Minutes_Investment Oversight Advisory Commission 7 26 17 Copyrighted
August 7, 2017
City of Dubuque Consent Items # 1.
ITEM TITLE: Minutes and Reports Submitted
SUMMARY: City Council Proceedings of 7/17, 7/20, 7/24; Investment
Oversight Advisory Commission of 7/26; Park and
Recreation Commission of 7/11 ; Proofs of publication for
City Council Proceedings of 7/5, 7/10, 7/11, 7/17, 7/20,
7/24.
SUGGESTED DISPOSITION: Suggested Disposition: Receive and File
ATTACHMENTS:
Description Type
Ctiy Council Proceeding of 7/17/17 Supporting Documentation
City Council Proceedings of 7/20/17 Supporting Documentation
City Council Proceedings of 7/24/17 Supporting Documentation
Investment Oversight Advisory Commission Minutes of Supporting Documentation
7/26/17
Park and Recreation Commission Minutes of 7/11/17 Supporting Documentation
Proof of Publication for City Council Proceedings of Supporting Documentation
7/5/17
Proof of Publication for City Council Proceedings of Supporting Documentation
7/10/17
Proof of Publication for City Council Proceedings of Supporting Documentation
7/11/17
Proof of Publication for City Council Proceedings of Supporting Documentation
7/17/17
Proof of Publication for City Council Proceedings of Supporting Documentation
7/20/17
Proof of Publication for City Council Proceedings of Supporting Documentation
7/24/17
THE CITY OF Dubuque
UBgkE 111 111-America Ci
Masterpiece on the Mississippi 2007.2012.2013
TO: Members of City of Dubuque Investment Oversight Advisory Commission
FROM: Paul Lassance, Investment Oversight Advisory Commission
Jean Nachtman, Finance Director
RE: Un-approved Minutes of the July 26, 2017, Meeting of the Investment
Oversight Advisory Commission and Chairman's Quarterly Report
DATE: July 26, 2017
Commission members; Paul Lassance; Gary Ruden and Franz Becker; and City staff,
Jean Nachtman, Finance Director; Tami Lansing, Assistant Finance Director.
1 . The oath of office was administered to reappointed commission member Paul
Lassance at the City Clerk's Office prior to the meeting.
2. The meeting was called to order at 3:01 p.m. in Conference Room A in City Hall
by Chairperson Paul Lassance. Finance Director Jean Nachtman, certified that
the meeting was in compliance with the Iowa open meetings law.
3. Gary Ruden moved that the minutes of the April 26, 2017, meeting be approved.
The motion was seconded by Franz Becker and approved unanimously.
4. Francis "Chip" Murray, President & CEO, and John Gonner, Senior Vice
President presented for First Community Trust.
John reviewed the handout. FCT has outperformed the index, 45 of the 59
months when the index showed a negative return and 65 out of the 118 months
when the index showed a positive return. This demonstrates that the risk
adverse strategy of the portfolio is not hampering returns on the growth side.
The standard deviation of returns for the City are also better than the Barclay's
index. The City's accounts have an R-Squared of .63 since inception. This is
considered in the average range (.40-.70).
John discussed the April JOLTS (Job Openings and Labor Turnover Survey)
report and discussed the it showed 6 million job openings nationwide. The
highest number since data has been tracked starting in December of 2000. That
is 2.3 million more open jobs than 4 years ago.
An indicator that has been weak during the economic recovery is capital
spending. Small businesses are now starting to shift spending towards capital
goods which may help boost productivity and economic growth.
There was a dramatic increase of yields for the 5 year treasury since at the end
of 2016. This is what triggered the negative returns for the year.
Recently, the yield on the 10-year treasury note had dropped to 2.15% from a
YTD high of 2.63% in mid-March.
John commented that they are concerned about the risk of rising rates and
positioned the portfolio to perform well in that environment.
Since the beginning of the year, interest rates on maturities less than four years
have increased while interest rates on maturities over 4 years have declined.
Short term interest rates have increased in response to two increases in the Fed
Funds rate this year while longer rates have remained low in response to
subdued economic growth and low inflation.
The City's average coupon is 1 .48% and the yield to maturity is 1 .51%. The
rates are so close due to the relatively short duration of 2.17 year.
John remarked that they plan to keep duration around two years as he
anticipates that interest rates are likely to increase.
John confirmed that the investments are in compliance with the City investment
policy.
5. Jean reported on current cash standings. With increased interest from local
banks and credit unions, excess funds have begun to shift out the DB&T Money
Market account into a laddered CD approach. $1 million was deposited into FCT
in June 2017. This was to replacing funds withdrawn from the managed
accounts back in the summer of 2016. Finance continues to monitor cash flow
needs during peak summer construction.
6. The Commission reviewed the June 2017 quarterly investment reports.
7. There was no communication from the public, commission or staff to report
according to Jean.
8. The next meeting of the Commission is scheduled for Wednesday, October 25,
2017 at 3:00 p.m. A representative from Dana will be invited to the meeting.
9. Paul Lassance moved that the meeting adjourn. The motion was seconded by
Gary Ruden, and approved unanimously. The meeting adjourned at 3:35 p.m.