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HomeMy WebLinkAbout2017-06-08MINUTES PALM DESERT HOUSING AUTHORITY MEETING THURSDAY, JUNE 8, 2017 CIVIC CENTER COUNCIL CHAMBER 73510 FRED WARING DRIVE, PALM DESERT, CA 92260 I. CALL TO ORDER - 3:00 P.M. Chairman Harnik convened the meeting at 3:01 p.m. II. ROLL CALL Present: Vice Chairman Sabby Jonathan Member Kathleen Kelly Member Gina Nestande Member Susan Marie Weber Chairman Jan C. Harnik Also Present: Lauri Aylaian, Executive Director Robert W. Hargreaves, City Attorney Rachelle D. Klassen, Secretary Lori Carney, Director of Administrative Services Russell Grance, Director of Building & Safety Ryan Stendell, Director of Community Development Martin Alvarez, Director of Economic Development Janet M. Moore, Director of Finance/City Treasurer Mark Greenwood, Director of Public Works Stephen Y. Aryan, Risk Manager Eddy Moore, Division Chief, Palm Desert Fire/Riverside Co. Fire Dept./Cal Fire Lt. Coby Webb, Asst. Chief, Palm Desert Police/Riverside Co. Sheriffs Dept. Grace L. Rocha, Deputy City Clerk III. ADJOURN TO CLOSED SESSION Reauest for Closed Session: None With Housing Authority Board concurrence, Chairman Harnik adjourned the meeting to Closed Session of the City Council and Successor Agency at 3:02 p.m. She reconvened the meeting at 4:01 p.m. MINUTES PALM DESERT HOUSING AUTHORITY MEETING JUNE 8, 2017 IV. RECONVENE REGULAR MEETING - 4:00 P.M. A. REPORT ON ACTION FROM CLOSED SESSION. None V. CONSENT CALENDAR A. MINUTES of the Housing Authority Meeting of May 25, 2017. Rec: Approve as presented. B. CLAIMS AND DEMANDS AGAINST THE CITY/HOUSING TREASURIES - Warrant Dated 5/19/2017 (Joint Consideration with the Palm Desert City Council). Rec: Approve as presented. Upon motion by Nestande, second by Weber, and 5-0 vote of the Authority Board (AYES: Jonathan, Kelly, Nestande, Weber, and Harnik; NOES: None), the Consent Calendar was approved as presented. VI. CONSENT ITEMS HELD OVER None VII. RESOLUTIONS None VIII. NEW BUSINESS A. REQUEST FOR ADOPTION OF RESOLUTIONS, APPROVING THE PALM DESERT "STATEMENT OF INVESTMENT POLICY," AS AMENDED (JOINT CONSIDERATION WITH THE PALM DESERT CITY COUNCIL, SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY, AND PALM DESERT FINANCING AUTHORITY). Deputy City Treasurer Thomas J. Metz stated that pursuant to State law the City Treasurers Office is requesting approval of the City's state of Investment Policy. Recently, staff received two additional recommendations for textual changes to the policy by Councilmember Kelly, which staff concurs with, and are as follows: 1) On page 3, under 4.0.2, the language is being added to the last sentence in the second paragraph to read, "Its purpose shall be to maximize profit within the parameters of Risk Management'; 2) on page 7, 2 MINUTES PALM DESERT HOUSING AUTHORITY MEETING JUNE 8, 2017 under 8.010, the last sentence of the 5th paragraph to read, "The City Treasurer shall provide all authorized brokers with a copy of the City's investment policy and anv amendments as they occur." Lastly, Councilmember Kelly had a question to the language that was added to page 1, under 1.0 Policy, the second blue -lined paragraph, which reads as follows: "At its discretion pursuant to minute order, the Palm Desert City Council may direct that funds be made available to facilitate other lawful investment actions that the city council takes. In that case, either the City Manager or the Director of Finance & City Treasurer is authorized to invest the funds accordingly." He said Councilmember Kelly wanted to know the reasoning behind that insertion, which he felt Mayor Pro Tem Jonathan might be in the best position to explain it. Mayor Pro TemNice ChairNice ChairmanNice President Jonathan explained that the intent was to provide flexibility if opportunities arise to enable the Council to make an exception to the normal investment policy. The normal investment policy boils down to very conservative CDs, conservative bonds, cash in some cases, and there may be occasions, as there have before, where there may be a temporary use of General Fund Reserves that Council feels is appropriate. However, if it conflicts with the Investment Policy, Council would not have the ability to make such investment. By having this language inserted, it provides Council flexibility to take action where it deemed appropriate. As a separate issue, he noticed the staff report indicates the City Treasurer shall provide the City Council with a monthly investment report within 30 days after the Audit, Investment & Finance Committee reviews it. However, the Investment Committee last discussed not meeting monthly; therefore, the language would not be consistent with the Investment Committee, because it will no longer meet on a monthly basis. He suggested striking the word monthly. Mayor/Chair/Chairman/President Harnik pointed out that the Policy itself already reflected