Minutes - Investment - 2009-02-26f
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COSTA MESA SANITARY DISTRICT
MINUTES OF INVESTMENT OVERSIGHT COMMITTEE MEETING
February 26, 2009
CALL TO ORDER The meeting was called to order at 5:18 p.m. by Treasurer /Finance Director
Marc Davis
ROLL CALL Committee Members Present:
Director Arthur Perry (rotating committee member)
Director James Ferryman (rotating committee member)
Director Gary Monahan (rotating committee member) arrived at 5:22 p.m.
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, Management Analyst
Ms. Teresa Gonzalez, Accountant
NEW BUSINESS Review of Treasurer's Report
Mr. Davis reported that the District's portfolio was earning approximately
2.0% as of January 31, 2009, compared to LAIF earning approximately
2.05 %. Between the period of December to January, $3 million in securities
were called, with $2 million being called in January. The securities had been
expected to be called because they had earnings of approximate 3.5 to 4%
and when the economic downturn happened US Treasury notes and US
government agency notes were down as low as 1 %. In February Mr. Davis
reported that he placed $2 million back in the securities market and obtained
yields close to 3.0 %, which will boost the total investment yield in the month
of February. As of the end of January, $2 million remained invested in the
sweep account. Director Ferryman asked if the money in the sweep
account was insured. Mr. Davis responded that for public agencies, funds in
sweep accounts are insured up to $100,000 and the remaining balance is
collateralized up to 110% of its value. Director Perry asked if the annual
interest rate earnings are anticipated to average about 3.0% and Mr. Davis
confirmed.
Mr. Davis made reference to the structure of the portfolio and pointed out that
roughly 75% of the funds in the portfolio mature in less than six months. This
is a result of a lot amount of money coming in to LAIF from the first allocation
of property tax. Mr. Davis plans to invest in longer term investments of one
to two years duration and to time the maturities for the period that we are
cash flow short.
MINUTES OF INVESTMENT OVERSIGHT COMMITTEE MEETING
February 26, 2009
Page 2
. Director Perry inquired about the status of the collection of the tax
assessments and Mr. Davis responded that it remains to be seen as to what
is going to be collected in this current fiscal year, given the current state of
the economy and bankruptcies. A short discussion then followed regarding
the Teeter and non - Teeter plans for general property taxes.
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Mr. Davis continued on to explain the Treasurer's Report's yield curve chart
as of January 31, 2009 and reported that the fall off of the District's yield was
due to the calls of several securities with 4% rates. He predicts that with the
investment of the new securities in the 3% rates we will see an upgrade.
Audit Services Contract Option
A request to exercise the second option year and approve an engagement
letter with Diehl, Evans & Company, LLP to perform the District's annual
audit for the year ending June 30, 2009 will be brought to the Board at
tonight's regular Board meeting. The original contract was a three year
contract with two one -year options. The proposed audit fee is $9,970, which
is still below the bids received from five years ago. We are requesting for
extension of the audit services because of the low fee proposal and because
we are very happy with the audit services received during the past audits.
The plan for next year is to put out to bid for audit services and to enter into
agreement with the audit firm under the District attorney's agreement.
Director Perry asked if there is a legal requirement that we change auditors.
Mr. Davis responded that he did not know of a legal requirement, but that he
would review the District's operation code to see if it has a requirement to
change auditors after a certain time period.
PUBLIC COMMENTS There were no items discussed under public comments.
ADJOURNMENT The meeting adjourned at 5:30 p.m.
Approved by:
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