Minutes - Investment - 2007-09-13"r
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COSTA MESA SANITARY DISTRICT
MINUTES OF INVESTMENT OVERSIGHT COMMITTEE MEETING
September 13, 2007
CALL TO ORDER The meeting was called to order at 5:30 p.m. by Treasurer /Finance Director
Marc Davis
ROLL CALL Committee Members Present:
Director Arlene Schafer (rotating committee member)
Director Arthur Perry (rotating committee member)
Mr. Rob Hamers, Manager /District Engineer
Staff Members Present:
Mr. Marc Davis, Treasurer /Finance Director
Mr. Thomas Fauth, Assistant Manager
Ms. Joan Revak, Board Secretary /Program Manager /Clerk of the District
Ms. Sherry Kallab, Accountant
NEW BUSINESS Review of Treasurer's Report
Mr. Davis reported that the District's portfolio is earning approximately 4.20/0
as of August 31, 2007. The average maturity of the portfolio investments is
approximately 6 months. The District has approximately $10,200,000
invested. The District plan has been to hold the current securities until they
mature. The next security will be maturing at the end of September in the
amount of $500,000, and that will not be reinvested, but will be placed into
LAIF. The reasoning behind putting the proceeds into LAIF is to provide
liquidity in the event the District needs the funds to make expenditures for the
District Yard. Mr. Davis explained that the District's portfolio is a fixed
income portfolio and reacts opposite of the interest rate. If interest rates
increase, the market value of our portfolio decreases, and if interest rates
decrease, the market value of our portfolio increases. Mr. Davis stated that
the Federal Reserve may drop interest rates at their next meeting and if they
do so, the market value of the District's portfolio will be higher. Several
securities will be maturing in 2008 and this will be the point in time the District
will start reinvesting and start to restructure the portfolio so that investments
will mature when we have our cash flow shortage, such as in the months of
May through November.
Director Perry inquired about the amount of District funds currently being held
in LAIF and Mr. Davis advised the amount is currently just under $4,000,000.
Director Schafer questioned whether LAIF was the best option for the District
funds. Mr. Davis discussed that LAIF currently has a slightly higher yield
than the Orange County Investment Pool and noted that the Orange County
Investment Pool has a longer waiting period for withdrawing funds.
MINUTES OF INVESTMENT OVERSIGHT COMMITTEE MEETING September 13, 2007
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Director Perry asked how the bank accounts are broken down and Mr. Davis
explained that District funds are commingled and invested all together.
Director Perry asked what account the funds for the District Yard would be
taken from. Mr. Davis replied that the funds for the District Yard will be taken
from the Facilities Revolving Fund. Mr. Hamers inquired whether a separate
account needed to be set up for the purchase of the District yard. Mr. Davis
noted that there is an item on tonight's Board Meeting Agenda for a budget
adjustment to set up an account for the purchase of the land for the district
yard. There was further discussion regarding the details of the budget
adjustment.
Update on Annual Audit
Mr. Davis reported that the final portion of the District Audit will be taking
place the week of October 15th and that the Auditors will be present at the
December Board Meeting to answer any questions the Board may have.
PUBLIC COMMENTS There were no items discussed under public comments.
ADJOURNMENT The meeting adjourned at 5:55 p.m.
Approved by:
Secretary, Costa M6sa SadiAar:? District
Board of : Directors
President, Costa Mesa Sanitary stri t
Board of Directors