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Home My WebLink AboutAGENDA & MINUTES OCTOBER-DECEMBER 1998-1999 INVESTMENT& FINANCE COMMITTEE MEMBERS 1998/99 1. Bob Spiegel Mayor City of Palm Desert 73-510 Fred Waring Drive 346-0611 Palm Desert, CA 92260 2. Ray Diaz City Manager 346-0611 City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 3. Dave Erwin City Attorney do Best, Best& Krieger 39-700 Bob Hope Drive, Suite 312 568-2611 Rancho Mirage, CA 92270 4. Murray Magloff Member 229 Camino Arroyo North 341-0118 Palm Desert, CA 92260 5. Carlos Ortega Executive Director of Redevelopment Agency City of Palm Desert 73-510 Fred Waring Drive 346-0611 Palm Desert, CA 92260 6. Buford Crites Mayor Pro-Tempore City of Palm Desert 73-510 Fred Waring Drive 346-0611 Palm Desert, CA 92260 7. Bill Veazie Member 42-900 Massachusetts Court 345-4075 Palm Desert, CA 92211 8. Thomas Jeffrey Investment Manager 346-0611 City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 9. Paul Gibson Director of Finance/Treasurer 346-0611 City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 REVIEW PROCESS: City Attorney, Finance Director, City Manager, RDA Director& Project Manager STAFF: John Wohlmuth ACM/Director of Administrative Services Veronica Abarca Recording Secretary Investment& Finance Committee 1998/1999 Page 2 PRESS: 1. KMIR TV News Director 72-920 Parkview Drive Palm Desert, CA 92260 2. THE DESERT SUN 74-617 Highway 111 Palm Desert, CA 92260 3. KESQ TV 42-650 Melanie Place Palm Desert, CA 92260 4. KPSI RADIO 2100 E. Tahquitz Canyon Way Palm Springs, CA 92262 revised 11/18/98 via INVESTMENT 81 FINANCE COMMITTEE ATTENDANCE LIST July 1998 - June 1999 NAMES Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 15 19 16 21 18 16 20 17 17 21 19 16 .............................................................................................. ................................ ............................... ................................ Jean Benson Meetings .'' X A Buford Crites takes over as Mayor Pro-Tempore Buford Crites A X ............................................................................................... ............................... ................................ ............................................................... Ray Diaz Postponed > X X X X ............................................................. ............................................. ............... .............................. ............... ............................................. Dave Erwin A X X A Paul Gibson j X X X X N Mayor Spiegel WPM A X X X Murray Magloff X X X X "/ Carlos Ortega X X A X Bill Veazie X X E X \/ Thomas Jeffreyilll!ip.:111.!!!!1111. X X X X 7 Russell Campbell °�°�c$; ss?�: 3' � °'4'�, Members: 10 Quorum: E: Excused A: Absent X: Present Revised 1/20/99 vla AGENDA INVESTMENT & FINANCE COMMITTEE WEDNESDAY, December 16, 1998-- 11:00 A.M. NORTH WING CONFERENCE ROOM ****************************************************************************** CALL TO ORDER II. ROLL CALL III. APPROVAL OF MINUTES Rec: Approve the Minutes of November 18, 1998 as submitted. Action: IV. ORAL COMMUNICATIONS A. Any person wishing to discuss any item not otherwise on the agenda may address the Investment & Finance Committee at this point by giving his or her name and address for the record. Remarks shall be limited to a maximum of five minutes unless additional time is authorized by the Chairman. B. This is the time and place for any person who wishes to comment on non- hearing agenda items. It should be noted that at the Investment & Finance Committee's discretion, these comments may be deferred until such time on the agenda, as the item is discussed. Remarks shall be limited to a maximum of five minutes unless additional time is authorized by the Chairman. V. OLD BUSINESS A. Status of Public and Private Partnerships Background Checks for Section 4 Rec: Report by Carlos Ortega. Action: B. Bond Issuance by Palm Desert Financing Authority Rec: Status Report on new Bonds for Bighorn. Action: AGENDA- INVESTMENT & FINANCE COMMITTEE December 16, 1998 ****************************************************************************** VI. NEW BUSINESS A. City and Redevelopment Agency Investment Schedule for November, 1998 Rec: Review and submit to the next City Council agenda. Review the presentation on the investment graphs. Review the investment activity during the month of August. Review status of capital projects and cash flow projections. Action: B. Review Short Term Investments Maturing in December. 