Minutes Investment Over 10 23CITY OF DUBUQUE, IOWA
MEMORANDUM
TO:
FROM:
RE:
Members of City of Dubuque Investment Oversight Advisory Commission
Kenneth J. T eKippe, Finance Director ~~.
Un-approved Minutes of the October 23, 2003 Meeting of the Investment
Oversight Advisory Commission
DATE:
October 27, 2003
Commission members Paul Lassance, Gary Ruden, Steve Reisdorf, and Hiram
Meiendez were present. Ken TeKippe, Finance Director and Jean Nachtman, Assistant
Finance Director were also present.
The meeting was called to order at 3:30 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. Gary Ruden moved that the minutes of the July 24, 2003 meeting be approved as
written. The motion was seconded by Steve Reisdorf and approved unanimously.
Joseph Veranth of Dana Investment Advisors provided a handout with information
on performance, outlook, asset allocation and current holdings for the funds
managed by their firm. Ken indicated that representatives of Dana have recently
been guests on some media shows. Joe was a guest on CNBC's morning show
"Squawk Box" and discussed the state of the U.S. Treasury Bond market. Joe
indicated that diversity of managers is good and the fund with Dana should do
better than other fixed rate managers in the current market. The current 4.4%
average coupon rate should be as Iow as it will get, with long-term rates to
increase. Although the City does not invest in stocks, it is currently the best time
since late 1990's for stocks as the economy improves, good returns on stocks may
lower returns for bonds. Joe is accumulating cash via monthly receipts of
mortgage payments to distribute to the City for their firm's share of drawdown from
managers. Dana will not need to sell assets to meet the drawdown amount. The
holdings in the portfolio are AAA credit quality and primarily pools of home loans
(ARM's).
Joe indicated that Dana Investment Advisors is in compliance with the City's
current investment policy. Their firm reconciles cash monthly with the custodian
and does shadow posting for the account.
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10.
Ken introduced and welcomed Jean Nachtman as the new Assistant Finance
Director for the City and thanked Dawn Lang for her work relative to City
investments over the past three years. Ken provided information on Jean's
background and experience and indicated that Jean would be attending future
meetings and be involved in the preparation of investment reports.
The Commission briefly reviewed the September 2003 quarterly investment reports
prepared by Dawn Lang. Ken indicated that the City has continued in recent
months to invest in Certificates of Deposit (primarily 6 month) when investments
mature, due to slightly higher returns than U.S. Treasuries, if funds are not needed
for capital projects. There are no U.S. Treasuries in the current portfolio. The City
is continuing to spend funds for capital projects primarily on the Grand River
Conference Center. In mid-October the City received approximately $6.5 million of
property tax revenue from the County. A significant payment for the Adams
Company buyout will be made on November 1. The City is expecting a $3.1
million payment from Vision Iowa Grant in the next few days, which will bring the
total received to $15 million out of the $20 million City grant. The proceeds of the
$2.1 million bond proceeds from the recent stormwater bond issue were invested
with Dubuque Bank and Trust since they provided the best proposal of three
financial institutions that submitted proposals out of the seven invited to respond.
Ken reviewed the need for the City to withdraw $2 million from the four investment
managers for capital projects. The managed funds retain earnings net of fees,
which has provided growth for the funds over the years. The withdrawal was
completed on the proportioned basis of the market value of each manager. The
committee felt this was an equitable method and would support if future
drawdowns are needed. As of September 30, Dubuque Bank and Trust
($630,800) and U.S. Bank ($617,700) had transferred their respective shares.
First Community Trust ($243,800) transferred in eady October with Dana
Investment Advisors ($507,700) to transfer their share in the next few days.
Ken distributed investment return information through September 30, 2003 from
the four investment managers: Dubuque Bank & Trust, U.S. Bank, Dana
Investment Advisors and First Community Trust. Also distributed was a recap of
manager/custodian annual fees based on September 30, 2003 market values.
There was no communication from the public, commission or staff to report
according to Ken.
The next meeting of the Commission is scheduled for Thursday, January 22, 2004,
at 3:30 p.m. in City Hall. A representative from Dubuque Bank and Trust will be
invited to the meeting.
Paul Lassance moved that the meeting adjourn. The motion was seconded by
Hiram Melendez and approved unanimously. The meeting adjourned at 4:40 p.m.