HomeMy WebLinkAbout2004-10-27 IFC Regular Meeting Agenda Packet _ CITY OF PALM DESERT
INVESTMENT & FINANCE COMMITTEE
AGENDA
October 27, 2004, 10:30 a.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 September 22,
2004, as submitted.
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INVESTMENT & FINANCE COMMITTEE
AGENDA OCTOBER 27, 2004
VI. CONSENT ITEMS HELD OVER
None.
VII. NEW BUSINESS
A. City and Redevelopment Agency Investment Schedules and
Summary of Cash Reports for September 2004
Rec: Review and submit for the next City Council agenda.
Review the presentation on the investment graphs. Review
the investment activity for September 2004.
B. State of California Local Agency Investment Fund Balance for the
month of September 2004
Rec: Informational item for the Committee to review. No action
required
C. California Asset Management Program (CAMP) September 2004
Statements
Rec: Informational item for the Committee to review. No action
required
D. City and Redevelopment Agency Monthly Financial Report for City
Council for September 2004
Rec: Report and submit to City Council
E. Parkview Professional Office Buildings - Financial Report for
September 2004 (Reports will be distributed at the meeting)
Rec: Review and file report
F. Palm Desert Golf Course Facilities Corporation Financial
Information for September 2004 (Reports will be distributed at the
meeting)
Rec: Review and file report
VIII. CONTINUED BUSINESS
None.
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INVESTMENT & FINANCE COMMITTEE
AGENDA OCTOBER 27, 2004
IX. OLD BUSINESS
A. Status of Public and Private Partnerships Background Checks
Rec: Status report on background checks
B. 1. Bond Issuance by Palm Desert Financing Authority
Rec: Status report on issuing new bonds
X. NEXT MEETING - Date to be determined
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 201" day of September 2004.
1 / rlL—
Niamh Ortega, Recdjng Secretary
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CITY OF PALM DESERT
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INVESTMENT & FINANCE COMMITTEE
AGENDA
October 27, 2004, 10:30 a.m.
North Wing Conference Room
1. CALL TO ORDER
Il. ROLL CALL
Ill. 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
Minutes
Rec: Approve minutes of the regular meeting of September 22,
2004, as submitted.
1
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INVESTMENT& FINANCE COMMITTEE
AGENDA OCTOBER 27,2004
VI. CONSENT ITEMS HELD OVER
None.
VII. NEW BUSINESS
A. City and Redevelopment Agency Investment Schedules and
Summary of Cash Reports for September 2004
Rec: Review and submit for the next City Council agenda.
Review the presentation on the investment graphs. Review
the investment activity for September 2004.
B. State of California Local Agency Investment Fund Balance for the
month of September 2004
Rec: Informational item for the Committee to review. No action
required
C. California Asset Management Program (CAMP) September 2004
Statements
Rec: Informational item for the Committee to review. No action
required
D. City and Redevelopment Agency Monthly Financial Report for City
Council for September 2004
Rec: Report and submit to City Council
E. Parkview Professional Office Buildings - Financial Report for
September 2004 (Reports will be distributed at the meeting)
Rec: Review and file report
F. Palm Desert Golf Course Facilities Corporation Financial
Information for September 2004 (Reports will be distributed at the
meeting)
Rec: Review and file report
Vill. CONTINUED BUSINESS
None.
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INVESTMENT & FINANCE COMMITTEE
AGENDA OCTOBER 27, 2004
IX. OLD BUSINESS
A. Status of Public and Private Partnerships Background Checks
Rec: Status report on background checks
B. 1. Bond Issuance by Palm Desert Financing Authority
Rec: Status report on issuing new bonds
X. NEXT MEETING - Date to be determined
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 201h day of September 2004.
Niamh Ortega, Reccoing Secretary
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CITY OF PALM DESERT
�•
INVESTMENT & FINANCE COMMITTEE
Minutes
September 22, 2004
I. CALL TO ORDER
A regular meeting was called to order by Chairman Gibson on Wednesday,
September 22, 2004 at 10:31 a.m.
II. ROLL CALL
Present: Absent:
Paul Gibson, Director of Finance Bob Spiegel, Mayor
Buford Crites, Mayor Pro-Tem
Thomas Jeffrey, Deputy City Treasurer
Carlos Ortega, City Manager
Bob Hargreaves, City Attorney
Bill Veazie
Russ Campbell
Everett Wood
Thomas Wormley
Also Present:
Steve Aryan, Assistant to the City Manager
Dennis Coleman, RDA/ Housing Finance Manager
Veronica Tapia, Redevelopment Accountant
Diana Leal, Recording Secretary
Guests:
Joseph Crowley, Citigroup
Carmen Vargas, Citigroup
Mike Cavanaugh, Wedbush Morgan Securities
III. ORAL COMMUNICATIONS
None.
IV. COMMITTEE MEMBER REPORTS
None.
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INVESTMENT & FINANCE COMMITTEE
MINUTES September 22, 2004
V. CONSENT CALENDAR
A. Approval of Minutes
Motion was made by Mr. Campbell and seconded by Mr. Veazie to approve
the Minutes of the July 28, 2004 meeting as submitted.
VI. CONSENT ITEMS HELD OVER
None.
VII. NEW BUSINESS
A. 1. City and Redevelopment Agency Investment Schedules and Summary
of Cash Reports for July and August 2004
For the month ended July 31, 2004, Mr. Jeffrey reported that the book value of
the City Portfolio was approximately $141,451,000, The City earned
approximately $187,000 in interest during that month. Portfolio yield-to-
maturity was approximately 1.68%.
For the month ended July 31, 2004, Mr. Jeffrey reported that the book value of
the RDA Portfolio was approximately $175,310,000. The City earned
approximately $229,000 in interest during that month. Portfolio yield-to-
maturity was approximately 1.53%.
Mr. Gibson added that the state has begun to take its 25% share of sales
taxes, reducing the monthly allocations. Additionally, the DMV fees have also
been decreased by 67%, greatly reducing cash flow. Payments will be
received under property taxes under the new state rules being adopted. That
will be in effect in January and June.
For the month ended August 31, 2004, Mr. Jeffrey reported that the book value
of the City Portfolio was approximately $136,975,000. The City earned
approximately $195,000 in interest during that month. Portfolio yield-to-
maturity was approximately 1.74%.
For the month ended August 31, 2004, Mr. Jeffrey reported that the book value
of the RDA Portfolio was approximately $161,119,000, The City earned
approximately $223,000 in interest during that month. Portfolio yield-to-
maturity was approximately 1.51%.
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INVESTMENT & FINANCE COMMITTEE
MINUTES September 22, 2004
2. Review of Statement of Investment Policy 2005
Mr. Jeffrey reminded the Committee that State law requires that the City
review its investment policy on an annual basis. He then discussed significant
policy changes.
First, Staff commented that although there is only enough regular business to
support four brokers, a fifth broker is needed when competitive offerings are
done for the investment of bond proceeds. Recently, the City required
competitive offerings for municipal bond proceeds, and received only two bids
— well below the IRS threshold of three bids for a "safe harbor." One broker
declined to bid at the last minute, and another simply did not have any
inventory for the date required. Staff therefore proposed increasing the
authorized number of brokers in the investment policy from four to five.
Second, in conjunction with the foregoing change, Staff recommended that the
Finance Committee relist Zions Bank of Salt Lake City, Utah as a primary
dealer on the List of Authorized Financial Institutions. The City Council had
approved Zions Bank as an authorized broker in 1999, and the City had
subsequently done business with Zions on a satisfactory basis. In 2000,
however, it became evident that the City did not have enough business to
support five brokers, so the Finance Committee elected to take Zions off the
authorized list since it was the most recent addition to that list.
Third, Staff recommended adding language which stated that the City would
not transact business with a broker until all of the documentation that is
required by both parties has been executed.
Fourth, Staff recommended adding express language which stated that the
City could reject a broker's application if it contained false or misleading
information, in which case, the broker would be prohibited from applying for
the City's business for another five years.