1998 Rec: Review investments in 1) collateralized deposits; 2) treasury bonds and notes; and, 3) Agencies discount notes. Action: C. State of California Local Agency Investment Fund Monthly Reports for October. 1998 Rec: Informational item for the Committee to review. No action required. D. Monthly Financial Report for City Council for November. 1998 Rec: Report and submit to City Council. Action: E. Parkview Professional Office Buildings - Financial Reports & Property Management Agreement Rec: Review of 11/30/98 financial statements. Review and recommend property management group. Action: F. Desert Willow Golf Resort Financial Information for November. 1998 Rec: Review and file report. Action: AGENDA- INVESTMENT & FINANCE COMMITTEE December 16, 1998 G. Palm Desert Recreation Facilities Corporation Income Analysis for November, 1998 Rec: Review and file report. Action: H. The McCallum Theatre Financial Statements for the year ended June 30, 1998 Rec: Review and file report. • Action: I. 1999 Investment Policy for City of Palm Desert Rec: Review and file report. Action: J. CAFR for the year ended June 30, 1998 Rec: Review report Action: Continue to January 20, 1999 meeting. VII. REPORTS AND REMARKS A. Reports and Remarks by any Committee Member B. Items to be placed on the Next Agenda VIII. NEXT MEETING DATE Next regularly scheduled meeting is: W J: ndi@1y., Iavinth 1r rj 22, Il99(9 ll II_Z® muman IX. ADJOURNMENT I hereby certify under penalty of perjury under the laws of the State of California, that the foregoing agenda for the Palm Desert Investment and Finance Committee was posted on the City Hall bulletin board not less than 72 hours prior to the meeting. Dated this December 10, 1998. Veronica Abarca,Recording Secretary • Minutes I _: onit . �%�ti. S tk - a Finance Committee ap„ CONVENE On November 18, 1998, the Investment & Finance Committee was called to order at 11:06 a.m. by Mr. Paul Gibson. ROLL CALL Ray Diaz, Dave Erwin, Paul Gibson, Thomas Jeffrey, Murray Magloff, Bob Spiegel, Bill Veazie, and Veronica Abarca, recording secretary. Dennis Coleman, Redevelopment Agency APPROVAL OF MINUTES Upon motion by Mr. Bob Spiegel, and seconded by Mr. Murray Maglof, the Minutes of the October 21, 1998 meeting were APPROVED as submitted. ORAL COMMUNICATIONS None. OLD BUSINESS A. Status of Public and Private Partnerships Backdround Checks for Section 4 There have been no changes to the previous month report. B. Bond Issuance by Palm Desert Financind Authority Mr. Coleman reminded the committee of the Canyons at Bighorn project. The bond issuance is currently on hold. Bighorn is reviewing the indemnity agreement, which needs to be signed prior to proceeding. The terms are being discussed with the City Attorney. Mr. Coleman stated that he did not foresee any problems with the bond issuance. - Staff is hoping for progress this week, however not sure. NEW BUSINESS A. City and Redevelopment Agency Investment Schedule Mr.Jeffrey noted that a one year Treasury Bill that is traded on the secondary market in terms of measuring the City's portfolio yield is the benchmark. Both yields will decrease due to reinvestment with lower interest rates. 1 Minutes Finance Committee Mr. Gibson stated that due to the many construction projects, we are unable to "go out" long on investments. Mr.Jeffrey is currently working with Mr. Coleman to coordinate the construction schedule with the investment schedule. Mr. Jeffrey noted that all investment definitions accompanying the graphs have been updated. Mr. Gibson addressed the Money Market Funds. The City's auditors • requested that we send a notice to both Fidelity and Highmark which indicates that they understand the City Investment Policy and will invest in the items approved in the policy, if not they need to return money to the City of Palm Desert