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HomeMy WebLinkAboutAudit Invstmnt & Finance Cmte - 12/22/09a�. MINUTES REGULAR MEETING OF THE PALM DESERT AUDIT, INVESTMENT, AND FINANCE COMMITTEE Tuesday, December 22, 2009 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 Thomas Jeffrey, Deputy City Treasurer Cindy Finerty, Mayor John Wohlmuth, City Manager Justin McCarthy, ACM/Redevelopment David Erwin, City Attorney Stephanie Loog, Community Member Everett Wood, Community Member James Walker, Community Member Absent: Jim Ferguson, Council Member Niamh Ortega, Recording Secretary CITY COUNCIL ACTION Also Present: APPROVED Anthony Hernandez, Senior Financial Analyst RECEIVED E O+` Jono Hildner, Resident Veronica Tapia, RDA Accountant Derek White, Desert Willow Richard Mogensen, Desert Willow III. ORAL COMMUNICATIONS IV. APPROVAL OF MINUTES rwINIED Ol'IER MEETING DATE 3-//- ©/O i AYES: ei)-5 DATE,, t/5oi �%// ' lec l / 7er,l , NOES: AI Ori ' }� f ABSENT: N O1 N. ABSTAIN: N c)tl VERIFIED BY: R-DI_IrG Original on File with City Clerk s Office A. MINUTES OF THE REGULAR MEETING OF NOVEMBER 24, 2009 MOTION was made by Member Loog and seconded by Member Wood to adopt and approve in their entirety the Minutes of the regular meeting of the Palm Desert Audit, Investment and Finance Committee held on November 24, 2009. G:\Finance\Niamh Ortega\Investment Committee\2009\Minutes\Minutes 122209.doc AUDIT, INVESTMENT, AND FINANCE COMMITTEE MINUTES December 22, 2009 V. NEW BUSINESS A. CITY AND REDEVELOPMENT AGENCY INVESTMENT SCHEDULES AND SUMMARY OF CASH REPORTS FOR NOVEMBER 2009 Member Jeffrey presented the report and highlighted the following points: City had shifted money into the GMRA account in November which resulted in higher returns. The book value of the City Portfolio for the period ended November 30, 2009 was approximately $201.4 million. Interest earnings were approximately $315,000. Yield -to -maturity was approximately 1.93%. The book value of the Redevelopment Agency Portfolio for the period ended November 30, 2009 was approximately $261.7 million. Interest earnings were approximately $257,000. Yield -to -maturity was approximately 1.21%. The City's GMRA arrangement will be ending on December 31st at which point the City will be going out in January to invest. B. LOCAL AGENCY INVESTMENT FUND (L.A.I.F.) ACCOUNT STATEMENTS FOR NOVEMBER 2009 Mr. Gibson stated that due to the GMRA arrangement closing, the City will be shifting money into the LAIF account with CAMP being the secondary account as we wait to invest. Maximum to invest is $45 million although our policy is $40 million. C. CALIFORNIA ASSET MANAGEMENT PROGRAM (C.A.M.P.) ACCOUNT STATEMENTS FOR NOVEMBER 2009 The report was received and filed. D. CITY FINANCIAL REPORTS AND REDEVELOPMENT AGENCY FINANCIAL REPORTS FOR NOVEMBER 2009 Mr. Gibson reported that at forecasting, revenues are down by $3.5 million due to sales tax and TOT figures continuing to slide with the current state of the economy. Departments have been asked to review their budgets and determine where further reductions can be made. As of this meeting, approximately $1.3 million in expenditures have been eliminated. Council will review to determine if the affected program cuts are appropriate. For the month of November, the City's revenues were $46.9 million and currently are down to $43.4 million. Mr. Wohlmuth commented that the City has projects that are budgeted across the year, and if they are completed at the start of the year, it is reflected as an increase in expenditures. 2 AUDIT, INVESTMENT, AND FINANCE COMMITTEE MINUTES December 22. 2009 Ms. Loog stated that now that the TARP money has been paid back by Bank of America the restrictions are not going to be as high for the home loans. Foreclosures will increase and the industry anticipates about 100,000 foreclosures. The revised estimate is now several thousand just with Bank of America. In the West there are about 35-50 foreclosures a day and 40% of them are coming from Riverside County. LA Times anticipates nationally about 1.7 million foreclosures. Ms. Tapia reported that RDA revenues for the month of November were $2.6 million and expenditures were approximately $1.3 million. Year-to-date is $5.1 million in revenues and $23 million in expenditures. E. PARKVIEW PROFESSIONAL OFFICE BUILDINGS FINANCIAL REPORTS FOR NOVEMBER 2009 Overall there is a 3% vacancy rate at the Parkview office complex. At this time there is a non-profit business who would like to rent and that request will be taken to Council in January. F. PALM DESERT GOLF COURSE FACILITIES CORPORATION FINANCIAL REPORTS FOR NOVEMBER 2009 Mr. White reported that revenues for November were $843,000 versus a budget of $882,000, roughly a 4% shortfall primarily in the Food and Beverage department. There is a significant decrease within the average check both from the dining and banquet perspectives. Payroll was $362,000 versus a budget of $366,000, roughly a 1% change. Operating expenses were $295,000 versus a budget of $369,000. Seed costs came in much lower than expected and were approximately $35,000, and utility costs were substantially lower. The earnings came in at $76,000 versus a budget of $34,000. Overall, budget is ahead of pace by $163,000 for the year to date. Mr. Morgensen mentioned that the group side of golf and catering are not doing well. Catering revenues include golf and food and beverage. Hotel group business has decreased which causes a struggle to make up the Toss. December will be a very difficult month due to the decrease in holiday parties, golf and catering. More all-inclusive deals will start to appear with hotels and golfing to make up for the decrease in golfers which results in an increase in competition. G. REVIEW OF AUTHORIZED MEDIUM -TERM NOTE ISSUER LIST Mr. Jeffrey stated that every year, the Committee is called upon for approval of the list of authorized issuers that are proposed for the upcoming year. This year, there are a few new companies including pharmaceutical, petroleum, and banking companies. Most of the companies have AA or AAA ratings. MOTION was made by Member Wood and seconded by Member Erwin to approve the Medium -Term Note Issuer List, unanimously approved. 3 AUDIT, INVESTMENT, AND FINANCE COMMITTEE MINUTES December 22. 2009 H. REVIEW OF RFP FOR BANKING AND CUSTODY SERVICES The Committee plans to have the RFP issued with a due date of February 4, 2010. Interviews will be conducted and will go to Council for approval on March 11, 2010. Interview results will be presented at the February 23 Investment and Finance meeting. Mr. Gibson asked for volunteers to be selected to decide on what companies will be on the interview panel. The following people were chosen: Paul Gibson Thomas Jeffrey Cindy Finerty John Wohlmuth Justin McCarthy MOTION was made by Member Wood and seconded by Member Walker to approve the RFP for Banking and Custody Services, unanimously approved. VI. CONTINUED BUSINESS None. VII. OLD BUSINESS None. VIII. INFORMATIONAL ITEMS None. IX. ADJOURNMENT There being no further business, this meeting, upon motion duly made, seconded and carried was adjourned at 10:45 a.m. to the next regular meeting of January 26, 2010. herie Williams, Recording Secretary 4