HomeMy WebLinkAbout2003-03-26 IFC Regular Meeting Agenda Packet COMMITTEE MEETING WORKSHEET
Meeting Description Investment Committee Meeting Date 3126/03 Time 2:00 p.m.
Location North Wing Conference Room Mailed Agenda 3119/03
Posted Agenda 3/19/03
Time
Convene Adjournment
0 Jt 7
Staff Members Attending Yes No Others Attending Yes No
1 Paul Gibson, Chairperson v711 Dennis Coleman
2 Council Member ol2 Justin McCarthy
3 Council Member V, 13 Rodney Young
4 Dave Erwin, City Attorney 14 Recording Secretary
5 Carlos Ortega, City Mgr.
6 Thomas Jeffrey
Public Members Attending Guests Attending
7 Russ Campbell 15
8 Murray Magloff 16
9 Bill Veazie 17
10 Everett Wood 18
19
20
Z Follow-Ups/Tasks Assigned Person Responsible Due Date
1
3
5 Z
s
7
8 n
Ooo .tit PTO,,
�rjD� yrr.
.. ®® MEETING NOTES
FM WAR
j
___ AFr r ri x I /i
Spoke I Mtn (1) Mtn (2) MEETING NOTES
n
1/J
Cgo
C o
e
33 e
ob
2 L
s
J.
pa4ir-rhA
S
�.�
Spoke Mtn (1) Mtn (2) _ MEETING NOTES
r
G 67
d c,
3
` l
isi .i���•r.� i! •�.�� � Via"
i�i11�• - -
Spoke Mtn (1) Mtn (2) MEETING NOTES
d
c
v
n QO
.. - ®m •
IMMMIll iIMIMM AM i� _ _ aLn�
All!! . M,,
=�l =1 .
orl
_ IM_ _tll I/ i�I7_��I/I��/ �I\ /_ ./_ 10 1=
1 ,/ /PI m GIiI
" I_ .!n//
r
Spoke Mtn (1) Mtn (2) MEETING NOTES
/ '
L �
Q
Spoke Mtn (1) Mtn (2) MEETING NOTES
Finance Department
MEMORANDUM
To: Rachelle Klassen, City Clerk
r
From: Diana Leal, Administrative Secretar}-- /
Subject: Investment and Finance Committee
Date: May 20, 2003
Attached is a copy of the.M_arch 26, 2003 minutes of the Investment and Finance Committee
approved by the Committee on April 23, 2003. Please place on the next City Council agenda for
approval thereof.
Thank you for your assistance.
Attachments (1)
GAFinance\Diana Leal\Wpdocs\lnvestment Committee\2002 Memos\City Clerk\4-23-03.wpd
CITY OF PALM DESERT
INVESTMENT & FINANCE COMMITTEE
Minutes
March 26, 2003, 2:00 p.m.
North Wing Conference Room
I. CALL TO ORDER
A regular meeting was called to order by Chairman Gibson on Wednesday, March
26, 2003 at 2:00 p.m.
II. ROLL CALL
Present: Absent:
Paul Gibson, Director of Finance Jean Benson, Mayor
Thomas Jeffrey, Deputy City Treasurer Bob Spiegel, Mayor Pro-Temp
David Erwin, City Attorney
Carlos Ortega, City Manager
Jose Luis Espinoza, Finance Operations Manager
Bill Veazie
Murray Magloff
Russ Campbell
Everett Wood
Also Present:
Steve Aryan, Assistant to the City Manager
Justin McCarthy, ACM Redevelopment
Dennis Coleman, RDA Finance Manager
Rodney Young, Desert Willow General Manager
Diana Leal, Recording Secretary
Guests:
None
III. ORAL COMMUNICATIONS
None.
IV. COMMITTEE MEMBER REPORTS
None.
1
32603.wpd
INVESTMENT & FINANCE*11MITTEE •
MINUTES March 26, 2003
V. CONSENT CALENDAR
A. Approval of Minutes
Motion was made by Mr. Ortega and seconded by Mr. Campbell to approve
the Minutes of the February 26, 2003 meeting with the following corrections:
Page 5
Informational
2. Markets Article Calpers Cools Down
Mr. Campbell said that the state went into long term care.
Page 6
Bond Issuance by Palm Desert Financing Authority
Paragraph 3, third sentence
A $500 million hit based upon the ERAF formula that is in place at this time,
the Palm Desert Redevelopment Agency would be hit by close to $8 million.
Motion carried.
VI. CONSENT ITEMS HELD OVER
None.
VII. NEW BUSINESS
A. City and Redevelopment Agency Investment Schedules and Summary of
Cash Reports for February 2003
Mr Jeffrey reported that, for the month ended February 28, 2003, the book
value of the City Portfolio was approximately $165,196,000. The City earned
approximately $210,000 in interest. Portfolio yield-to-maturity was
approximately 1.63%.
For the month ended February 28, 2003, the book value of the RDA Portfolio
was approximately $103,760,000. The RDA earned approximately $138,000
in interest. Portfolio yield-to-maturity was approximately 1.66%.
Mr. Ortega asked if it would be legal for the City to buy Redevelopment
Agency bonds since the City would buy the bonds from the underwriter. If the
City is currently receiving less than a 2% yield, then the short maturities of
municipal bonds could potentially yield more.
2
32603.wpd
INVESTMENT & FINANCE SAMITTEE •
MINUTES March 26, 2003
Mr. Gibson responded that it would depend on the type of bond that is being
purchased. Mr. Gibson stated that he would research the matter further.
B. State of California Local Agency Investment Fund Balance for the Month of
February 2003
Mr. Gibson said that the City is maxed out in both the City and Redevelopment
Agency accounts.
C. California Asset Management Program (CAMP) February 2003
There being no business issues to report, discussion ensued to the next
agenda item.
D. City and Redevelopment Agency Monthly Financial Reports for City Council
for February 2002
Mr. Gibson said that he will receive the quarter end report this week and he
will have a better idea of what the sales tax numbers are for the second
quarter. Expenditures are in line with what was expected.
The City has started with the collection of Transient Occupancy Tax (TOT)
from the new hotel on Gerald Ford and Cook Street. The City should receive
monies in about thirty days.
Mr. Ortega said that the three major sources are up. Mr. Gibson said that the
sources are up when considering the budget, however, this is due to the
advances the State has been sending the City above what was given in the
past due to an error made in the previous quarter. This information is
misleading. They expect to have a true final number by the end of May 2003.
Mr. Magloff asked how much money the City receives from property taxes.
Mr. Gibson said that the City receives $2.7 million in total for the year (half,
$1.3 million, in January and the other half in May). The Redevelopment
Agency receives approximately $22 million (half, $11 million, in January and
the other half in May).
Mr. Wood asked if staff thought that the City would meet budget once all the
numbers came in. Mr. Gibson said that the revenues will be slightly ahead. At
this time, it is difficult to tell because the City has not received 50% of the total
revenues. TOT is dependent on whether or not the City receives money owed
by Vacation Inn. They pay $150,000/year which, to date, they have only paid
the last two months.
3
3zso3.wva
INVESTMENT & FINANCE 0MITTEE •
MINUTES March 26, 2003
E. Parkview Professional Office Buildings - Financial Report for February 2003
Mr. Gibson said that roof repairs are on-going. They had a delay last week
due to rain. The roof contractors had torn off about 1/3 of the roof and had to
quickly put a coating on the roof to prevent leaks. They had a few leaks within
the Water Resources Control Board building. Their storage room for files had
approximately 10 boxes damaged from the water that came in. The
documents had to be dried out and the carpet cleaned. The roofing contractor
hopes to finish the roof work within two weeks.
The contract with Mountain Conservancy has been completed and they have
moved in. To date, staff has not heard from the American Cancer Society on
whether they are still interested in leasing a space.
F. Palm Desert Golf Course Facilities Corporation Financial Information for
February 2002
Mr. Young said that the February numbers were down compared to the prior
year end budget. They were doing well until the 11`" of the month when they
had three days of rain. On those days they had 300 plus golfers booked every
day and they ended up with only 60-90 golfers each day. At the end of the
month they also experienced heavy rain which caused them a loss of $20,000
for a total revenue loss of $60,000.
Net income was $21,000 below budget, however, it was slightly ahead of last
year even though revenues were down by $37,000. To date, they are at 103%
of budget. Merchandise numbers continue to turn downward with the total
revenue numbers continue to go up. Their cost to goods are near 55%. This
cost will go up in April and drop off in the summer time.
Both courses are in excellent condition. The greens have had a lot of
compaction. Earlier this year, to improve the conditions by May or June, they
did pencil-type application holes to relieve the compaction.
Mr. Gibson said that they attempted to obtain a non-profit status for Desert
Willow to deal with the liquor license. Unfortunately, the IRS did not agree to
provide the City with a non-profit status because it would mean that all
contributions given to the golf course would be considered non-taxable
charitable contributions.
4
32603.wPd
INVESTMENT & FINANCE�MITTEE •
MINUTES March 26,2003
G. Discuss State Legislature Affecting Investments (AB 849 and SB 787)
Mr. Jeffrey said that SB 787, which the City of Palm Desert is sponsoring, will
be heard before the first committee on May 7. Senate Bill 787 would
authorize asset backed commercial paper as a legal investment for California
local agencies. The State Treasurer has already obtained such permission for
LAIF. Currently, the City of Los Angeles, the California Association of County
Treasurers and Tax Collectors ("CACTTC"), and the Sacramento Municipal
Utility District are sending support letters in favor of the bill.
