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Home My WebLink About2018-09-25 FC Regular Meeting Minutes I. CALL TO ORDER Chairman Leo called the meeting to order at 10:00 a.m. II. ROLL CALL Present: Absent: Lauri Aylaian, City Manager Russell Campbell, Community Member Robert Hargreaves, City Attorney Brian Holcombe, Community Member Sabby Jonathan, Mayor Janet Moore, Finance Director Stanley Sperling, Committee Member Susan Marie Weber, Mayor Pro-Tempore Robert Leo, Chair Also Present: Jared Burns, Desert Willow Golf Resort Mike Cavanaugh, Hilltop Securities Jose Luis Espinoza, Assistant Finance Director Anthony Hernandez, Senior Financial Analyst Thomas Metz, Deputy City Treasurer Niamh Ortega, Recording Secretary Veronica Tapia, Senior Management Analyst Jenny Weill, Accountant Derek White, Desert Willow Golf Resort III. ORAL COMMUNICATIONS None. IV. APPROVAL OF MINUTES A. MINUTES OF THE MEETING OF MAY 22, 2018 MOTION was made by Member Sterling to approve the Minutes of the regular meeting of the Palm Desert Audit, Investment and Finance Committee held on May 22, 2018. Motion was seconded by Member Aylaian and carried by a 9-0 vote, with Aylaian, Campbell, Hargreaves, Holcombe, Jonathan, Moore, Sperling, Weber and Leo voting AYE. MINUTES REGULAR MEETING OF THE PALM DESERT AUDIT, INVESTMENT & FINANCE COMMITTEE Tuesday, September 25, 2018 INVESTMENT & FINANCE COMMITTEE MINUTES SEPTEMBER 25, 2018 G:\Finance\Niamh Ortega\Investment Committee\2018\Minutes 092518.docx 2 V. NEW BUSINESS A. REPORT ON CITY INVESTMENT SCHEDULE AND SUMMARY OF CASH THROUGH AUGUST 2018 Mr. Metz noted that the City liquidity and income are now combined in one portfolio. He reported that for the month ended August 31, 2018, the City’s book value was $273.3 million. The rate of return was approximately 2% and the monthly earnings were approximately $461,000. MOTION was made by Member Holcombe to recommend that the City Council receive and file the City Investment Schedule and Summary of Cash Report for the months of May through August 2018. Motion was seconded by Member Campbell and carried by a 9-0 vote, with Aylaian, Campbell, Hargreaves, Holcombe, Jonathan, Moore, Sperling, Weber and Leo voting AYE. B. STATEMENTS FOR LOCAL AGENCY INVESTMENT POOL ACCOUNT THROUGH AUGUST 2018 Mr. Metz reviewed the activity for the CAMP report and stated the LAIF and County reports were unchanged. 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 through August 2018. Motion was seconded by Member Sperling and carried by a 9-0 vote, with Aylaian, Campbell, Hargreaves, Holcombe, Jonathan, Moore, Sperling, Weber and Leo voting AYE. C. FINANCIAL REPORT FOR CITY OF PALM DESERT THROUGH AUGUST 2018 Ms. Moore reported that June’s report is essentially final. The only changes remaining are any adjustments that may be recommended during the course of the audit. The report for August contains limited information, as activities for the months of July and August typically relate to the prior fiscal year. MOTION was made by Member Campbell to receive and file the financial report for the City of Palm Desert through August 2018. Motion was seconded by Member Moore and carried by a 9-0 vote, with Aylaian, Campbell, Hargreaves, Holcombe, Jonathan, Moore, Sperling, Weber and Leo voting AYE. D. FINANCIAL REPORT FOR PARKVIEW PROFESSIONAL OFFICE BUILDINGS THROUGH AUGUST 2018 Mr. Hernandez provided a summary of the revenue and expenses for the Parkview buildings. He noted a correction that will be made to the equipment number for the month of August. The correct figure is $36,000, and results in a positive net income of $44,000. Mr. Hernandez also noted that a new tenant, INVESTMENT & FINANCE COMMITTEE MINUTES SEPTEMBER 25, 2018 G:\Finance\Niamh Ortega\Investment Committee\2018\Minutes 092518.docx 3 Lift to Rise, now occupies the old United Way suite, with United Way relocating to a larger suite. Mayor Jonathan inquired as to the status of the Parkview remodel. Member Aylaian responded that staff was directed to go back out to bid for architectural services. Design is anticipated to begin this year. MOTION was made by Member Hargreaves to receive and file the financial report for the Parkview professional office buildings through August 2018. Motion was seconded by Member Sperling and carried by a 9-0 vote, with Aylaian, Campbell, Hargreaves, Holcombe, Jonathan, Moore, Sperling, Weber and Leo voting AYE. E. FINANCIAL REPORT FOR DESERT WILLOW GOLF RESORT THROUGH AUGUST 2018 Mr. White was happy to report that the fiscal year end resulted in revenue records being broken. He also reported that overall growth was in the double digits, and he could not be more pleased. For the month of August, revenues were slightly under budget, partly due to much higher temperatures compared to last year. Expenses are over budget, and Mr. White attributed this to timing issues and preparations for the season. He stated that economic indicators remain positive and loyalty card programs are selling faster than last year. MOTION