Mr. Ortega asked who would determined if the information was false. Mr.
Gibson replied that Staff runs a background check on all broker applicants.
Mr. Ortega recommended adding a sentence that stated, "If, in the City's
opinion, the information is false or misleading..."
Fifth, Staff recommended adding language that would in put the City in
compliance with a new GASB Pronouncement, which took effect on June 15,
2004. The changes dealt with additional internal reporting requirements.
Motion was made by Mr. Wood and seconded by Mr. Campbell that the
Finance Committee recommend that the City Council approve Palm
Desert "State of Investment Policy 2005," with the changes indicated.
Motion carried.
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INVESTMENT & FINANCE COMMITTEE
MINUTES September 22, 2004
3. Renewal of Banking and Custodial Relationship with Union Bank
Mr. Jeffrey stated that Union Bank has been the City's primary banker and
securities custodian since 1997. The relationship has been quite satisfactory.
Union has state-of-the art banking technology, and the City's account
representative is the former Finance Director of the City of Riverside. He
therefore has a keen sense of what the City's needs are. In terms of the
custodial relationship, Union processes securities transactions that are not
related to the City's municipal bonds.
The alternatives to Union are Bank of America and Wells Fargo Bank. Based
upon the City's prior history with Bank of America, it was not recommended.
With respect to Wells Fargo, in December 2003, the City of La Quinta had
taken RFPs from Union Bank and Wells Fargo for a banking relationship. La
Quinta was kind enough to forward to Palm Desert a comparison of both bids
(this analysis was provided to the Finance Committee in the form of an
attached table). Backing out armored car and sweep account costs (Palm
Desert does not use either service), Union had the lower bid. In view of this
and in view of the City's satisfactory relationship with Union Bank, Staff
recommended that the banking and custodial relationship be renewed for
another five years.
Mr. Wood asked if banking was usually put out to bid every five years. Mr.
Gibson replied that it had not been done in the past. If it were, and another
bank were selected, then it would create additional work since City would have
to change its check stock, and all of its banking services and transactions. If
the City subsequently wished to terminate its relationship with Union Bank,
then it could do so with 30 days' notice pursuant to contract.
Motion was made by Mr. Campbell and seconded by Mr. Wood that the
Finance Committee recommend that the City Council approve the
renewal of the City's banking and custodial relationship with Union Bank
for another five years. Motion carried.
4. Renewal of Corporate Trust Relationship with Bank of New York
Mr. Jeffrey said that the corporate trust relationship with Bank of New York
(BONY) was due to expire soon. BONY is current the top provider of
corporate trust services in the United States. The City's relationship with
BONY has, on the whole, been satisfactory. The City has a fee arrangement
with BONY that saves the City an estimated $60,000 per year. Based upon
the relationship and the shrinking number of corporate trustees due to mergers
and acquisitions, Staff recommends renewal of the City's corporate trust
relationship with Bank of New York for another five years.
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INVESTMENT & FINANCE COMMITTEE
MINUTES September 22, 2004
Mr. Gibson added that this approval should be contingent upon the favorable
conclusion of renewal negotiations with BONY.
Motion was made by Mr. Wood and seconded by Mr. Veazie that the
Finance Committee recommend that the City Council approve the
renewal of the City's corporate trust relationship with Bank of New York
for another five years, subject to a favorable outcome in contract
renewal negotiations. Motion carried.
5. Relisting of Zions Bank as a Broker-Dealer
Mr. Jeffrey said that this item had been discussed earlier in Item A2. Staff had
distributed two pieces of correspondence to the Committee. One was a Staff
Report that the City Council had approved in 1999, authorizing Zions Bank to
be added as a Primary Dealer to the City's List of Authorized Financial
Institutions. The second was a letter from that City Treasurer had sent to
Zions in 2000, indicating that the Finance Committee had authorized the
delisting of Zions from the Financial Institutions List due to a substantial and
prolonged decline in the City's trading volume.
Mr. Crites asked if the City had a backup bank in case Zions showed no
interest in being relisted. Mr. Gibson said that Staff had already contacted
Zions to see if there was any interest, and Zions had responded affirmatively.
If not, then the City could do a broker solicitation.
Motion was made by Mr. Campbell and seconded by Mr. Ortega that the
Finance Committee relist Zions Bank as a Primary Dealer on the List of
Authorized Financial Institutions. Motion carried.
6. Appointment of Paul Gibson to C.A.M.P. Board of Trustees
Mr. Jeffrey noticed the Finance Committee that City Treasurer Paul Gibson
had been selected from a statewide slate of candidates to sit on the Board of
Trustees of the California Asset Management Program (CAMP), a statewide
investment pool that competes with LAIF. The City Attorney had indicated that
there would not be a conflict-of-interest since CAMP is a Joint Powers
Authority (JPA). Mr. Gibson's appointment will be effective November 2004.
The CAMP Board will meet quarterly. CAMP will pay for Mr. Gibson's travel,
lodging, and meal costs as they relate to his attendance of CAMP Board
meetings.
B. State of California Local Agency Investment Fund Balance for the Month of
August 2004
Mr. Gibson said that the City is maxed out in both the City and Redevelopment
Agency accounts.
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INVESTMENT& FINANCE COMMITTEE
MINUTES September 22, 2004
C. California Asset Management Program (CAMP) August 2004
Mr. Gibson said that due to the fact that there has been a decrease in cash
flow, the City is having to withdraw from CAMP to cover costs.
D. City and Redevelopment Agency Monthly Financial Reports for Citk Council
for July and August 2004
Mr. Gibson said that the first couple of months staff is accruing revenues that
are in July and August back to the prior fiscal year. This is why there is a zero
is shown for the prior year. The amounts indicated have not been reversed.
The State is taking the reallocations away from the City. Expenditures are
within budget. The only concern with the sales tax is the timing if the City has
increases over the prior year, it will be the following year before the increases
are shown. This will be monitored through the sales tax consultant.
E. Parkview Professional Office Buildinas - Financial Report for March 2003
Mr. Gibson said that the landscaping staff presented the City Council with a
separate contract for the landscape around the office complex. That cost will
be showing up soon. Supervisor Roy Wilson moved in to his suite. The
complex is at full occupancy until UCR and the Palm Desert Chamber of
Commerce moves into their new buildings. There is a waiting list of interested
tenants.
F. Palm Desert Golf Course Facilities Corporation Financial Information for
July and August 2004
Mr. Gibson said that at year end Desert Willow was close to approximately
$500,000 on the positive side for cash flow. In both July and August they were
ahead of what they anticipated. The Committee is awaiting an answer as to
whether this was due to the participation of the Palm Desert Greens. Mr.
Ortega said that he thinks the answer to that question was that the resident
rounds were down. However, the reason more money received was due to
the average higher per round revenue meaning that there was a lot of outside
play.
Mr. Wood asked when the budget will show that it is in the black. Mr. Gibson
said that it is shown typically from January through April. The rest of the
months the expenditures are higher due to reseeding and other course
preparation. Mr. Ortega said that the money shown does not include the
money that comes in from developers. Mr. Wood said that the monies from
developers will end. Mr. Gibson said that monies submitted have decreased
based on the current agreement in place. At the moment, the developers have
not been expanding their time share project, therefore, he does not foresee an
increase.
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INVESTMENT & FINANCE COMMITTEE
MINUTES September 22, 2004
Vill. CONTINUED BUSINESS - None.
IX. OLD BUSINESS
A. Status of Public and Private Partnershij)s Background Checks
There being no business issues to report, discussion ensued to the next
agenda item.
B. 1. Bond Issuance by Palm Desert Financing Authority
Mr. Coleman introduced Joseph Crowley and Carmen Vargas of Citigroup,
who presented a reference guide with summaries and details regarding the
bond transaction. Mr. Crowley thanked the Committee for the opportunity to
serve as the senior manager for the 2004 Series A bonds. Ms. Vargas
outlined the contents of the reference guide. She said that one of the keys of
this transaction was receiving bids from all four insurance agencies for bond
insurance. The guide includes a copy of the preliminary official statement and
the official statement. It also includes a sales memorandum which is
distributed throughout their national retail system. This is a marketing tool they
use to obtain pricing. Mr. Crowley said that the transaction summary shows a
significant savings. He pointed out that 56% of the bonds went to retail
investors, which was very important in securing the lowest costs.