that change on page 18. Councilmember/Director/Member/Commissioner Kelly said she appreciated the explanation for the paragraph on page 1 of the staff report and on page 1 of the Policy itself, but she is troubled by the language, because it seems to say that despite the fact that great effort has gone into defining an appropriate investment policy, the City Council can do whatever it wants. However, Councilmembers are not investment experts, and while she may trust present company to be very prudent, it didn't strike her as good policy to invite that kind of initiative from Council without following the usual process for amendment of the investment policy. If the thought is that sometimes sensitive opportunities could come up, her response would be that it should probably stay away from it, because the level of risk that the City has adopted doesn't warrant jumping into a time sensitive opportunity. Additionally, she hadn't heard anything that makes her comfortable with it. 3 MINUTES PALM DESERT HOUSING AUTHORITY MEETING JUNE 8, 2017 Mayor Pro TemNice ChairNice ChairmanNice President Jonathan concurred, stating the intent of this language was to give the Council the ability to take action using General Fund Reserves, which is a departure from the normal investment policy. For example, if the City Council felt it needed to temporarily acquire a strategic piece of real estate using General Funds, the current policy prohibits it, because it's limited to investments of CDs, bonds, etc. The idea is to give the Council flexibility to utilize General Fund Reserves in such a way that it deemed appropriate. If there is other language that would make that point clear, he was open to it. Again, the intent is not to jump into some investment that may offer a 12% return. Another example, if in fact the City moves forward with the Community Choice Aggregation Energy (CCA) Program, there are start-up funds that are required, and many cities have provided those funds because it's a very secured loan to the CCA, adding it might pay 4% instead of 1%. He's not here proposing that the City do that, but he's just providing an example where other cities have used General Fund Reserves in a way that would not be consistent with Palm Desert's investment policy. He explained that taking that type of action is beneficial to the City, but if this language is not clear, he's open to other language that would limit the departure from the investment policy to actions of that nature. Ms. Moore replied that with regard to the investment policy, staff may offer a compromise, in that the investment policy doesn't prohibit Council from taking action for the use of reserves. What the investment policy encourages and requires, is that there are policies for investable funds to be followed. Therefore, when the City has investable cash, it is to be invested in accordance with the policy. If Council were to take action to dedicate some of the monies available for a specific purpose that would make that un- investable according to the plan. If the goal was to look at a property, the policy may not prohibit that, and perhaps that's where there is confusion or where a compromise may occur. Mayor Pro TemNice ChairNice ChairmanNice President Jonathan asked that if the paragraph in question was stricken, would Council still have the ability to use General Fund Reserves in a way other than traditional investing. Ms. Moore answered yes, but would caution that if any of the things Council decided to do with the funds were of an investment nature, then that would then be subject to the investment policy. Mayor Pro Tem/Vice Chair/Vice ChairmanNice President Jonathan commented he thought a loan to the CCA, which is a promise or notice of security, subject to legal interpretation, was considered an investment. 4 MINUTES PALM DESERT HOUSING AUTHORITY MEETING JUNE 8, 2017 Councilmember/Director/Member/Commissioner Weber disagreed, in that she wouldn't consider a loan to the CCA or purchasing property an investment, stating investments are defined differently in the policy. Therefore, she shared Councilmember Kelly's concern about the language making it sound like Council can haphazardly invest, which is not the function of the Council. The City is extremely conservative, so if this is how the language is being translated, she would agree that the paragraph is not needed, because it can be translated down the road in that manner. Mayor Pro Tem/Vice Chair/Vice ChairmanNice President Jonathan agreed, but he wants to make sure Council has the ability to act in the City's best interest when opportunities arise. He reiterated that investing in a note might be deemed an investment, stating that if the City lends money to the US Treasury or the State of California, those are loans the City is making with General Fund Reserves. Therefore, a loan to the CCA would not be any different, but perhaps different