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Home My WebLink AboutAudit Invstmnt & Finance Cmte - 01/26/10MINUTES REGULAR MEETING OF THE PALM DESERT AUDIT, INVESTMENT, AND FINANCE COMMITTEE Tuesday, January 26, 2010 I. CALL TO ORDER Chairman Gibson called to order a regular meeting of the Palm Desert Audit, Investment and Finance Committee at 10:00 a.m. II. ROLL CALL Present: Paul Gibson, Finance Director Luis Espinoza, Asst. Finance Director Jim Ferguson, Council Member Thomas Jeffrey, Deputy City Treasurer Cindy Finerty, Mayor John Wohlmuth, City Manager Justin McCarthy, ACM/Redevelopment David Erwin, City Attorney Jono Hildner, Committee Member Patricia Kent, Committee Member Everett Wood, Committee Member James Walker, Committee Member Absent: CITY COUNCILACTION APPROVED DENIED RECEIVED £ Fi 1e - OTHER MEETING DATE 3-//--.)J /U AYES. &&f)San, ((514.0f1 Ke7/ ,S 7 e i Fi/)er� NOES. /JoOC- / AIINENiT• N077C. ABSTAIN• /\IO/le_ ERHF II,I) I:Y• R � Cry Original on File with City Clerk'si)flice Also Present: Anthony Hernandez, Senior Financial Analyst Richard Mogensen, Desert Willow Daphne Munoz, Diehl, Evans & Company, LLP Niamh Ortega, Recording Secretary Nitin Patel, Diehl, Evans & Company, LLP Veronica Tapia, RDA Accountant Derek White, Desert Willow III. ORAL COMMUNICATIONS Chairman Gibson welcomed Jono Hildner and Patricia Kent as new members of the Audit, Investment and Finance Committee. IV. APPROVAL OF MINUTES A. MINUTES OF THE REGULAR MEETING OF DECEMBER 22, 2009 Member Hildner requested that his attendance be recorded under "Also Present" as a Public Member as it was placed in the incorrect category. He also requested G:\Finance\Niamh Ortega\Investment Committee\2010\Minutes 012610.docx AUDIT, INVESTMENT, AND FINANCE COMMITTEE MINUTES January 26, 2010 that the word "users" be changed to "issuers" under Section G, "Review of Authorized Medium -Term Note Issuer List". MOTION was made by Member Wood and seconded by Member Erwin to adopt and approve in their entirety the Minutes, as amended, of the regular meeting of the Palm Desert Audit, Investment and Finance Committee held on December 22, 2009. V. NEW BUSINESS A. CITY AND REDEVELOPMENT AGENCY INVESTMENT SCHEDULES AND SUMMARY OF CASH REPORTS FOR DECEMBER 2009 Member Jeffrey presented the report and highlighted the following points: The book value of the City Portfolio for the period ended December 31, 2009 was approximately $202.2 million. Interest earnings were approximately $314,000. Yield -to -maturity was approximately 1.82%. The book value of the Redevelopment Agency Portfolio for the period ended December 31, 2009 was approximately $256.3 million. Interest earnings were approximately $262,000. Yield -to -maturity was approximately 1.21%. Member Jeffrey pointed out the list of securities purchased for the City and Redevelopment Agency, and noted that they were purchased at the best returns available. B. LOCAL AGENCY INVESTMENT FUND (L.A.I.F.) ACCOUNT STATEMENTS FOR DECEMBER 2009 The report was received and filed. C. CALIFORNIA ASSET MANAGEMENT PROGRAM (C.A.M.P.) ACCOUNT STATEMENTS FOR DECEMBER 2009 The report was received and filed. D. CITY FINANCIAL REPORTS AND REDEVELOPMENT AGENCY FINANCIAL REPORTS FOR DECEMBER 2009 Chairman Gibson indicated that the ERAF payment is typically received in January or February. Proposition 1A money should be received shortly. Expenditures are within budgeted amounts. As noted in previous months, payments are typically received January through June, resulting in a distorted picture when compared to expenditures. It evens out in May or June each year, giving a more balanced picture at that time. Ms. Tapia gave an overview of the revised RDA report format based on requests by Committee members. Several members indicated they liked the new format. 2 AUDIT, INVESTMENT, AND FINANCE COMMITTEE MINUTES January 26, 2010 E. PARKVIEW PROFESSIONAL OFFICE BUILDINGS FINANCIAL REPORTS FOR DECEMBER 2009 There are two small spaces, 400 sq. ft. and 700 sq. ft. available for lease. No interest has been expressed in leasing these spaces. The Water Resources board is currently in the design process for tenant improvements. F. PALM DESERT GOLF COURSE FACILITIES CORPORATION FINANCIAL REPORTS FOR DECEMBER 2009 Mr. White indicated that revenue was approximately $528,000 versus a budget of $669,000 and prior year of $605,000. There were six rain -outs and three or four frost delays, accounting for approximately half of the revenue shortfall. The course also relies heavily on catering events which were lacking this year. Payroll expenses indicated a 5% saving on budget and 4% savings on prior year. Operating expenses were $231,000 versus a budget of $241,000 and prior year of $211,000. Mr. White reminded the Committee that the renovation of the Mountain View course in the summer resulted in a loss of revenue due to