immediately. The letters have been sent to both Fidelity and Highmark (Money Market Funds) indicating the necessity of a fully executed "Certificate of Compliance" as per the request of the auditors. Both certificates have been signed; however, Mr.Jeffrey commented that the City's policy is far more strict than that of the State of California. After reviewing the current policy, Mr. Jeffrey found that the effect of the City's current policy excludes it from investing in the most conservative, high quality funds. Mr. Spiegel questioned how that could be changed. Mr. Gibson stated that the Investment Policy would need to be amended, approved by the Finance Committee and then by the City Council. Mr. Jeffrey stated that the amendment would include keeping the current $500 million limit in assets in and then having the option of either the highest rating from two of the three largest national rating agencies, or an , investment advisor registered with the SEC who has more than 5 years experience.in managing similarly structured funds. These changes would align the City Investment Policy more closely with State law. Mr. Erwin asked if there would be any problem with changing the weighted average maturity limit to 90 days (per SEC law). Mr. Gibson stated that could be done as well. Mr. Spiegel asked what rates we are receiving currently. Mr.Jeffrey stated that we are receiving approximately 4.3% from Highmark, 5.0% from Fidelity, 4.0% from T-Bills, and.5.6% from LAIF. Receive and file reports. 2 Minutes Finance Committee B. Review Short Term Investments Maturing in November. 1998 Mr. Gibson stated there were no investments maturing at this time. There are maturities coming up in December and those will be reinvested at that time. Receive and file report. - C. State of California Local Agency Investment Fund Monthly Report Mr. Gibson reported that for the month of September, the City has$22.6 million and the Redevelopment Agency has $11.2 million with a rate of 5.639%. Mr. Spiegel asked how this compared to last year. Mr. Gibson stated that last year we received 5.7% for September. Receive and file reports. D. Monthly Financial Report for City Council Mr. Gibson reported the actual for sales tax year to date is at $1.386 million verses last years $1.142 million. TOT is$.916 million compared to last years $.584 million. Mr. Spiegel stated that according to the newspaper our TOT figures are down compared to last year. Mr. Gibson stated that the apparent decrease is due to the time we receive the funds from the various agencies. The Marriott is on a 13 period system which gives them a different due date. Other agencies do not always send their returns on time and they earn penalties and interest. Current expenditures are lower compared to last year. Mr. Gibson reviewed the Redevelopment Agency summaries. Mr. Gibson stated that their expenditures go up and down based on their Capital Outlay. The major revenue for Redevelopment Agency comes in January and May, as a result of payment of property tax. Receive and file report. F. Parkview Professional Office Buildings - Financial Reports 3 Minutes Finance Committee Mr. Gibson stated that the revenues for the office complex are far behind the budgeted year to date. This is due to the tenant contract renewals; many of which have decreasing lease payments. Revenues will increase with the addition of at least three new tenants. Mr. Gibson gave an update as to the law suit against Mr.Juan Armenta, a former Parkview tenant. Mr. Armenta did not show for the hearing, defaulting the case to the City (this was the third trial date set due to Mr. Armenta's inability to attend the trial). Mr. Armenta does however have time to appeal the ruling. Mr. Erwin stated that he believes he will be hard pressed this time. Receive and file report. F. Desert Willow Golf Resort Financial Information for November, 1998 Mr. Gibson stated that the revenues for October exceeded the budgeted amount. Staff has gone to Desert Willow to complete an internal audit review of the cash operations and inventory operations. There are a number of issues which will be reviewed with Gregg Lindquist and then brought back to the committee at a