Assembly Bill 849 would extend state control, for the first time, over the City's
selection of broker-dealers. If a broker-dealer, or a parent company, did not
have a positive rating under the Federal Community Reinvestment Act, then
the City could not do business with that broker. If this bill enacted as currently
drafted, then the City would probably lose its best broker, Wells Fargo Bank.
Mr. Gibson said that the Legislative Committee requested that staff bring AB
849 before the Investment and Finance Committee in order to obtain the
Committee's opinion on whether the City should oppose the bill and, if so, how
this opposition should occur.
Motion was made by Mr. Ortega and seconded by Mr. Campbell to
recommend that `local agencies"be deleted from Assembly Bill 849.
Motion carried.
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 handed out the numbers in relation to the bond that they closed
today. Normally, when they issue bonds, they are issued discounted to yield a
certain price. They issued their bonds at 4.6 which was a good rate. The
coupon protection is what most of the institutional buyers are looking for when
they buy these type of bonds. The investment concern is: Do you buy
something now and lock it in, or do you look to get performance, or do you
hold your money and buy later when the rates are going up. The compromise
for the institutional investors is that the Redevelopment Agency (RDA) gives
5
32603.w d
INVESTMENT & FINANCE QhQMITTEE
MINUTES v March 26, 2003
them the coupon they want, and the institutional investors pay a premium for
the coupon.
RDA has issued $16,745,000 in bonds but the net premiums that they gained
were another $186,000 in proceeds. When all is said and done, they
deposited $15.3 million. Mr. Coleman reported to the committee before that
they were going to do a $12 million to $13 million bond issue because they
were going to be conservative. However, RDA's financial advisor found a way
to leverage more money. The financial advisor instructed RDA to obtain as
much money as possible with the debt service available without impacting the
agency too much. They did a $15 million bond issue. They have $15.3
million for projects. They immediately used part of the money to repay the
note to ART. They are also reimbursing themselves $3 million for monies they
advanced to pay for the note. Mr. Ortega said that the note is for the land
RDA bought. RDA found land at a good price. They purchased the land and
issued a note.
Mr. Coleman pointed out that the net interest cost was 4.895% with a true
interest cost of 4.81%. The all inclusive interest cost was 5.087% for 30 years.
This was the second best bond issue they have done. The housing bond that
was done in September was a little better because they took advantage of
maturities to keep their debt service level. This allows them the ability to issue
more maximum bonds. The copy that he handed out showed how the bond
was structured. They issued their 30 year bond with a coupon of 5%. The
payment was 102.309% to give them a 4.7 yield.
Mr. Ortega asked how long the call protection was on the bond. Mr. Coleman
said that the call protection is for 10 years at 2% and can be down to 0% at the
tenth year. Mr. Ortega said that this is important because in the future if there
is excess money, RDA can call the bond and won't have to pay 5%. Mr.
Coleman said that there was a structure that yielded lower than this bond,
however, was not callable.
Mr. Veazie said that the RDA is selling the bond at a period and time of record
low interest rates. He believes that the call feature provides much more
security and control for the issuer if rates are sufficient to want to call.
However, if RDA has lots of money in 10 years and the interest rates on this
type of bond have gone up to 8 or 9%, the City would not call a 5% with the
money RDA has at a 102, RDA would invest the money available to obtain the
higher interest rates available at that time. Mr. Ortega said that generally this
is the procedure, however, the reason RDA can collect money is that they
have debt. They really could not just collect money and invest the money.
There may be a time when RDA does not have a choice with what to do with
the money except to call debt. Every year RDA has to file a debt statement
with the County. It is only because of this debt statement that RDA can call a
bond.
6
32603 wpd
INVESTMENT & FINANCE a MITTEE
MINUTES March 26, 2003
Mr. Coleman said that they have started the process for a bond issue for
Project Area No. 1. They plan to do a conservative bond issue in Project
Areas 1 and 3 and once completed, they can go back to check their ability to
bond. They are looking at the end of June.
Mr. Wood said that he was hoping that members of the council would be
present to hear his comment. He said that the City's audit report was
fantastic. In reviewing the report and realizing the number of people and
everything that is being accomplished, he thinks that the City's management
team has done a great job. Mr. Ortega thanked Mr. Wood for his comment
and said that he has a great bunch of employees. He takes pride in knowing
that the work is done with fewer people compared to cities of similar size.
X. NEXT MEETING - Wednesday, March 26, 2003 at 2:00 p.m.
XI. ADJOURNMENT
There being no further business, the meeting was adjourned by Mr. Gibson at 2:50 p.m.
Respectfully submitted,
i ing Secretary e
7
32603."d
INVESTMENT &,ANCE WMITTEE
MINUTES • • February 26, 2003
X. NEXT MEETING - Wednesday, March 26, 2003 at 2:00 p.m.
XI. ADJOURNMENT
There being no further business, the meeting was adjourned by Mr. Gibson at 3:05 p.m.
Respecttu submitted,
Di na Leal, Re r ing Secretary
9
22603.wpd
1` Mnanee Department
MEMORANDUM
To: Gloria Martinez, Records Technician
From: Diana Leal, Administrative Secretary i
Subject: Investment and Finance Committee
Date: April 14, 2003
Attached, for your records, is a copy of the 44 26, 2003 Investment and Finance Committee
meeting attendance register.
Thank you for your assistance.
Attachments (1)
GArinanceMiana LeaMpdocsUnve tl t Committee\2002 Memos\Ciry C1erk\2-26-03.wpd
�
\
& /
e 2 ) \ \
k ) \ \ k } \
Q > m o 3a «
ƒ ay
¥ _ @
$ s \
\� .. .
�b ® � •
, ,
T
- �
v,�
�,.
CITY OF PALM DESERT
�•�
INVESTMENT & FINANCE COMMITTEE
AGENDA
March 26, 2003, 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 February 26,
2003, as submitted.
Action:
1
32603.wpd
INVESTMENT & FINANCAMMITTEE
AGENDA March 26, 2003
VI. CONSENT ITEMS HELD OVER
None.
VII. NEW BUSINESS
A. City and Redevelopment Agency Investment Schedules and
Summary of Cash Reports for February 2003
Rec: Review and submit for the next City Council agenda.
Review the presentation on the investment graphs. Review
the investment activity for February 2003.
Action:
B. State of California Local Agency Investment Fund Balance for the
month of February 2003
Rec: Informational item for the Committee to review. No action
required
C. California Asset Management Program (CAMP) February 2003
Statement
Rec: Informational item for the Committee to review. No action
required
D. City and Redevelopment Agency Monthly Financial Reports for City
Council for February 2003
Rec: Report and submit to City Council
Action:
E. Parkview Professional Office Buildings - Financial Report for
February 2003
Rec: Review and file report
Action:
2
32601. d
INVESTMENT & FINANCEOMMITTEE •
AGENDA March 26, 2003
F. Palm Desert Golf Course Facilities Corporation Financial
Information for January 2003
Rec: Review and file report
Action:
G. Discuss State Legislature Affecting Investments (AB 849
and SB 787)
Rec: Report and submit to City Council
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 - Wednesday, April 23, 2003 at 2:00 p.m.
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 WlIetin board not less than 72
hours prior to the meeting. Dated this 19` day o 15 h, 2003.
D'a eal, R r ing ecretary
3
32603.-Pd
Q •
0
U
G
N
� 3
C T �
o � C
R 5 a n
w
U LLA m a
�+I
LU {ULU
o a O
h m O•. Vl b O N S1. 'R vl d' oo O 7 O -- �° �
d ® q oobhb oM +° q °. ovrnh .-. N o, v
^ Ot ^ 7 V' W l� 7 N O M O N M O -. .� •�
a+ ai A
® Z_ IpL�
LL CI
U
7 0 p
M ..•• � O V h 0� 00 °i � G1 N 00 00 7 7 h O Y
�G r1 O O •-. O vi � vi �p �n .-. V O 7 .-. v
N �
A
'� ooboallo-oob a oobobc� rn o N
O Y M 0 7 v1 -- vt b h N •� O N O M O �n M O y
Y
Y
C N �D h M U1 00 h M C
U @ ..O � � r b N vt •- M M �
0
. >. ° O 6U Ln N U N
i o 6a.J ro >tws
Y m W W d o O E- W C b
� 1 L i• Y lC �. {.,� P L C^
• Y
N rz {nE- .� ars. � vaQC W w° c� wa � � O w ^
This report will be distributed at the meeting.
• CITY OF PALM ART
INVESTMENT & FINANCE COMMITTEE
Minutes
February 26, 2003, 2:00 p.m.
North Wing Conference Room
I. CALL TO ORDER
A regular meeting was called to order by Chairman Gibson on Wednesday, February
26, 2003 at 2:00 p.m.
II. ROLL CALL
Present: Absent:
Paul Gibson, Director of Finance Everett Wood
Jean Benson, Mayor
Bob Spiegel, Mayor Pro-Temp
Thomas Jeffrey, Deputy City Treasurer
David Erwin, City Attorney
Carlos Ortega, City Manager
Jose Luis Espinoza, Finance Operations Manager
Bill Veazie
Murray Magloff
Russ Campbell
Also Present:
Justin McCarthy, ACM Redevelopment
Rodney Young, Desert Willow General Manager
Diana Leal, Recording Secretary
Guests:
None
III. ORAL COMMUNICATIONS
None.
