Minutes_Investment Oversight 7 22 09Dubuque
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TO: Members of City of Dubuque Investment Oversight Advisory Commission
FROM: Kenneth J. TeKippe, Finance Director -~~
RE: Un-approved Minutes of the July 22, 2009 Meeting of the Investment
Oversight Advisory Commission
DATE: July 23, 2009
Commission members Steve Reisdorf, Virgil Blocker, Gary Ruden and Brad Chalmers
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
Finance Director, Ken TeKippe. Ken indicated that Hiram Melendez would not be
able to attend the meeting. Finance Director Ken TeKippe, certified that the
meeting was in compliance with the Iowa open meetings law.
2. Virgil Blocker moved that the election of a chairperson be delayed until the next
meeting when the full commission is present. The motion was seconded by Gary
Ruden and approved unanimously. Steve Reisdorf agreed to serve as acting
chairperson for the meeting.
3. Hiram Melendez was reappointed and Brad Chalmers appointed for a three year
term on the committee by the City Council beginning July 2009. The committee
welcomed Brad Chalmers.
4. Virgil Blocker moved that the minutes of the April 22, 2009 meeting be approved.
The motion was seconded by Gary Ruden and approved unanimously.
5. Dale Repass and John Gonner of First Community Trust (FCT) distributed a
handout which provided information on performance, economic and interest rate
outlook, and five year treasury yield history and recent history of spreads.
Dale indicated the firm is in its ninth year and is a federally chartered trust
company which continues to grow at $40 to $50 million per year. FCT continues to
receive good exam results and has two outside audits per year. Recently the firm
purchased their own building on Hillcrest which indicates their commitment to
Dubuque. 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: focused on the
low risk low volatility investments; index has more volatility than the City portfolio;
returns have beat the index overall for positive and negative returns since
inception; Since firm began managing City funds, treasuries have outperformed
government agency investments; yield curve has been steep for some time. There
are additional treasury bonds available due to stimulus plans. Inflation concerns
over increased money supply has been offset by a slow down in the velocity of the
money supply. Higher unemployment percentage and longer lengths of
unemployment along with a national rise in savings will work to keep inflation in
check.
John Gonner confirmed that First Community Trust is in compliance with the City's
current investment policy.
6. Ken distributed investment return information for June 30, 2009, 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, 2009, market values. Ken indicated the
schedule of fees reflects Dana's recent decrease in fees which should save the
City approximately $8,000 per year. Ken spoke with American Trust about their
custodian fees and American Trust agreed to reduce fees from .25 to .20% on the
first $1 million on each account. This change should save the City $2,000 per
year.
7. The Commission reviewed the June 2009 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, except for the reserve fund established for 2007 Port of Dubuque
GO Bond. Certificate of deposit returns have been in the .78% range for recent
purchases. The City has continued to borrow significant 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. There was no communication from the public, commission or staff to report
according to Ken.
9. The next meeting of the Commission is scheduled for Wednesday, October 28,
2009, at 3:00 p.m. in City Hall. A representative from Dana will be invited to the
meeting.
10. Virgil Blocker moved that the meeting adjourn. The motion was seconded by Gary
Ruden and approved unanimously. The meeting adjourned at 4:05 p.m.