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Investment Oversight Advisory Commission 62nd Quarterly ReportFrom: City of Dubuque, Investment Oversight Commission To: MEMBERS of the CITY COUNCIL OF DUBUQUE Regarding: Quarterly Report In Accordance with Ordinance No. 50-92 (3) Sec. 2-231, City code, the City of Dubuque Investment Oversight Commission (IOC) respectfully submits the 62nd quarterly report. The IOC members met on October 22, 2008. The transactions reviewed through September 30, 2008 appear to be in compliance with the Articles in the Investment Policy. Ellen Roberts, Senior Vice President with Dana Investment Advisors made the fim's annual presentation to the IOC. Ms. Roberts's presentation centered around the effect the credit market problems are having on the financial markets and investments. Ms. Roberts stated to the IOC that the portfolio managed by Dana is made up of high quality debt that is maintaining the bonds value. She discussed what the short duration of the portfolio managed by Dana. The duration has increased slightly in the last few months as people have not been refinancing their current mortgages. This has helped increase the average yield of the portfolio. Ms. Roberts verified that the Dana portfolio was in compliance with the City of Dubuque Investment Policy. Ken TeKippe, City Finance Director gave the IOC an update of the $16.3 million in project construction funds for the parking ramp project in the Port of Dubuque. He then reviewed the schedule of funds managed by their department. It was noted that there have been fewer local banks bidding on certificate of deposits the last few weeks. The IOC discussed the latest draft of the City's Investment Policy. After discussion of different area of the Policy, the IOC recommended it be sent to the City council for approval. The IOC did not receive any communication or questions from the public. Respectfully submitted ~auC~assance Paul Lassance Chairman Investment Oversight Commission THE CITY OF DUBUQUE Showing the Spirit Memorandum TO: Michael C. Van Milligen, City Manager FROM: Kenneth J. TeKippe, Finance Director RE: Un-approved Minutes of the October 22, 2008 Meeting of the Investment Oversight Advisory Commission DATE: October 27, 2008 Commission members Paul Lassance, Stephen Reisdorf, Virgil Blocker, Hiram Melendez and Gary Ruden were present. Ken TeKippe, Finance Director, Jean Nachtman, Assistant Finance Director, and Boy Scout, Justin Brimeyer were also present. 1. The meeting was called to order at 3:00 p.m. in Conference Room A in City Hall by Chairperson Paul Lassance. Finance Director Ken TeKippe, certified that the meeting was in compliance with the Iowa open meetings law. 2. Virgil Blocker moved that the minutes of the July 23, 2008 meeting be approved as written. The motion was seconded by Stephen Reisdorf and approved unanimously. 3. Ms. Ellen Roberts of Dana Investment Advisors provided a handout with various information including current economic environment, macroeconomic overview and current portfolio performance, outlook, asset allocation and current holdings information. Ellen indicated Dubuque has been a client of their firm since June 1989 and is one of 83 municipal clients. The firm has had an average return of 5.31 % over the 19 years. Ellen believes it is good for the City to diversify investments with the use of adjustable rate mortgages. With the credit and liquidity concerns, we know what we own at end of day, a very diversified pool of mortgages that are U.S. Government backed with current average coupon rate above 5%. Ellen's comments included short-term rates should creep up, fed funds could drop from current 1.50%, exports are positive, 2009 before economy turns, inflation fears exist, in a recession since two down quarters in a row. Ellen confirmed that Dana is in compliance with the City's current investment policy. A group of recent articles on current financial situation was distributed. 4. Ken distributed investment return information for September 30, 2008, from the four investment managers: Dubuque Bank and Trust, U.S. Bank, Dana Investment Advisors and First Community Trust. Also distributed a recap of manager/ custodian annual fees based on September 30, 2008, market values. 5. The Commission reviewed the September 2008 quarterly investment reports prepared by Jean Nachtman. The City has continued to invest new funds or maturing investments in Certificates of Deposit (approximately 6 month maturities), due to higher returns than U.S. Treasuries. Recent interest rates for certificates of deposit acquired have been in the 3.30-3.60% range with the City receiving $8.2 million in property taxes from County in mid-October. A summary of investment quotes for certificates of deposit bids in the current fiscal year was distributed. There has not been as many bidders for certificates recently. Ken indicated the City will receive approximately $12,000,000 of additional bond proceeds on November 4, 2008 that will be invested to be spent on a number of projects over the next 6-18 months. Bids will be solicited from the local financial institutions, hoping for interest and bidders. The City continues to monitor Port of Dubuque Parking Ramp bond proceeds, approximately $16,500,000 remain at September 30tH 6. The updated Investment Policy was reviewed. A table of contents and bylaws will be included with the policy when submitted to City Council for their approval in November 2008. Hiram Melendez moved to approve the policy and forward to City Council. The motion was seconded by Gary Ruden and approved unanimously. 7. There was no communication from the public, commission or staff to report according to Ken. 8. The next meeting of the Commission is scheduled for Wednesday, January 28, 2009, at 3:00 p.m. in City Hall. A representative from Dubuque Bank and Trust will be invited to the meeting. 9. Gary Ruden moved that the meeting adjourn. The motion was seconded by Virgil Blocker and approved unanimously. The meeting adjourned at 4:05 p.m.