Approximately 17% of the transaction was purchased by institutional investors.
He said that this was indicative of strong credit and a strong financing team.
Mr. Coleman said that he discussed the reimbursement policy for staff cost
associated with land-based financing at the last Investment and Finance
Committee meeting. A reimbursement schedule can be based on 75 basis
points for the first $5 million, 50 basis points for $5 - $10 million and 25 basis
points above $10 million. One of the things discussed at the last meeting was
that a cap was not placed, however, he would like to have a floor cap of
$50,000 placed. Staff looked at the IRS standpoint in terms of what was
charged. The other issue was whether or not staff needs to be sensitive to
Prop 218. Staff can look at actual staff time cost which can be obtained at the
end of the year. If not enough money was charged for staff time, more would
be charged for the administrative cost on the property rolls to balance it out. If
more than the staff time was charged, a refund would be provided at that point.
The Committee asked staff to have legal counsel review the policy. Legal
counsel is still in the process of reviewing the policy. Legal counsel feels that
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INVESTMENT & FINANCE COMMITTEE
MINUTES September 22, 2004
from a Prop 218 standpoint, the Agency is okay. . However, legal counsel
suggested that when this item is brought before the City Council for adoption it
should be presented as any other fee whereby it is placed on a public hearing
agenda. The policy has been modified and the following sentence has been
added for the section of refinanced bond issues and the section under new
bond issues: The actual staff cost provided for each new bond issue or
refinanced bond issue shall be tracked and staff shall make proper
adjustments for the administrative charges on the property tax rolls in
preceding years. Staff will either give a credit or will increase the
administrative charges for costs not reimbursed with the initial charges.
Mr. Ortega said that if it is taken through the 218 process, costs must be equal
to expenses. This is a benefit to the developer. He wants to make sure that it
is included in an agreement with the developer. If the developer wants the
City to finance the project, then there will be a specific cost associated with the
financing. Mr. Coleman said that Robin (Harris), legal counsel, said that she
was not sure that it would be Prop 218. She said that since it is a fee it should
be taken through the public hearing process before it is adopted and not
necessarily the Prop 218 process. Mr. Crites said that the attorney should be
asked whether it is a fee or if it is part of an agreement between two parties.
Mr. Hargreaves said that the developer is not required to come to the City as
they have other options. The City needs to show that what it is doing is
reasonable under the circumstances.
Mr. Crites said that a fee is charged for services being provided. In this case
the City is recovering the costs of a mutually agreed upon agreement between
the City and the developer.
Mr. Gibson said that the dilemma that staff is facing is if a policy is done it is
based on a fee basis. If it is worked out through a development agreement
then some of the issues with regard to fee based costs are handled differently.
Mr. Coleman said that he would ask legal counsel whether or not it is a fee or
a charge, Mr. Ortega said that in the past, with regard to the assessment
districts, any time a fee changed, staff had to go through a public hearing and
the fees were not passed.
Mr. Hargreaves said that on typical fees there is no voter approval process. It
is based on reimbursement equal to cost. If challenged, the City must show
that the fees charged are reasonable.
Mr. Gibson said that if it is charged to a bond issue, it comes with more
restrictions. If it comes directly from the developer, it is not charged to the
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INVESTMENT & FINANCE COMMITTEE
MINUTES September 22, 2004
bond issue. Mr. Crites suggested that staff request an opinion from both the
City attorney and the RDA legal counsel.
Mr. Ortega said that before is presented to Council, the pros and cons must
be discussed.
Mr. Coleman said that City Council asked that staff look at the bonding
capacity. Staff has reviewed bonding capacity. Staff has taken a look at the
preliminary numbers on the tax increment. Last fiscal year, staff bought in just
under $56 million in tax increment. Of that, staff passed through about $21
million to the affected tax entities. There was about $13 million in debt service
and administration was about $3.2 million with respect to the Agency,
consultant costs and reimbursements to the City for City staff time spent on
Agency projects. This year the RDA has reimbursed the City for about
$940,000 for staff time. Next year they are projecting, subtracting the money
that the County takes for administration of about $58.6 million. Based on
those figures, they asked their financial advisor to take a look at the bonding
capacity. There are two scenarios for project area 2. 1) based on the current
coverage ratio of 1.6 and a 1.2 taking into effect no ERAF charges. 2) What
would happen if ERAF had to be subtracted. Currently, for the next two years,
RDA is slated to pay the State about $3.89 million to ERAF. After the two
years, staff does not know what will happen. If Prop 65 passes, RDA is okay.
If the state brokered legislation passes, Redevelopment was left out. Even
though they can not raid the Cities, they can still come back and do further
shifts to redevelopment. Taking a look at RDA's bonding capacity it is about
$95 - $110 million if RDA does not have to pay ERAF and in the neighborhood
of about $65 million if they have to pay ERAF. He pointed out that in that
bonding capacity, it does not take into effect that RDA has to cover
administration costs and must pay the City $32,785,000.
2. Request for Qualifications for Bond Underwriting_Services
Mr. Coleman said that Mike Cavannaugh from Wedbush Morgan Securities
was in attendance. He said that RDA was going to go out to request for
qualifications for bond underwriting services. He asked the Committee how
many qualified underwriting brokers he should have in the pool and would he
have enough work to keep them all interested in doing work with the Agency.
The Agency has been doing investments on a shorter term basis because they
do not want to lock their money up. When he does a bond issue, it is on a
longer term basis anywhere from 20-30 years. When there are refunding
opportunities, the Agency does come back to discuss it. At this time there
exists some opportunities for bonding capabilities. The Agency will have some
refunding opportunities which will arise from some of the Agency's other bond
issues. They still would like to have a pool. The question is how many
brokers should be included as he thinks they will lose interest due to lack of
sufficient work. He asked if the committee is inclined, two members of the
Committee can serve as a sub committee. In his proposal he asks that the
firms waive their fees in
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INVESTMENT & FINANCE COMMITTEE
MINUTES September 22, 2004
terms of the type of financing. He would like to ask that fees be based on a
range of financing. A non-rated financing of $5 million or below. Other items
he would like to have reviewed based on rated but not insured and insured.
He would like to set up a subcommittee to decide a time line and issue the
requests for qualifications. After the requests are reviewed, a shortlist of firms
can be provided to the Committee. At that time, the firms can make
presentations to the committee on their qualifications. Then the Committee
can make a recommendation to the City Council.
Mr. Ortega said that the Committee needs to limit how many firms are included
in the request for qualifications. He said that he recommends that the
Committee look at the qualifications that meet the criteria and make a
selection as is done with brokers.
Mr. Veazie said that competitive bidding for the issuer is always the cheapest
way to go. Mr. Coleman said that competitive bidding should be done when
they have a plain bond that they sell. If there is a difficult bond with a story to
tell it should be done on a negotiated basis because certain things need to be
obtained. Perhaps costs would be saved, however, staff and the financial
advisor would have to put more time into the marketing document which is the
official statement to get the story out. If you are really sensitive in an interest
market, you have to pull your bid back and reset it for another time. There is
merit with respect to competitive bidding, however, there may be other times
when it would be more beneficial to do a negotiated basis. He said that if the
committee wants staff to review the bond bids on a competitive basis, it can be
done.
Mr. Veazie said that it is up to the financial advisor to convey the story so that
the competitive bidders can know what is being bid. Additionally, there is
insurance whereby you can acquire an additional cost by paying a fee. But, if
you get an Ambac or MBIA on the deal it is automatically rated AAA.
Mr. Coleman said that you cannot obtain insurance for most story bonds. Mr.
Veazie said that if you cannot obtain insurance on a story bond, then you need
to have a good financial advisor or you must negotiate your deal.
