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Minutes Invest Over 10 23 02 CITY OF DUBUQUE, IOWA MEMORANDUM · TO: FROM: RE: Members of City of Dubuque Investment Oversight Advisory Commission J. TeKippe, Finance Director ~¢,.~. ~ Kenneth Un-approved Minutes of the October 23, 2002 Meeting of the Investment Oversight Advisory Commission DATE: October 25, 2002 Commission members Paul Lassance, Stephen Reisdorf, Charles Spielman, and Hiram Melendez were present. Ken TeKippe, Finance Director, and Dawn Lang, Assistant Finance Director were also present. The meeting was called to order at 3:34 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. Steve Reisdorf moved that the minutes of the July 25, 2002 meeting be approved as written. The motion was seconded by Hiram Melendez and approved unanimously. Joe Veranth from Dana Investment Advisors provided a handout with information on performance, outlook, asset allocation and current holdings. Joe stated that Dana provides the lowest interest rate risk of the investment managers and also provides for diversification and buffer from other managers. Their 2002 return should be in the mid 4% range. The current Iow interest rates will normally yield a lower return from the Dana segment of the portfolio, whereas in times of higher interest rates Dana will normally outperform the other managers. Significant changes in interest rates are not anticipated in the next few months. Joe indicated that Dana was in compliance with the City's current investment policy and there have been no changes in their firm personnel associated with the Dubuque account. Dana has recently added an investment professional to their firm. Joe's presentation was very good and provided solid information to everyone relative to their investment style and return projections. The Commission briefly reviewed the September 2002 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. Presently there are no 7. J U.S. Treasuries in the portfolio. There has been a reduction in City funds over the past few months as capital projects are undertaken. Interest rates for recent October, 2002 certificates acquired have been in the area of 1.75%. Funds were available to invest due to the property tax distribution from Dubuque County in mid October. The transition to utilizing First Community Trust (FCT) went well on October 1, 2002. One million dollars was transferred from each of the current managers to FCT. The Investment Advisor Agreement was finalized with assistance from Bill Noth of the Ahlers law firm in Des Moines. Final approval of the Revised General Rules of Procedure for the Investment Oversight Advisory Commission was provided via a motion from Steve Reisdorf and seconded by Charles Spielman with unanimous approval. Copy to be attached to meeting minutes. Ken distributed investment return information through September 30, 2002 from the three investment managers: Dubuque Bank & Trust, U.S. Bank and Dana Investment Advisors. First Community Trust will be expected to provide return information in the future. There was no communication from the public, commission or staff to report according to Ken. The next meeting of the Commission was scheduled for Thursday, January 23, 2002, at 3:00 p.m. in City Hall (start time one half hour earlier than normal). Representatives from Dubuque Bank and Trust will be invited to the meeting. Paul Lassance moved that the meeting adjourn. The motion was seconded by Steve Reisdorf and approved unanimously. The meeting adjourned at 4:20 p.m. GENERAL RULES OF PROCEDURE INVESTMENT OVERSIGHT ADVISORY COMMISSION CITY OF DUBUQUE, IOWA ARTICLE I MEETINGS Regular meetings of the Investment Oversight Advisory Commission shall be held at 3:30 p.m., on the fourth Thursday of January, April, July, and October, or as rescheduled by the Commission to be in compliance with open meeting rules. Special meetings may be called by the Chairperson or upon request of two members of the Commission. A quorum of the Commission shall consist of three members. ARTICLE II OFFICERS AND DUTIES The Chairperson will be popularly elected each year during the first commission meeting after July 1. The Chairperson shall preside at all meetings and headngs of the Commission. In the event of the absence or disability of the Chairperson, the Chairperson shall appoint a Chairperson Pro Tem to preside. The Chairperson, subject to these rules, shall decide all points of procedure unless otherwise directed by a majodty of the Commission in session at the time. The Chairperson shall, subject to these rules, and further instructions from the Commission and transact the official business of the Commission. 5. City staff shall provide the necessary clerical support upon request from the commission. ARTICLE III AMENDMENTS These rules may be amended or modified by an affirmative vote of not less than three (3) members of the Commission, provided that such amendment be presented in writing at a regular meeting. ARTICLE IV ORDER OF BUSINESS AT THE REGULAR MEETING The order of business at all regular meetings of the Commission shall be as follows: a. Call to Order. b. Certification of Compliance with Iowa Open Meetings Law. c. Review Minutes d. Review of Quarterly Performance Reports and Investment Summaries e. Communications from the Public, Commission and Staff. f. Discuss additional information needs with Staff. g. Adjourn. The Commission may, with cause, modify the order of business items. Passed, approved and adopted the .,2.~ day of ~~ 2002. Investment Oversight Advisory Commission From: To: Regarding: City of Dubuque, Investment Oversight Commission MEMBERS of the CITY COUNCIL OF DUBUQUE Quarterly Report In Accordance with Ordinance No. 50-92 (3) Sec. 2-231, City code, the City of Dubuque Investment Oversight Commission (lOC) respectfully submits the 38th quarterly report. The IOC members met on October 23, 2002. The transactions reviewed through September 30, 2002 appear to be in compliance with the Articles in the Investment Policy. Joseph Veranth, CFA, Executive Vice President with Dana Investment Advisors made a presentation to the lOC. We had invited Dana for an annual review of their portfolio. Dana's emphasis is the use of govermnent agency bonds in the portfolio they manage for the city. Mr. Veranth did an excellent job of explaining how Dana's portfolio should minimize the impact of rising interest rates on the value of the principle. There was also a very informative discussion of the current very low interest rate market. Ken TeKippe, City Finance Director and Dawn Lang, Assistant Finance Director reviewed the schedule of funds managed by their department. The lower interest rates the City is receiving on Certificates of Deposits that are being rolled over was not a surprise give the historically lower interest rates we are seeing. Mr. TeKippe did report that there was rather limited interest by local financial institutions on bidding for funds when the City wanted to roll a maturing CD over recently. However, the yield in the CD market is still greater than short term Treasury Bills. The IOC made some changes to the general rules for the Commission to allow us to have some more flexibility in scheduling meeting. This would make it easier for Commission members to schedule around various work conflicts. The IOC did not receive any communication or questions from the public. Respectfully submitted. C au£ Lassance Paul Lassance Chairman Investment Oversight Commission