HomeMy WebLinkAbout2002-11-20 IFC Regular Meeting Agenda Packet COMMITTEE MEETING WORKSHEET
Meeting Description Investment Committee Meeting Date 11/20/02 Time 2:00 p.m.
Location North Wing Conference Room Mailed Agenda 11/13/02
Posted Agenda 11/13/02
Time
Convene Adjournment
Staff Members Attending Yes No Others Attending Yes No
1 Paul Gibson, Chairperson 11 Dennis Coleman
2 Council Member 12 Justin McCarthy
3 Council Member 13 Rodney Young
4 Dave Erwin, City Attorney 14 Recording Secretary
5 Carlos Ortega, City Mgr.
6 Thomas Jeffrey
Public Members Attendinq Guests Attending
7 Russ Campbell 15
8 Murray Magloff 16
9 Bill Veazie 17
10 Everett Wood 18
19
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Finance Department
MEMORANDUM
To: Gloria Martinez, Records Technician
From: Diana Leal, Administrative Secretary .
Subject: Investment and Finance Committee 11
Date: November 21, 2002
Attached, for your records, is a copy of the October 23, 2002 Investment and Finance Committee
meeting attendance register.
Thankyou for your assistance.
Attachments (1)
G:\Pinance\Diana Leal\Wpdocs\Investment Committee\2002 Memos\City Clerk\l 1-20-02attendance.wpd
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_ CITY OF PALM DESERT
INVESTMENT & FINANCE COMMITTEE
AGENDA
November 20, 2002, 2:00 p.m.
North Wing Conference Room
I. CALL TO ORDER
II. ROLL CALL
III. ORAL COMMUNICATIONS
A. Any person wishing to discuss any item not on the agenda may
address the Investment and Finance Committee at this point by
giving his/her name and address for the record. Remarks shall be
limited to a maximum of five minutes, unless the Investment and
Finance Committee authorizes additional time.
B. This is the time and place for any person who wishes to comment
on agenda items. It should be noted that at the Investment and
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 the
Investment and Finance Committee authorizes additional time.
IV. COMMITTEE MEMBER REPORTS
V. CONSENT CALENDAR
ALL MATTERS LISTED ON THE CONSENT CALENDAR ARE
CONSIDERED TO BE ROUTINE AND WILL BE ENACTED BY ONE
ROLL CALL VOTE. THERE WILL BE NO SEPARATE DISCUSSION OF
THESE ITEMS UNLESS MEMBERS OF THE INVESTMENT & FINANCE
COMMITTEE OR AUDIENCE REQUEST ITEMS BE REMOVED FROM
THE CONSENT CALENDAR FOR SEPARATE DISCUSSION AND
ACTION UNDER SECTION V. CONSENT ITEMS HELD OVER, OF THE
AGENDA.
A. Approval of Minutes
Rec: Approve minutes of the regular meeting of October 23, 2002,
as submitted.
Action:
1
INVESTMENT & FINANCE COMMITTEE
AGENDA November 20, 2002
VI. CONSENT ITEMS HELD OVER
None.
VII. NEW BUSINESS
A. City and Redevelopment Agency Investment Schedules and
Summary of Cash Reports for October 2002
Rec: Review and submit for the next City Council agenda.
Review the presentation on the investment graphs. Review
the investment activity for October 2002.
Action:
B. State of California Local Agency Investment Fund Balance for the
month of October 2002
Rec: Informational item for the Committee to review. No action
required
C. California Asset Management Program (CAMP) October 2002
Statement
Rec: Informational item for the Committee to review. No action
required
D. City and Redevelopment Agency Monthly Financial Reports for City
Council for October 2002
Rec: Report and submit to City Council
Action:
E. Parkview Professional Office Buildings - Financial Report for
October 2002
Rec: Review and file report
Action:
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INVESTMENT & FINANCE COMMITTEE
AGENDA November 20, 2002
F. Palm Desert Golf Course Facilities Corporation Financial
Information for October 2002 (will be distributed at the meeting)
Rec: Review and file report
Action:
Vill. CONTINUED BUSINESS
None.
IX. OLD BUSINESS
A. Status of Public and Private Partnerships Background Checks
Rec: Status report on background checks
Action:
B. Bond Issuance by Palm Desert Financing Authority
Rec: Status report on issuing new bonds
Action:
X. NEXT MEETING - To be announced.
XI. ADJOURNMENT .
I hereby certify under penalty of perjury under the laws of the State of
California, that the foregoing agenda for the Investment and Finance
Committee was posted on the City Hall bulletin board not less than 72
hours prior to the meeting. Dated this 131" day of November, 2002.
Din Leal, q 'ng S retary
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_ CITY OF PALM DESERT
INVESTMENT & FINANCE COMMITTEE
Minutes
October 23, 2002, 2:00 p.m.
North Wing Conference Room
1. CALL TO ORDER
A regular meeting was called to order by Chairman Gibson on Wednesday, October
23, 2002 at 2:03 p.m.
II. ROLL CALL
Present: Absent:
Paul Gibson, Director of Finance David Erwin, City Attorney
Jean Benson, Mayor Pro-Tempore
Bob Spiegel, Council Member
Thomas Jeffrey, Investment Manager
Steve Aryan, Assistant to the City Manager
Everett Wood
Murray Magloff
Bill Veazie
Russ Campbell
Also Present:
Justin McCarthy, ACM Redevelopment
Dennis Coleman, Redevelopment Finance Manager
Diana Leal, Recording Secretary
Guests:
None
III. ORAL COMMUNICATIONS
None.
IV. COMMITTEE MEMBER REPORTS
None.
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102302,w d
INVESTMENT & FINANCE COMMITTEE
MINUTES October 23, 2002
V. CONSENT CALENDAR
A. Approval of Minutes
Motion was made by Mr. Spiegel and seconded by Mr. Campbell to approve
the Minutes of the September 25, 2002 meeting as submitted. - Motion carried.
