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Minutes Investment Oversight 1 25 06 .. 5~"i>~E ~*~ Memorandum , RE: Members of City of Dubuque Investment Oversight Advisory Commission Kenneth J. TeKippe, Finance Director ~rJ' G'4.~ Un-approved Minutes of the January 25, 2006 Meeting of the Investment Oversight Advisory Commission TO: FROM: DATE: January 26, 2006 Commission members Paul Lassance, Hiram Melendez, Gary Ruden and Steve Reisdorf were present. Ken TeKippe, Finance Director and Jean Nachtman, Assistant Finance Director were also present. 1. The meeting was called to order at 4:03 p.m. in Conference Room A by Chairperson Paul Lassance. Finance Director Ken TeKippe, certified that the meeting was in compliance with the Iowa open meetings law. 2. Gary Ruden moved that the minutes of the October 19, 2005 meeting be approved as written. The motion was seconded by Steve Reisdorf and approved unanimously. 3. Mr. Mel Miller, Ms. Kim Grant and Mr. Andrew Douglas of Dubuque Bank and Trust provided a handout with various information to the attendees and indicated that the name of their division has changed to Wealth Management Group. Mel introduced Andrew Douglas who recently joined their firm and has expertise in bond area. The group reviewed the handout materials and projected interest rates for federal funds will go from current 4.25% to 4.75%, unemployment rate to edge lower and a 3.5% increase in GDP in 2006 after 4.0% growth in 2005. The 1.43 weighted duration for the portfolio last year has increased to 2.50 this year (strategy is to stay in this range for now). Greenspan retirement may provide more inflation targets and a less vocal leader of Federal Reserve. The anticipated increase in Federal Funds may result in a rate greater than a ten year Treasury and an inverted yield curve, but a recession should not follow. Mel confirmed that Dubuque Bank and Trust is in compliance with the City's current investment policy. The bank will begin requesting monthly payment of fees in January versus the quarterly payment in the past. '" t 4. Ken distributed investment return information through December 31, 2005 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 December 31, 2005 market values plus a recap of earnings of managers for recent calendar years. Revised December 31,2005 reports from our custodian, American Trust and Savings Bank, were distributed for U.S. Bank and the combined report due to a small change (approximately $4,000) in accrued interest on the U.S. Bank managed funds. Ken indicated that City did not withdraw funds from the investment managers in the past few months and there are no plans to withdraw during next few months. 5. The Commission reviewed the December 2005 quarterly investment reports prepared by Jean Nachtman. Ken indicated that the City has continued in recent months to invest in Certificates of Deposit (approximately 6 month maturities) when investments mature or new funds received, due to higher returns than U.S. Treasuries. There are no U.S. Treasuries in the current portfolio. Recent interest rates for certificates of deposit acquired have been in the 4.5-4.8% range. American Trust and Savings Bank continues to be high bidder on most recent bids. A recap of investment quotes for 22 CD bids to date during the current fiscal year ending June 30, 2006 was distributed. Ken indicated that additional bond borrowing for stormwater projects ($2,900,000) and improvements to Iowa and Locust Street Ramps ($910,000) will be taking place in the next few months. Proposals for investing the proceeds of the bond issues will be solicited from the local financial institutions. Refunding part of 2000 bond issues is being reviewed as well. 6. There was no communication from the public, commission or staff to report according to Ken. 7. The next meeting of the Commission is scheduled for Wednesday, April 26, 2006, at 3:00 p.m. in City Hall. A representative from U.S. Bank will be invited to the meeting. 8. Hiram Melendez moved that the meeting adjourn. The motion was seconded by Steve Reisdorf and approved unanimously. The meeting adjourned at 4:40 p.m.