Fullerton City Hall - 303 West Commonwealth Avenue
Third Floor - Room 301
Administrative Services Department Conference Room
Chair Beatley called the meeting to order at 4:01 p.m.
|Members present:||Don Bankhead, Mayor Pro Tem, Council Alternate|
Victoria Beatley, Citizen Member
Steven Foeller, Citizen Member
Lynn Lauderdale, Citizen Member
Chris Meyer, Director of Administrative Services
Phyllis Garrova, City Treasurer
Note: City Manager joined the meeting at 4:11 p.m.
|Members absent:||F. Richard Jones, M.D., Mayor|
City Treasurer Garrova introduced new Citizen Member Lynn Lauderdale, who briefed the Committee members on her experience in the banking/investment industry.
Ms. Garrova asked if anyone had any corrections to the previous meeting's minutes. With no response, Chair Beatley moved to approve the November 16, 2001, minutes. Mr. Foeller seconded. Mr. Meyer noted there was an adequate quorum for approving the minutes even though only four of the Committee members present were in attendance at the November 16, 2001, meeting.
|AYES:||Beatley, Foeller, Meyer, Garrova|
Ms. Garrova noted that prior to the meeting each member had been provided with the latest investment report (as of 4/30/01), which would be submitted to Council in June, and the quarterly summary (updated through 4/30/01), which provided the current status of the portfolio with previous month and previous quarter comparisons, along with a listing of activity that occurred during the reporting period.
Ms. Lauderdale questioned whether the Certificates of Deposit limit of 15% (noted in the portfolio report) should say "negotiable" CODs. Chair Beatley indicated they are comparatively different instruments and a change in the description wasn't necessary.
Ms. Garrova noted that the interest rate continues to decline and will probably do so through the end of the year and probably rebound next year.
Ms. Lauderdale asked if it would be of value to indicate the ratings of the investments in the portfolio report. Chair Beatley noted that it was not state mandated, and that the Government Code requires that investments be A1 or P1 only.
Ms. Lauderdale asked if the report would reflect a downgrade in a rating if an investment were to be downgraded. Chair Beatley pointed out that the City's Investment Policy allows the City to hold the investment till maturity if it is downgraded, and that a notation of the downgrade could be provided in the portfolio status report, but that it was not critical to the report.
Ms. Garrova noted that she enters the ratings of the investments into the portfolio tracking software, and a separate report could be printed if needed, but that it is not a report that is required by law to be provided to Council. However, she added that the Investment Policy does require that the City Treasurer inform Council if adverse conditions affect the invest-ments.
Ms. Garrova distributed to the Committee members a new report titled "Summary By Issuer" dated May 31, 2001, which provided a listing of the number of investments, the issuer, par value, book value, percentage of portfolio, average yield-to-maturity, and average days to maturity. She indicated that this information would be included in future reports to Committee members. The report is intended to show the diversification of the portfolio.
A question was raised as to whether or not the data in the report could be sorted by different criteria. Ms. Garrova indicated that the sort capability was limited in SYMPRO, but it was noted by Mr. Foeller that the data could be exported to Excel for sorting.
City Treasurer Garrova presented to the Committee members a red-lined draft of the proposed revisions to the 2000 Investment Policy, and explained the purpose and necessity of each revision. A copy of the draft document is attached hereto and by reference made a part of these minutes.
Ms. Garrova noted that there had been a discussion at the last meeting pertaining to revising the Investment Policy to allow investment maturities to five years instead of the existing three-year limit.
Chair Beatley pointed out there were better investment opportunities in the five-year area.
Ms. Garrova indicated that the Investment Policy's average days to maturity would control how much of the portfolio could be invested in the five-year area, and that a five-year investment would most likely have a call feature on it, and a determination would need to be made as to how much the City would want callable.
Mr. Foeller asked what the Council's requirements were for cash over the next three years. Councilman Bankhead stated it depended on what the City Manager needed to run the City.
Mr. Foeller suggested that a determination be made of what was needed for operating costs and what amount might be available for longer-term investments.
Director of Administrative Services Chris Meyer requested that City Treasurer Garrova prepare a recommendation to the Committee of a percentage of the portfolio that could be used for longer-term investment.
Ms. Garrova asked if there were any additional questions or comments pertaining to the proposed revisions to the Investment Policy.
Mr. Meyer commented that Ms. Garrova's recommended changes to the Investment Policy had significantly improved the document.
Ms. Lauderdale asked how the six-month Treasury Bill or average Federal Funds (Fed Funds) rate was used as a benchmark.
Ms. Garrova noted that it would be the higher of the two, which is a standard measure used by cities, and was the model used by the Municipal Treasurers Association, but with safety and liquidity always the primary objectives.
Mr. Foeller motioned to approve the Investment Policy. Ms. Lauderdale seconded.
City Manager Armstrong asked if the proposed revisions included changing the investment maturity to five years. Chair Beatley asked that the change be made.
Mr. Foeller amended his motion to approve the Investment Policy as modified. Ms. Lauderdale seconded. Motion was approved unanimously.
Chair Beatley asked if there was any new business.
It was noted that the agenda lacked a "New Business" section and a "Public Comments" section. It was pointed out that the third paragraph of the agenda allowed public comments at the Chair's discretion on items not on the agenda. The suggestion was made to delete the third paragraph and, instead, include a section for "Public Comments" at the end of the meeting.
With no further business, Mr. Meyer motioned to adjourn the meeting. Chair Beatley seconded. Motion was unanimously approved.
Meeting adjourned at 4:50 p.m.
Next meeting scheduled for August 23, 2001, at 4:00 p.m. in the Administrative Services Department Conference Room.