VI. CONSENT ITEMS HELD OVER
None.
VII. NEW BUSINESS
A. City and Redevelopment Agency Investment Schedules and Summary of
Cash Reports for September 2002
Mr. Jeffrey distributed an article from the International Harold Tribune on the
new alignment of the Cal Pers Board of Directors.
Mr. Jeffrey addressed a recent downgrade of General Motors Acceptance
Corporation. He indicated that only one major credit rating agency (S&P) had
done a downgrade, based upon GM's pension liabilities. This should not affect
the repayment in March 2003 of a $4 million GM note that the City holds.
For the month ended September 30, 2002, the book value of the City Portfolio
was approximately $170.4 million. The City earned approximately $390,000 in
interest. The portfolio yield-to-maturity was 2.22%.
For the month ended September 30, 2002, the book value of the RDA
Portfolio was approximately $99.2 million. The RDA earned approximately
$191,000 in interest. The portfolio yield-to-maturity was 2.26%.
Currently 76% of the City portfolio is liquid. Much of it is being held in CAMP
or LAIF. When staff looks at commercial paper yield, it is very close to what
they obtain from CAMP and below that of LAIF. At this time, staff is trying to
keep the money in the highest-yielding assets based on a rather unusual
market.
The performance graph shows the impact of the maturing securities in the City
Portfolio. For the first time in over a year, the City's yield has dropped below
that of LAIF. This is reverting back to a more traditional pattern since
historically, the City yield has been slightly lower than LAIF's. On the other
hand, the California State Treasury, in the last year, has lost $800 million
between WorldCom and Enron, while the City has not lost a penny.
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INVESTMENT & FINANCE COMMITTEE
MINUTES October 23, 2002
The Redevelopment portfolio remains the same, highly liquid, with the bulk of
the securities split between money market funds and LAIF.
Mr. Spiegel asked if the City would continue to remain liquid. Mr. Jeffrey said
that the City would probably remain liquid, waiting for a projected economic
recovery in 2003.
B. State of California Local Agency Investment Fund Balance for the Month of
September 2002
Mr. Gibson said that the accounts are maxed out.
C. California Asset Management Program (CAMP) September 2002
Mr. Gibson said that a $4.2 million withdrawal was made. However, as monies
have been reimbursed, this money will be re-deposited.
D. Annual Audit Policy and Audit Subcommittee
Mr. Gibson said that the Annual Audit Policy includes a proposal to have a
subcommittee that will perform the bidding process, review annual reports
from the auditors, and recommend changes to the auditors. He suggested
that the mayor, city manager, finance director, finance operations manager
and a member of the Investment Committee be assigned as the
subcommittee.
In addition, he recommended that when the actual bid is being conducted, the
Annual Audit subcommittee invite a finance director from another city, who
understands the audit procedures, to participate in the bid. Mr. Veazie asked
why the City wanted a finance director from another city to participate. Mr.
.Gibson said that they suggest that a finance director from another city
participate because they have the expertise on what is required of a City audit.
The individual that he has in mind has worked with CVAG and is a certified
public accountant which makes him very knowledgeable with City audits.
Mr. Wood asked who was on the last audit subcommittee. Mr. Gibson said
that there was a representative from the Redevelopment Agency, the finance
director, and the finance operations manager. The draft policy proposes to
have a member from the Investment Committee, a council member, and to
add an outside finance director.
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INVESTMENT & FINANCE COMMITTEE
MINUTES October 23, 2002
Mr. Wood asked what the advantage would be of having a local firm merge
with a large qualified firm that would handle the audit. He does not believe
that there exists a local firm that is large enough or one that has the expertise
to perform the task by itself. Mr. Gibson said that the local firms are not
qualified to perform an audit for a governmental agency as they lack the
expertise. With regard to a joint venture, the City, in the past, worked with
Oscar Armijo and Diehl Evans. This was the City's first attempt to work with a
joint venture. For the most part it worked well, however, there were some
communication issues between the two parties as far as who would be
handling certain tasks, etc. Mr. Gibson felt that a joint venture should be
excluded, however, the Council made known their desire to have local firms
participate in this process. Because local firms lack governmental experience,
a joint venture is the only way to include local firms.
Mr. Wood asked if the City received any discounts for hiring a local firm. Mr.
Gibson said that the City does not receive any discounts.
Mr. McCarthy said that inefficiencies can be expected when a merging of two
firms is forced.
Mr. Wood said that the City wants to obtain the most efficient and qualified firm
to conduct its audit as the audit is an important task.
Mr. Campbell asked how many qualified firms are in existence. Mr. Gibson
said that there are five qualified firms. In the past, some firms were not
q
considered as they tend to send inexperienced staff and the audit is not
completed in a timely manner which in turn creates a greater cost to the City.
Mr. McCarthy said that in the last agency where he was employed, they used
a qualified firm, however, the basic audit services were conducted by new
accountants which were being trained to conduct audits. He said that working
with mid levels is what should be practiced. There are quite a few firms that
have principals that the City can work with that have plenty of experience. Mr.
Gibson said that in California there are approximately ten firms, however, they
are in northern and southern California. Something that needs to be
considered is travel expenses if the firm is located in northern California. This
leaves about five medium size governmental audit firms available.
Mr. Wood asked if travel expenses are included in the billing if a northern
California firm is hired. Mr. Gibson said that mileage, hotel accommodations,
etc. can be included in their bill.
Mr. Gibson said that most of the Los Angeles firms that conduct business in
the Coachella Valley have other clients in the valley making it feasible for their
firms to travel to the valley to conduct audits.
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INVESTMENT & FINANCE COMMITTEE
MINUTES October 23, 2002
Mr. Wood said that he would not like to have the joint venture included as he
does not see an.advantage to hiring a joint venture.
Mr. Spiegel said that he thinks that the constituents like to know that there is a
local company who they can call if they have any questions. One of the
reasons the auditors were changed was because of the stock market scandals
and bad audits. The new audit policy will state that the City's auditors will not
be able to conduct the City's audits for more than five years.
