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HomeMy WebLinkAboutMinutes - Audit Investment and Finance Committee 05/23/06MINUTES REGULAR MEETING OF THE PALM DESERT AUDIT, INVESTMENT, AND FINANCE COMMITTEE Tuesday, May 23, 2006 CALL TO ORDER Chairman Gibson called to order a regular meeting of the Palm Desert Audit, Investment and Finance Committee at 10:03 a.m. II. ROLL CALL Present: Paul Gibson, Finance Director/Treasurer Dick Kelly, Mayor Pro-Tempore Carlos L. Ortega, City Manager Luis Espinoza, Asst. Finance Director Thomas Jeffrey, Deputy City Treasurer Justin McCarthy, ACM/Redevelopment Russ Campbell, Community Member Dixie Proulx, Community Member Bill Veazie, Community Member Bob Hargreaves, City Attorney Also Present: Absent: Jim Ferguson, Mayor Dave Erwin, City Attorney Everett Wood, Community Member (arrived at 10:23 a.m.) Mike Cavanaugh, Wedbush Morgan Securities Anthony Hernandez, Senior Financial Analyst Arla Scott, Financial Analyst Veronica Tapia, Redevelopment Accountant Rodney Young, Desert Willow Golf Resort Suzanne Cicchini, Recording Secretary ORAL COMMUNICATIONS Chairman Gibson introduced Mike Cavanaugh of Wedbush Morgan Securities. IV. APPROVAL OF MINUTES A. MINUTES OF THE REGULAR MEETING OF APRIL 25, 2006 MOTION was made by Mr. Campbell and seconded by Mr. Veazie to adopt and approve in their entirety the minutes of the regular meeting of the Palm Desert Audit, Investment and Finance Committee held on April 25, 2006. Motion passed. AUDIT, INVESTMENT, AND FINANCE COMMITTEE MINUTES MAY 23, 2006 V. NEW BUSINESS A. CITY AND REDEVELOPMENT AGENCY INVESTMENT SCHEDULES AND. SUMMARY OF CASH REPORTS FOR APRIL 2006 Mr. Jeffrey highlighted the following points of the City and RDA investment reports for April 2006: The book value of the City Portfolio for April, 2006 was approximately $150.8 million. Interest earnings were approximately $506,000. Yield -to -maturity was approximately 4.47%. The book value of the RDA Portfolio for April, 2006 was approximately $142.7 million. Interest earnings were approximately $522,000. Yield -to -maturity was approximately 4.50%. B. LOCAL AGENCY INVESTMENT FUND (L.A.I.F.) ACCOUNT STATEMENTS FOR APRIL 2006 The reports were reviewed and placed on file. C. CALIFORNIA ASSET MANAGEMENT PROGRAM (C.A.M.P.) ACCOUNT STATEMENTS FOR APRIL 2006 The reports were reviewed and placed on file. D. CITY AND REDEVELOPMENT AGENCY FINANCIAL REPORTS FOR APRIL 2006 Mr. Gibson presented the City's report. License and permit revenue is up due to development activity. Interest rates are higher. Property tax revenue is higher due timing of the ERAF payment and a one time supplemental payment from the County of Riverside. Budgeted revenues are at 99% of the year to date. The City would actually be above that if 100% of sales tax was received. The State of California deducts 25% and the City receives only two payments in January and May. Mr Gibson noted that it was a timing issue. Mr. Campbell inquired about the time line for the build out of Palm Desert, and whether property taxes would cover the costs of services. Mr. Gibson indicated that build out is about 5 years away according to a consultant projection provided to the City of Palm Desert. Mr. Gibson noted that there is a lot of growth in the north sphere that will be occurring. Growth is expected for retail, hotels, and housing projects. Mr. Gibson believes that growth will begin to slow in the 5-8 year range. Growth of other cities is an offset because their citizens shop at the mall. Mr. Ortega noted that total property taxes is a very small portion of our total budget. That is why the city pursues opportunities that produce sales tax revenue, such as hotels. Mr. Campbell inquired about the growth of police and fire services which would be an additional expense for Palm Desert. Mr. Gibson noted that discussions to build a new fire station in the north area