Mr. Gibson asked if the Committee preferred a competitive bidding. Mr.
Coleman suggested that a combination of both competitive and
negotiated bond issues can be done. Mr. Ortega said that the current process
used has given RDA good results.
The following committee members agreed to participate in the
subcommittee: Bill Veazie, Thomas Wormley, Dennis Coleman, Carlos Ortega
and Paul Gibson. Meeting date and time will be announced at a later time.
10
092204.wpd
INVESTMENT & FINANCE COMMITTEE
MINUTES September 22, 2004
Mr. Crites said that with all that has happened in Florida, he was wondering
what would happen to the ratings of issued bonds and insurance should there
be a catastrophe such as an earthquake in Palm Desert. Mr. Ortega said that
this is an issue that has been discussed with the rating agencies on numerous
occasions as the City is near the San Andreas fault. Mr. Gibson said that each
city is looked at uniquely depending on fund balances, cash flows and revenue
streams. There is one rating agency that has come to the table and said that
maybe they need to change their method on insurance purposes. Mr.
Coleman said that if something happened here and the City lost the assessed
valuation and taxes, the insurance would pay for the bonds. However, once it
came back, the City would have to repay the insurance company. The
premium is based on the debt service throughout the life of the bond.
Mr. Veazie said that property taxes only represent about 10%, therefore, a
disaster of proportion to property values would not injure the cash flow
severely.
Mr. Gibson asked the committee if the time of the Investment and Finance
Committee meeting can be changed as it conflicts with the scheduled Entrada
meeting. Mr. Ortega said that he would talk to the coordinators of the Entrada
meeting and ask them to change their meeting time as the Investment and
Finance Committee meeting has two members of the public that attend the
meetings and it is difficult to schedule times to meet.
X. NEXT MEETING - Wednesday, October 27;2004 at 10:30 a.m.
XI. ADJOURNMENT
There being no further business, the meeting was adjourned by Mr. Gibson at 11:41 a.m.
Respectfully submitted,
Diana Leal, Recording Secretary
11
092204.wp0
City of Palm Desert
City and Redevelopment Agency Portfolios
COMPLIANCE ANALYSIS AND INVESTMENT REPORT
September 2004
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)will meet on 10 November to review short-term interest rates. The Futures
Market has assigned an 85% probability to another 25-basis point hike in the Federal Funds Rate, bringing it to 2.00%. This
might not be the case, however, if the October monthly payroll data proves to be disappointing, or if the outcome of the
presidential election is not apparent on 3 November. If there is a rate hike, then it may be the last one for a while. The FOMC is
reportedly less concerned about inflation, and has indicated that any future rate increases are going to be driven by economic
data. The FOMC is currently studying inflation trends in order to decide how long a pause it should take after reaching a
2.00% Federal Funds Rate at the November meeting.
As an FOMC official recently outlined, there are very clear risks to continued economic growth, such as rising oil prices; weak
employment growth; a low household savings rate; cautious business investment; weakening fiscal stimulus; a large trade
deficit; and the relative strength of the U.S. Dollar.
It is believed that higher oil prices are more likely to act as a drag on economic growth than as a stimulant for inflation. Rising
oil prices will cause companies to limit their hiring, and consumers to limit their discretionary spending. A competitive global
economy will serve as a brake on the"pricing power"of U.S. businesses, thereby slowing inflation.
JVa41(zs 4idwr4 C..C,R r.
Treasurer
PORTFOLIO STATISTICS
Dollars in Thousands
SEP-04 AUG-04 JUL-04 JUN-04 MAY-04 APR-04
CITY
Month-End Book Value"' $ 132,120 $ 136,975 $ 141,451 $ 142,417 $ 125,903 $ 130,340
Month-End Market Value*** $ 132,402 $ 137,301 $ 141,666 $ 142,542 $ 126,048 $ 130,530
Paper Gain(Loss) $ 282 $ 326 $ 215 $ 125 $ 145 $ 190
Prior Year Book Variance $ (6,243) $ (48,234) $ (34,386) $ (35,770) $ (55,318) $ (26,045)
Interest Earnings $ 191 $ 195 $ 187 $ 174 $ 159 $ 156
Yield-To-Maturity 1.84% 1.74% 1.68% 1.58% 1.53% 1.54%
Weighted Maturity(Days) 123 121 128 133 120 119
Effective Duration 0.18 0.19 0.22 0.23 0.18 0.20
RDA
Month-End Book Value"' $ 159,360 $ 161,119 $ 175,310 $ 184,909 $ 179,643 $ 152,696
Month-End Market Value"* $ 159,405 $ 161,209 $ 177,511 $ 187,083 $ 181,819 $ 154,863
Paper Gain (Loss) $ 45 $ 90 $ 2,201 $ 2,174 $ 2,176 $ 2,167
Prior Year Book Variance $ 6,467 $ 37,804 $ 74,759 $ 85,643 $ 77,086 $ 49,309
Interest Earnings $ 199 $ 223 $ 229 $ 183 $ 161 $ 156
Yield-To-Maturity 1.61% 1,51% 1.53% 1.37% 1.17% 1.22%
Weighted Maturity(Days) 62 71 134 128 81 96
Effective Duration 0.10 0.12 0.13 0.15 0.02 0.03
*** Omits SLGSs.
City of Palm Desert --Portfolio Characteristics
30 September 2004
Dollars in Thousands
Aneina Interval Market Value
General Fund Agein
< 1 M $ 55,605g
<2M 2,381
<3M 3,009 100 -
<6M 10,793 80
< 1 YR 6,489 a 66
<2YR - c 60
<3YR 5,967 40
<4YR - °
a
<5YR - 20 3 4 13 8
>5YR - p
0
Total: $ 84,244 <1M <2M <3M <6M <1YR <2YR
Ratings" Market Value Credit Quality AAA
AAA $ 31,519 28% AA
Unrated"' 72, 0%
AA 7,029029 '
A 8,408 A
A-1 6,026 7% Unrated"
Total: $ 125,767 65%
Secto Market Value Asset Allocation
Money Market Funds $ 22,054 LAIF
LAIF 32,785 35°/�
RDA Loan 32,785
MTNs 17,878 RDA Loan
U.S.Treasury - Money Market 29%
Federal Agency 7,024 Funds
Commercial Paper 6,026 20%
Total: $ 125,767 MTNs
16%
Month City Yield LAIF Yield Variance Performance
Oct03 1.61 1.60 0.01
Nov 1.61 1.57 0.03 1.9
Dec 1.58 1.55 0.03
Jan04 1.58 1.53 0.05
