism to track whether that individual used the resident rate or other loyalty program. It was suggested that with the recent push to become connected electronically with electronic key cards, passes and even driver's licenses storing information electronically, it would make sense that players should have an electronic swipe or tap card that would store their purchase or play history, providing detailed information on an individual basis. Member Harnik agreed, providing the example of her husband having a 3 INVESTMENT & FINANCE COMMITTEE MINUTES June 28, 2016 resident card but only playing once or twice annually, yet 4,000 cards would average 5 plays a year to reach 20,000 rounds. Madam Chairman Moore indicated that the City recently approved a proposal for IT Master Plan Services. She said she was unsure whether Desert Willow was included in the proposal, but suggested that it could be added to see what they should be doing to upgrade their systems and provide the information needed to the City. Mr. White agreed that traceable, scannable cards were a necessity to track who is playing rounds and at what rate. MOTION was made by Member Spiegel to receive and file the Palm Desert Golf Course Facilities Corporation financial report for May 2016 as presented. Motion was seconded by Member Campbell and carried by a 7-0 vote, with Campbell, Hargreaves, Harnik, Leo, Moore, Sperling and Spiegel voting AYE; McCarthy ABSENT. VI. CONTINUED BUSINESS None. VII. OLD BUSINESS A. PALM DESERT FINANCING AUTHORITY BOND ISSUANCE None. VIII. INFORMATIONAL ITEMS Madam Chairman Moore reported that she would be absent for the next meeting and that Mr. Espinoza would chair the meeting for her. Member Leo reported he would also be absent, and Member Sperling indicated that he would likely be absent also. Members will be contacted following the meeting to determine if they will attend and to establish a quorum for the July 26 meeting. IX. ADJOURNMENT With Committee concurrence, Madam Chairman Moore adjourned the meeting at 10:35 a.m. Respectfully submitted, Niamh Ortega, Reco ing Secretary 4