IV. COMMITTEE MEMBER REPORTS
None.
1
22603.wpd
INVESTMENT & FINANCE am
•
MINUTES February 26, 2003
V. CONSENT CALENDAR
A. Approval of Minutes
Motion was made by Mr. Campbell and seconded by Mr. Veazie to approve
the Minutes of the January 22, 2003 meeting as submitted.
VI. CONSENT ITEMS HELD OVER
None.
VII. NEW BUSINESS
A. City and Redevelopment Agency Investment Schedules and Summary of
Cash Reports for January 2003
Mr Jeffrey reported that, for the month ended January 31, 2003, the book
value of the City Portfolio was approximately $174.2 million. The City earned
approximately $212,000 in interest. Portfolio yield-to-maturity was
approximately 1.63%.
For the month ended January 31, 2003, the book value of the RDA Portfolio
was approximately $105 million. The RDA earned approximately $152,000 in
interest. Portfolio yield-to-maturity was approximately 1.76%.
B. State of California Local Agency Investment Fund Balance for the Month of
January 2003
Mr. Gibson stated that the City's and the Redevelopment Agency's LAIF
accounts are maxed out at $40 million each.
C. California Asset Management Program (CAMP) January 2003
Mr. Gibson said that the City is getting close to the maximum amount they can
have in the account. The City is allowed to have 20% in the City and 20% in
the Redevelopment Agency for a total of 40% combined.
Mr. Campbell asked if the amount was going to be increased. Mr. Jeffrey said
that last year before interest rates began to fall, the City didn't think that they
would be doing any local agency polls. The City tried to shorting the City's $20
million policy, they removed it.
Mr. Campbell asked what happens when CAMP gets maxed out. Mr. Gibson
said that at that point the City will have to consider short term investments as
long term investments would be foolish at this point. The economist said that
2
22603.wpd
INVESTMENT & FINANCE 0MITTEE •
MINUTES February 26, 2003
once the economy starts picking up he expects the federal government to
raise the rates by 100 basis points within a matter of one month. It is not worth
the risk if market values drop.
D. City and Redevelopment Agency Monthly Financial Reports for City Council
for December 2002
Mr. Gibson said that sales tax is based on a quarterly basis. They typically
give the City advances on a monthly basis. The City is still ahead on the
transient occupancy tax (TOT) with the exclusion of collecting monies from
Vacation Inn. The City requested that the auditor visit (8) agencies to conduct
TOT audits. The Marriott and Embassy Suites will be included. Vacation Inn
will be audited due to the bankruptcy. Mr. Spiegel asked if the Vacation Inn's
new owners were paying the past due TOT. Mr. Gibson said that they paid
December and said that they would pay January.
Mr. Gibson said that through the State budget process, the governor has not
reimbursed the City for the mandated costs. The City is submitting a request
for reimbursement just in case they decide to pay it in future years. If you
don't, within a year's time, the City forfeits their chance of ever getting
reimbursed.
Mr. Ortega said with the exception of the subventions, in all cases, when one
looks at last year versus this year, the City is ahead. Mr. Gibson said that the
only exception was the interest income received as it is lower due to the rates
being lower.
E. Parkview Professional Office Buildings - Financial Report for January 2003
Mr. Gibson said that the roof repairs will begin next week. Repairs were
placed on hold due to rain. The carpeting was placed at the Water Resources
facilities. Most of the tenant improvements have been completed. Ms.
Benson asked if there were any bad leaks which required repairing. Mr.
Gibson said that the State Rehabilitation (SR) has an office that has a steady
leak and until the tar paper is torn off and the roof is redone completely, they
will continue to have leaks. Ms. Benson asked if there was interior damage.
Mr. Gibson said that there is interior damage, however, he has informed SR
that the necessary work cannot be completed until the roof is done. The lab is
experiencing a similar problem. This is due to the fact that they are using
strong chemicals in the lab. The chemicals are carried through the vent and
onto the roof. The chemicals are causing the deterioration of the roof.
Something of substance will be placed on the roof so that it can prevent the
chemicals are traveling onto the roof and causing its erosion.
3
22603 wPd
INVESTMENT & FINANCE�MITTEE
MINUTES February 26, 2003
Mr. McCarthy asked if the City was indemnified for the damages on the
building. Mr. Gibson said that the City was not indemnified as this was a gross
lease and the City has to pay for carpet changes, etc.
F. Palm Desert Golf Course Facilities Corporation Financial Information for
December 2002
Mr. Young said that Food and Beverage did well. The banquet business
continues to grow. He credits the department heads, managers and staff who
are doing a great job. Golf continues to struggle a bit. Group rounds are down,
and they are getting the larger groups in. They lost approximately $70,000 for
the four days when it rained. Expenses and payroll are in line. Net income is
ahead of budget for year to date.
Mr. Spiegel asked if Mr. Young had looked into extending the hours of
operation to include dinner. Mr. Young said that dinner is a tough market to
enter into as there is a great deal of competition. The staff, plates, and the
food is very well planned and there is very little waste. In the beginning, there
would be a lot of waste if there are not enough guests. He thinks that it would
be wise to wait to offer dinner when a hotel comes onsite.
Further, they are doing very well with the banquets. They have Saturday
nights booked through 2003. They need to focus on booking large groups. It
is difficult to keep the necessary margins with the smaller groups. They are not
booking too far in advance just in case they need to book a special event.
They plan to have a theme night once a month/week. Mr. Spiegel asked what
the maximum amount of people Desert Willow could hold. Mr. Young said that
it can hold 240 people without a dance floor and 210 people with a dance floor.
Mr. Veazie said that he was impressed with the number of people that Desert
Willow accommodates.
Ms. Benson said that she met with someone from a local group yesterday who
was not aware that Desert Willow could be used as a banquet facility as they
did not see any advertisements. Mr. Young said that they advertise through
local wedding planners, florists, etc. They could include a flyer with the bill that
is given to the lunch customers. Mr. Gibson suggested that an ad be included
in the City's newsletter. Ms. Benson said that there is no restaurant in Palm
Desert that is big enough to accommodate a large number of people. Mr.
Spiegel said that Kristy Kneiding, the City's marketing manager, could develop
a one page ad that can be added to the bill. Mr. Young said that there is
space to grow. He will take a look at it.
Mr. Young said that golf shop revenue is down for the year. The income is
only down $1,000 and revenues are down $54,000. He thinks that next year
they can maintain costs at 56%.
4
22603.wpd
INVESTMENT & FINANCE IVMITTEE •
MINUTES February 26, 2003
Mr. Spiegel said that the City has anew golf course. The Coachella Valley
Recreation and Park District (CVRPD) owns the executive golf course,
however, the City provides them with a minimum stipend to get the course in
shape, and the City will give them $30,000 annually to maintain the course.
Mr. Young said that he has it on his list to contact them to coordinate golf
programs. Mr. Spiegel said that Mr. Don Martin is the person he should
contact.
Ms. Benson said that she was approached by senior residents who inquired
about having a "senior day" or something special for seniors at Desert Willow
when member play is down. Mr. Young said that resident dollars are up
because higher paying rounds are down. The course is sold out until 2:00
p.m. everyday. He would have to displace a higher paying play for a discount.
He does not need the rounds. He would like to help them out if he could find a
slot to do it. It is difficult to make the revenues they need.
Mr. Ortega suggested a 9-hole senior day after everyone else has played at
about 2:00 p.m. or 3:00 p.m. Mr. Young said that he will take a look at the
possibility. At this time the greens are getting beat up badly. They are looking
at their rate schedule and with evening events they are looking to offer to
businesses. After 3:00 p.m. on Tuesdays, Wednesdays and Thursdays local
businesses they can play at Desert Willow for $25. Mr. Spiegel said that the
new CVRPD golf course will hold a senior day once a week for $14 -$16. Ms.
Benson said that this would be a good alternative for those people who do not
want to play an 18-hole course. Mr. Ortega said that Desert Willow is not a golf
course that is easy to play, some people might prefer a smaller course.
G. Informational
1. Wall Street Journal Article Review & Outlook: Cronyism at Calpers
2. Markets Article Calpers Cools Down
Mr. Veazie said that the State went into long term care. One of the provisions
is tied to the premiums that they have assumed that there will be a certain
number of people that will drop out of the plan, will die or will draw benefits.
The industry feels that the numbers they used are incorrect. There will be
more people staying on the plan. Generally the people that stay on the plan
are the unhealthy people. If people drop out, then the rates will be raised.
They have a right to go into their pension plan to supplement the premiums
and pay benefits. Not many people are aware of this. He had a client who
came across this fact. Mr. Veazie challenged the State and he received a
definitive answer. The State said that they can go into the pension plan.
5
22603.wpd
INVESTMENT & FINANCE MITTEE .
MINUTES February 26, 2003
Mr. Gibson said that at the Finance Officers' Conference they discussed the
rates for next year and the years to follow. They indicated that the safety
members, i.e. police officers, firefighters will be 47% of salary will be the rate
that they will be charging PERS members.
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 he has attended previous board and council meetings
where he spoke about the bond issue for Project Area No. 3. He said that they
did not analyze how much money they could issue for bonds in Project Area
No. 2. They are at a capacity to issue $35 million.