Ms. Benson asked if criteria could be incorporated into the audit policy that
states that a local agency, as part of a joint venture, will be required to be in
operation for a specific number of years. Mr. Gibson said that once the
subcommittee starts meeting, it can establish the criteria.
Mr. McCarthy said that having joint ventures is common in many agencies.
For various reasons, the community likes to have a local component. The real
issue is ensuring that the criteria for selecting the local component, in terms of
errors and omissions insurance, etc. are appropriate.
Mr. Wood said that where he worked previously he and his staff spent many
hours assisting the auditors. He felt it was not worth the time and money. He
would not want a local firm to conduct the audit if the firm was only be
considered because they were local. Mr. Gibson said that a local firm needs .
to find and merge with another firm that has governmental experience in order
to be able conduct the City's audit.
Mr. Coleman said that in terms of local participation there is a firm that will be
in the position to team up with a joint venture. They can perform the testing,
however, will not be able to solely handle an audit for an entity of this size.
Mr. Gibson said that Diehl Evans and Oscar Armijo conducted the City's audit
for ten years. The firm that was recently selected was Lance, Sol[ and
Lunghard. The audit policy proposes the rotation of auditors every five years
with the provision that if the subcommittee or the Investment and Finance
Committee feels comfortable with allowing the auditor to continue to conduct
the audit for 10 years, it may be done.
Mr. Wood said that if there is a local firm that can conduct the audit, he
believes that it would be wise to utilize this firm, however, if they are a joint
venture and lack expertise, they should not be considered.
Mr. Veazie said that the people voted for the Council and it is the responsibility
of the Council to ensure the professional ability of the City's staff as they have
the ability to hire and fire. He asked if the subcommittee would be making any
actions. Mr. Gibson said that the audit policy was being brought to the
committee to review and make recommendations to council.
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INVESTMENT & FINANCE COMMITTEE
MINUTES October 23, 2002
Mr. Veazie recommended that Mr. Wood be a member of the audit
subcommittee representing the Investment and Finance Committee as he
feels Mr. Wood has the background and ability to serve.
Mr. Wood said that he had some concerns on this issue as remarks were
made on the subject at a previous meeting. He would like to see the audit
procedure improve. He thinks that the audit is very important. He feels that if
he hires a firm, he wants to be able to support that firm.
Mr. Spiegel said that whatever action is taken to Council can be changed at a
later date if the committee decides that the action is inappropriate.
Mr. Gibson said that once the subcommittee is formed, they can review and
establish the criteria for local firms.
Mr. Gibson asked if the committee had an opportunity to review the scope of
the subcommittee as well as the location of the auditors and if these sections
were acceptable to the committee.
Mr. Wood asked about the make up of the audit subcommittee. He asked if it
was an appropriate time to involve the mayor. He also asked how many
subcommittees the mayor participated in. Mr. Gibson said that review
committees, in the past, did not include any council representation and
committee meetings were considered more of a management function.
Now, the mayor and/or a council member participates in the various
committees. Mr. Wood said that he suggests that the policy be changed to
reflect "a council member" instead of showing "the mayor" will participate in the
subcommittee.
Motion was made by Mr. Spiegel and seconded by Mr. Wood to approve
the Audit Policy as submitted with a change to reflect "council member"
instead of showing "mayor" will participate in the audit subcommittee.
Motion carried.
E. City and Redevelopment Agency Monthly Financial Reports for City Council
for September 2002
Mr. Gibson said that they are still going through the transition from last year's
books to this year's books. The timing when reversals occur from one year
versus others sometimes changes depending on when the auditors complete
certain tasks. The end of the fiscal year is June 30. More accurate numbers
will be indicated in the October report.
Mr. Campbell inquired about the Marriott transient occupancy tax (TOT). Mr.
Gibson said that the Marriott is doing fine. They are on a 13 payment period
and not on a monthly payment period. Depending on when the cycle happens
each year, TOT can be received one month versus another month.
6
f02302..Pd
INVESTMENT& FINANCE COMMITTEE
MINUTES October 23, 2002
Vacation Inn has not paid their fees for close to one year. Staff will bring this
matter to council as Vacation Inn has not honored their promise to pay and
staff will seek court action.
F. Parkview Professional Office Buildings - Financial Report for September 2002
Mr. Gibson said that staff examined the roof at the Parkview building last
week. Bids should be out in the next two weeks. He plans to have the same
roofing material placed on the Parkview building as is on the City hall buildings
because this roofing material has assisted in the decrease of the energy bill.
Ms. Benson asked if there were any vacancies at Parkview. Mr. Gibson said
that currently everything is taken. The Mountain Conservancy will be moving
from the Portola building to Parkview as they require more space.
G. Palm Desert Golf Course Facilities Corporation Financial Information for
September 2002
Mr. Gibson said that July through September are typically not the best months
for golf due to the heat.
Mr. Spiegel said that Desert Willow should be doing better as they have
changed their re-seeding practices. They have done one of the courses and
plan to do the other course sometime in Christmas when golfing is slow.
Ms. Benson asked when a report would be presented that showed if Desert
Willow was making any money. When Desert Willow was first completed, it
was said that it would take about five years for it to make money. Mr. Spiegel
said that income obtained from Intrawest is not shown on the reports received
by the council and without that figure, it is difficult to ascertain the amount. Mr.
Gibson said that with the Intrawest figure and the figure for the replacement of
equipment, there was a $600,000 positive figure for last year.
Mr. McCarthy said that if one looks at the figures from the standpoint of the
golf operations, there will be a negative. However, if one looks at it from a
project perspective, as a redevelopment project, with the land sell, and
proceeds from Intrawest and other hotels, there will be a positive outcome.
Mr. Gibson said that as far as rounds, Indian Wells (IW) has had equal rounds
as that of the City of Palm Desert. In the past, IW had 30,000 more rounds.
