Minutes Investment Oversight 01_25_07DU~BU E Memorandum
TO: Members of City of Dubuque Investment Oversight Advisory Commission
FROM: Kenneth J. TeKippe, Finance Director ~ ~ .e%.~~''~~"
RE: Un-approved Minutes of the January 24, 2007 Meeting of the Investment
Oversight Advisory Commission
DATE: January 26, 2007
Commission members Paul Lassance, Hiram Melendez, Steve Reisdorf, Gary Ruden
and Virgil Blocker 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
Chairperson Paul Lassance. Finance Director Ken TeKippe, certified that the
meeting was in compliance with the Iowa open meetings law.
2. Hiram Melendez moved that the minutes of the October 25, 2006 meeting be
approved as written. The motion was seconded by Steve Reisdorf and approved
unanimously.
3. Andrew Douglas of Dubuque Bank and Trust introduced William Zaleski, Senior
Wealth Advisor, and Kim Grant, Portfolio Manager to the group and distributed a
handout which provided information on their strategic outlook, returns, and 2007
economic and market forecast. In addition, data on two potential new bond types
for the portfolio was provided. (Taxable Municipals and Investment Grade
Corporate Bonds) Dubuque Bank and Trust recommended a 5% - 20%
investment for Taxable Municipals and 15% - 20% maximum investment for
Investment Grade Corporate Bonds. Taxable Municipals have a historically low
default rate and bank would only buy AAA rated, insured bonds. Investment Grade
Corporate Bonds would use an Exchange Traded Fund which is composed of 100
highly liquid investment grade (AAA to BBB) corporate bonds. The use of these
funds could generate 20-30 additional basis points in returns.
After considerable discussion, Paul Lassance recommended that no more than
10% of the City's funds managed by Dubuque Bank and Trust be invested in
Taxable Municipal Bonds and no funds be invested in Investment Grade Corporate
Bonds Fund. The motion was seconded by Hiram Melendez and approved
unanimously.
Kim Grant confirmed that Dubuque Bank and Trust is in compliance with the City's
current investment policy.
4. Ken distributed investment return information for calendar year 2006 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, 2006, market values.
5. The Commission reviewed the December 2006 quarterly investment reports
prepared by Jean Nachtman. Ken indicated that the City has continued to invest in
Certificates of Deposit (approximately 6 month maturities), due to higher returns
than U.S. Treasuries, when investments mature or new funds received. There are
no U.S. Treasuries in the current portfolio. Recent interest rates for certificates of
deposit acquired have been in the 5.10-5.30% range. A summary of 29 investment
quotes for certificates of deposit bids in the current fiscal year was distributed.
State Central Bank has recently begun bidding on City funds and has been
successful for five bids.
Bids to invest escrow funds for the new parking ramp in the Port of Dubuque were
received today. Dubuque Bank and Trust provided the best interest rate (5.31 %)
for the approximately $6.3 million of funds that will be received around March 1
and spent over the next several months.
The City hopes to retain a firm to assist in the development of an RFP for primary
banking services. The firm will also assist in the review and selection of proposals
received.
Loans through the State Revolving Loan Fund (SRF) are being initiated for several
stormwater, water and water pollution control projects. Interest rates and fees
totaling 3.25% are attractive for the 20 year loans.
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 25, 2007,
at 3:00 p.m. in City Hall. A representative from U.S. Bank will be invited to the
meeting.
8. Gary Ruden moved that the meeting adjourn. The motion was seconded by Steve
Reisdorf and approved unanimously. The meeting adjourned at 3:55 p.m.