Minutes Investment Oversight 7 23 08THE CITY OF
DuB E
~~
Memorandum
TO: Members of City of Dubuque Investment Oversight Advisory Commission
FROM: Kenneth J. TeKippe, Finance Director ~C¢~^-..~'~~, ~~~4~
RE: Un-approved Minutes of the July 23, 2008 Meeting of the Investment
Oversight Advisory Commission
DATE: July 24, 2008
Commission members Paul Lassance, Steve Reisdorf and Virgil Blocker were present.
Ken TeKippe, Finance Director, and Jean Nachtman, Assistant Finance Director, 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. Dale Repass and John Gonner of First Community Trust distributed a handout
which provided information on performance, economic and interest rate outlook,
and five year treasury yield and fund returns.
Dale indicated the firm has grown to $275 million in assets since established in
January 2001, experiencing positive earnings and is financially sound. The firm
continues to work with eight financial institutions including four local: East
Dubuque Savings Bank, Premier Bank, Dutrac Community Credit Union and
Dupaco Community Credit Union.
John reviewed the handout and provided the following comments: for the 69
months the firm has invested City funds, results yielded better returns (more
months with positive returns and less months with negative returns) than the
Lehman 1-5 year government index, predicts increase in Federal funds rate to
2.50-2.75% should strengthen dollar with oil and other commodities dropping and
helping inflation, faith in Chairman of Federal Reserve Ben Bernanke's leadership
and believes our returns should benefit from government helping Fannie Mae and
Freddie Mac, inflation is running hotter than the Fed prefers. John's information
reflected their five calendar year average returns highest of four managers (3.64%
vs 3.57%, 3.56% and 3.47%).
John Gonner confirmed that First Community Trust is in compliance with the City's
current investment policy.
3. Virgil Blocker moved that Paul Lassance be reappointed chairperson for the
commission. The motion was seconded by Steve Reisdorf and approved
unanimously.
4. Virgil Blocker was reappointed by City Council in July for three year term on the
committee.
5. Virgil Blocker moved that the minutes of the April 23, 2008 meeting be approved
with change noted in firm to appear at July meeting, should have been First
Community Trust and not U.S. Bank. The motion was seconded by Steve Reisdorf
and approved unanimously.
6. Ken distributed investment return information for June 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 June 30, 2008, market values.
7. The Commission reviewed the June 2008 quarterly investment reports prepared by
Jean Nachtman. Ken indicated that 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. There are no U.S. Treasuries in the
current portfolio. A summary of 53 investment quotes for certificates of deposit
bids in the fiscal year ended June 30, 2008 was distributed. The City has
continued to borrow funds from State Revolving Fund (SRF) for water, storm and
sanitary sewer projects.
Ken indicated that City has not withdrawn funds from the investment managers in
the past few months and there are no plans to withdraw during next few months.
8. A draft of an updated Investment Policy was distributed. It will be forwarded to
managers for feedback/input. Ken TeKippe and Jean met with Paul Heacock who
provided valuable information to assist in the update.
9. There was no communication from the public, commission or staff to report
according to Ken.
10. The next meeting of the Commission is scheduled for Wednesday, October 22,
2008, at 3:00 p.m. in City Hall. A representative from Dana will be invited to the
meeting.
11. Virgil Blocker moved that the meeting adjourn. The motion was seconded by Steve
Reisdorf and approved unanimously. The meeting adjourned at 3:45 p.m.
From: 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 61st quarterly report.
The IOC members met on July 23, 2008. The transactions reviewed through June 30, 2008 appear
to be in compliance with the Articles in the Investment Policy.
Dale Repass, Chief Executive Officer and John Gonner, CFA, Senior Vice President from First
Community Trust (FCT) made their annual presentation to the IOC of the portfolio they manage
for the City. Mr. Gonner stated that he had reviewed the City investment policy and that First
Community Trust was operating within compliance of the policy.
Mr. Gonner then reviewed the investment portfolio managed by FCT and its performance. There
have not been any change in the type of investments utilized FCT. Although interest rates have
been affected by the recent troubles in the sub-prime mortgage lending market, FCT anticipates
the Federal Reserve will start increasing rates after the recent cuts made to shore up financial
markets. Mr. Gonner pointed out that the spread between Treasury bonds and government agency
issued bond are unusually high. He believes that this spread will move back to a more normal
level within the next 6 months. This should help the portfolio performance in coming months.
Ken TeKippe, City Finance Director reviewed the schedule of funds managed by their department.
City funds continue to have a significant amount invested in CDs with various local financial
institutions. A draft copy of the revised City investment policy was handed out. Commission
members will review and prepare comments back to the Finance Department for our next meeting.
The IOC did not receive any communication or questions from the public.
Respectfully submitted
~1'auCGassance
Paul Lassance
Chairman
Investment Oversight Commission