10-13-2008 VC SP WS-M• MINUTES OF THE SPECIAL JOINT WORKSHOP SESSION
VILLAGE COUNCIL AND AUDIT COMMTI'TEE
OF NORTH PALM BEACH, FLORIDA
OCTOBER 13, 2008
Village Council
William Manuel, Mayor
David Norris, Vice Mayor
Darryl Aubrey, President Pro Tem
Edwazd Eissey, Councilman
T.R. Hernacki, Councilman
Jimmy Knight, Village Manager
Melissa Teal, CMC, Village Clerk
ROLL CALL
Audit Committee
Tom Magill, Chairman
Richazd Podell, Vice Chairman
Amy Dean, Member
Christina Ivaldi, Member
Emery Newell, 1st Alternate
Bob Gebbia, 2nd Alternate
Mayor Manuel called the meeting to order at 4:30 p.m. All members of Council were present.
All members of the Audit Committee were present, except Mr. Talley, who had a meeting
conflict, and Ms. Dean, who arrived at 5:20 p.m. All members of staff were present, except the
Village Attorney. Finance Director Sarnia Janjua was present.
Mr. Knight distributed copies of the revised ordinance (document A); proposed investment
policy (document B); example of core/operating funds investment detail, using FY 2009 Budget
and proposed policy; information on NSRO (nationally recognized statistical rating
organizations); and information on Wachovia Bank and the Evergreen Institutional Treasury
Money Mazket Fund.
CODE AMENDMENT REVISING INVESTMENT POLICY OF THE VILLAGE
Mr. Knight briefly reviewed the difference in core and operating funds and the specific
allocations of each in the proposed ordinance. Mr. Knight explained investments with regazd to
the Village's undesignated reserve fund, and noted that from reserves an amount equal to 35% of
the total budget is set aside for investment in core (long-term) funds, with any remaining monies
invested in operating funds. Mr. Knight advised that one-twelfth of the annual budget would
always be invested in operating funds.
Discussion took place concerning revisions to the proposed ordinance. Mr. Knight stated that
shaded azeas in document A aze items that have been changed or deleted. Discussion ensued on
subsection (f)(1) regazding CAEL (Capital adequacy, Asset Quality, Earnings, and Liquidity)
scores. Consensus was to leave this in the proposed ordinance as an additional benchmazk.
Discussion was held on subsection (f)(2), in which Morningstar fund performance was deleted
and Moody's and S&P were added.
Minutes of Special Joint Workshop held 10/13/08 Page 2 of 2
• Discussion ensued on the table inset on page 5 of the proposed ordinance regazding the
requirement that no more than 33.33% of operating funds be invested in registered money
mazket funds. It was decided that the ordinance should be revised to include language
establishing an investment committee consisting of the Audit Committee, Village Manager, and
Finance Director, with a quorum to wnsist ofthree members ofthe Audit Committee, along with
the Manager and Finance Director. Both the Village Council and Audit Committee determined
that it is necessazy to hire an investment advisor.
Subsection (p) on page 7 was changed to require quarterly investment reports.
Subsection (s)(2) on page 8 was revised to specify that the investment policy shall be reviewed by
Council on an annual basis during its Goals and Objectives meeting, prior to the budget process.
Discussion took place concerning having the investment committee assist with the investment
management process, in addition to the investment advisory firm mentioned in subsection (t).
Concern was expressed about possible liability because neither the Finance Director nor any
Audit Committee members hold the designation of CFA (Chartered Financial Analyst.) After
further consideration, it was noted that ¶3 in subsection (e)(1) on page 3 provides for protection from
being held personally responsible for an individual security's credit risk or market price changes.
ADJOURNMENT
With no further business to come before the Council, the meeting adjourned at 6:00 p.m.
Melissa Teal, CMC, Village C erk
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