He will ask the accounting technician to prepare a report that compares Indian
Wells to the City of Palm Desert. Desert Willow has done a good job of
keeping the play up even with all of the surrounding competition.
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102302.wpd
INVESTMENT 8, FINANCE COMMITTEE
MINUTES October 23, 2002
Mr. Gibson said that Desert Willow will be purchasing new equipment
(lawnmowers, etc.). One of the bids which will require re-bidding due to
unequal bids is for 160 golf carts. Most of the improvements requested in the
Capital Improvement Program have been completed. The restroom remodel
has not gone out to bid as yet.
Mr. Spiegel asked about the status of the sound system. Ms. Benson said that
the system has been tested and has worked better when there is no one in the
room. Perhaps a new system should be purchased.
Vill. CONTINUED BUSINESS - None.
IX. OLD BUSINESS
A. Status of Public and Private Partnerships Background Checks
There being no business issues to report, discussion ensued to the next
agenda item.
B. Bond Issuance by Palm Desert Financing Authority
Mr. Coleman said that they are on schedule to issue bonds for Project Area
No. 2 at the end of January. The low income housing bond is complete. They
obtained favorable rates. The bond rates are not doing well at this time.
Everyone is anticipating that the state will come to market with an $11 billion
bond for the Department of Water and Power for the electricity. Thus, a lot of
people will not finance.
Mr. Coleman said that the Housing Report draft is complete and will be
presented to the Council on November 14. The review period will be 61 days
after the Council accepts the Housing Report. They are looking at the end of
January.
Mr. Coleman said that he does not know the status of the assessment districts.
Mr. Gibson said that he has not received an update from the engineer. Mr.
Coleman said that the preliminary engineer's report has not been completed
for this neighborhood assessment which will be done for the placement of
utilities under ground.
Mr. Gibson said that another authority which was recently created and
approved by Council was a joint authority between the County of Riverside
and the City. Monthly meetings will be held. This committee will review issues
relative to the animal shelter.
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102302.w d
INVESTMENT & FINANCE COMMITTEE
MINUTES October 23, 2002
X. NEXT MEETING - Wednesday, November 20, 2002 at 2:00 p.m.
XI. ADJOURNMENT
There being no further business, the meeting was adjourned by Mr. Spiegel at 3:00 p.m.
Respectfully submitted,
Diana Leal, Recording Secretary
9
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w �Ctty and Rede>/elo meni Agenc Po ol►os
GQM Li�/ANCE ANFAL SY S AN INY TAA N7 REI
�� ,�Qctober�2002� ,.
Paul S. Gibson, C.C.M.T., Treasurer
Thomas W. Jeffrey, J.D., M.B.A., Deputy City Treasurer
Treasurer's Commentary
The Federal Open Market Committee (FOMC) met on 6 November and lowered the Federal Funds Rate and the Discount Rate
by 50 basis points to 1.25 percent and 0.75 percent, respectively. This was a larger-than-normal rate cut. The FOMC also
shifted to a neutral risk assessment of the economy. Most analysts interpreted these actions as indicating that the FOMC
believed that one last cut was needed before year-end in order to get the economy out of a "soft spot," before it could grow on its
own. In other words, the FOMC might be signaling that it's done with rate cuts.
As a precaution, however, the FOMC is studying the possibility that deflation might occur in conjunction with high levels of
corporate and consumer debt. The danger is perceived to be declining inflation, inflation near zero, and the absence of pricing
power. The U.S. automobile industry would be particularly vulnerable if the economy slid into a recession since automakers
would be experiencing both falling prices and falling demand. Deflation increases the real cost of debt and debt financing.
It also imposes the risk of a depreciation of real estate values,and reduces the FOMC's ability.to cut interest rates.
The U.S. economy shows signs of both good deflation (price declines due to competition and productivity gains) and bad