of town are now underway. Mr. Kelly noted that a fire assessment is on the City Council agenda. Mr. Gibson indicated the current ordinance that goes back to 1981, charged $100 per residential unit and about .10 per square foot for commercial development. The cost has grown since then 2 G:lFinanceWiamh Ortega\Wpdocs\lnvestment Committee12006Winutes\Minutes 052306.doc AUDIT, INVESTMENT, AND FINANCE COMMITTEE MINUTES MAY 23, 2006 D. CITY AND REDEVELOPMENT AGENCY FINANCIAL REPORTS FOR APRIL 2006 (CONTINUED) so the new proposed fees are estimated to be $689.00 per residential unit and declines based on density of the units for apartments and condominiums. Two rates are being considered for commercial development. One would be .22 and another .29 per square foot. This would raise about $3.3 million dollars for the development in the north end. Ms. Proulx inquired who would pay the fee and Mr. Gibson responded that it would be the developers responsibility. Ms. Proulx wanted to know how fire services would be paid for after that. Mr. Gibson responded that it would be borne by the General Fund. Mr. Gibson also noted that there was a Proposition A Fire tax that dated back to 1981, but it wasn't collected because development was needed in the north area. Ms. Scott presented the RDA report. Income was slightly lower than expected due to types of units rented and the time frame of February to May for that income. Tax increments are received in January and May. Expenses were slightly lower due to averaging over a 12 month period. Debt service was averaged over 12 months. The reports were reviewed and placed on file. E. PARKVIEW PROFESSIONAL OFFICE BUILDINGS FINANCIAL REPORT FOR APRIL 2006 Paul Gibson reported that a request was received from the State Department of Rehabilitation to extend their lease. They are requesting some tenant improvements. An architect was consulted to review the building and the requested improvements. These items will be addressed in next year's budget. The report was reviewed and placed on file. F. PALM DESERT GOLF COURSE FACILITIES CORPORATION FINANCIAL REPORT FOR APRIL 2006 Mr. Young reported that April was an excellent month for Desert Willow. Revenues were up approximately 20% over budget. Expenses were somewhat higher, but were based upon increased revenues. April, 2006 rounds are up by 652. Additionally, over 90,000 rounds of golf are projected for calendar year 2006. Ms Proulx inquired about the age of the golf course and the reburbishment schedule of various components of the course. Mr. Young responded that the course will be 10 years old next February. The carts are replaced every 3-4 years. Landscape refurbishment is constant. Refurbishment of tee boxes, sand traps and bunkers is ongoing. The sprinkler system has a life span of about 25 years depending upon technology and parts of the system are replaced as needed. The staff is very satisfied with the course's performance this month. 3 G TinanceWiamh OrtegalWpdocsllnvestment Committee 1200610nutesWinutes 052306.doc AUDIT, INVESTMENT, AND FINANCE COMMITTEE MINUTES MAY 23. 2006 VI. CONTINUED BUSINESS None. VII. OLD BUSINESS A. PUBLIC AND PRIVATE PARTNERSHIP BACKGROUND CHECKS No report. B. PALM DESERT FINANCING AUTHORITY BOND ISSUANCE Mr. Gibson reported that at last month's meeting, Mr. Ken Dieker of Del Rio Advisors, Inc., the financial advisor to the City with regard to several bond issues read a report to the committee. Bond ratings and insurance information are anticipated soon. It is expected that new bond ratings will be provided to City Council on June 8, 2006. (Mr. Wood entered the meeting at 10:23 a.m.) VIII. ADJOURNMENT There being no further business, this meeting, upon motion duly made, seconded and carried was adjourned at 10:25 a.m. Niamh Ortega, Record' Secretary le! G:kFinanceWiamh Ortegakftdocsllnvestment Committee120061Minutes)Minutes 052306.doc