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HomeMy WebLinkAboutMinutes - Investment & Finance Committee 02/23/2005CITY OF PALM DESERT FINANCE DEPARTMENT INTEROFFICE MEMORANDUM TO: RACHELLE KLASSEN, CITY CLERK FROM: NIAMH ORTEGA, RECORDING SECRETARY\\O DATE: MARCH 24, 2005 SUBJECT: APPROVED MINUTES OF THE FEBRUARY 23, 2005 INVESTMENT & FINANCE COMMITTEE MEETING Please find attached the Minutes of the Investment & Finance Committee meeting which took place on Wednesday, February 23, 2005, and were approved by the Committee at the meeting of March 23, 2005. Please include on the upcoming agenda for review and acceptance by City Council. Please feel free to contact me at Ext. 382 if you have any questions. Thank you. nmo Attachment (as noted) G:\Finance\Niamh Ortega\Wpdocs\Investment Comrr ttee\Memos\rklassen012605.wpd MINUTES REGULAR MEETING OF THE PALM DESERT INVESTMENT & FINANCE COMMITTEE Wednesday, February 23, 2005 I. CALL TO ORDER Chairman Espinoza called to order a regular meeting of the Palm Desert Investment & Finance Committee at 10:32 a.m. II. ROLL CALL Present: Absent: Luis Espinoza, Acting Chairman Buford Crites, Mayor Jim Ferguson, Mayor Pro-Tempore Carlos Ortega, City Manager Justin McCarthy, ACM/Redevelopment Thomas Jeffrey, Deputy City Treasurer David J. Erwin, City Attorney Russ Campbell, Member Bill Veazie, Member Everett Wood, Member Also Present: Thomas Lee Wormley, Member Dennis Coleman, RDA/Housing Finance Manager Anthony Hernandez, Senior Financial Analyst Niamh Ortega, Recording Secretary III. ORAL COMMUNICATIONS None. INVESTMENT & FINANCE COMMITTEE MINUTES FEBRUARY 23.2005 IV. APPROVAL OF MINUTES A. MINUTES OF THE MEETING OF JANUARY 26, 2005 Mr. Espinoza noted that the names of the Mayor and Mayor Pro-Tempore would be changed on the attendance record to reflect the recent change of office, appointing former Mayor Pro-Tempore Crites to the position of Mayor and Councilman Ferguson to that of Mayor Pro-Tempore. MOTION was made by Mr. Campbell and seconded by Mr. Veazie to approve the Minutes of the January 26, 2005 meeting as corrected. Motion passed. V. NEW BUSINESS A. CITY AND REDEVELOPMENT AGENCY INVESTMENT SCHEDULES AND SUMMARY OF CASH REPORTS FOR JANUARY 2005 Mr. Jeffrey submitted the report for January 2005, and highlighted the following areas: For the month ended January 31, 2005, the book value of the City Portfolio was approximately $140.2 million. Interest earnings were approximately $243,000. Yield -to -maturity was approximately 2.54%. For the month ended January 31, 2005, the book value of the RDA Portfolio was approximately $160.6 million. Interest earnings were approximately $268,000. Yield -to -maturity was approximately 2.23%. Due to property taxes received in January, the difference between the LAIF benchmark and the City's portfolio has increased favorably. Mr. Jeffrey explained the barbell theory of investing to the Committee, and indicated that this is one strategy that the City uses when considering an investment opportunity. Mr. Veazie noted that Ford has a BBB- rating and expressed that this was of concern to him. Mr. Jeffrey responded that this rating is acceptable according to governmental investing standards. He offered insight into the background and operating procedures of the Ford Company and various companies owned by Ford, and explained why it is a good investment. He also indicated that the note expires in 2007, and the City collects interest from the Ford Company on this investment. Mr. Jeffrey indicated that staff is comfortable with their current investment direction. He compared corporate investment opportunities to governmental investment 2 G:IFinance\Niamh OrtegalWpdocsVnvestment Committee120051Minutes\Minutes 0022305.doc INVESTMENT & FINANCE COMMITTEE MINUTES FEBRUARY 23.2005 opportunities and expressed a greater level of comfort with corporate investments. Mayor Pro-Tempore Ferguson asked how the gap would be bridged with the PERS liability. Mr. Espinoza indicated that more funds are being placed in the general fund for retiree benefits than are actually required. Mr. Ferguson requested an analysis of the