deflation (price declines due to over-investment and overcapacity). Most economists, however, believe that the likelihood of
sustained deflation in the U.S. is remote.
pis 4(i C..C..M r.
Treasurer
PORTFOLIO STATISTICS
Dollars in Thousands
OCT-02 SEP-02 AUG-02 JUL-02 JUN-02 MAY-02
CITY
Month-End Book Value'"' $ 144,054 $ 170,423 $ 180,743 $ 189,368 $ 195,867 $ 189,180
Month-End Market Value*** $ 144,259 $ 170,723 $ 181,096 $ 191,228 $ 197,955 $ 191,365
Paper Gain (Loss) $ 205 $ 300 $ 353 $ 1,860 $ 2,088 $ 2,185
Interest Earnings $ 271 $ 390 $ . 428 $ 462 $ 453 $ 440
Yield-To-Maturity 2.15% 2.22% 2.64% 2.88% 2.86% 2.92%
Weighted Maturity(Days) 52 70 222 285 295 292
Effective Duration 0.04 0.04 0.06 0.08 0.11 0.13
RDA
Month-End Book Value"" $ 94,884 $ 99,221 $ 100,125 $ 115,066 $ 92,648 $ 99,197
Month-End Market Value*'* $ 97,147 $ 101,468 $ 102,313 $ 119,206 $ 94,673 $ 101,214
Paper Gain (Loss) $ 2,263 $ 2,247 $ 2,188 $ 4,140 $ 2,025 $ 2,017
Interest Earnings $ 185 $ 191 $ 199 $ 216 $ 198 $ 214
Yield-To-Maturity 2.23% 226% 2.27% 2.23% 2.37/6 2.38%
Weighted Maturity(Days) 147 141 142 139 166 158
Effective Duration 0.13 0.13 0.14 0.13 0.16 0.15
City Treasurer's Office
73-510 Fred Waring Drive
Palm Desert, CA 92260-2578
"' Omits SLGSs. 760.346.0611
City of Palm Desert- Portfolio Characteristics
31 October 2002
Dollars in Thousands
Ageing Interval Market Value
< 1 M $ 64,562
General Fund Ageing
<2M 2,014 76
<3M 7,991 80
<6M 10,12360
%s
<1YR °mm,
<2YR o
40
<3YR }uA
<4YR a° 20 12
s
>5YR a 2 = •, 0 0
0
Total: $ 84,690 <1M <2M <3M <6M <1YR <2YR
Ratings Market Value CredR t]uality AAA A
AAA $ 48,342 33%O�%
AA Al/P7
A 4,021 AA 6
o%
A1/P1 12,037
Unrated" 81,386 Unrated
Total: $ 145,786• 56%
Sector Market Value Asset Allocation Comm Paper MTNs
U.S.Treasury $ 7%,D 3%
Federal Agency 6,083 Money Market
Money Market Funds 50,860 Funds LAIF
Commercial Paper 12,037 3s/ 27i
MTNs 4,021 U.S.Treasury
RDA 32,785 4� o°i
RDA Loan 32,785 Fed Agency RDA Loan
Total: $ 145,786 s% 220/6
Month City Yield LAW Yield Variance Performance
NovO1 3.69 3.53 0.17
Dec 3.54 3.26 0.28 4.0
Jan02 3.27 3.07 0.20
Feb 3.27 2.97 0.31
Mar 3.17 2.86 0.31
Apr 3.18 2.85 0.34 3.0
May 3.06 2.74 0.32 s
Jun 2.86 2.69 0.18
Jul 2.88 2.71 0.17 2.0
Aug 2.64 2.59 0.04 Nov01 Dec Jan02 Feb Mar Apr May Jun Jul Aug Sep Oct
Sep 2.22 2.60 -0.38
Oct 2.15 2.49 -0.33 OLAIF Yieid 0Q Yield
' Standard and Poor's Credit Ratings
LAIF, HighMark, and City Loan to RDA Page 2 of 7
City of Palm Desert
Portfolio Holdings
31 October 2002
Market Ratings
Par Value Issuer Coupon MaturityT Cost I YTM I Price Value I Moody's S&P
Medium-Term Notes
$ 4,000,000 GENERAL MOTORS 5.95 3/14/03 $ 3.999,944 5.94 100.53 $ 4,021,120 A2 BBB
$ 4,000,000 Subtotal $ 3,999,944 5.94 $ 4,021,120
Commercial Paper-Unsecured
$ 2,030,000 GENERAL ELECTRIC 2.08 1/15/03 $ 1,999,036 2.14 99.67 $ 2,023,357 Aaa AAA
$ 6,000,000 GENERAL ELECTRIC 1.76 1/6/03 $ 5,943,387 1.81 99.71 $ 5,982,692 Aaa AAA
$ 2,015.000 MERRILL LYNCH 1.95 11/25/02 $ 1,995,354 1.97 99.89 $ 2,012,845 Aa3 AA-
$ 2,023,000 WELLS FARGO BANK 2.01 12/26/02 $ 1,999,167 2.07 99.76 $ 2,018,122 Aa2 A+
$ 12,068,000 Subtotal $ 11,936,944 1.96 $ 12,037,016
Agencies-Discount
$ 4,080,000 FED NATIONAL MTG ASSOC 2.21 3/14/03 $ 3,999,350 2.28 99.45 $ 4,057,560 Aaa AAA
$ 2,034,000 SALLIEMAE 2.13 2/7103 $ 1,999,461 2.19 99.59 $ 2,025,661 Aaa AAA
$ 6,114,000 Subtotal $ 5,998,811 2.28 $ 6,083,220
LGIP
$ 40,000,000 L.A.I.F. 0.00 11/1/02 $ 40,000,000 2.49 100.00 $ 40,000,000 NR NR
$ 40,000,000 Subtotal $ 40,000,000 2.49 $ 40,000,000
LGIP
$ 23,254,185 C.A.M.P. 0.00 11/1/02 $ 23,254,185 1.69 100.00 $ 23,254,185 NR AAA
$ 23,254,185 Subtotal $ 23,254,185 1.69 $ 23,254,185
Pooled Funds-AIM
$ 19,004,464 PRIME PORTFOLIO 0.00 11/1/02 $ 19,004,464 1.39 100.00 $ 19,004,464 Aaa AAA
$ 19,004,464 Subtotal $ 19,004,464 1.39 $ 19,004,464
Pooled Funds-HighMark
$ 6,534,398 CITY MAIN SWEEP 0.00 11/1/02 $ 6,534.398 0.68 100.00 $ 6,534,398 NR NR
$ 90,000 DESERT WILLOW SWEEP 0.00 11/1/02 $ 90,000 0.68 100.00 $ 90,000 NR NR
$ 266,072 GOLF COURSE SWEEP 0.00 11/1/02 $ 266,072 0.68 100.00 $ 266,072 NR NR
$ 1,710,026 OFFICE COMPLEX SWEEP 0.00 11/1/02 $ 1,710,026 0.68 100.00 $ 1,710,026 NR NR
$ 8,600,496 Subtotal $ 8,600,496 0.68 $ 8,600,496
City Loan to RDA
$ 32,785,480 CITY OF PALM DESERT 0.00 11/1/32 $ 32,785,480 2.49 100.00 $ 32,785,480 NR NR