As the State budget started unraveling, the Governor unveiled what he wanted
to do in terms of the State budget. One item he wanted to look at in particular
was redevelopment. The Governor wanted to take the permanent $250 million
from Redevelopment Agencies via ERAF and give the money to schools and
lower the school bills via general fund commitment to the schools. They also
wanted to raise it until they permanently gave 100% of the schools' share of
pass throughs to them. In addition, the Governor had mid year cuts within the
budget to take a half billion dollars in Redevelopment housing funds and
transferring the money to the general fund. The good news is that no such
action was taken. None of the parties, legislature, assembly or the senate,
wanted to have the money transferred to the general fund. The senate local
government committee and the housing and community development
committee both were supportive of redevelopment.
The City, the Redevelopment Agency and some of the local redevelopment
agencies said that they do not want to give anything. The best staff was
looking at was a one-time hit to the redevelopment agencies collectively of
$200 - $500 million. A $500 million hit, based upon the ERAF formula that is
in place at this time, the Palm Desert Redevelopment Agency would be hit by
close to $4 million.
6
22603.wpd
INVESTMENT & FINANCE Y&MITTEE
MINUTES 0 February 26, 2003
The Redevelopment Agency has some things that they feel they need to
accomplish in Project Area No. 2. For instance, the 171 acres from ART. The
Agency put some money down and took a note on the property. They
approached the bond insurer and offered an issue of$13-$14 million in bonds
instead of the $35 million. This left the Agency with enough money on the
table to continue paying interest, obligations and administration.
Mr. Coleman said that he is happy to report that they have bond insurance for
the Project Area No. 2 bond. Staff received a commitment from MBIA to issue
up to $20 million, and they received an insurance policy for 80 basis points,
which is very reasonable. They also obtained a surety substitution for reserve
funds.
The Agency's strategy is to take whatever money they can bond and request
more money after the State budget is resolved. At this point, it is difficult to
guess when the state budget will be resolved. The good news is that there are
a group of moderates, twelve (seven democrats and five republicans), who
have been meeting to get some sort of dialogue because there is such an
impasse.
Staff is looking to issue a bond with debt service that will be $2 million plus.
They will continue to pay the City loans and other obligations. Right now, it will
net at least $12 million or more. The bad news, from an investment
standpoint, is that the rates are bad. However, if you seek to borrow money
the rates are very good. They are looking at 30 year serial bonds at about 5 to
5 1/4. They are looking at a borrowing environment whereby they can obtain a
cheaper rate.
The Agency is scheduled to go to the market to price their bonds. This will be
the next big test to see how the market will receive RDA's credit. They are
looking to price the bonds on March 11 and to close on March 26. They have
approached the bond insurers and said that based upon the model they have
came up with, they would like to look at Project Area No. 1. There again is the
philosophy that they want to buy what they feel they really want to have within
the next few months, and then they will go back later to take the rest.
Mr. Coleman said that they are also looking at a possible bond in Project Area
No. 3 based on that model. They are being prudent not to issue to the
maximum amount especially when the requirements for ERAF state that if the
Redevelopment Agency can not pay, the general fund will pay. The Agency
does not want to put the general fund in harms way.
Mr. Campbell asked if this was due to the concern as to what is or is not
committed as viewed by the State. Mr. Coleman said that in terms of
committed and not committed with respect to the housing funds, the State is
looking at what is obligated in contracts. There would be a liability if the
Agency could not pay their obligations. The State is being cautious.
7
226W.wpE
INVESTMENT & FINANCE YVMITTEE
MINUTES 0 February 26, 2003
Mr. Campbell said that he does not fully understand how the State will look at
what is considered committed or when the money is considered committed.
Mr. Gibson said that there are a lot of questions on that which remain
unanswered. Mr. Ortega said that the historical interpretation is that if an
agency has debt, it is obligated.
Mr. Veazie asked if the City or the Redevelopment Agency has any
outstanding bonds that are not insured. Mr. Coleman said that the Agency
does not have any uninsured bonds, they are all triple A. The Agency has
some assessment districts that are not only not insured, but also nonrated,
however, they are backed by the property. They have been fortunate to obtain
insurance. The only time they got nervous was in November 2001 they did a
bond issue in Project Area No. 4. The first time they said that they were not
going to make a commitment. They paid 150 basis points for that insurance
policy as opposed to 80 basis point for the current one. If they can not get
insurance the other way to go is to go via rating. When an agency goes via
rating, the Agency helps to shape the way the deal is made in terms of the
coverage. The bond must be fully funded and there must be a reserve fund.
The way they are doing it with the bond insurance is by buying a surety policy.
They can do less debt for the reserve purposes, however, they have an
insurance policy there in case they can not make payments. They have two
policies: 1) a policy that insures the bond, 2) an insurance policy that sits into
the reserve fund which allows the Agency to use more of the balance they
leverage for projects.
Mr. Veazie asked if Mr. Coleman foresees a wave of rating reduction on bonds
as the State of California recently had one. He would like to know as it relates
to cities, counties and redevelopment agencies throughout California. Mr.
Coleman said that some municipals can have them. It depends on the
outstanding debt they have and their capacity to pay. He said that he is not
sure that redevelopment agencies would be involved as much. He thought
that it would be interesting to find out how the school districts will be hit as they
do general obligation bonds. He thinks that Los Angeles Unified School District
(LAUSD) took a slight hit on some of the ratings. They just issued a $2 billion
bond. The only good thing at this time is that there are lower interest rates on
the general obligation bonds. They are looking at an interest rate of 5.30, 5.29
for their 30 year debt.
Mr. Gibson said that there will be another bond issue for the assessment
district for the undergrounding. Mr. Coleman said that it is dependent upon the
approval of the assessment district.
8
22603.wp0
INVESTMENT & FINANCE GMUMITTEE
MINUTES • February 26, 2003
X. NEXT MEETING - Wednesday, March 26, 2003 at 2:00 p.m.
XI. ADJOURNMENT
There being no further business, the meeting was adjourned by Mr. Gibson at 3:05 p.m.
Respectfully submitted,
Diana Leal, Recording Secretary
9
22603.wp0
STATE OF CALIFORNIA ®, PHILIP ANGELIDES, Treasurer
OFFICE OF THE TREASURER 'Wer
SACRAMENTO
Local Agency Investment Fund
PO Box 942809
Sacramento, CA 94209-0001
(916) 653-3001
February, 2003 Statement
CITY OF PALM DESERT Account Number : 98-33-621
Attu: CITY TREASURER
735I0 FRED WARING DRIVE
PALM DESERT CA 92260
Account Summary
Total Deposit : 0.00 Beginning Balance : 40,000,000.00
Total Withdrawal : 0.00 Ending Balance : 40,000,000.00
Page : 1 of 1
STATE OF CALIFORNIA ® A91k PHILIP ANGELIDES. Treasurer
OFFICE OF THE TREASURER
SACRAMENTO
Local Agency Investment Fund
PO Box 942809
Sacramento, CA 94209-0001
(916) 653-3001
February,2003 Statement
PALM DESERT REDEVELGPMENT AGENCY Account Number : 65-33-015
Attn: TREASURER
73-510 FRED WARING DRIVE
PALM DESERT CA 92260
Account SumrnaT}'
Total Deposit : 0.00 Beginning Balance : 40,000,000.00
Total Withdrawal : 0.00 Ending Balance : 40,0009000.00
Page : 1 of 1
C A I, r t7 o R N I A A S SET STATEMENT
MANAGEMENT PROGRANL
JOINT POWERS A1t'1-H0It1"rY ._
.50 CA FORMA SrRFF_T 23RD rT-Q0R
SAN1la.WC1S"C0 CAI-IFORNIA94111 - FOR ACCOUNT
INFORMATION: 800-729-7665
STATEMENT DATE: 2/28/2003
CITY OF PALM DESERT ACCOUNT NUMBER: 553-00
OPERATING:FUND
73-510 FRED WARING DRIVE FUND NAME: Cash Reserve Portfolio
PALM DESERT, CA 92260
Page 1 of 1
AccountaSummary�as�of�2l28�20$3'
Statement Income Dividends Capital Gains Total Shares Account
Date Paid This Year Paid This Year Owned Value
2/28/2003 $85,826.21 $0.00 59,391,728.850 -' $59,391,728.85
Trar�sactlo 'Summaryzfor 2/11200$„�2/28/2003�n � "
Beginning Balance Purchases Reinvestments Redemptions Ending Balance
$54,336,542.30 $6,000,000.00 $55,186.55 $1,000,000.00 $59,391,728,85
...,.-.�-m,.�.. .. _ ._.... u._.
Tfi DE OS NG o- OL"' AMOU li]ARE SHARES THIS 70TAL
D T Dq T ANSACTI'y 0 R .SACTION pRICI? TRANSA-,Cl'ION SH ES OWNED
02/01/03 Beginning Balance 54,336,542.300
02/10/03 2/10/2003 Purchase-Wire Pur. $2,300,000.00 $1.00 2,300,000.000 56,636,542.300
02/11/03 2/11/2003 Purchase-Wire Pur. $1,000,000.00 $1.00 1,000,000.000 57,636,542.300
02/21/03 2/21/2003 Purchase-Wire Pur. $2,700,000.00 $1.00 2,700,000.000 60,336,542.300
02/27/03 2/27/2003 Redemption-Wire Red. $1,000,000.00- $1.00 1,000,000.000- 59,336,542.300
02/28/03 3/1/2003 Accrual Income Div Reinvestment-DIV $55,186.55 $1.00 55,186.550 59,391,728.850
Message Line: THE DIVIDEND YIELD FOR THE MONTH IS 1.26%.
THE ANNUALIZED YIELD IS 1.27%.
