DB&T Interest Earnings Press ReleaseCopyrighted
January 6, 2025
City of Dubuque ACTION ITEMS # 1.
City Council
ITEM TITLE: DB&T Interest Earnings Press Release
SUMMARY: City Manager providing a copy of a press release regarding
Dubuque Bank and Trust (DB&T) recently paying the City
over $2 million in interest earnings following a review of a
banking services agreement between the City and DB&T
from 2007 to present.
SUGGUESTED Receive and File
DISPOSITION:
ATTACHMENTS:
1. Joint Statement from City of Dubuque and DBT
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1213112024
DBU Pays City Over $2 Million in Interest
The City of Dubuque and Dubuque Bank and Trust (DB&T) have collaborated to
successfully resolve issues related to interest earnings owed to the City.
DB&T recently paid the City $2,053,691 in interest earnings following a review of a
banking services agreement between the City and DB&T from 2007 to present and the
City's accounts covered by that agreement
An analysis conducted by the City Finance Department and DB&T confirmed the 2007
agreement required DB&T to pay the City an interest rate based on the Federal
Reserve rate. When Federal Reserve interest rates declined in 2020, DB&T paid a
fixed rate higher than called for by the agreement. However, DB&T did not adjust the
City's interest rate when the Federal Reserve interest rates began rising after a
prolonged period of decline. Due to changes in personnel at DB&T and the City of
Dubuque, this oversight was not identified at the time.
Following a competitive selection process that included eight different banking
proposals, the City recently awarded a new banking services agreement to DB&T. It
was during the preparation of the new banking services recommendation for the
November 18, 2024, City Council meeting that City staff identified the discrepancy from
the agreement in place. It was brought to DB&T's attention and quickly resolved.
City staff and DB&T are now finalizing the terms of the new agreement, which will
include additional policies and procedures to ensure agreement compliance, including:
• The City Finance Department has assigned a staff member to closely monitor
accounts to ensure the correct rates are applied per the agreement.
• The purpose of the City's Investment Oversight Advisory Commission is being
amended to include cash management responsibilities, providing another layer of
review.
• The implementation of quarterly meetings between DB&T and City Finance staff
will be scheduled to discuss City accounts and any new financial opportunities
within the City's accounts.
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