$ 32,785,480 Subtotal $ 32,785,480 2.49 $ 32,785,480
Total Investments
$ 145,826,625 $ 145,580,324 2.15 $ 145,785,982
NR=Not Rated Page 3 o17
City of Palm Desert
Portfolio Holdings
31 October 2002
Market Ratings
Par Value Issuer Coupon Maturi—ty—r Cost I YTM I Price Value I Moody's S&P
Cash
$ 53,397 OFFICE COMPLEX CHCKG 0.00 11/1/02 $ 53,397 0.00 100,00 $ 53,397 NR NR
$ (1,716,213) CITY MAIN CHECKING 0.00 11/1/02 $ (1,716,213) 0.00 100.00 $ (1,716,213) NR NR
$ 159,726 DESERT WILLOW CHKG 0.00 11/1/02 $ 159,726 0.00 100.00 $ 159.726 NR NR
$ (122,350) CPD GOLF COURSE CHKG 0.00 11/1/02 $ (122,350) 0.00 100.00 $ (122,350) NR NR
$ 30,181 OFFICE COMPLEX TRUST 0.00 11/1/02 $ 30,181 0.00 100.00 $ 30,181 NR NR
$ 68,498 RECREATIONAL FAC CHKG 0.00 11/1/02 $ 68,498 0.00 100.00 $ 68,498 NR NR
$ - VACATION INN CHKG 0.00 11/1/02 $ - 0.00 100.00 $ - NR NR
$ (1,526,760) Subtotal $ (1,526,760) 0.00 $ (1,526,760)
Total Cash and Investments
$ 144,299,865 $ 144,053,564 $ 144,259,222
NR=Not Rated Page 4 of 7
Palm Desert Redevelopment Agency- Portfolio Characteristics
31 October 2002
Dollais in Thousands
Ageing Interval Market Value
<1 M $ 71,081 Portfolio Ageing w/o SLGSs
<2M
<3M - 100 90
<6M 197 90
60 ,
<1YR 868 70
60
<2YR 7,103 0
<3YR - 6o
0
40 "}
<4YR a0 30 t'
<SYR 20 `Z 9
>SYR 10 ,t o 0 0 1 0 0
0
Total: $ 79,249 <1M <2M <3M <6M <1YR <2YR <3YR <4YR
Quality' Market Value Credit Quality 7
AAA $ 36,646
AA
A AAA Unrated"
�°� 62'/
Al/P1 -
Unrated" 60,401 AqAn
Total: $ 97,047 o
0°/<
Sector Market Value Asset Allocation Feder OoAgency
U.S.TreasuryFederal
$ 8,183 Money Market
Federal Agency - Funds
Money Market Funds 34,536 36%
LAIF 54,328 F LAIF
Commercial Paper "'n 56%
Corporate Bonds - U.S.Treasury '
Total: $ 97,047 8%
Month RDA Yield LAIF Yield Variance Pertormance
Nov01 2.83 3.53 -0.69
Dec 2.59 3.26 -0.67 4.0
Jan02 2.46 3.07 -0.61
Feb 2.51 2.97 -0.46
Mar 2.28 2.86 -0.59
Apr 2.42 2.85 -0.43 & 3.0
May 2.38 2.74 -0.36 5-
Jun 2.37 2.69 -0.32
Jul 2.23 2.71 -0.48 2.0
Aug 2.27 2.59 -0.33 Nov01 Dec Jan02 Feb Mar Apr May Jun Jul Aug Sep Oct
Sep 2.26 2.60 -0.35
Oct 2.23 2.49 -0.25 113 LAIF Yield 0 RDA Yield
i
' Standard and Poor's Credit Ratings
LAIF and HighMark Sweep Page 5 of 7
Palm Desert Redevelopment Agency
Portfolio Holdings
31 October 2002
Market Ratings
Par Value Issuer Coupon Maturity Cost I YTM I Price Value I Moody's I S&P
U.S.Treasury-Discount
$ 198,000 UNITED STATES TREASURY 4.70 2115/03 $ 150,793 5.45 99.61 $ 197,226 Aaa AAA
$ 181,000 UNITED STATES TREASURY 4.63 2115/04 $ 130,168 5.51 98.20 $ 177,751 Aaa AAA
$ 7,143,000 UNITED STATES TREASURY 4.59 8/15/04 $ 4,989,671 5.54 97.17 $ 6,940,996 Aaa AAA
$ 532,400 UNITED STATES TREASURY 4.66 8/15/03 $ 394,279 5.47 98.90 $ 526,570 Aaa AAA
$ 344,600 UNITED STATES TREASURY 4.66 8/15/03 $ 255,200 5.47 98.90 $ 340,827 Aaa AAA
$ 8,399,000 Subtotal $ 5,920,112 5.529 $ 8,183,369
$ 40,000,000 L.A.I.F. 0.00 11/1/02 $ 40,000,000 2.49 100.00 $ 40,000,000 NR NR
$ 4,862,648 L.A.I.F. BOND PROCEEDS 0.00 11/1/02 $ 4,862,648 2.49 100.00 $ 4,862,648 NR NR
$ 9,464,864 L.A.I.F. BOND PROCEEDS 0.00 11/1/02 $ 9,464,864 2.49 100.00 $ 9,464,864 NR NR
$ 54,327,512 Subtotal $ 54,327,612 2.49 $ 64,327,512
Pooled Funds-AIM
$ 28,462,337 PRIME PORTFOLIO 0.00 11/1/02 $ 28,462,337 1.39 100.00 $ 28,462,337 Aaa AAA
$ 28,462,337 Subtotal $ 28,462,337 1.39 $ 28,462,337
Pooled Funds-HighMark
$ 5,865,750 HOUSING AUTH CHK SWEEP 0.00 11/1/02 $ 5,865,750 0.68 100.00 $ 5,865,750 NR NR
$ 207,694 HOUSING AUTH TRT SWEEP 0.00 11/1/02 $ 207,694 0.68 100.00 $ 207,694 NR NR
$ 6,073,445 Subtotal $ 6,073,445 0.68 $ 6,073,445
Total Investments
$ 97,262,293 $ 94,783,405 $ 97,046,663
Cash
$ 49,405 HOUSING AUTH CHKG 0.00 11/1/02 $ 49,405 0.00 100.00 $ 49,405 NR NR
$ 50,786 HOUSING AUTH TRUST 0.00 11/1/02 $ 50,786 0.00 100.00 $ 50,786 NR NR
$ 100,191 Subtotal $ 100,191 $ 100,191
Total Cash and Investments
$ 97,362,485 $ 94,883,597 $ 97,146,854
NR=Not Rated Page 6 of 7
STATEMENT OF COMPLIANCE
The investment portfolios of the City of Palm Desert('City')and the Palm Desert Redevelopment Agency ('RDA')are
governed by federal, state, and local law. The City Treasurers'Statement of Investment Policy' is more restrictive than the
California Government Code. The Palm Desert Investment Committee and the Palm Desert City Council review the
Statement of Investment Policy annually.