• City of Palm Desert
• Parkview Office Complex •
Financial Statement
for Fiscal Year 2002.2003
February-03 February-03 # % YTD YTD #
Budget Actual Variance Variance Budget Actual Variance Variance
Revenues
Rental $ 68,500 $ 68,260 $ (240) 99.65% $ 548,000 $ 564,142 $ 16,142 102.95%
Dividends/Interest $ 4,375 $ 421 $ (3,954) 9.62% $ 35,000 $ 6,906 $ (28,094) 19.73%
Total Revenues $ 72,875 $ 68,681 $ (4,194) 94.24%_ '',',;......�' $ 583,000 $ 571,048 $ (11,952) 97.95%
.m
n
Expenses
Professional-Accounting&Auditing $ 7,000 $ 7,000 $ - 100.00% „ $ 56,000 $ 56,000 $ - 100.00%
Professional-Consultants $ 6,000 $ 5,555 $ 445 92.58% $ 48,000 $ 45,680 $ 2,320 95.17%
Tenant Improvements $ 2,500 $ 3,077 $ (577) 123.09% ..=_ c. $ 20,000 $ 30,947 $ (10,947) 154.73%
Repairs&Maintenance Building $ 8,000 $ 13,809 $ (5,809) 172,61% $ 64,000 $ 63,363 $ 637 99.00%
Repairs&Maintenance-Landscaping $ 2,300 $ - $ Z300 0.00% M tfP $ 18,400 $ - $ 18,400 0.00%
Utilities-Water $ 250 $ 109 $ 141 43.78% '8 $ 2,000 $ 753 $ 1,247 37.64%
Utilities-Gas/Electric $ 5,000 $ 4,540 $ 460 90.80% $ 61,000 $ 55,938 $ 5,062 91.70%
Utilities-Trash $ 700 $ 1,052 $ (352) 150.28%• ,;; $ 5,600 $ 3,682 $ 1,918 65.75%
Telephone $ 150 $ 317 $ (167) 211.01% ? .' $ 11200 $ 1,257 $ (57) 104.73%
Insurance $ 521 $ - $ 521 0.00% $ 4,166 $ - $ 4,166 0,00%
Total Expenses $ 32,421 $ 35,459 $ (3,038) 109.37% $ 280,366 $ 257,619 $ 22,747 91.89%
t
Ope'rr+tingLec nle!e. ,.$•�; :,, ; .... , .,.1; 222 ^ S'';(7,233). `"8,2:12P/o °) .:$ 302;6345� 3 429 :$3' 10,795... 103.57°..a
Equipment Replacement Reserve $ 13,000 $ 13,000 $ - 100.00% $ 104,000 $ 104,000 $ - 100.00%
IN
et Incince ,�,i�,u` ;} s ` +tanj�4'= .t. ,` >2: ;. A�;2s.,5 (rt233}�r .... �66°!8 TF ` 98;b34 'y$4.,209,429 $ 5. :: .705.43°:a
2003 Investment Reportlnv Report 2003
City of Palm Desert
• Parkview Office Complex •
Vacancy Rate Schedule by Suite
February 2003
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 Assembly Rules Committee 785
(Assemblyman Benoit's lease begins March 1,2003)
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 Mountain Conservancy 480
205 Vacant 700
208 Alzheimer's Association 960
2003 Investment ReportVacancy Report
d City of Palm Desert
Parkview Office Complex
t Vacancy Rate Schedule by Suite
February 2003
210 Wilson,Pesota&Pichardo 3,040
211 State of California Department of Food& Agriculture 937
217 Joe B. McMillan,. Esq. 775
220 Vacant 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-3,388/31,562= 10.73%
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--3,388/51,191 6.620/6
Occupancy Rate-47,803151,191 93.38'%6
2003 Investment ReportVacancy Report
PalmDlSert Recreation Facilities Corporation
Income Statement
Jan-03 Jan-03 k %
Budget Actual Variance Variance
Food & Beverage Revenues $125,810 $165,109 $39,299 131.24%
Total Revenues $125,810 $165,109 $39,299 131.24%
Salaries $63,094 $71,631 ($8,537) 113.53%
Cost of Goods Sold-F&B $39,401 $49,519 ($10,118) 125.68%
Food & Beverage Expense $14,632 $16,931 ($2,299) 115.71%
Total Expenses $117,127 $138,081 ($20,954) 117.89%
Net Income (Loss) $8,683 $27,028 $18,345 311.27%
Note: The above revenues and expenditures are also included in the Desert Willow analysis.
Dw2003;PDRFC Budget Page 1
City of Palm Desert
Desert Willow
Budget Vs Actual
For the month of
January 2003
Budgeted Actual Budgeted Actual
January January $ Percentage Year to Year to S Percentage
Revenue 2003 2003 Variance Variance Date Date Variance Variance
Course&Ground $ 543,335 $ 501,919 $ (41,416) 92.38% 5 1,968,726 $ 1,869,023 S (99,703) 94.94%
Carts S 44,062 S 37,925 5 (6,137) 86.07% $ 191,504 S 161,715 5 (29,789) 84.44%
Golf Shop $ 85,788 $ 92,052 $ 6,264 107.30% S 371,043 S 366,710 $ (4,333) 98.83%
Range S 5,500 S 6,960 $ 1,460 126.55% S 19,850 $ 21,021 S 1.171 105.90%
Food&Beverage $ 125,910 5 165,109 S 39,299 13124% S 684,841 S 741.398 $ 56.557 108.26%
Interest Income 5 400 S 101 S (299) 25.25% $ 4,250 5 1,552 $ (2,698) 36.52%
Total evenues 804895 S 804066 R29 99.90°° S 3240214 S 3161419 78795 9757°
Payroll
Proshop $ 6,634 $ 7,167 $ (533) 108.03% $ 27,253 S 25,211 $ 2,042 92.51%
Can $ 29,459 $ 27,119 S 1,340 95.29% $ 147,427 S 139,595 S 8,832 94.01°/
Course&Ground S 125,306 $ 129,192 S (2,886) 102.30% $ 896,127 $ 893,236 S 12,891 98.56%
Golf Operations $ 32,212 $ 23,446 $ 8,766 72.79% $ 187,503 $ 171,004 $ 16,499 91.20%
General&Administration S 41,590 $ 39.997 $ 1,593 96.17% $ 286,149 $ 250,920 $ 35,228 87.69%
Food&Beverage $ 63,094 $ 71,631 $ (8,537) 113.53% $ 365.689 5 413,850 S (48,161) 113.17%
Tot 1 Pa roil 1 297,295 22ZA552 257 100.09% 1 910 147 S 1.882.816 27.331 98.57%
Other Expenditures
Perimeter Landscaping $ - S - $ - 0,00% $ - $ - S - 0.00%
Proshop $ 11,755 $ 13,392 S (1,637) 113.93% S 25,840 $ 29,501 5 (3,661) 114.17%
Proshop-COGS $ 45,593 $ 31,127 S 14,466 68.27% S 201,206 S 148,632 $ 52,574 73.87%
Can $ 13,895 S 13,339 $ 556 96.00% $ 97,815 S 95,382 S 2,433 97,51%
Course&Ground-North Course $ 53,587 S 41,654 $ 11,933 77.73% $ 479,714 S 428,212 $ 51,502 89.26%
Course&Ground-South Course $ 40,160 $ 42,171 S (2,011) 105.01% S 445,296 $ 419,823 S 25,473 94.28%
Course&Ground-Desert Pallet-N S 970 S (849) S 1,719 -91.59% S Um S 7,719 S 582 9299%
Course&Ground-Desert Pallet-S $ 1,460 S (290) S 1,750 -19.86% $ 9,570 S 5,497 $ 4,073 57.44%
Golf Operations $ 1,200 $ 2,384 $ (1,184) 198.67% $ 10,140 S 9,217 S 923 90.90%
General&Administration $ 73,197 $ 101,078 S (27,881) 138.09% S 475,352 S 530,557 S (55,205) 111.61%
Range S 650 $ 112 $ 538 17.23% $ 11,250 S 7,947 $ 3,303 70,64%
Food&Beverage S 14,632 S 16,931 $ (2,299) 115.71% S %,880 $ 93,503 S 3,377 96.51%
Food&Beverage COGS S 39,401 S 49,519 S (10,118) 125.68% $ 215,632 $ 238,173 $ (22,541) 110.45%
Management Fee $ 25,000 S 25,000 $ - 100.00% S 175,000 S 175,000 $ - 100,00%
Financing/Lease S 3,608 S 5,319 $ (1,711) 147.42% S 9,502 $ 23,548 S (14,046) 247.82%
Total Cher Ex enditures S 325008 3 -0887 15879 104.89°° S 2261497 S 2212710 S 48787 97.84
Desert Willow Golf Academy
Desert Willow Golf Academy S 17,700 $ 19,180 S 1,480 108.36% S 73,750 S 52,372 $ (21,378) 71,01%
COGS-Merchandise S (11,452) S (5,625) $ 5,827 49.12% $ (52,001) S (32,738) S 19,263 62.96%
Other Expenditures $ (2,050) S (7,957) S (5,907) 388.15% $ (15,373) $ (20,998) S (5,625) 136.59%
Learning Center Income(Loss) $ 4,198 $ 5,598 $ 1,400 133.35% S 6,376 S (1,364) S (7,740) -21,39%
Operating Income(Loss) $ 186,790 S 171,225 $ (15,565) 91.67% S (925,054) S (935,471) 5 (10,417) 101.13%
Equipment Reserve Replacement $ 71,955 $ 66,734 ,$ (5,221) 92.74% $ 503,685 $ 467,138 $ (36,547) 92.74%
Net Inc me Loss 114.835 S 1041491 344 90.99° 1 42R 39 $ 1 4U6091 26,130 98.17
Snaps at of Golf Rounds Budgeted ma Actual mo Variance Variance% Budgeted td Actual vtd Variance Variance%
Resident 2,665 2,828 163 106% 8,505 9,214 709 108%
Non Resident 5,334 4,078 (1,256) 76% 23,617 21,203 (2A 14) 90%
Other - - - 0% - 177 177 100%
Com li entar 562 387 175 69% 2377 1986 391 84%
Total 8,561 7,293 (1,268) 85% 34,499 32,580 (1,919) 94%
F.Ider:Desert Willow 20017Dw2003;Firometal Statement Page 1
co CD to N m
} } \ \ /_ � ,
�
ci
\ \ ) /\ \ \ / \ \ ) 00 J
\ £
/ «
{ !_ ]
/� \ � 0 da
/ � 00
■ 7 : 22 0
§ ! 7f E
! k � � ) ±
) ! a G
§ &*
§ ! § `
\ + ( ) a ) k7 ® !
