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Investment Advisory Committee Minutes February 10, 2000

Investment Advisory Committee Minutes February 10, 2000


Regular Meeting
Fullerton City Hall - 303 West Commonwealth Avenue
Third Floor - Room 301
Administrative Services Department Conference Room

Thursday, February 10, 2000
4:00 p.m.


Chris Meyer called the meeting to order at 4:10 p.m.


Members present: Victoria Beatley, Citizen Member
Marlies Diamond, City Treasurer
Virginia Han, Citizen Member
Chris Meyer, Director of Administrative Services
Members absent: Jim Armstrong, City Manager
John Greenwood, Citizen Member, Chairman
F. Richard Jones, M.D., Mayor

In Chairman Greenwood's absence, Mr. Meyer served as Acting Chairman


Item 1. Approval of Minutes of February 11, 1999

Due to a lack of quorum of those in attendance at the February 11, 1999, meeting, approval of the minutes was postponed to the next meeting.

Item 2. Status of Current Investment Portfolio

City Treasurer Marlies Diamond distributed to the committee members an updated status report of the investment portfolio. The quarterly report provided the following:

  1. Portfolio balances as of 11/30/99, 12/31/99, and 1/31/00.
  2. Types of investments, with percentages of portfolio invested in each type, and change from last report.
  3. List of maturities between November 1, 1999, and February 9, 2000.
  4. List of reinvestments between November 1, 1999, and February 9, 2000.

Ms. Diamond noted that she had not made many investments during January, due to the anticipated rate increase expected February 2nd, and that investments were still short-term. She pointed out that LAIF averaged 5.77 for January. Ms. Beatley pointed out that during an election year, staying short would be appropriate, but noted that five-year Treasury Notes are coming out at 8 percent yield.

Item 3. Resolution of Orange County Bankruptcy

Mr. Meyer pointed out that the Orange County bankruptcy has essentially been resolved, and that the City of Fullerton will receive a final payout of $3.2 million on or about February 24th, which will bring the City's recovery of monies to 97.5%.

Item 4. Investment Policy Annual Review

Prior to the meeting, the Committee members had received a copy of the City's current Investment Policy for review. Ms. Diamond pointed out that there were no new laws which would require any changes to the Investment Policy. Mr. Meyer asked if anyone had any comments or questions pertaining to the policy. Ms. Beatley questioned the restriction of 60% of the portfolio being invested in federal agency securities (page 2, paragraph B of the policy), and suggested that perhaps a dollar amount would be more appropriate. Mr. Meyer pointed out that the percentage allows more flexibility with a growing portfolio such as the City's. Ms. Beatley pointed out that the Government Code has no limitations on agency securities, but Ms. Diamond noted that a survey she did revealed that most cities impose limitations. Ms. Beatley suggested that the words "at the time of purchase" be added to the end of the sentence, i.e., "Purchase of this category shall not exceed sixty percent (60%) of the portfolio at the time of purchase."

Mr. Meyer motioned to recommend to City Council that the wording of paragraph B, "Federal Agency Securities," on page 2 of the Investment Policy, be modified to read as follows:

B. Federal Agency Securities: Obligations issued by a Federal Agency or U.S. government sponsored enterprise (see Attachment 1 - Government Code Section 53601[e]). Purchases of this category shall not exceed sixty percent (60%) of the portfolio at the time of purchase.

Ms. Beatley seconded, and the motion was unanimously approved.

Item 5. Confirmation of Meeting Dates for 2000

It was agreed that the Committee meeting dates for 2000 will be May 25, August 24, and November 16 - Thursdays, at 4:00 p.m.

Other Comments

Mr. Meyer informed the committee members that Ms. Diamond had notified the City of her intent to retire as of May 5, 2000, and noted that she would serve on a part-time basis while staff evaluated the position, talked to Council, and completed a recruitment.

With no further business, Acting Chairman Meyer asked for a motion to adjourn.


Meeting adjourned at 5:05 p.m.