Investment Oversight Advisory Commission 69th Quarterly ReportFrom: City of Dubuque, Investment Oversight Advisory 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 Advisory Commission (IOC) respectfully submits the
69 quarterly report.
The IOC members met on July 28,2010. The transactions reviewed through June 30,
2010 appear to be in compliance with the Articles in the Investment Policy as further
noted below. Representatives from First Community Trust (FCT) came before the IOC
for their report on funds managed for the City. Mr. Dale Repass, CEO thanked the IOC
for letting additional funds for management by the FCT. As of August 1, the only
remaining transfer is to be made from Dana in the latter part of 2010. John Gonner, CFA,
Senior Vice President presented the performance review through June 30, 2010. Mr.
Gonner stated that, in the eight year period FCT managed funds the City portfolio out
Performed benchmarks 88% of the months in which the index had a negative return and
50% of the months in which the index had a positive return. These results were due
primarily to the FCT practice of purchasing "agencies" over the eight years. These had
what is called "step -up" interest rates and non - callable features which result in a very
conservative portfolio. Currently, however, these type of instruments are very difficult to
find.
Mr. Gonner observed that inflation is very low and returns will continue to be low as
the economy is expanding but only very slowly. Mr. Gonner concluded by stating that
FCT practices are in compliance with IOC policies.
Representatives from U.S. Bank followed with their report on funds managed for
the City. U.S. Bank representative Nick Zimmerman stated that funds for FCT will be
transferred on or about July 29, 2010 from the U.S. Bank share of managed funds.
Messrs. Chris Johnson and Taylord Harwood presented the performance review through
June 30, 2010. Mr. Harwood stated that corporate and high yield instruments were better
Than agencies, but for safety, the focus has been on callable agency notes. They
Continue to look for shorter terms to ladder in order to keep durations in 3.5 to 4 years.
U.S. Bank focuses on Barclay Capital 1 -3 years governments for comparative purposes.
Increasing returns will be a challenge. Mr. Harwood stated that U.S. Bank practices are
in compliance with IOC policies.
Mr. TeKippe reviewed manager returns and fees. All manager fees are now
standardized and paid monthly. Mr. TeKippe noted further that D.B. &T. had transferred
its share of funds for management to FCT, U.S. Bank will by July 29, 2010 and Dana
will be the last to do so.
Members Gary Ruden and Stephen Reisdorf were reappointed for three year
Terms. As is the practice at the beginning of new fiscal periods, a chairman of the IOC
was elected. Stephen Reisdorf was elected Chairman for the ensuing fiscal period.
Dana.
The IOC next meeting date was set for October 27, 2010 and presenter will be
Respectfully submitted,
Stephen V. Reisdorf
Chairman
Investment Oversight Advisory Commission