from a purchase of real estate. He suggested tabling this issue to get legal opinion. However, he completely concurred with his colleagues in that the wording opens the door to an imprudent investment, which is not the intent of the Audit, Investment & Finance Committee who is making the recommendation. Their intent was to enable the City Council to have flexibility when opportunities arise. He said if purchasing real estate is not an investment, that's not an issue, but other opportunities may arise. So, if something like the CCA would be prohibited by the existing policy, then wording needs to be found that would satisfy all concerns. Councilmember/Director/Member/Commissioner Kelly offered that the overall approach to changing the policy is extremely well -thought out, over due, and probably should be adopted as soon as possible, because the thrust of the recommendation is that the City's policy has been overly conservative to its disadvantage. She would like to see this policy adopted this evening without the paragraph it has been discussing, because staff can continue to research whether some addition to the policy is necessary to address the concerns Mayor Pro Tem Jonathan has raised, and if needed, an amendment can be made in the future. However, she didn't see any reason to hold up the very thoughtful and important changes that make up the substance of what's before the City Council this evening. Mr. Hargreaves concurred with the suggestion, because trying to decide the nature of a particular investment will depend on the specifics, more importantly, what's the purpose of it, and is it just to make money, adding that the same would apply for real estate. He encouraged the City Council to adopt the Investment Policy without the subject paragraph and address specific situations as they arise. At that time, figure out if it comes under the policy, and if it does, Council can modify the policy if necessary. 5 MINUTES PALM DESERT HOUSING AUTHORITY MEETING JUNE 8, 2017 Councilmember/Director/Member/Commissioner Kelly said she will move to approve the policy with the two verbal changes made in language this evening and striking the paragraph that's been under discussion and appears on page 1 of the policy. Councilmember/Director/Member/Commissioner Kelly moved to, waive further reading and adopt the following, approving the Palm Desert "Statement of Investment Policy," as further amended, including the changes orally provided at the meeting: 1) City Council Resolution No. 2017 - 43; 2) Successor Agency Resolution No. SA -RDA 066; 3) Financing Authority Resolution No. FA - 68; 4) Housing Authority Resolution No. HA - 81. Motion was seconded by Weber and carried by a 5-0 vote (AYES: Jonathan, Kelly, Nestande, Weber, and Harnik; NOES: None). B. REQUEST FOR APPROVAL OF AN EXTENSION TO CONTRACT WITH JOHN HARRISON CONTRACTING IN AN AMOUNT NOT TO EXCEED $150,000 FOR THE 2017/18 H.V.A.C. MECHANICAL SYSTEMS MAINTENANCE SERVICES AT PALM DESERT HOUSING AUTHORITY PROPERTIES (CONTRACT NO. HA33452). Senior Management Analyst Veronica Tapia stated this request was to approve the final extension on John Harrison's contract in the amount of $150,000, adding they have done an exemplary job for the Authority. The Authority originally applied for the Energy Savings Assistance Program (ESAP) in 2013, which was a program for income qualified customers needing assistance with energy efficiencies in their unit. However, some of the units didn't qualify, so this contract is to covers those units. This contract is a slight increase from 2016-2017, but even with the increase, it's lower than the bidder from 2015. Member Kelly moved to, by Minute Motion: 1) Approve an extension to subject contract with John Harrison Contracting, Banning, California, for the 2017/18 H.V.A.C. Mechanical Systems Maintenance Services at Housing Authority Properties for a period of 12 months in a total amount not to exceed $150,000 for contract services; 2) authorize the Executive Director and/or the Chairman to execute the extension and any documents necessary to effectuate the actions taken herewith — monies have been included in the FY 2017-2018 proposed Authority's Replacement Reserve Budget, in the appropriate Authority accounts for same. Motion was seconded by Weber and carried by a 5-0 vote (AYES: Jonathan, Kelly, Nestande, Weber, and Harnik; NOES: None). IX. CONTINUED BUSINESS None X. OLD BUSINESS None 6 MINUTES PALM DESERT HOUSING AUTHORITY MEETING JUNE 8, 2017 XI. PUBLIC HEARINGS None XII . REPORTS, REMARKS, AND AUTHORITY BOARD ITEMS REQUIRING ACTION A. EXECUTIVE DIRECTOR None B. AUTHORITY COUNSEL None C. CHAIRMAN AND MEMBERS OF THE AUTHORITY None XIII. ORAL COMMUNICATIONS - C None XIV. ADJOURNMENT With City Council concurrence, Chairman Harnik adjourned the meeting at6:00 p.m. JAN C. HARNIK, CHAIRMAN ATTEST: !IPPPOptka- RAC ELLE D. KLASSE . ECRETARY PALM DESERT HOUSING AUTHORITY 7