HomeMy WebLinkAbout07.06.1999COUNCIL WORK SESSION
July 6, 1999
5:30 p.m.
Council Chambers
Members present: Mayor Rooff, Getty, Murphy, Jordan, Krizek, Gronen, Collier.
Members absent: Anders.
Moved by Krizek, seconded by Gronen that the Agenda, as proposed, be approved. Ayes: Six.
Absent: Anders. Motion carried.
Bruce Meisinger, Finance Manager, stated that he is proposing that the council consider a
different means of investing capital projects funds that the city has received from the issuance of
$9.8 million in General Obligation bonds for construction costs. Mr. Meisinger stated that he is
proposing a longer term investment of bond funds that the city will not immediately need for
construction requirements. Mr. Meisinger reported that the local banks and Iowa Public Agency
Investment Trust (IPAIT) are currently reviewing his investment offering and will be submitting
proposals to the city on July 9, 1999_ Mr. Meisinger stated that the intent of the program is to
keep the amount of bond funds, not immediately needed, invested as effectively as possible while
maintaining the security of the principal in a manner consistent with the city's investment policy.
The planned funds drawn -down schedule has been structured to cover the city's construction
cashflow while optimizing the productivity of the idle capital bond funds. Mr. Meisinger stated
that he is projecting that this program could result in $100,000 interest earned on the $9.8 million
GO bond funds.
Paul Kruse, Managing Director of Iowa Public Agency Investment Trust, stated that the Iowa
Public Agency Investment Trust (IPAIT) was established in 1987 and is a pooled investment
program sponsored by the Iowa League of Cities, Iowa State Association of Counties and the
Iowa Municipal Utilities. Mr. Kruse stated that IPAIT contacts twelve large banks informing
them of the amount the city has to invest and asks the banks if they are interested in bidding_ Mr.
Kruse commented that usually IPAIT can get good rates for the city. Mr. Kruse stated that the
money is invested in a flex CD, which allows the city to draw down an amount each month. The
banks review the amount the city thinks it will need each month and the average life of the funds.
Mr. Kruse reported that there is no penalty for early withdrawal, and that the money cannot leave
the State of Iowa.. Mr. Kruse stated that there is no cost for the program when IPAIT quotes a
rate but that 10 basis point is included in the rate.
Mayor Rooff stated that the city could possibly put all idle funds into the investment program.
Mr. Meisinger stated that the city typically has between $10 and $12 million in aggregate funds
that could be invested in some type of program. Mr. Meisinger reported that Union Planters
Bank no longer invests public funds, and he recommends the city try the program. Mr. Meisinger
will review all RFPs received and make a recommendation to the council.
Moved by Getty, seconded by Krizek that the Finance Manager be authorized to proceed with
RFPs for investment of the bond funds and bring back a recommendation to the council next
week. Ayes: Six. Absent: Anders. Motion carried.
With no further business before the council, it was moved by Getty, seconded by Collier that the
meeting be adjourned at 6:09 p.m. Ayes: Six. Absent: Anders. Motion carried.
Nancy Eckert
City Clerk