\
/
it
/r;
';�
d
m
m
a
b>
P
az
4 9 _
v [j�+ www--w wwwwww »»www»wwwwww »ww » w a
ta
U
U g0 Q
i> N
wwwwww www»»» www»wwwwwwww ww- w w
a
wwwwww wwwwww »»wwwwww»w»w w w w w
s C
a
wwwwww wwwwww wwwwwwwwwwww www w w
E v o
6 U U lJ K li_ Y V U U U
�
/
§ ;
k �
§
§
\
k 2
j \
e %
3k \
P.
J | ) � 0 � )
666§ § § / }
e « o § §
\ B
R §
§ \
§ §
\ L Ll
7
§
$
) ) } )
#
\
. • � �
�
§ )
K §
13 .
\
\ /
2 } %
f §
_ §
/ k
k k
§
ca
! � ;§ � � \ k
§ a | k }
] ! ! q 12 \ } \
■a §§ w E \ g
; / « % § ) x
§ LU
k
\\ .
1LL
§
) k
� \
\ ( ƒ \
) ] 7 ! ) ] !
� } \
Ajo Beje3 ® 8
� v
m
U n
u 0.
:1
4
x cexceooce
g b y
pJ
IJ9
n o - .
L Q
n o v v d
�A
7
J
a O O v�Q a ry
A C' N rvrvry - �n
' q9 -
�
q U
� V •� `00 nrvocoo6 c F°- o4
° y �. v cexxrxxex a°
E'tia ao
V u �
G � ce ce ce ce ce ce ce 5E mull
° e4 -
U � �
v" �_Gr-ems a Sm'.8Namer r FsP"' -
-
U > c
Z
-
z om Q
a °
z
man
F,rv^g.� ' MISS
¢% c o P m _ - po Rows* s w
-N ry_ N �'
ce ceaexxcece BE
_mam v
00
u _ .- ., rvmn N
5 > tfi j
qq U
a �
A'c e8NIMrn�N�n �F ,-r„ ram e _ G_t
xv
F o n F E o - q a ry e
m _ _
c E E g
v � N E � a E E � q °u G E �
8 �' gvEA ug E ` xiE
s g
o � Uc
B c
3 m
a
a
c
a
0
888 � � ° a 8
v>
b
>
b
�O
Sm=
O
�Q
O
noe no_ �� u 80— 08o e�
o U
ra .e cecece�cecece � -
u ..
C •<qq� pe U
na. 3 O eo ry u ae ee ego ; � � oe
a
PBa L rvrv— a pes Bmr _ _ _
-
u
Z
ce�cecem QQ
z �m
g i
V
n � OY _ _ vn gK rvnmv�mq a ^
g
•+ov a no v moan „ `a E .^.. _ — .- _
»E E E E g`+ E E A » E g E E 'c
1
. • � �
k
\! � a
; n
2 � ;
2
) � }
� $ �2 , ® #
to
� ! {a § cl 7
G ƒ = a
; f
� � ■ � �
� � |
\ ■ � � ■ ka � J a ) /
to
) k ON )
\
& )
\ / }
� )
O Desert Willow
Breakdown of Rounds
per point of sale system
Desert Willow - Combined Analysis- January 2003
Resident -.
$ 126,690 . $ 44.80 38.78%
- ------ - -- - - - ----- ---- ° - -- --
Non-Resident __ �- 4,078 $ 409,46-1 � . $ 100.41 55.92%
Other $ ~I $ - 0.00%
Complimentary 387$ 2,960T1 $ 7.65 5.31%
Desert Willow Totals 7,293 ' 539,111 73.92 100.00%
Dw2003YOS AVG RD Page 9
Desert Willow
Breakdown of Rounds
per point of sale system
FIRECLIFF COURSE- JANUARY 2003
Description No. Of Rve enue Avg. Per Pet to
Rounds P Pre OS j Round Total
Resident Rounds
Resident Fee-Weekday 1,392 $ 62,070 $ 44.59 36.84%
Resident -Twilight 29 $ 1,305 $ 45.00 0.77%
Total Resident 17421 63,375 44.60 37.61%
Non Resident
Posted_Weekday - -- -- 1 361 $ - 60,115 $ 166.52 9.56%
IROC Des. PRTY - Weekday 106 $ 8,745 $ 82.50 2.81%
IROC MBR. (Guest Weekday 56 $ 7,3_92 $ 132.00 1.48%
Wholesale Weekend 16�$ 1,920 ' $ 120.00 0.42%
Wholesale Weekday - 906 j $ _- 73,228 $ 80.83 23.98%
Twilight 319 $ 28,985 $ 90.86 8.44%
outing Weekday 252 $ 31,160 g - y $ 123.65 6.67%
- p -Club-
----_ --- -----
Players_Club- Weekday _ 6 $ 570 j ' $ 95.00 ' 0.16%
Fee S ecial Event Variable 199 $ 166,367 1, $ 82.25 5.27%
I I
Total Non Resident Rounds 2,221 228,482 102.87 58.79%
Other Rounds
Junior Walking $ $ - 0.00%
Total Other - 0.00%
Complimentary -
VIP 31—$--- $ 0.82%
PGA_Member J _41 $ 1,025 $ 25.00 1.09%
PGA Complimentary _ - 39 $ - _ 225 L $ 5.77 1.03%
Employee/ Employee Guest 25 $ — $ 0.66%
Total Complimentary 136 1,250 9.19 3.60%
Total Round (FireCliff( 31778 $ 293,107 $ 77.58 100.00%
Dw2003;POS AVG RD Page 10
4& Desert Willow •
Breakdown of Rounds
per point of sale system
MOUNTAINVIEW COURSE- JANUARY 2003
Description No. Of Revenue . Avg. Per Pct to
- ------------- - - -.
Rounds PerPOS Round Total
Resident Rounds -
Resident Fee-Weekday 1,407 $ 63,315 $ 45.00 40.03%
Total Resident 1,407 63,315 $75.00 40.03%
i
Non Resident
Posted_W_eekday 233 $ 38,925 7 $ 167.06 6.63%
1ROC Des. PRTY- Weekday 209 _$_ 17,243 $ 22.50 5.95%
IROC Mbr./ Guest Weekday 54 $ 7,128 $ 132.00 1.54%
Wholesale Weekend 16 $ 1,280 $ 80.00 0.46%
Wholesale Weekday 585 $ 49,451 $ 84.53 16.64°fo
Twilight 318 $ 28,275 $ 88.92 9.05%
Outing-Weekday 259 $ 23,250 $ 89.77 7.37%
Players Club- Weekday _ 3 , $_ 2.8_5 $ 95.00 0.09%
_. -
Fee S ecial Event Variable 180 p $ 15,142 $ 84.12 5.12%
Total Non Resident Rounds 1,857 180,979 : 97.46 52.83%
Other Rounds
i
Junior Walking --- --- ------- $ - -_ -- -$- 0.00%
Total Other 0.00%
`-
Complimentary �_..- h--------_--- -- -
VIP -- 27 - -- - - $ 0.77%
PGA Member 62 $ 1,550 $ 25.00 1.76%
PGA Complimentary _ 44 $ 160 $ 3.64 1.25%
COMP Champions Club _ 27 $ $ 0.77%
Employee/ Employee Guest 91 . $ $ 2.59%
Total Complimentary 251 1,710 6.81 7.14%
Total Rounds (Mountainview) 3,515 $ 246,004 $ 69.99 100%
Dw2003;POS AVG RD Page 11
® City of Palm Desert •
Desert Willow
Cash Reserve Analysis
for the month of
January 2003
Cash Reserve Analysis One Month
Required Reserve $ 500,000,00
Cash on Hand $ 453,111.66
Variance- Favorable Unfavorable $ 46,888.34)
Please note: As part of the management agreement Kemper Sports Inc. deposited deficient cash balance into the
the Desert Willow bank account.
Page 12
CALIFORNIA LEGISLATURE-2003-04 REGULAR SESSION
ASSEMBLY BILL No. 849
Introduced by Assembly Member Lieber
February 20, 2003
An act relating to public agency investments.
LEGISLATIVE COUNSEL'S DIGEST
AB 849, as introduced, Lieber. Public agency investments.