unfunded liability and the effectiveness of investing in Ford. Mr. Espinoza added that the financial statement has a note that discloses the gap. Mayor Pro-Tempore Ferguson asked if there is a new assessment of the bonding capacity for each project area since they have been extended in the last few years. Mr. Coleman responded that the new dates to receive increment are 2026 for Project Area 1 (original), 2032 for Project Area 1 (annexed), 2038 for Project Area 2, 2039 for Project Area 3, and 2043 for Project Area 4. The tax increment cap will not be reached in Project Areas 1 (original), 2 and 3. It may be reached in Project Areas 1 (annexed) and 4. The bonding capacity is around $55 million to $62 million, taking ERAF into consideration. Over the next two years, the ERAF payment is approximately $3.9 million. MOTION to accept the report and recommend that it be received and filed by the City Council made by Member Wood, seconded by Member Ortega, and unanimously approved. B. LOCAL AGENCY INVESTMENT FUND (L.A.I.F.) ACCOUNT STATEMENTS FOR JANUARY 2005 The reports were reviewed and placed on file. C. CALIFORNIA ASSET MANAGEMENT PROGRAM (C.A.M.P.) ACCOUNT STATEMENTS FOR JANUARY 2005 The reports were reviewed and placed on file. D. CITY AND REDEVELOPMENT AGENCY FINANCIAL REPORTS FOR JANUARY 2005 The City's report was reviewed and placed on file. Mr. Coleman announced that the Redevelopment Agency's reports were distributed for November and December 2004, as well as January 2005. The reports were reviewed and placed on file. E. PARKVIEW PROFESSIONAL OFFICE BUILDINGS FINANCIAL REPORT FOR JANUARY 2005 3 G:IFinancelNiamh Ortega\Wpdocsllnvestment Committee120051Minutes\Minutes 0022305.doc INVESTMENT & FINANCE COMMITTEE MINUTES FEBRUARY 23.2005 The report was reviewed and placed on file. F. PALM DESERT GOLF COURSE FACILITIES CORPORATION FINANCIAL REPORT FOR JANUARY 2005 Mr. Espinoza reported that Mr. Young was out of state and would be able to answer any questions at the next regular meeting. Mr. Ortega reported that at the end of January, in spite of a few rainy days, the course was performing better than budgeted. G. 457 DEFERRED COMPENSATION REPORTS FOR 4Q04 (NATIONWIDE AND ICMA) The report was reviewed and placed on file. H. INDEPENDENT ACCOUNTANTS' REPORT — CASH AND INVESTMENT ACTIVITIES REVIEW Mr. Espinoza reported that there were no significant findings by the accountants, and will be reviewed again in three years. VI. CONTINUED BUSINESS A. UPDATE ON INVESTMENT SUBCOMMITTEE MEETING Mr. Coleman reported that the subcommittee met to discuss the Request for Qualifications (RFQ) draft for underwriting services. Once the changes are made, the RFQ will be distributed. A list of those receiving the RFQ was distributed to the Committee. The next meeting date has not yet been determined. VII. OLD BUSINESS A. PUBLIC AND PRIVATE PARTNERSHIP BACKGROUND CHECKS No report. B. PALM DESERT FINANCING AUTHORITY BOND ISSUANCE Mr. Coleman reported that staff was directed by Council to research the possibility of recovering funds for staff time expended on bond issues. He requested that the Committee approve staff to enter into discussions with the City Attorneys to explore this opportunity. 4 G:IFinancelNiamh Ortega\Wpdocsllnvestment Committee120051MinuteslMinutes 0022305.doc INVESTMENT & FINANCE COMMITTEE MINUTES FEBRUARY 23.2005 Member Wood questioned if the City is the only source for developers to recover these fees. Member Ortega indicated that the developer would typically have to pay for conditions placed on a development in cash, but the City of Palm Desert allows them to form an assessment district to do this. The purpose would be to obtain a legal opinion that designates how much the City could impose. MOTION to approve discussions between staff and the City Attorneys to explore recovery of funds for staff time spent on bond issues made by Member Wood, seconded by Member Campbell, unanimously approved. VI11. ADJOURNMENT Mr. Espinoza adjourned the meeting at 11:15 a.m. Niamh Ortega, Reco 5 1 rl g Secretary G:IFinanc&Niamh Ortega\Wpdocsllnvestment Committee120051Minutes\Minutes 0022305.doc