later date. . Mr. Erwin stated that the budgeted rounds between resident and non-resident for last year compared to actual were almost reverse and this year looks very, similar. Mr. Spiegel suggested that Gregg Lindquist come to the next meeting to explain.the estimations vs. the actual. Mr. Gibson stated that both the Marriott and the Esmeralda have increased the number of rounds by non-residents by over one-third. We currently have a five year contract with Kemper Sports Management. Mr. Spiegel asked if Kemper is aware that we are not happy with the financial performance. Mr. Gibson stated that yes, from the staff level, but from Council he is not sure. Receive and file report. G. Palm Desert Recreation Facilities Corporation Income Analysis for November, 1998 4 Minutes Finance Committee Mr. Gibson stated that for the month of October there was a positive $2,000 profit. Mr. Spiegel asked if they have a rental agreement. Mr. Gibson stated that there is a condition of the rent that if there is a profit of over$8,000 each month the City can "pull down" the excess: Mr. Diaz suggested that there should be more incentive so they will earn more money. Mr. Spiegel suggested we look into that. Receive and file report. I. Reports and. Remarks by Committee Members Mr. Erwin questioned if a schedule had been established for the repayment of the loan to the Redevelopment Agency. Mr. Gibson gtated that there is no repayment schedule at this time, however any future loans will require schedules of repayment. The Redevelopment Agency has utilized a portion of the tax increment to pay for the Desert Willow project and therefore unable to repay the loan at this time. The current loan agreements do not spell out a time frame for repayment. Mr. Coleman pointed out that a set payment schedule would eliminate the Agency's flexibility to do projects. There will come a time in these project areas where debt can no longer be issued and at that time a payment scheduled could easily be adhered to. Mr. Spiegel asked if the garage at the Gardens of El Paseo had been paid yet. Mr. Gibson stated that prior to payment of the garages, the Parking Management Agreement would need to be approved by the City and then payment would be made. The invoice will be for the amount of$5 million. Mr. Spiegel asked that staff contact the McCallum Theatre to check the status of the Financial Reports. Mr. Magloff asked how many square feet equaled the 6%vacancy at the Parkview Office Complex. Mr. Gibson stated that the total vacant square footage is 3,376. Mr. Magloff suggested that the City look into organizing an art museum and locate it at the office complex similar to the one at the City of Palm Springs. 5 r _ • Minutes Finance Committee Mr. Diaz stated that the City of Palm Springs contributes no funding to the museum. Mr. Magloff asked what a "Deferred Compensation Program" was. Mr. Erwin defined it as the ability of the employees of the City to defer compensation on a temporary basis and earn interest. NEXT MEETING DATE The next Investment & Finance Committee meeting will be held Wednesday, December 16, 1998 at 11:00 a.m. ADJOURNMENT Upon motion by Murray Magloff and seconded by Dave Erwin the Investment &Finance Committee adjourned at 11:57 a.m. Respectfully submitted, • n l X � 1 9 �Veronica L. Abarca Recording Secretary • • INVESTMENT sz FINANCE COMMITTEE ATTENDANCE LIST July 1998 - June 1999 NAMES Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 15 19 16 21 18 16 20 17 17 21 19 16 ........................ ..... ................................ ............................... Jean Benson Meetings X A Bufor rites takes over as Mayor Pro-Tempore Buford Crites A Ray Diaz Postponed ' X X X .............. ............... ............................ ............... ............... .............................. ............... ............... .............................. ............... ............... .............................. Dave Erwin A X X Paul Gibson X X X �\ Mayor Spiegel A X X V Murray Magloff X X X Carlos Ortega X X A Bill Veazie X X E Thomas Jeffrey ,._..:L...... ........... X X X \,/ Members: 9 Quorum: 5 E: Excused A: Absent X: Present Revised 12/9/98 via