For the month ended 31 October 2002,the City and the RDA'investment portfolios were in compliance with all applicable
federal, state, and local laws and regulations. The City Treasury continued to pursue conservative and prudent investment
strategies, based upon the stated objectives of safety, liquidity, and yield (in order of priority).
Barring unforeseen events,the City Treasury should have sufficient cash to finance the operations of the City of Palm Desert
and the Palm Desert Redevelopment Agency over the next six months. In addition, portions of either the City or the RDA
portfolio could be liquidated in order to meet any significant, unexpected cash requirements.
Bloomberg L.P. and Interactive Data Corporation provided the data and the analytical tools that were used to calculate the
market value of all securities in the City and the RDA investment portfolios. State and Local Government Series securities
are held in escrow accounts and are therefore not included in this report as assets. All balances are bank balances.
Respectfully submitted on 20 November 2002,
PauLS. 6d w*4 C.GM.1. "
City Treasurer
SUMMARY OF AUTHORIZED INVESTMENTS
California Government Code City Investment Policy
CA Govt Maximum Maximum Quality Maximum Maximum Quality %of City %of RDA
Code Investment Category Maturhy Limit S&P/Mdys Maturity Limit S&P/Mdys Portfolio Portfolio
53601 a Palm Desert Bonds 5 Years No Limit Not Authorized 1
53601 b ;U:S,Treasuri6s v:.`. ?5 Years' No LImns 2 `„ �_ +u 5;Yeais ,".,�� .
53601 c CA State Debt 5 Years No Limit Not Authorized
53601 d CA Local Agency Debt 5 Years No Limit Not Authorized
v53601 e ; S.No,L'iinit: 5 Years
53601 f" -Barikei"s's Aoce lances: ,180.Da'"s` .40%r;' 5 i;= 180,"Da s, ..aa40�o',., A 1;&+P 1x ,
53601 t:,Corr mercial,Pa er' , '270,Da s ,.,,.25%,S? A 1+&,P,1' '270 Days, k+ ',25% ,. A,14,,&P,1111
, 2%�„, , . Oi0% n
53601 h s": Ne' otiatile CDs-' `,5 Years:: .. 30%� j ;v , 5.Years. 'r30go; AA„or;"Aa3 ;,ff ?
:53601 i'; , r+ k•:Re`os ",: 1 Year.. ,'No Limit' a`w .,,, ',30=Da`s. ;4,20%+, AAA"&rAaa t" A .9
53601 i Reverse Re os 92 Days 20% Not Authorized
.. ,,
5360,, ' - a Medium Term Notes•' , 5 Years �30% A,. ti '_3,Years A300% 41-.��:
53601 k =7 _h Mutual'Funds� w' 90 Da §j ,. 20% :%IAA'&"Aaa 9P.Da s . ,"r20%Q AAA:&„Ada e:34`9W •,i36s4%"
53601 I Trust Indenture Debt Not Authorized
53601 m Secured Bank Deposits I 5 Years No Limit Not Authorized
53601(n) Mortgage-Backed 5 Years 20% A(Issuer)& Not Authorized
Securities 1AA(Security
c R , „.A M ':',. .,'�.s 3,.'x 'aa, .w.�
tx16429,.t r- bye- `=L'`AIF ,,," r ,No'Limit' a 'No3L°imd � d57":3%._
77.5% 100.0%
1 The City loan to RDA, which is not a bond, has been approved by the Palm Desert City Council.
Certified California Municipal Treasurer Page 7 of 7
STATE OF CALIFORNIA PHILIP ANGELIDES, Treasurer
OFFICE OF THE TREASURER
SACRAMENTO
Local Agency Investment Fund
PO Box 942809
Sacramento, CA 94209-0001
(916) 653-3001
October, 2002 Statement
CITY OF PALM DESERT Account Number : 98-33-621 li
Attn: CITY TREASURER
73510 FRED WARING DRIVE
PALM DESERT CA 92260
T-ransaction..
Effective Transaction Tran Confirm Authorized Amount
Date Date Type Number Caller
10-15-2002 10-14-2002 QRD SYSTEM 244,107.64,
10-21-2002 10-21-2002 RW 605905 THOMAS JEFFREY - 243,971.97
Account Summary
Total Deposit : 244,107.64 Beginning Balance : 39,999,864.33
Total Withdrawal : 243,971.97 Ending Balance : 40,000,000.00
Page : 1 of 1
STATE OF CALIFORNIA PHILIP ANGELIDES, Treasurer
OFFICE OF THE TREASURER
SACRAMENTO .'
Local Agency Investment Fund
PO Box 942809 .
