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Home My WebLink AboutMinutes Audit Investment and Finance Committee 10/26/05MINUTES REGULAR MEETING OF THE PALM DESERT INVESTMENT AND FINANCE COMMITTEE Wednesday, October 26, 2005 CALL TO ORDER Mr. Espinoza, acting as chairman, called to order a regular meeting of the Palm Desert Investment and Finance Committee at ten -thirty in the morning. II. ROLL CALL Present: Absent: Buford Crites, Mayor David Erwin, City Attorney Bob Spiegel, Councilman Paul Gibson, Finance Director/Treasurer Carlos Ortega, City Manager Justin McCarthy, ACM/Redevelopment Thomas Jeffrey, Deputy City Treasurer Russ Campbell, Community Member Dixie Proulx, Community Member Bill Veazie, Community Member Everett Wood, Community Member Also Present: Mike Cavanaugh, Wedbush Morgan Luis Espinoza, Assistant Finance Director Anthony Hernandez, Senior Financial Analyst Niamh Ortega, Recording Secretary Randy Rassi, Interim Redevelopment/Finance Manager Veronica Tapia, Redevelopment Accountant Rodney Young, Desert Willow Golf Resort General Manager III. ORAL COMMUNICATIONS Mr. Espinoza noted that Mr. Gibson was absent because he was attending the CalPERS Educational Forum in Monterey, California. Councilman Spiegel wanted to discuss the concept of an audit committee. Mr. Espinoza suggested deferring this discussion since the item was already on the agenda under "New Business." Councilman Spiegel agreed. INVESTMENT AND FINANCE COMMITTEE MINUTES IV. APPROVAL OF MINUTES OCTOBER 26, 2005 A. MINUTES OF THE REGULAR MEETING OF JULY 27, 2005 MOTION was made by Mr. Wood and seconded by Mr. Campbell to adopt and approve in their entirety the minutes of the regular meeting of the Palm Desert Investment and Finance Committee held on July 27, 2005. Motion adopted by a majority vote. Councilman Spiegel and Mr. Jeffrey abstained from voting. V. NEW BUSINESS A. CITY AND REDEVELOPMENT AGENCY INVESTMENT SCHEDULES AND SUMMARY OF CASH REPORTS FOR JULY, AUGUST, AND SEPTEMBER 2005 Mr. Jeffrey submitted the CITY and RDA investments reports for July, August, and September 2005. He highlighted the following points for the month ended September 30, 2005: The book value of the CITY Portfolio was approximately $149 million. Interest earnings were approximately $431,000. Yield -to -maturity was approximately 3.50%. The book value of the RDA Portfolio was approximately $126 million. Interest earnings were approximately $374,000. Yield -to -maturity was approximately 3.42%. MOTION was made by Mr. Wood and seconded by Mr. Campbell to recommend that the City Council approve the CITY and RDA investment reports for the months of July, August, and September 2005. Motion adopted unanimously. B. LOCAL AGENCY INVESTMENT FUND (L.A.I.F.) ACCOUNT STATEMENTS FOR JULY, AUGUST, AND SEPTEMBER 2005 The reports were reviewed and placed on file. C. CALIFORNIA ASSET MANAGEMENT PROGRAM (C.A.M.P.) ACCOUNT STATEMENTS FOR JULY, AUGUST, AND SEPTEMBER 2005 The reports were reviewed and placed on file. D. CITY AND REDEVELOPMENT AGENCY FINANCIAL REPORTS FOR JULY, AUGUST AND SEPTEMBER 2005 The reports were reviewed and placed on file. 2 WAAgenda Items12006-July 13Vnvestment Committee minutesVnv Minutes 102605.doc INVESTMENT AND FINANCE COMMITTEE MINUTES OCTOBER 26, 2005 E. PARKVIEW PROFESSIONAL OFFICE BUILDINGS FINANCIAL REPORT FOR JULY, AUGUST, AND SEPTEMBER 2005 The report was reviewed and placed on file. Currently, there are no vacancies at the Parkview building. F. PALM DESERT GOLF COURSE FACILITIES CORPORATION FINANCIAL REPORT FOR JULY, AUGUST, AND SEPTEMBER 2005 Mr. Young reported that the course is doing quite well. The Mountain View Course will reopen next week following its reseeding. The largest expenses during this period are due to increased gas prices, and the cost of fertilizer. G. UPDATE RELATIVE TO CONFLICT OF INTEREST REGULATIONS This item was continued to the next regular meeting. H. APPROVAL OF WELLS FARGO & COMPANY AS A SUCCESSOR TRUSTEE Mr. Veazie stated that he would abstain