Existing law generally provides that whenever a state agency is
authorized to invest funds, or to sell or exchange securities, approval of
the Department of Finance is required prior to the investment, sale, or
exchange.
This bill would state the intent of the Legislature to require a state or
local agency that invests public funds and purchases financial
instruments from financial institutions to go through a financial
institution that has positive rating under the federal Community
Reinvestment Act.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
The people of the State of California do enact as follows:
1 SECTION 1. It is the intent of the Legislature to require a state
2 or local agency that invests public funds and purchases financial
3 instruments from financial institutions to go through a financial
4 institution that has positive rating under the federal Community
99
AB 849 — 2 —
1 Reinvestment Act set forth in Chapter 30 of Title 12 of the United
2 States Code.
O
99
SENATE BILL No. 787
Introduced by Senator Battin
February 21, 2003
An act to amend Sections 53601 and 53635 to the Government Code,
relating to local agency investments.
LEGISLATIVE COUNSELS DIGEST
SB 787, as introduced, Battin. Local agency investments.
Existing law authorizes the legislative body of a local agency having
money in a sinking fund of, or surplus money in, its treasury not
required for the immediate needs of the local agency to invest any
portion of the money that it deems wise or expedient in specified
securities and financial instruments. One of the eligible securities is
commercial paper of prime quality of the highest ranking, as provided
by one of 3 named services, issued by a corporation meeting specified
standards.
This bill would provide that the commercial paper of prime quality
be of the highest ranking as provided by a nationally recognized rating
service and that the entity issuing the commercial paper meet either the
existing standards or another set of standards, as specified.
The bill would also make conforming changes.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
The people of the State of California do enact as follows:
I SECTION 1. Section 53601 of the Government Code is
2 amended to read:
3 53601. This section shall apply to a local agency that is a city,
4 a district, or other local agency that does not pool money in
99
SB 787 — 2 —
1 deposits or investments with other local agencies, other than local
2 agencies that have the same governing body. However, Section
3 53635 shall apply to all local agencies that pool money in deposits
4 or investments with other local agencies that have separate
5 governing bodies. The legislative body of a local agency having
6 money in a sinking fund or money in its treasury not required for
7 the immediate needs of the local agency may invest any portion of
8 the money that it deems wise or expedient in those investments set
9 forth below. A local agency purchasing or obtaining any securities
10 prescribed in this section, in a negotiable, bearer, registered, or
11 nonregistered format, shall require delivery of the securities to the
12 local agency, including those purchased for the agency by
13 financial advisers, consultants, or managers using the agency's
14 funds, by book entry, physical delivery, or by third-party custodial
15 agreement. The transfer of securities to the counterparty bank's
16 customer book entry account may be used for book entry delivery.
17 For purposes of this section, "counterparty" means the other
18 party to the transaction. A counterparty bank's trust department or
19 separate safekeeping department may be used for the physical
20 delivery of the security if the security is held in the name of the
21 local agency. Where this section specifies a percentage limitation
22 for a particular category of investment, that percentage is
23 applicable only at the date of purchase. Where this section does not
24 specify a limitation on the term or remaining maturity at the time
25 of the investment, no investment shall be made in any security,
26 other than a security underlying a repurchase or reverse repurchase
27 agreement or securities lending agreement authorized by this
28 section, that at the time of the investment has a term remaining to
29 maturity in excess of five years, unless the legislative body has
30 granted express authority to make that investment either
31 specifically or as a part of an investment program approved by the
32 legislative body no less than three months prior to the investment:
33 (a) Bonds issued by the local agency, including bonds payable
34 solely out of the revenues from a revenue-producing property
35 owned, controlled, or operated by the local agency or by a
36 department, board, agency, or authority of the local agency.
37 (b) United States Treasury notes, bonds, bills, or certificates of
3.8 indebtedness, or those for which the faith and credit of the United
39 States are pledged for the payment of principal and interest.
99
—3 — SB 787
1 (c) Registered state warrants or treasury notes or bonds of this
2 state, including bonds payable solely out of the revenues from a
3 revenue-producing property owned,controlled,or operated by the
4 state or by a department, board, agency, or authority of the state.
5 (d) Bonds, notes, warrants, or other evidences of indebtedness
6 of any local agency within this state, including bonds payable
7 solely out of the revenues from a revenue-producing property
8 owned, controlled, or operated by the local agency, or by a
9 department, board, agency, or authority of the local agency.
10 (e) Federal agency or United States government-sponsored
11 enterprise obligations, participations, or other instruments,
12 including those issued by or fully guaranteed as to principal and
13 interest by federal agencies or United States
14 government-sponsored enterprises.
15 (0 Bankers acceptances otherwise known as bills of exchange
16 or time drafts that are drawn on and accepted by a commercial
17 bank. Purchases of bankers acceptances may not exceed 180 days'
18 maturity or 40 percent of the agency's money that may be invested
19 pursuant to this section. However, no more than 30 percent of the
20 agency's money may be invested in the bankers acceptances of any
21 one commercial bank pursuant to this section.
22 This subdivision does not preclude a municipal utility district
23 from investing any money in its treasury in any manner authorized
24 by the Municipal Utility District Act (Division 6 (commencing
25 with Section 11501) of the Public Utilities Code).
26 (g) Commercial paper of "prime" quality of the highest
27 ranking or of the highest letter and number rating as provided for
28 by
29
30
31 and operating withitt the i4nited States, shall have total ass
32 exeess of five imndfed million dollars and shall
33 issue debt, athef than eat"iftereift! pttpet� if an)- that is rated "A2'
34 a nationally
35 recognized rating service. The entity that issues the commercial
36 paper shall meet all of the following conditions in either
37 paragraph (1) or paragraph (2):
38 (1) The entity meets the following criteria:
39 (A) Is organized and operating in the United States as a general
40 corporation.
99
0
SB 787 —4—
1 (B) Has total assets in excess of five hundred million dollars
2 ($500,000,000).
3 (C) Has debt other than commercial paper, if any, that is rated
4 "A" or higher by a nationally recognized rating service.
5 (2) The entity meets the following criteria:
6 (A) is organized within the United States as a special purpose
7 corporation, trust, or limited liability company.
8 (B) Has programwide credit enhancements including, but not
9 limited to, overcollateralization, letters of credit, or surety bond.
10 (C) Has commercial paper that is rated "A-1 "or higher, or the
I I equivalent, by a nationally recognized rating service.
12 Eligible commercial paper shall have a maximum maturity of
13 270 days or less. Local agencies, other than counties or a city and
14 county, may invest no more than 25 percent of their money in
15 eligible commercial paper. Local agencies, other than counties or
16 a city and county, may purchase no more than 10 percent of the
17 outstanding commercial paper of any single eafporete isstre issuer.
18 Counties or a city and county may invest in commercial paper
19 pursuant to the concentration limits in subdivision (a) of Section
20 53635.
21 (h) Negotiable certificates of deposit issued by a nationally or
22 state-chartered bank, a savings association or a federal association
23 (as defined by Section 5102 of the Financial Code), a state or
24 federal credit union, or by a state-licensed branch of a foreign
25 bank. Purchases of negotiable certificates of deposit may not
26 exceed 30 percent of the agency's money which may be invested
27 pursuant to this section. For purposes of this section, negotiable
28 certificates of deposit do not come within Article 2 (commencing
29 with Section 53630), except that the amount so invested shall be
30 subject to the limitations of Section 53638. The legislative body
31 of a local agency and the treasurer or other official of the local
32 agency having legal custody of the money are prohibited from
33 investing local agency funds, or funds in the custody of the local
34 agency, in negotiable certificates of deposit issued by a state or
35 federal credit union if a member of the legislative body of the local
36 agency, or any person with investment decisionmaking authority
37 in the administrative office manager's office, budget office,
38 auditor-controller's office, or treasurer's office of the local agency
39 also serves on the board of directors, or any committee appointed
40 by the board of directors, or the credit committee or the
99
— 5— SB 787
1 supervisory committee of the state or federal credit union issuing
2 the negotiable certificates of deposit.
3 (i) (1) Investments in repurchase agreements or reverse
4 repurchase agreements or securities lending agreements of any
5 securities authorized by this section, as long as the agreements are
6 subject to this subdivision, including the delivery requirements
7 specified in this section.
8 (2) Investments in repurchase agreements may be made, on any
9 investment authorized in this section, when the term of the
10 agreement does not exceed one year. The market value of
1 I securities that underlay a repurchase agreement shall be valued at
12 102 percent or greater of the funds borrowed against those
13 securities and the value shall be adjusted no less than quarterly.
14 Since the market value of the underlying securities is subject to
15 daily market fluctuations, the investments in repurchase
16 agreements shall be in compliance if the value of the underlying
17 securities is brought back up to 102 percent no later than the next
18 business day.
19 (3) Reverse repurchase agreements or securities lending
20 agreements may be utilized only when all of the following
21 conditions are met:
22 (A) The security to be sold on reverse repurchase agreement or
23 securities lending agreement has been owned and fully paid for by
24 the local agency for a minimum of 30 days prior to sale.
25 (B) The total of all reverse repurchase agreements and
26 securities lending agreements on investments owned by the local
27 agency does not exceed 20 percent of the base value of the
28 portfolio.
29 (C) The agreement does not exceed a term of 92 days, unless
30 the agreement includes a written codicil guaranteeing a minimum
31 earning or spread for the entire period between the sale of a
32 security using a reverse repurchase agreement or securities lending
33 agreement and the final maturity date of the same security.