Sacramento, CA 94209-0001
(916) 653-3001
October, 2002 Statement
PALM DESERT REDEVELOPMENT AGENCY Account Number : 65-33-015
Attn: TREASURER
73-510 FRED WARING DRIVE
PALM DESERT CA 92260
Transactions
Effective Transaction .Tran Confirm Authorized Amount
Date Date Type Number Caller
10-15-2002 10-14-2002 QRD SYSTEM 254,363.12
10-21-2002 10-21-2002 RW 116232 THOMAS W. JEFFREY - 254,109.34
Account Summary
Total Deposit : 254,363.12 Beginning Balance : 39,999,746.22
Total Withdrawal : 254,109.34 Ending Balance : 40,000,000.00
Page : 1 of 1
�T" '"" I �_I
CALIFORNIA ASSET CONFIRMATION
MANAGEMENT PROGRAM _
JOINT POWERS AUTI'IORITY `
50 CALIFORN A STREET 23RD FLOOR
SAN FRANC1SCCl CALIFC RN1A 94111 FOR ACCOUNT
INFORMATION: 800-729-7665
STATEMENT DATE: 1 012 5/2 0 0 2
CITY OF PALM DESERT
OPERATING FUND ACCOUNT NUMBER: 553-00
73.510 FRED WARING DRIVE
PALM DESERT,CA 92260 FUND NAME: Cash Reserve Portfolio
Page of 1
Accourtf Summ3i as of iQ125/2ti0 a
Statement Income Dividends Capital Gains Total Shares Account
Date Paid This Year Paid This Year - Owned - Value
10/25/2002 - $156,240.34 $0.00 23,227,267.380 $23,227,267.38
Transactldn SumtlarY,for;#Ii/2S120ti=xf0/2 � 1 -'
Beginning Balance Purchases Reinvestments Redemptions Ending Balance
$16,227,267.38 $7,000,000.00 $0.00 $0.00 $23,227,267.38
tTRADEr,F. .EPOSTLNfi z�- r �^ - r.,s -; "a .?`DOL
PAACrT10N -ea At:F10N f11 iIG 15 _C7tONs�'1,F H.. •x1'r
1 w
10/25/02 10/25/02 Beginning Balance 16,227,267.380
10/25/02 10/25/02 Purchase-Wire Pur. $7,000,000.00 $1.00 7,000,000.000 23,227,267.380
Aessage Line:
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City of Palm Desert
Parkview Office Complex
Financial Statement
' for Fiscal Year 2002-2003
October-02 October-02 # % YTD YTD # %
Budget Actual Variance Variance Budget Actual Variance Variance
Revenues
Rental $ 68,500 $ 70,083 $ 1,583 102.31% '. $ 274,000 $ 281,980 $ 7,980 102.97
Dividends/Interest $ 4,375 $ -936 $ (3,439) 21.40% $ 17,500 $ 3,971 $ (13,529) 22.69%
Total Revenues $ 72,875 $ 71,019 $ (1,856) 97.45% Z $ 291,500 $ 285,951 $ (5,549) 98.10%
Expenses
Professional-Accounting&Auditing $ 7,000 $ 7,000 $ - 100.00% „!.; $ 28,000 $ 28,000 $ - 100.00%
Professional-Consultants $ 6,000 $ 5,500 $ 500 91.67% '. $ 24,000 $ 22,759 $ 1,242 94,83%
Tenant Improvements $ Z500 $ - $ Z500 0.00% $ 10,000 $ 11,918 $ (1,818) 118.18%
Repairs&Maintenance Building $ 8,000 $ 8,201 $ (201) 102.51% $ 32,000 $ 33,106 $ (1,106) 103.467.
Repairs&Maintenance-Landscaping $ 2,300 $ - $ 2,300 0.00% $ 9,200 $ - $ 9,200 0.00%
Utilities-Water $ 250 _ $ 102 $ 148 40.97% '.' $ 1,000 $ 323 $ 677 32.34%
Utilities-Gas/Electric $ 8,500 $ 11,596 $ (3,096) 136.42% $ 38,500 $ 36,019 $ 2,481 93.56%
Utilities-Trash - $ 700 $ 1,052 $ (352) 150.28% !: $ 2,800 $ 1,578 $ 1,222 56.36%
Telephone $ 150 $ 192 $ (42) 128.31% - ''a $ 600 $ 621 $ (21) 103.57%
Insurance $ 521 $ - $ 521 0.00% : $ Z082 $ - $ 2,082 0.00%
Total Expenses $ 35,921 $ 33,644 $ 2,277 93.66% $ 148,182 $ 134,224 $ 13,958 90.59
x. ;727 g. Q9' 105A,
Equipment Replacement Reserve $ 13,000 $ 13,000 $ - 100.00% $ 52,000 $ 52,000 $ - 100,00%
eK]n,"ec??+1C ,.,. -.:- °�" ._..�t�;.::_ .• � ,$,. 422 _`.'!&,°. ,:• *` .... r :_91 `$ "$.404` -1Q9.21°.
2003 Investment Reportlnv Report 2003
M
City of Palm Desert
,M Parkview Office Complex
l Vacancy Rate Schedule by Suite
October 2002
Suite Square
No. Tenant Feet
73-710 Fred Waring Drive-Two (2) Story Building
100 Hanover 1,915
100A EPA 645
102 Bergren 1,360
103 Multiple Sclerosis 488
104 Arthritis Foundation 960 .
106 Coachella Valley Economic Partnership 928
108 Assemblyman Kelly 785
112 Senator Battin 1,406
114 Chamber of Commerce 1,478
118 Goodwill Industries 1,250
119 City/CVAG Conference Room 1,380
120 Duke Gerstal 1,750
200 CVAG 4,292
200A University of California Riverside 841
201 University of California Riverside 604
203 Property Manager is Currently Negotiating with Mountain 480
Conservency
205 Vacant 700 .
208 Alzheimer's Association 960
2003 Investment ReportVacancy Report
4
Y
City of Palm Desert
Parkview Office Complex
Vacancy Rate Schedule by Suite
October 2002
210 Wilson,Pesota&Pichardo 3,040
211 State of California Department of Food&Agriculture 937
217 Joe B. McMillan,. Esq. 775
220 CA. State Dept. of Agriculture 1,607
222 Cove Commission-Fire Marshal 1,900
222 CITY Storage-Vacant 1,081
Total square footage(2 story Building) 31,562
Vacancy Rate-2,261/31,562= 7.16%
73-720 Fred Waring Drive- One Story Building
100 State of California-Water Resources 15,233
102 State of California-Rehabilitation Department 4,396
Total Square Footage 19,629
Vacancy Rate--0.00% 0.00%
Overall Vacancy Rate for Both Buildings:
Vacancy Rate--2,261/51,191 4.42%
Occupancy Rate-48,930/51,191 95.58%
2003 Investment ReportVacancy Report
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