from discussing or voting on this matter since he was formerly in executive management at Wells Fargo & Company. Mr. Jeffrey explained why the City had distributed a Request for Proposals (RFP) for a Corporate Trustee. The City had received RFP responses from Wachovia Bank (Charlotte, North Carolina); Zions Bank (Salt Lake City, Utah); and Wells Fargo & Company (San Francisco, California). City Finance and Redevelopment Agency staff had interviewed all three candidates. After reviewing the proposals, and referencing the candidates, it was determined that Wells Fargo & Company had submitted the most competitive offer, based upon pricing, staffing, and familiarity with the City's bond issues. MOTION made by Mr. Wood and seconded by Mr. Campbell to recommend that the City Council terminate the City's trust relationship with Bank of New York, and approve Wells Fargo & Company as the successor trustee for a five-year term, beginning January 1, 2006. Motion adopted by a majority vote. Mr. Veazie abstained from voting. 3 WAAgenda Items12006-July 13Vnvestment Committee minutesVnv Minutes 102605.doc INVESTMENT AND FINANCE COMMITTEE MINUTES OCTOBER 26, 2005 REVIEW OF PROPOSED ORDINANCE TO AMEND SECTION 2.16.010 OF THE CODE OF THE CITY OF PALM DESERT, CALIFORNIA Councilman Spiegel discussed why he thought that the formal assignment of audit review responsibilities to the Investment and Finance Committee would benefit the City. Currently, the City Council is the only formal level of audit review in the City. Councilman Spiegel believed that the independent city residents who sit on the Investment and Finance Committee should also review the City's audits. Councilman Spiegel observed that since it was already existing practice for the Investment and Finance Committee to: (1) recommend To Council which outside auditor should be selected; (2) review the audit report; and (3) recommend to Council that it approve the final audit report, it would make sense for the City to formalize this practice by Ordinance. If the City Council were to assign these responsibilities to a separate Audit Committee, then that committee might not be effective since it would only meet once or twice a year. Councilman Spiegel stated that under the proposed amendment, Staff would continue to make audit recommendations to the Investment and Finance Committee. Likewise, the Investment and Finance Committee would continue to make audit recommendations to the City Council. This would provide the City Council with two levels of advisory audit review. Mr. Ortega said that he thought that a state law had recently been enacted which required nonprofit entities to keep audit committees separate from finance committees. This would allow the audit committees to audit the finance committees. Mr. Ortega asked if anyone knew if this law applied to cities. Councilman Spiegel responded by suggesting that the Committee recommend that Council adopt the amended Ordinance as drafted, and, then, if state law required a separate Audit Committee, the City could always create one. Otherwise, the Investment and Finance Committee would assume those responsibilities. MOTION made by Mr. Jeffrey and seconded by Mrs. Proulx to recommend that the City Council adopt the amended Ordinance as drafted, and rename the Investment and Finance Committee as "The Audit, Investment, and Finance Committee." Motion adopted unanimously. 0 WAAgenda Items12006-July 13Vnvestment Committee minutesVnv Minutes 102605.doc INVESTMENT AND FINANCE COMMITTEE MINUTES OCTOBER 26, 2005 VI. CONTINUED BUSINESS None. VII. OLD BUSINESS A. PUBLIC AND PRIVATE PARTNERSHIP BACKGROUND CHECKS No report. B. PALM DESERT FINANCING AUTHORITY BOND ISSUANCE No report. VIII. MEMBER COMMENTS None. IX. ADJOURNMENT There being no further business, this meeting, upon motion duly made, seconded, and carried, was adjourned at eleven o'clock in the morning. Niamh Ortega, Recording Secretary 5 WAAgenda Items12006-July 13Vnvestment Committee minutesVnv Minutes 102605.doc