34 (D) Funds obtained or funds within the pool of an equivalent
35 amount to that obtained from selling a security to a counterparty
36 by way of a reverse repurchase agreement or securities lending
37 agreement shall not be used to purchase another security with a
38 maturity longer than 92 days from the initial settlement date of the
39 reverse repurchase agreement or securities lending agreement,
40 unless the reverse repurchase agreement or securities lending
99
SB 787 —6—
1 agreement includes a written codicil guaranteeing a minimum
2 earning or spread for the entire period between the sale of a
3 security using a reverse repurchase agreement or securities lending
4 agreement and the final maturity date of the same security.
5 (4) (A) Investments in reverse repurchase agreements,
6 securities lending agreements, or similar investments in which the
7 local agency sells securities prior to purchase with a simultaneous
8 agreement to repurchase the security may only be made upon prior
9 approval of the governing body of the local agency and shall only
10 be made with primary dealers of the Federal Reserve Bank of New
1 I York or with a nationally or state-chartered bank that has or has had
12 a significant banking relationship with a local agency.
13 (B) For purposes of this chapter, "significant banking
14 relationship" means any of the following activities of a bank:
15 (i) Involvement in the creation, sale,purchase, or retirement of
16 a local agency's bonds, warrants, notes, or other evidence of
17 indebtedness.
18 (ii) Financing of a local agency's activities.
19 (iii) Acceptance of a local agency's securities or funds as
20 deposits.
21 (5) (A) "Repurchase agreement" means a purchase of
22 securities by the local agency pursuant to an agreement by which
23 the counterparty seller will repurchase the securities on or before
24 a specified date and for a specified amount and the counterparty
25 will deliver the underlying securities to the local agency by book
26 entry, physical delivery, or by third-party custodial agreement.
27 The transfer of underlying securities to the counterparty bank's
28 customer book-entry account may be used for book-entry delivery.
29 (B) "Securities," for purpose of repurchase under this
30 subdivision, means securities of the same issuer, description, issue
31 date, and maturity.
32 (C) "Reverse repurchase agreement" means a sale of securities
33 by the local agency pursuant to an agreement by which the local
34 agency will repurchase the securities on or before a specified date
35 and includes other comparable agreements.
36 (D) "Securities lending agreement" means an agreement
37 under which a local agency agrees to transfer securities to a
38 borrower who, in turn, agrees to provide collateral to the local
39 agency. During the term of the agreement, both the securities and
40 the collateral are held by a third party. At the conclusion of the
99
—7— SB 787
1 agreement, the securities are transferred back to the local agency
2 in return for the collateral.
3 (E) For purposes of this section, the base value of the local
4 agency's pool portfolio shall be that dollar amount obtained by
5 totaling all cash balances placed in the pool by all pool
6 participants, excluding any amounts obtained through selling
7 securities by way of reverse repurchase agreements, securities
8 lending agreements, or other similar borrowing methods.
9 (F) For purposes of this section, the spread is the difference
10 between the cost of funds obtained using the reverse repurchase
11 agreement and the earnings obtained on the reinvestment of the
12 funds.
13 Q) Medium-term notes, defined as all corporate and depository
14 institution debt securities with a maximum remaining maturity of
15 five years or less, issued by corporations organized and operating
16 within the United States or by depository institutions licensed by
17 the United States or any state and operating within the United
18 States. Notes eligible for investment under this subdivision shall
19 be rated "A" or better by a nationally recognized rating service.
20 Purchases of medium-term notes shall not include other
21 instruments authorized by this section and may not exceed 30
22 percent of the agency's money that may be invested pursuant to
23 this section.
24 (k) (1) Shares of beneficial interest issued by diversified
25 management companies that invest in the securities and
26 obligations as authorized by subdivisions (a) to 0), inclusive, or
27 subdivisions (m) or (n) and that comply with the investment
28 restrictions of this article and Article 2 (commencing with Section
29 53630). However, notwithstanding these restrictions, a
30 counterparty to a reverse repurchase agreement or securities
31 lending agreement is not required to be a primary dealer of the
32 Federal Reserve Bank of New York if the company's board of
33 directors finds that the counterparty presents a minimal risk of
34 default, and the value of the securities underlying a repurchase
35 agreement or securities lending agreement may be 100 percent of
36 the sales price if the securities are marked to market daily.
37 (2) Shares of beneficial interest issued by diversified
38 management companies that are money market funds registered
39 with the Securities and Exchange Commission under the
40 Investment Company Act of 1940 (15 U.S.C. Sec. 80a-1 et seq.).
99
0
SB 787 — 8 —
1 (3) If investment is in shares issued pursuant to paragraph (1),
2 the company shall have met either of the following criteria:
3 (A) Attained the highest ranking or the highest letter and
4 numerical rating provided by not less than two nationally
5 recognized statistical rating organizations.
6 (B) Retained an investment adviser registered or exempt from
7 registration with the Securities and Exchange Commission with
8 not less than five years' experience investing in the securities and
9 obligations authorized by subdivisions (a) to 0), inclusive, or
10 subdivisions (m) or (n) and with assets under management in
1 I excess of five hundred million dollars ($500,000,000).
12 (4) If investment is in shares issued pursuant to paragraph (2),
13 the company shall have met either of the following criteria:
14 (A) Attained the highest ranking or the highest letter and
15 numerical rating provided by not less than two nationally
16 recognized statistical rating organizations.
17 (B) Retained an investment adviser registered or exempt from
18 registration with the Securities and Exchange Commission with
19 not less than five years' experience managing money market
20 mutual funds with assets under management in excess of five
21 hundred million dollars ($500,000,000).
22 (5) The purchase price of shares of beneficial interest
23 purchased pursuant to this subdivision shall not include any
24 commission that the companies may charge and shall not exceed
25 20 percent of the agency's money that may be invested pursuant
26 to this section. However, no more than 10 percent of the agency's
27 funds may be invested in shares of beneficial interest of any one
28 mutual fund pursuant to paragraph (1).
29 (1) Moneys held by a trustee or fiscal agent and pledged to the
30 payment or security of bonds or other indebtedness, or obligations
31 under a lease, installment sale, or other agreement of a local
32 agency, or certificates of participation in those bonds,
33 indebtedness, or lease installment sale, or other agreements, may
34 be invested in accordance with the statutory provisions governing
35 the issuance of those bonds, indebtedness, or lease installment
36 sale, or other agreement, or to the extent not inconsistent therewith
37 or if there are no specific statutory provisions, in accordance with
38 the ordinance, resolution, indenture, or agreement of the local
39 agency providing for the issuance.
99
—9— SB 787
1 (m) Notes, bonds, or other obligations that are at all times
2 secured by a valid first priority security interest in securities of the
3 types listed by Section 53651 as eligible securities for the purpose
4 of securing local agency deposits having a market value at least
5 equal to that required by Section 53652 for the purpose of securing
6 local agency deposits. The securities serving as collateral shall be
7 placed by delivery or book entry into the custody of a trust
8 company or the trust department of a bank that is not affiliated with
9 the issuer of the secured obligation, and the security interest shall
10 be perfected in accordance with the requirements of the Uniform
11 Commercial Code or federal regulations applicable to the types of
12 securities in which the security interest is granted.
13 (n) Any mortgage passthrough security, collateralized
14 mortgage obligation, mortgage-backed or other pay-through
15 bond, equipment lease-backed certificate, consumer receivable
16 passthrough certificate, or consumer receivable-backed bond of a
17 maximum of five years' maturity. Securities eligible for
18 investment under this subdivision shall be issued by an issuer
19 having an "A" or higher rating for the issuer's debt as provided by
20 a nationally recognized rating service and rated in a rating category
21 of "AA" or its equivalent or better by a nationally recognized
22 rating service. Purchase of securities authorized by this
23 subdivision may not exceed 20 percent of the agency's surplus
24 money that may be invested pursuant to this section.
25 SEC. 2. Section 53635 of the Government Code is amended
26 to read:
27 53635. (a) This section shall apply to a local agency that is a
28 county, a city and a county, or other local agency that pools money
29 in deposits or investments with other local agencies, including
30 local agencies that have the same governing body. However,
31 Section 53601 shall apply to all local agencies that pool money in
32 deposits or investments exclusively with local agencies that have
33 the same governing body.
34 This section shall be interpreted in a manner that recognizes the
35 distinct characteristics of investment pools and the distinct
36 administrative burdens on managing and investing funds on a
37 pooled basis pursuant to Article 6 (commencing with Section
38 27130) of Chapter 5 of Division 2 of Title 3.
39 A local agency that is a county, a city and county, or other local
40 agency that pools money in deposits or investments with other
99
SB 787 — 10—
1 agencies may invest in commercial paper pursuant to subdivision
2 (g) of Section 53601, except that the local agency shall be subject
3 to the following concentration limits:
4 (1) No more than 40 percent of the local agency's money may
5 be invested in eligible commercial paper.
6 (2) No more than 10 percent of the local agency's money that
7 may be invested pursuant to this section may be invested in the
8 outstanding commercial paper of any single eafpefate issuer.
9 (3) No more than 10 percent of the outstanding commercial
10 paper of any single earperate issuer may be purchased by the local
11 agency.
12 (b) Notwithstanding Section 53601, the City of Los Angeles
13 shall be subject to the concentration limits of this section for
14 counties and for cities and counties with regard to the investment
15 of money in eligible commercial paper.
O
99
F