HomeMy WebLinkAbout11-20-2013 IOC MinutesCITY OF SAN LUIS OBISPO
INVESTMENT OVERSIGHT COMMITTEE
MINUTES
Wednesday, November 20, 2013
2:00 PM
Finance and IT Conference Room, 1 st Floor, 990 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 Wednesday,
November 20, 2013, at 2:00 p.m. in the Finance and IT Conference Room, located at
990 Palm Street, San Luis Obispo, California, by Chair Padilla.
ROLL CALL
Committee Members
Present: Mayor Jan Marx, City Manager Katie Lichtig, Finance & IT Director /City
Treasurer Wayne Padilla, Finance Operations Manager Mette Richardson,
Jayson Schmitt, Chandler Asset Management (City's Financial Advisor), Al
Eschenbach, City's Independent Auditor, and Steve Barasch, public member
Committee Member
Absent: Assistant City Manager Michael Codron
OATHS OF OFFICE
It was noted that the City's Independent Auditor Al Eschenbach is serving in the
capacity of an ex- officio officer of the committee, not as a voting member.
City Clerk Mejia administered the Oath of Office to all Committee Members present.
PUBLIC COMMENT
Matt Kokenen queried about prior meetings of the committee as well as the logistics and
policies related to use of an outside investment firm. It was suggested that Mr. Kokonen
submit a public records request if he needed additional information.
Investment Oversight Committee Minutes — November 20, 2013 Page 2
Leslie Halls inquired about short-term senior debt.
Gordon Mullin inquired about the City's investment policies, state and federal
regulations, and under what parameters can the city deviate from those regulations.
Unnamed Individual questioned whether the City could find alternatives to investments
like Chevron and other fossil fuel companies while still maintaining the required diversity
of the portfolio.
1. INTRODUCTION OF COMMITTEE MEMBERS
Individual Committee Members gave a brief introduction and discussed their prior
experience with investment functions.
2. PRESENTATION OF QUARTERLY INVESTMENT REPORT AND PORTFOLIO
PERFORMANCE
City Financial Advisor Schmitt summarized the quarterly investment report and
portfolio's performance over the quarter and past year in comparison to
benchmarks previously established. In response to inquiry, Mr. Schmitt advised
that a variety of benchmarks exist and the one chosen was deemed a best fit at
the time.
3. REVIEW OF INVESTMENT POLICY COMPLIANCE
City Financial Advisor Schmitt reviewed the points of compliance that are
required and provided an analysis within the report that confirmed that the
portfolio is in compliance with the City's Investment Policy; responded to inquiries
from the floor and committee.
Matt Kokonen called for a point of order to have the committee make a finding for
the record whether the portfolio is in compliance with the City's Investment
Policy.
By unanimous consensus, the Committee affirmed that the portfolio is in
compliance with the City's Investment Policy.
4. DISCUSSION REGARDING PREVIOUS PUBLIC COMMENTS PROVIDED AT
CITY COUNCIL MEETINGS TO UPDATE THE INVESTMENT POLICY TO
LIMIT ENERGY COMPANY HOLDINGS AND ADDRESS CONCERNS ABOUT
HOLDINGS IN CERTAIN MULTI - NATIONAL COMPANIES
Heidi Harmon expressed an interest in revising the City's Investment Policy to
prohibit investment in companies which have a significant involvement in fossil
fuels or maintain a multi - national presence; opined that the City should find
alternative investments that meet the necessary diversity and risk avoidance.
Several individuals from the floor opined that the City's focus should be return on
investments, in compliance with existing regulations.
Investment Oversight Committee Minutes — November 20, 2013 Page 3
Staff advised that it would bring material to the committee regarding other
agencies practices in relation to energy company holdings and multi - national
company investments. City Treasurer Padilla advised that revisions to the City's
Investment Policy would be forwarded to the Council before June 30, 2014.
In response to Committee inquiry, City Treasurer Padilla stated that the City is
meeting its reporting standards in relation to investment portfolio reports; stated
that he would review the material distributed by Committee Member Barasch and
report back to the Committee.
It was noted that proposed revisions to the City's Investment Policy should be
circulated prior to the next quarterly meeting to ensure Committee Members have
adequate time to review the proposal.
ADJOURNMENT
The meeting adjourned at 3:02 p.m.
* * * * * * * * * **
Wayne Padilla, Secretary
Investment Oversight Committee
Following the conclusion of the Investment Oversight Committee Meeting of November
20, 2013, it was discovered that the City's Financial Advisor is not a member of the
Investment Oversight Committee. City Clerk Mejia prepared a memorandum, dated
December 11, 2013, entitled "Investment Oversight Committee Membership" which the
contents are included below:
At the Investment Oversight Committee (IOC) Meeting of November 20, 2013, the
members of the committee were sworn into office. After reviewing the City Investment
Policy which details the membership of the committee it has come to my attention that
the City's Financial Advisor Jayson Schmitt, of Chandler Investment, is not identified as
a member of the committee and should be removed from its roster. The membership is
as follows:
Members include the City Manager, Assistant City Manager, Director of Finance &
Information Technology /City Treasurer, Finance Operations Manager, the City's
Independent Auditor, one Council Member, and one member of the public.
The member of the public shall be appointed by the City Council in accordance with the
City's process for appointing advisory bodies.
It was also noted that the City's Independent Auditor is an ex- officio officer of the
committee, not a voting member of the committee, and does not possess a conflict of
interest in relation to the Political Reform Act.