HomeMy WebLinkAbout08-14-2014 IOC MinutesCITY OF SAN LUIS OBISPO
INVESTMENT OVERSIGHT COMMITTEE
MINUTES
August 14, 2014
1:30 PM
Conference Room #1, 919 Palm Street
San Luis Obispo, California
MISSION: As set forth in the Investment Management Plan, this committee is responsible for reviewing
the City's portfolio on an ongoing basis to determine compliance with the City's investment policies and
for making recommendations to the City Treasurer (Director of Finance and Information Technology)
regarding investment management practices.
CALL TO ORDER
A meeting of the Investment Oversight Committee was called to order on Thursday, August 14, 2014,
at 1:33 p.m. in Conference Room # 1, located at 919 Palm Street, San Luis Obispo, California, by
Chairperson Padilla.
ROLL CALL
Committee Members
Present: Committee Members Steve Barasch, Katie Lichtig, Vilma Warner, and Chairperson
Wayne Padilla
Committee Members
Absent: Committee Members Jan Marx and Michael Codron
Others Present: Jayson Schmitt, Chandler Investments (City's Investment Advisor); Al Eschenbach *,
Independent Auditor and ex- officio member; Heather Goodwin, Deputy City Clerk
* Al Eschenbach arrived at 1:45 p. m.
PUBLIC COMMENT
There were no members of the public desiring to speak.
Investment Oversight Committee Minutes - August 14, 2014
APPROVAL OF MINUTES
Page 2
MOTION BY COMMITTEE MEMBER BARASCH, SECOND BY COMMITTEE MEMBER
LICHTIG, CARRIED 4 -0, to approve the Investment Oversight Committee Meeting minutes of
May 8, 2014.
2. PRESENTATION OF THE QUARTERLY INVESTMENT REPORT AND PORTFOLIO
PERFORMANCE
City Treasurer Padilla distributed a revised Quarterly Investment Report and City Investment
Advisor Schmitt reviewed the contents of the subject report and the portfolio's performance and
responded to inquiries from the floor and Committee.
Jeffery Spec questioned, and received clarification, that the State of California's investment
managers are responsible for the management of the Local Agency Investment Fund.
In response to Committee inquiry, City Treasurer Padilla explained the components of the City's
self - managed investments, including cash, deposits with the Local Agency Investment Fund,
money market accounts, and certificates of deposit.
MOTION BY COMMITTEE MEMBER LICHTIG, SECOND BY COMMITTEE MEMBER
WARNER, CARRIED 4 -0, to confirm the Quarterly Investment Report, for the period ending
June 30, 2014, is in compliance with the City's Investment Policy.
1 CONTINUE DISCUSSION OF POSSIBLE CHANGES TO THE INVESTMENT
POLICY INCLUDING THOSE TO ALLOW ADDITIONAL INVESTMENTS WITH
HIGHER YIELDS
City Investment Advisor Schmitt and City Treasurer Padilla discussed the possibility of amending
the City's Investment Policy to include investments with single "A" ratings which could produce
higher yields and responded to Committee inquiries.
Leslie Halls, questioned, and received clarification, that the City's financial advisor has
analyzed the City's existing debt and determined that potential savings are not yet adequate
enough to justify refinancing at this time.
Committee Member Barasch distributed hard copies of a document entitled "City of San Luis
Obispo, Statement of Net Position as of May 31, 2014." A hard copy of Committee Member
Barasch's document is on file with the City.
The Committee recommended that the City Treasurer analyze the City's liquidity requirements
in comparison to actual liquid investments to ensure that the portfolio is not overly invested in
cash deposits.
Following discussion, MOTION BY COMMITTEE MEMBER BARASCH, SECOND BY
COMMITTEE MEMBER LICHTIG, CARRIED 4 -0, to amend the City's Investment Policy to
allow investment in single "A" rated utility and industrial corporate investments.
Investment Oversight Committee Minutes - August 14, 2014 Page 3
4. CONTINUE DISCUSSION OF POSSIBLE CHANGES TO THE INVESTMENT
POLICY RELATED TO SOCIALLY RESPONSIBLE INVESTMENTS AND
CONSIDER MAJOR ELEMENTS OF SUCH A POLICY
City Investment Advisor Schmitt and City Treasurer Padilla discussed the possibility of
amending the City's Investment Policy as it relates to Socially Responsible Investments and
responded to Committee inquires.
Leslie Halls, voiced concerns related to the implementation of a Socially Responsible Investment
Policy; opined that the City should focus on obtaining the highest yield on investment.
Matt Kokkonen, expressed concerns related to a Socially Responsible Investment Policy.
Keith Gurnee, opined that the City's should focus on maximizing its yields on investments and
should not move forward in drafting a Socially Responsible Investment Policy.
Jeffery Spec ht, questioned, and received clarification, that the City Treasurer is responsible for
ensuring the balancing of the City's budget and that Council is working towards addressing
long -term pension liabilities.
MOTION BY COMMITTEE MEMBER BARASCH to consider adopting a broad Socially
Responsible Investment Plan and to request that specific policies be developed as to guide to
the selection of investments. The motion died for lack of a second.
Following discussion, the Committee agreed that it desires to continue discussion as it relates to
a Socially Responsible Investment Policy and requested that the matter be agendized for a
future meeting. It was noted that future discussion should focus on the tenants of a Socially
Responsible Investment Policy and providing direction to the City Treasurer and City
Investment Advisor to aid in the development of such a draft policy.
DISCUSSION REGARDING THE USE OF LOCAL FINANCIAL INSTITUTIONS FOR
PUBLIC AGENCY DEPOSITS AND INVESTMENTS
Market Area President Filippin and Senior Client Relationship Manager Summer, representing
Heritage Oaks Bank, discussed the use of local financial institutions for public agency deposits
and investments.
In response to Committee inquiry, Mr. Filippin spoke on his bank's ability and willingness to
provide public agency accounts and the required collateralization; advised that he is not aware
of other banks' ability or desire to offer comparable services.
Under committee direction, City Treasurer Padilla advised that staff will research other cities'
investment policies to determine if definitions and/or criteria exist related to the utilization of
local financial institutions for public agency deposits and investments.
Investment Oversight Committee Minutes - August 14, 2014
6. ITEMS TO BE CONSIDERED FOR THE NEXT MEETING
Page 4
As noted above, further consideration of a Socially Responsible Investment Policy and other cities'
definitions and criteria for use of Local Financial Institutions should be agendized for a future
meeting.
ADJOURNMENT
The meeting adjourned at 3:39 p.m.
r
{
at C dwin
Deputy Ci y Clerk
Approved: 11/13/14