Feb 1.58 1.44 0.14
Mar 1.56 1.47 0.09
m
Apr 1.54 1.45 0.09 i >-
May 1.53 1.43 0.11
Jun 1.58 1.47 0.11 1.4 IT
Jul 1.68 1.60 0.07 Oct03 Nov Dec Jan04 Feb Mar Apr May Jun Jul Aug Sep
Aug 1.74 1.67 0.06
Sep 1.84 1.77 0.07 113LAIF Yield OCity Yield
Moody's Credit Ratings
LAIF,and City Loan to RDA Page 2 of 8
City of Palm Desert
Portfolio Holdings
30 September 2004
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value Moodys S 8 P
Medium-Term Notes
$ 2,406,000 ABBOTT LABS 6.80 5/15105 $ 2,475,589 2.08 102.50 $ 2,466,212 Al AA
$ 2,355,000 CHEVRON-TEXACO 6.63 10/1/04 $ 2,355,000 1.13 100.00 $ 2,355,000 Aa2 AA
$ 3,000,000 FORD 7.20 6/15107 $ 3,103,434 5.75 108.03 $ 3,240,939 A3 BBB-
$ 2,500,000 FORD 7.20 6/15/07 $ 2,586,195 5.75 108.03 $ 2,700,782 A3 BBB-
$ 2,360,000 NORTHERN TRUST 6.65 11/9/04 $ 2,373,551 1.17 100.45 $ 2,370,542 Aa3 AA-
$ 1,270,000 PITNEY BOWES 5.95 2/1/05 $ 1,289,392 1.32 101.02 $ 1,282,968 Aa3 AA
$ 1,000,000 WACHOVIA 7.70 2115/05 $ 1,023,273 1.38 102.01 $ 1,020,056 Aa3 A
$ 14,891,000 Subtotal $ 15,206,433 2.81 $ 15,436,500
Commercial Paper--Discount
$ 3,025,000 GENERAL ELECTRIC 1.55 12/15/04 $ 2,999,603 1.61 99.59 $ 3,012,611 P-1 A-1+
$ 2,425,000 GENERAL ELECTRIC 4.25 1128105 $ 2,447,993 1.30 100.69 $ 2,441,849 P-1 A-1+
$ 3,031,000 GENERAL ELECTRIC 1.64 1/14/05 $ 2,999,932 1.70 99.41 $ 3,013,062 P-1 A-1+
$ 8,481,000 Subtotal $ 8,447,528 1.66 $ 8,467,521
Federal Agencies --Discount
$ 1,015,000 FANNIE MAE 1.92 512/05 $ 997,021 2.00 98.73 $ 1,002,109 Aaa AAA
$ 3,035,000 FANNIE MAE 1.71 3/3/05 $ 2,995,644 1.78 99.14 $ 3,008,899 Aaa AAA
$ 3,045,000 FANNIE MAE 1.79 4/1/05 $ 2,999,427 1.86 98.96 $ 3,013,332 Aaa AAA
$ 7,095,000 Subtotal $ 6,992,092 1.85 $ 7,024,341
LGIP
$ 40,000,000 L.A.I.F. 0.00 10/1/04 $ 40,000,000 1.77 100.00 $ 40,000,000 U U
$ 40,000,000 Subtotal $ 40,000,000 1.77 $ 40,000,000
LGIP
$ 11,335,591 C.A.M.P. 0.00 10/1/04 $ 11,335,591 1.47 100.00 $ 11,335,591 U AAA
$ 11,335,591 Subtotal $ 11,335,591 1.47 $ 11,335,591
Pooled Funds--AIM
$ 10,718,729 PRIME PORTFOLIO 0.00 10/1/04 $ 10,718,729 1.22 100.00 $ 10,718,729 Aaa AAA
$ 10,718,729 Subtotal $ 10,718,729 1.22 $ 10,718,729
City Loan to RDA
$ 32,786,480 CITY OF PALM DESERT 0.00 10/1/04 $ 32,785,480 1.77 100.00 $ 32,785,480 U U
$ 32,785,480 Subtotal $ 32,785,480 1.77 $ 32,785,480
Total Investments
$ 125,306,800 $ 125,485,852 1.84 $ 125,768,161
"U"= Unrated Page 3 of 8
City of Palm Desert
Portfolio Holdings
30 September 2004
Market Ratings
Par Value Issuer Coupon Maturity Cost I YTM Price Value Moody's S&P
Cash
$ 5,962,653 CITY MAIN CHKG 0.00 10/1/04 $ 5,962,653 0.00 100.00 $ 5,962,653 N/A N/A
$ 324,463 DESERT WILLOW CHKG 0.00 10/1/04 $ 324,463 0.00 100.00 $ 324,463 N/A N/A
$ 22,920 OFFICE COMPLEX TRUST 0.00 10/1/04 $ 22,920 0.00 100.00 $ 22,920 N/A N/A
$ 323,896 RECREATIONAL FAC CHKG 0.00 10/1/04 $ 323,896 0.00 100.00 $ 323,896 N/A N/A
$ 6,633,931 Subtotal $ 6,633,931 $ 6,633,931
Total Investment and Cash
$ 131,940,131 $ 132,119,783 $ 132,402,092
"U"= Unrated Page 4 of 8
Palm Desert Redevelopment Agency --Portfolio Characteristics
30 September 2004
Dollars in Thousands
Aaeina Interval Market Value Portfolio Ageing w/o SLGSs�
< 1 M $ 76,873
<2M -
<3M - 100 87
<6M 11,016 90
80
< 1YR e 70
<2YR o 60
0 50
<3YR 40
<4YR - a° 30 13
<5YR 20
10 0 0 0 0 0 0
>5YR 0
Total: $ 87,889 <1M <2M <3M <6M < 1YR <2YR <3YR <4YR
ualit Market Value Credit Quality AA
AAA $ 90,327 AAA
58
Unrated** 61,262
q
AA 0%
A -
A-1 5,021 A-1 O Unrated"
Total: $ 156,610 3% 39%
Sector Market Value Asset Allocation
Money Market
U.S.Treasury $ 23,064 Funds
59
Money Market Funds 59,252 41%
LAIF 61,262
Federal Agency 8,011 U.S.Treasury
Commercial Paper 5,021 16%
Corporate Bonds - LAIF
Total: $ 156,610 43%
Month RDA Yield LAIF Yield Variance Performance
Oct03 1.30 1.60 -0.30
Nov 1.29 1.57 -0.28
Dec 1.29 1.55 -0.25
Jan04 1.24 1.53 -0.29 1.7
Feb 1.20 1.44 -0.24
Mar 1.20 1.47 0.28
1.4
Apr 1.22 1.45 -0.23 5:
May 1.17 1.43 -0.26 $ t I
Jun 1.37 1.47 -0.10 1.1
,01
Jul 1.53 1.60 -0.08 Oct03Nov Dec,an04Feb Mar Apr May Jun Jul Aug Sep
Aug 1.51 1.67 -0.16
Sep 1.61 1.77 -0.17 MLAIF Yield ORDA Yield
Moody's Credit Ratings
** LAW Page 5 of 8
Palm Desert Redevelopment Agency
Portfolio Holdings
30 September 2004
Market Ratings
Par Value Issuer Coupon Maturity Cost YTM Price Value Moody's S&P
Commercial Paper--Discount
$ 2,009,000 GENERAL ELECTRIC 1.35 10/4/04 $ 1,999,733 1.38 99.98 $ 2,008,609 P-1 A-1+
$ 3,039,000 GENERAL ELECTRIC 1.73 3/1105 $ 2,999,569 1.80 99.11 $ 3,012,054 P-1 A-1+
$ 5,048,000 Subtotal $ 4,999,302 1.63 $ 5,020,664
U.S.Treasury--Coupon
$ 23,107,000 UNITED STATES TREASURY 1.63 3/31105 $ 23,065,480 1.86 99.81 $ 23,063,674 Aaa AAA
$ 23,107,000 Subtotal $ 23,065,480 1.86 $ 23,063,674
Federal Agency--Coupon
$ 1,983,000 FED HOME LOAN MORTGAGE 1.88 1/15/05 $ 1,985,102 1.70 100.00 $ 1,983,000 Aaa AAA
$ 1,983,000 Subtotal $ 1,985,102 1.70 $ 1,983,000
Federal Agency--Discount
$ 3,040,000 FED NATIONAL MTG ASSOC 1.75 314/05 $ 2,999,509 1.82 99.14 $ 3,013,856 Aaa AAA
$ 3,040,000 FED NATIONAL MTG ASSOC 1.71 3/1105 $ 3,001,012 1.78 99.15 $ 3,014,160 Aaa AAA
$ 6,080,000 Subtotal $ 6,000,521 1.80 $ 6,028,016
LGIPs
$ 40,000,000 L.A.I.F. 0.00 10/1/04 $ 40,000,000 1.77 100.00 $ 40,000,000 U U
$ 5.971,845 L.A.I.F. (HOUSING) 0.00 10/1/04 $ 5,971,845 1.77 100.00 $ 5,971,845 U U
$ 5,470,540 L.A.I.F. BOND PROCEEDS 0.00 10/1/04 $ 5,470,540 1.77 100.00 $ 5,470,540 U U
$ 9,820,019 L.A.I.F, BOND PROCEEDS 0.00 10/1/04 $ 9,820,019 1.77 100.00 $ 9,820,019 U U
$ 61,262,404 Subtotal $ 61,262,404 1.77 $ 61,262,404
LGIP
$ 20,938,942 C.A.M.P. 0.00 10/1/04 $ 20,938,942 1.47 100.00 $ 20,938,942 U AAA
$ 20,938,942 Subtotal $ 20,938,942 1.47 $ 20,938,942
Pooled Funds--AIM
$ 38,313,785 PRIME PORTFOLIO 0.00 10/1/04 $ 38,313,785 1.22 100.00 $ 38,313,785 Aaa AAA
$ 38,313,785 Subtotal $ 38,313,785 1.22 $ 38,313,785
Total Investments