was made by Member Sperling to receive and file the financial report for the Parkview professional office buildings through August 2018. Motion was seconded by Member Holcombe and carried by a 9-0 vote, with Aylaian, Campbell, Hargreaves, Holcombe, Jonathan, Moore, Sperling, Weber and Leo voting AYE. F. REPORT RELATIVE TO RESERVE POLICY Member Moore provided an overview of the staff report. She summarized that the current policy is to reserve 100% of budget and was adopted in 2008. The policy helped the City navigate the next eight years until it returned to pre- recession revenues. Staff decided to take a new look at the policy both to make sure that the reserves were sufficient, and to ensure that the City was not holding too much in reserves. The staff report outlines the categories reviewed in the study, and Member Moore summarized each one and the recommended reserve. Overall, the study found that a 100% reserve policy is prudent, but not enough based on what the City has planned in the way of projects and operations. Member Moore reminded the Committee that the reserves are for intended uses; however, Council has the authority to authorize the funds for other uses at any time should it become necessary. INVESTMENT & FINANCE COMMITTEE MINUTES SEPTEMBER 25, 2018 G:\Finance\Niamh Ortega\Investment Committee\2018\Minutes 092518.docx 4 Member Aylaian noted that the staff report included two alternate options for funding the reserves at 50% and 75%. She asked the Committee what level of funding they would recommend, keeping in mind that a higher percentage would mean less money available in the unassigned fund category. Member Holcombe stated that he would recommend the 50% level for reserves and that the City should be conservative without being restrictive. Member Leo suggested that the Committee be allowed more time to consider Member Aylaian’s request. Following discussion, Member Moore noted that the policy would be presented for Council consideration later that week. She stated that it could be postponed until after the Committee has had an opportunity to provide comments or suggestions, and commented that the next regular Committee meeting was scheduled for the end of November 2018. Member Campbell recommended that it not be postponed, but suggested the item could be reviewed by the Committee at a later date following adoption to see how it is working. Chairman Leo added the reserve policy could be a standing agenda item to discuss any changes that may be considered in the future. MOTION was made by Member Sperling to receive and file the report relative to the Reserve Policy. Motion was seconded by Member Campbell and carried by a 9-0 vote, with Aylaian, Campbell, Hargreaves, Holcombe, Jonathan, Moore, Sperling, Weber and Leo voting AYE. G. REPORT RELATIVE TO UNCLAIMED MONIES POLICY Member Moore provided an overview of the report, and noted that the total amount of current unclaimed funds is approximately $6,000. MOTION was made by Member Campbell to receive and file the report relative to the Unclaimed Monies Policy. Motion was seconded by Member Sperling and carried by a 9-0 vote, with Aylaian, Campbell, Hargreaves, Holcombe, Jonathan, Moore, Sperling, Weber and Leo voting AYE. H. REPORT RELATIVE TO UNDERWRITERS FOR POTENTIAL FUTURE DEBT ISSUANCE OR REFUNDINGS Ms. Tapia provided an overview of the report. She explained that six underwriting firms submitted a proposal. A Committee was formed to review the applications and each of them met the minimum qualifications. Therefore, they have all been placed on the list of qualified underwriters for Council acceptance at the next meeting. MOTION was made by Member Campbell to receive and file the report relative to the underwriters for potential future debt issuance or refundings. Motion was seconded by Member Holcombe and carried by a 9-0 vote, with Aylaian, Campbell, Hargreaves, Holcombe, Jonathan, Moore, Sperling, Weber and Leo voting AYE. INVESTMENT & FINANCE COMMITTEE MINUTES SEPTEMBER 25, 2018 G:\Finance\Niamh Ortega\Investment Committee\2018\Minutes 092518.docx 5 VI. CONTINUED BUSINESS – None. VII. OLD BUSINESS – None. VIII. INFORMATIONAL ITEMS A. COMMITTEE MEMBER COMMENTS Member Jonathan requested a status update on the audit. Mr. Espinoza responded that the auditors were currently onsite conducting fieldwork and testing on the City’s books. He expects that the auditors’ review will be complete in November and a final report is anticipated from the auditors at the January 2019 meeting. Mayor Jonathan inquired as to the additional work that was discussed by the Committee at the May 2018 meeting. Mr. Espinoza answered that the majority of the work had been completed and an update would be available at the next meeting. B. REQUEST TO ADD POTENTIAL ITEMS TO UPCOMING AGENDA – None. IX. ADJOURNMENT By Minute Motion duly made, seconded and unanimously approved, the meeting was adjourned to the next regular meeting of November 27, 2018. Respectfully submitted, Niamh Ortega, Recording Secretary