the length of time the course was closed, and is reflected in the year-to-date totals. January appears to be a better month, and is $35,000 ahead of prior year for green fees despite one rain -out day. Food and beverage is approximately $15,000 ahead of last year. The majority of business occurs from January 15 through the end of April, so the coming months should be more positive. G. REVIEW OF AMENDMENT TO INVESTMENT POLICY Following the most recent approval of the amendments to the Investment Policy, LAIF adjusted the maximum that could be invested. The City's policy should be amended to reflect that the amount to be invested should equal the maximum established by LAIF, rather than a dollar amount. The Committee will continue to be informed when LAIF adjusts its maximum allowable investment amount. MOTION was made by Member Hildner and seconded by Member Walker to approve the amendment to the Investment Policy as presented. (The following three items were presented and addressed in one presentation under Item H.) H. PRESENTATION OF THE CITY OF PALM DESERT AUDITED FINANCIAL REPORTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 Mr. Nitin Patel gave an overview of the Comprehensive Annual Financial Report, which serves as a complete report and summary of all financial statements for the City, and includes financial information for the Redevelopment Agency and Palm Desert Recreational Facilities Corporation. Mr. Patel stated that the auditors issued an unqualified, or "clean", opinion for the financial statements for all entities, found on Pages 1 and 2. A synopsis of the 3 AUDIT, INVESTMENT, AND FINANCE COMMITTEE MINUTES January 26, 2010 General Fund can be found on Page 20, and Mr. Patel highlighted some of the key points on the table. Pages 111 and 112 provide a summary of the activity over the course of the year, and show that expenditures exceeded revenues for the year. He indicated that this is typical of other cities he has reviewed, and should not come as a surprise to Palm Desert staff and officials. Mr. Gibson explained that part of the reason expenditures exceeded revenues were because: 1) a $2.5 million loan to the Energy Improvement Program was approved; 2) encumbrances carried over from the old year to new year for purchase orders add to the budget for the new year; and 3) an additional $3 million in appropriations was approved at the Council level to perform street resurfacing projects. Mr. Patel indicated that they issued a three -page letter of communication for those in charge of governance as required by Statement 114, and gave an overview of the letter, which was contained in the staff report to the Committee. He also highlighted statements that GASB recently announced and are now in effect for upcoming audits. MOTION was made by Member Finerty and seconded by Member Ferguson to recommend that the City Council receive and file the City of Palm Desert audited financial reports for the fiscal year ended June 30, 2009. Unanimously approved. I. PRESENTATION OF THE PALM DESERT REDEVELOPMENT AGENCY FINANCIAL REPORTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 See discussion under Item V., H. MOTION was made by Member Finerty and seconded by Member Ferguson to recommend that the City Council receive and file the Palm Desert Redevelopment Agency financial reports for the fiscal year ended June 30, 2009. Unanimously approved. J. PRESENTATION OF THE CITY OF PALM DESERT AUDITED FINANCIAL REPORTS FOR THE FISCAL YEAR ENDED JUNE 30, 2009 See discussion under Item V., H. MOTION was made by Member Finerty and seconded by Member Ferguson to recommend that the City Council receive and file the Palm Desert Recreational Facilities Corporation financial reports for the fiscal year ended June 30, 2009. Unanimously approved. K. INDEPENDENT ACCOUNTANTS' REPORT ON AGREED -UPON PROCEDURES PERFORMED ON THE MEASURE A TRANSPORTATION FUND FOR THE FISCAL YEAR ENDED JUNE 30, 2009 Chairman Gibson reported that independent auditors reviewed the City's expenditures to ensure that all monies are reported appropriately. 4 AUDIT, INVESTMENT, AND FINANCE COMMITTEE MINUTES January 26. 2010 MOTION was made by Member Finerty and seconded by Member Walker to recommend that the City Council receive and file the Independent Accountants' Report on agreed -upon procedures performed on the Measure A transportation Fund for the fiscal year ended June 30, 2009. Unanimously approved. VI. CONTINUED BUSINESS None. VII. OLD BUSINESS A. PALM DESERT FINANCING AUTHORITY BOND ISSUANCE The City Council has approved the resolution for the Energy Independence Program. VII1. INFORMATIONAL ITEMS None. IX. ADJOURNMENT There being no further business, this meeting, upon motion duly made, seconded and carried was adjourned at 10:50 a.m. to the next regular meeting of February 23, 2010. Niamh Ortega, R 5 • rding Secretary