$ 156,733,131 $ 156,565,536 1.61 $ 156,610,485
Cash
$ 2,470,597 HOUSING AUTH CHKG 0.00 10/1/04 $ 2,470,597 0.00 100.00 $ 2,470,597 N/A N/A
$ 324,329 HOUSING AUTH TRUST 0.00 1011/04 $ 324,329 0.00 100.00 $ 324,329 N/A N/A
$ 2,794,926 Subtotal $ 2,794,926 $ 2,794,926
0=Unrated Page 6 of 8
Palm Desert Redevelopment Agency
Portfolio Holdings
30 September 2004
Market Ratings
Par Value Issuer I Coupon 1 Maturity cost YTM Price I Value lMoodysj S&P
Total Investments and Cash
$ 159,528,057 $ 159,360,462 $ 159,405,411
U= Unrated Page 7 of 8
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 Treasurer's"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 30 September 2004, 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 27 October 2004,
PauLS. (jaaom, c.c.M.r
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 Maturity 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.Treasuries 5 Years No Limit 5 Years I No Limit I 1 0.0% 14.7%
53601(c) CA State Debt 5 Years No Limit Not Authorized
53601(d) CA Local Agency Debt 5 Years No Limit Not Authorized
53601(e) Federal Agencies 5 Years No Limit 5 Years 30% 5.6% 5.1%
53601(f) Bankers's Acceptances 180 Days 40% 180 Days 40% 1 A-1 &P-1 I - -
53601(g) Commercial Paper 270 Days 25% A-1+or P-1 270 Days 1 25% A-1+or P-1 4.8% 3.2%
53601(h) Negotiable CDs 5 Years 30% 5 Years 1 30% 1 AA-or Aa3
53601(i) Repos 1 Year No Limit 30 Da vs 1 20% 1 AAA&Aaa - -
53601(i) Reverse Repos 92 Days 20% Not Authorized
536010) Medium-Term Notes 5 Years 30% A 5 Years 30% 1 A 1 14.1% 0.0%
53601(k) Mutual Funds 90 Days 20% AAA&Aaa 90 Days 20% (2) 1 AAA&Aaal 8.5% 1 24.5%
53601(I) Trust Indenture Debt Not Authorized
53601(m) Secured Bank Deposits 5 Years No Limit Not Authorized
53601(k) Local Government AAA&Aaa AAA&Aaa
Investment Pools 90 Days 20% or Advisor 90 Days 20% (2) 1 or Advisor 1 9.0% 1 13.4%
53601(n) Mortgage-Backed 5 Years 20% A(Issuer)& Not Authorized
Securities AA(Security)
LAIF No Limit I I No Limit 31.9% 39.1%
(1) The City loan to RDA, which is not a bond, has been approved by the Palm Desert City Council. 73.9% 100.0%
(2) Maximum limit for mutual funds and local government investment pools, excluding bond proceeds.
' Certified California Municipal Treasurer Page 8 of 8
I,rly OFp
STATE OF CALIFORNIA F�f"�/�Pr1i11 }�{V ES, Treasurer
1�
OFFICESACRAMEN OF THE TREASURER 1�U OCT l2
48
Local Agency Investment Fund 35
PO Box 942809 I
Sacramento; CA 94209-0001
(916) 653-3001
September, 2004 Statement
CITY OF PALM DESERT Account Number : 98-33-621
Attn: CITY TREASURER
73510 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 PHILIP ANGELIDES, Treasurer
OFFICE OF THE TREASURER
SACRAMENTO
Local Agency Investment Fund
PO Box 942809
Sacramento, CA 94209-0001
(916) 653-3001
OCT 1 2 1
September, 2004 Statement
e
PAI„iv,1;DF : .. �VEfX1)MENTAGENC
%, • ': , . icy Account Number : 65-33-015
Atf ..—„T$EASUR ,_.,_
73-510 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 PHILIP ANGELIDES, Treasurer
OFFICE OF THE TREASURER
SACRAMENTO
Local Agency Investment Fund
PO Box 942869
Sacramento, CA 94209-0001
(916) 653-3001
September, 2004 Statement
PALM DESERT,HOL7SJ1 ,bI�iMORITY- ��CY
Ann: -DEPUTY crry uRER Account Number : 25-33-003
73-510 FRED WARING DRIVE
PALM DESERT CA 99260-2578
Transactions
Effective Transaction Tran Confirm Authorized Amount
Date Date Type Number Caller
09-03-2004 09-03-2004 RW 963386 THOMAS JEFFREY 300,000.00
Account Summary
Total Deposit : 0.00 Beginning Balance : 6,271,845.03
Total Withdrawal : - 300,000.00 Ending Balance : 5,071,845.03
Page : 1 of 1
CITY OF RALIvl DESERT
s o F1t ANCE DEPARTMENT
CA I- I F O R N I A ASSET OCTATEMENT
MANAGEMENT PROGRAM ���� r11.. /II� :' I�
IOIN'1' POWERS AUTHORITY 1 ! 35
50 CALIFORNIA STREET 23RD FLOOR
SAN FRANCISCO CALIPORMA 941II FOR ACCOUNT
INFORMATION: 600-729-7665
STATEMENT DATE: 9/30/2004
CITY OF PALM DESERT ACCOUNT NUMBER: 553-00
OPERATING FUND
ATTN-PAUL GIBSON FUND NAME: Cash Reserve Portfolio
73-510 FRED WARING DRIVE
PALM DESERT, CA 92260
Page 1 of 1
Account Summary as of 9/3012004
Statement Income Dividends Capital Gains Total Shares Account
Date Paid This Year Paid This Year Owned Value
9/30/2004 $101,532.89 $0.00 11,335,590.670 $11,335,590.67
Transaction Summary fo"r 9/1/2004-9/30/2004
Beginning Balance Purchases Reinvestments Redemptions Ending Balance
$11,322,030.73 $0.00 $13,559.94 $0.00 $11,335,590.67
TRADE SETTLE DOLLAR AMOUNT'. SHARK. SHARES THIS , TOTAL
DATE DATE TRANSACTION OF TRANSACTION,.:. PRICE.' TRANSACTION_ ' SH_ ARES OWNED.
09/01/04 Beginning Balance 11,322,030.730
09/30/04 10/1/2004 Accrual Income Div Reinvestment-DIV $13,559.94 $1.00 13,559.940 11,335,590.670
Message Line; The Monthly Distribution Yield is 1.46%.
The Monthly Effective Annual Yield is 1.47%.
I
CALI FORNI A ASSET STATEMENT
MANAGEMENT PROGRAM
)O1NI' POVFRRS AUTHORITY
511 CILIFORNIA STRFrT 23RI3 rLCHJR
SAN FRANCISCO CALIFORNIA 941 11 FOR ACCOUNT
INFORMATION: 800-729-7665
STATEMENT DATE: 9/30/2004
PALM DESERT REDEVELOPMENT AGENCY ACCOUNT NUMBER: 553-02
GENERALFUND
ATTN: PAUL GIBSON FUND NAME: Cash Reserve Portfolio
73-510 FRED WARING DRIVE
PALM DESERT,CA 92260-2578
Page 1 of 1
Account Summary as of 9130/2004
Statement Income Dividends Capital Gains Total Shares Account
Date Paid This Year Paid This Year Owned Value
9/30/2004 $221,188.34 $0.00 20,938,941.850 $20,938,941.85
Transaction Summary for 9/1/2004-9/30/2004
Beginning Balance Purchases Reinvestments Redemptions Ending Balance
$20,913,894.12 $0.00 $25,047.73 $0.00 $20,938,941.85
SHARES THIS ,, ; TOTAL_
TRADE SETTLE DOLLAR AMOUNT' SHARE,, .•z"
DATE DATE - TRANSACTION OF TRANSACTION . PRICE , TRANSACTION;;. SHARES OWNER
09/01/04 Beginning Balance 20,913,894.120
09/30/04 10/1/2004 Accrual Income Div Reinvestment-DIV $25,047.73 $1.00 25,047.730 20,938,941.850
Message Line: The Monthly Distribution Yield is 1.46%.
