Minutes Invest Oversigh 1 22 04CITY OF DUBUQUE, IOWA
MEMORANDUM
TO:
FROM:
RE:
Members of City of Dubuque Investment Oversight Advisory Commission
Kenneth J. T eKippe, Finance Director ~2' ~/~/~
Un-approved Minutes of the January 22, 2004 Meeting of the Investment
Oversight Advisory Commission
DATE:
January 26, 2004
Commission members Paul Lassance, Hiram Melendez, Steve Reisdorf, Gary Ruden
and Charles Spielman were present. Ken TeKippe, Finance Director and Jean
Nachtman, Assistant Finance Director were also present.
The meeting was called to order at 11:50 a.m. in Conference Room 1 in City Hall
Annex by Chairperson Paul Lassance. Finance Director Ken TeKippe, certified that
the meeting was in compliance with the Iowa open meetings law.
Gary Ruden moved that the minutes of the October 23, 2003 meeting be approved
as written. The motion was seconded by Hiram Melendez and approved
unanimously.
3. Mel Miller and Klm Grant of Dubuque Bank and Trust provided a handout with
various information to the attendees.
Klm reviewed the portfolio duration analysis which reflects a 1.67 weighted
average duration at December 31, 2003 and total return of 2.05% for 2003 versus
a benchmark of 2.01% for Lehman Brothers short-term 1-3 year Government
Bonds.
Mel reviewed the bank's interest rate forecast for one and three years and
information on historical yield curve, as well as the 2004 economic market forecast.
Mel indicated that future inflation is the key factor in buying short or long-term
bonds. 2003 was the most volatile year since 1994 for bonds. Currently there is a
steep yield curve which would indicate rates are going up. In addition, the
economy is improving; inflation is dead; lots of liquidity and Feds won't do anything
with rates until unemployment rate comes down. Mel indicated that collaterized
mortgage instruments will be utilized for the shorter term investments and agencies
will be utilized for the longer term. Interest rates remaining down has surprised
Mel who also felt the Feds may be behind the curve on rates. Stock market
outlook is optimistic, however, this does not affect City portfolio.
Mel indicated that Dubuque Bank and Trust is in compliance with the City's current
investment policy. Their bank does not shadow post for the account.
The Commission briefly reviewed the December 2003 quarterly investment reports
prepared by Jean Nachtman. 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. There are no U.S.
Treasuries in the current portfolio. A revised monthly investment summary was
distributed. State Central Bank was recently approved by the City Council as a
depository for City funds and will bid on certificates of deposit and accept
payments from utility customers. Liberty Bank has been the most competitive on
recent bids for certificates and has been awarded the last six due to their interest
rates.
Ken distributed investment return information through December 31, 2003 from the
four investment managers: Dubuque Bank & Trust, U.S. Bank, Dana Investment
Advisors and First Community Trust. Also distributed was a recap of
manager/custodian annual fees based on December 31, 2003 market values.
There was no communication from the public, commission or staff to report
according to Ken.
The next meeting of the Commission is scheduled for Thursday, April 22, 2004, at
3:30 p.m. in City Hall. A representative from U.S. Bank will be invited to the
meeting.
Steve Reisdorf moved that the meeting adjourn. The motion was seconded by
Hiram Meiendez and approved unanimously. The meeting adjourned at 12:30 p.m.