Report_Investment Oversight Commission 64th Quarterly ReportFrom: 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 64th quarterly report.
The IOC members met on Apri122, 2009. The transactions reviewed through March 31, 2009
appear to be in compliance with the Articles in the Investment Policy.
Mr. Nick Zimmerman, V.P. of Business Development and Mr. Michael Maloney Senior Portfolio
Manager from U.S. Bank came before the Commission for the annual review of the funds they
manage for the City. Mr. Maloney presented information and answered questions relative to his
bank's investment management work. Mr. Maloney confirmed that investments with U.S. Bank
are in compliance with the City's investment policy. Mr. Maloney reviewed the portfolio
performa~ice, treasury yield curve comparison, economic trends and fixed income conditions and
outlook. Mr. Maloney discussed his concerns about inflation as a result the Federal Reserve's
efforts to increase money supply to stimulate the economy. A larger part of the portfolio has been
invested in very short term fmancial instruments in anticipation of rising interest rates. The price
of high quality short term bonds has gone up and correspondingly the yield fallen to the point
where Mr. Maloney is uncomfortable to reinvest in longer term issues for only slightly higher
yields. This prudent approach is appropriate given the high priority that is given to preservation of
capital for the City's accounts.
In our review of fees for advisory and custodial services the IOC have a lengthily discussion about
the cost of custodial services. It was noted that the City has not had any change in the pricing rate
of custodial services sense the present agreement was set up. Changes in technology should have
lowered the cost for these services in the option of the IOC. Based on what is being provided with
these services the IOC recommended that the City staff go out for Request for Proposals to insure
that the City is getting the best price and services for this service.
Ken TeKippe, Finance Director reviewed the schedule of funds managed by their department and
presented information on fees charged by the outside portfolio managers. The commission
reviewed activity on Certificates of Deposits (CD) that are being rolled over. Bidding on new CD
issues has been very weak. Rates on new CD are at record low levels.
The IOC did receive communication from the Association of Public Treasurers concerning
recertification of our Investment Policy.
Respectfully submitted
haul ~assance
Paul Lassance
Chairman
Investment Oversight Commission
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