The Monthly Effective Annual Yield is 1.47%.
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City of Palm Desert
Parkview Office Complex
Financial Statement
for Fiscal Year 2004.2005
September-04 September-04 # % YTD Y1'D # %
Budget Actual Variance Variance Budget Actual Variance Variance
(
Revenues I I
Rental $ 68,500 $ 74,393 $ 5,893 108,60%� $ 205,500 $ 218,346 $ 12,846 106.25%
Dividends/Interest $ 700 $ - $ (700) 0.00% $ 2,100 $ - $ (2,100) 0.00%
Total Revenues $ 69,200 $ 74,393 $ 5,193 107.50%1 $ 207,600 $ 218,346 $ 10,746 105.18%
Expenses f
Professional-Accounting&Auditing $ 81500 $ 8,829 $ (329) 103.87% 1 $ 25,500 $ 26,487 $ (987) 103.87%
Professional-Consultants $ 6,000 $ 6,870 $ (870) 114.50% $ 18,000 $ 15,920 $ Z080 88.45%
Tenant Improvements $ 3,000 $ 39,597 $ (36,597) 1319.90% $ 9,000 $ 39,597 1 $ (30,597) 439.97%
Repairs&Maintenance Building $ 8,000 $ 7,168 $ 832 89.61% $ 24,000 $ 23,967 $ 33 99,86%
Repairs&Maintenance-Landscaping $ Z300 $ - $ 2,300 0.00%, $ 6,900 $ - $ 6,900 0.00%
Utilities-Water $ 150 $ 112 $ 38 74.49% ` ] $ 450 $ 218 $ 232 49,39%
Utilities-Gas/Electric $ 7,000 $ 11,279 $ (4,279) 161.12% $ 21,000 $ 17,596 $ 3,404 83.79%
Utilities-Waste Disposal $ 600 $ 1,077 $ (477) 179.44% $ 1,800 $ 2,153 $ (353) 119.63%
Telephone $ 250 $ 445 $ (195) 177.90%L $ 750 $ 1,067 $ (317) 142.25%
Insurance $ 521 $ - $ 521 0.00% - $ 1,561 $ - $ 1,561 0.00%
Total Expenses $ 36,321 $ 75,376 $ (39,055) 207.53°/u $ 108,961 $ 127,005 $ (18,044) 116.56%
INLa;Ntt9_l eotrte $ 32;879 $ (993) $ (33,862) 2SJ9'!g $ 98,6 $$ 91,$43 $ (7,2298) 9260%i
Equipment Replacement Reserve $ 16,700 $ 16,666 $ 34 99.80% $ 50,100 $ 49,998 $ 102 99.80%
1!'etinc#nne $ 16,179 $ (19,649) $ (33,828) 109;08°I° $ 48,539 $ 41,34$ $ (7196) 85.18°0�
1-Note:The tenant improvements for The Riverside County Supervisor,Roy Wilson are recorded as an expenditure for the purpose of this investment report,
however,at the end of the year the tenant improvements will be capitalized as fixed assets and depreciated over the useful life of the asset.
2005 Investment Reportlnv Report 2005
' City of Palm Desert
Parkview Office Complex
Vacancy Rate Schedule by Suite
September 2004
Suite Square
No. Tenant Feet
73-710 Fred Waring Drive-Two (2) Story Building
100 Hanover 1,915
100A William Bonneheim 645
102 Cove Commission-Fire Marshal 1,360
103 National Multiple Sclerosis 488
104 Arthritis Foundation 960
106 Coachella Valley Economic Partnership 928
108 Assembly Rules Committee-Assemblyman Benoit 450
112 Senator Battin 1,741
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 Adopt-A-Class 700
208 Alzheimer's Association 960
210 Wilson,Pesota &Pichardo 3,040
211 State of California Department of Food& Agriculture 937
217 Joe B. McMillan,.Esq. 775
2005 Investment ReportVacancy Report
City of Palm Desert
Parkview Office Complex
Vacancy Rate Schedule by Suite
September 2004
220 Environmental Products Applications 1,607
222 Riverside County Supervisor-Roy Wilson 3,348
Total square footage(2 story Building) 31,929
Vacancy Rate--0.00% 0.00%
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--0.00% 0.00%
Occupancy Rate-100% 100.00%
2005 Investment ReportVacancy Report
City of Palm Desert
Desert Willow
Budget Vs Actual
For the month of
September 2004
Budgeted Actual Budgeted Actual
September September S Percentage Year to Year to $ Percentage
Revenue 2004 2004 Variance Variance Date Date Variance Variance
Course&Ground $ 176,850 S 195,686 S 18,836 110.65% S 391.212 $ 462,919 $ 71,707 118.33%
Cans $ 23.216 S 25,950 $ 2,734 111.78% $ 56,341 $ 67.250 $ 10,909 119,36%
Golf Shop S 48,335 $ 41,872 S (6,463) 86.63% $ 99,504 $ 88,070 $ (II434) 88.51%
Range $ 750 S 727 $ (23) 96.93% $ 2,100 $ 2,286 S 186 108.86%
Food&Beverage S 85,147 $ 98,349 S 13,202 115.50% $ 179,433 $ 219,567 $ 41,134 123,05%
Interest Income $ - $ - $ - 0.00% $ - S - $ - 0.00%
T tal Revenuer S 334,298 S 362,584 S 28,286 108.46% $ 727,590 $ 840.092 $ 112.502 115.46
Payroll
Proshop $ 2,432 $ 1,191 S 1,241 48.97% $ 7,458 S 3.173 S 4,285 42.54%
Can $ 15,770 S 14,628 $ 1,142 92.76% $ 46,576 S 43,283 $ 3,293 92.93%
Course&Ground S 126,575 S 128,347 $ (1,772) 101.40% $ 378,329 $ 361,635 $ 16,694 95,59%
Golf Operations $ 25,059 S 20,633 $ 4,426 82.34% $ 63,893 S 59,455 $ 4,438 93.05%
General&Administration S 40,925 $ 40,990 S (65) 100.16% $ 123,521 $ 121,464 S 2,057 98.33%
Food&Beverage $ 56,170 $ 55,174 S 996 98,23% $ 15&444 $ 163,529 $ (5,084) 103.21%
Total Payroll 5 266,931 S 260,963 S 5,968 97.76% S 778.221 S 752.538 S 25.683 96.70
Other Expenditures
Perimeter Landscaping $ - $ - $ - 0.00% $ - $ - $ - 0.00%
Proshop $ 4,400 $ 2,048 S 2.352 46.55% S 7,400 S 5,026 S 2,374 67.92%
Proshop-COGS S 24,394 S 23,472 S 922 96.22% $ 52,099 S 48,304 S 3,795 92.72%
Carl S 14,290 $ 13,115 S 1,175 91.78% $ 41,670 $ 39,161 $ 2,509 93.98%
Coarse&Ground-Nosh Course $ 41,303 S 50,704 S (9,401) 122.76% $ 150,749 $ 152,388 $ (1,639) 101.09%
Coarse&Ground-South Course S 38,554 S 52,803 S (14,249) 136.96% $ 151,102 $ 169,851 $ (18,749) 112.41%
Coarse&Ground-Desert Pallet-N $ 425 $ 571 S (146) 134.35% $ 1,875 $ 1,828 $ 47 97,49%
Coarse&Ground-Desert Pallet-S $ 425 $ - $ 425 0.00% $ 1,875 $ 577 $ 1,298 30,77%
Golf Operations S 825 S 110 $ 715 13.33% $ 2,375 $ 558 $ 1,817 23.49%
General&Administration $ 51,779 S 56,330 $ (4,551) 108.79% $ 170,387 $ 152,284 $ 18,103 89.38%
Range $ 95 $ 919 $ (824) 967.37% $ 790 $ 959 $ (169) 121,39%
Food it Beverage $ 18,003 $ 31,905 S (13,902) 177.22% $ 51,074 $ 79,936 $ (28,862) 156.51%
Ford&Beverage COGS S 26,562 $ 34,930 S (9,369) 13L50% S 5S.613 $ 90.939 S (25,2251 14S.36%
Management Fee - $ 25,000 $ 25,000 $ - 100,00% $ 75.000 $ 75000 $ - 100.00%
Financinp/Lease $ 4,352 $ 4,150 S 202 95,36% $ 13.093 $ 12,515 S 579 95.59%
To nt Other Ex endNnres $ 250,407 S 296,057 $ (45,650) 118.23% S 775,102 $ 819,225 $ 44 123 105.69
Desert Willow Golf Academy
Desert Willow Golf Academy $ 10,250 $ 11,225 $ 975 109.51% S 28,050 $ 30,642 $ 2,592 109,24%
COGS-Merchandise $ (6,134) $ (5,825) S 309 9C96% $ (20,283) $ (24,316) $ (4,033) 119,88%
Other Expenditures $ (2,225) $ (1.258) S 967 56.54% $ (9,025) $ (9,105) S (80) 100,89%
Learning Center Income(Loss) $ 1.891 $ 4,142 S 2,251 219.04% $ (1258) $ (2,779) $ (I521) 220,91%
Operating Income(Lass) $ (181,149) $ (190,294) S (9,145) 105.05% $ (826.991) S (734,450) $ 92,541 88.81%
Equipment Reserve Replacement $ 70,000 $ 69,124 $ (876) 98.75% $ 210,000 $ 207.714 S (2,286) 98.91%
Net Income Loss $ (251,149) 259 41 B S (8,269) 103.29.% $ 1 036 991 S (942,164) S 94,827 90.86
Sna shot of Golf Rounds Budgeted mo Actual mp Variance Variance% Budgeted id Actual td Variance Variance%
Resident 645 500 (145) 78% 1,345 1,730 385 129%
Non Resident 4,006 4.497 491 112% 9,870 11,738 1,868 119%
Other - 42 42 100% - 168 168 100%
CatT!Plimcntary 300 323 23 108% 800 865 65 109%
Total 4,951 5,362 411 108% 12,015 14,501 2,486 121
Folder.Desert Willow 2004:DW2005;Financial Statement Page I
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Desert Willow
Breakdown of Rounds
per point of sale system
Desert Willow - Combined Analysis- SEPTEMBER 2004
Resident 500 $ 22,500 $ 45.00 9.30%
Non-Resident 4,497 $ 193,937 $ 43.13 83.90%
Other 42 $ 420 $ 10.00 0.809/.
Complimentary 323 $ 14,229 $ 44.05 6.00%
Desert Willow Totals 5,362 2 11,086 43.10 100.00%
DW2005;POS AVG RD Page 9
• Desert Willow
Breakdown of Rounds
per point of sale system
FIRECLIFF COURSE- SEPTEMBER 2004
Description No. Of Revenue Avg. Per I Pct to
Rounds Per POS Round Total
Resident Rounds
Resident Fee 203 $ 9,135 $ 45.00 7.17%
Total Resident 203 9,135 7f 45.00 7.17%
Non Resident
IROC Member/ Guest 64 $ 3,712 $ 58.00 2.26%
Sunrise 304 $ 22,800 $ 75.00 10.73%
Prime 249 $ 15,755 $ 63.27 8.79%
Midday 62 $ 3,250 $ 52.42 2.19%
Sunset 674 $ 18,050 $ 26.78 23.80%
VIP Card 259 $ 7,770 $ 30.00 9.15%
Wholesale 242 $ 10,180 $ 42.07 8.55%
Outing 394 $ 14,498 $ 36.80 13.91%
Twilight 70 $ 2,840 $ 40.57 2.47%
Fee Special Event Variable 141 $ 6,073 $ 43.07 4.98%
Total Non Resident Rounds 2,459M104,928 42.67 86.83%
Other Rounds
Junior Walking 23 $ 10.00 0.81%
Total Other 23 10.00 0.81%
Complimentary
VIP 84 $ 4,285 $ 51.01 2.97%
PGA Member 10 $ 520 $ 52.00 0.35%
USGA Kids on Course 7 $ 7 $ 1.00 0.25%
Champions Club 3 $ 150 $ 50.00 0.11%
PDHS/COD 2 $ 2 $ 1.00 0.07%
Employee / Employee Guest 41 $ 1,755 $ 42.80 1.45%
Total Complimentary 147 6,71911 $ 45.71 5.19%
Total Round (FireCliff( 2,832 1 $ 121,012 $ 42.73 100.00%
DW2005;POS AVG RD Page 10
Desert Willow
Breakdown of Rounds
per point of sale system
MOUNTAINVIEW COURSE- SEPTEMBER 2004
Description No. Of Revenue Avg. Per Pct to
Rounds Per POS Round Total
Resident Rounds
Resident Fee 297 $ 13,365 $ 45.00 11.74%
Total Resident 297 13,365 45.00 11.74%
Non Resident
IROC Desginated Party 6 $ 225 $ 37.50 0.24%
IROC Member/ Guest 82 $ 4,416 $ 53.85 3.24%
Sunrise 184 $ 13,800 $ 75.00 7.27%
Prime 270 $ 18,195 $ 67.39 10.67%
Midday 66 $ 3,470 $ 52.58 2.61%
Sunset 524 $ 13,260 $ 25.31 2 ..71%
VIP Card 209 $ 6,270 $ 30.00 8.26%
Wholesale 251 $ 10,121 $ 40.32 9.92%
Outing 196 $ 7,947 $ 40.55 7.75%
Twilight 120 $ 5,150 $ 42.92 4.74%
Fee Special Event Variable 136 $ 6,380 $ 46.91 5.38%
Total Non Resident Rounds 1 2,038 89,009 43.67 80.55%
Other Rounds
Junior Walking 19 $ 190 $ 10.00 0.75%
Total Other 19 190 10.00 0.75%
Complimentary
VIP 58 $ 3,085 $ 53.19 2.29%
PGA Member 9 $ 340 $ 37.78 0.36%
Employee / Employee Guest 43 $ 2,195 $ 51.05 1.70%
PDHS/COD 56 $ 1,880 $ 33.57 2.21%
USGA Kids on Course 10 $ 10 $ 1.00 0.40%
Total Complimentary 176 7,5101 $ 42.67 6.96%
Total Round (Mountainview) 2,530 $ 1 00,074 $ 43.51 100%
DW2005;POS AVG RD Page 11
City of Palm Desert
Desert Willow
Cash Reserve Analysis
for the month of
September 2004
Cash Reserve Analysis One Month
Required Reserve $ 500,000.00
Kash on Hand $ 571,700.90
Variance- Favorable Unfavorable $ 71,700.90
Page 12
PalmDesert Recreation Facilities Corporation
Income Statement
Sep-04 Sep-04 # %
Budget Actual Variance Variance
Food & Beverage Revenues $85,147 $98,349 $13,202 115.50%
Total Revenues $85,147 $98,349 $13,202 115,50%
Salaries $56,170 $55,174 $996 98.23%
Cost of Goods Sold-F&B $26,562 $34,930 ($8,368) 131.50%
Food & Beverage Expense $18,003 $31,905 ($13,902) 177.22%
Total Expenses $100,735 $122,009 ($21,274) 121.12%
Net Income (Loss) ($15,588) ($23,660) ($8,072) 151.78%
Note: The above revenues and expenditures are also included in the Desert Willow analysis.
DW2005;PDRFC Budget Page 1