City of Oak Creek

Common Council Report

Meeting Date: 05/02/06

Item No.:        

Recommendation:

That the Common Council adopt Resolution No. 10637-050206, a Resolution Modifying Resolution No. 10549-092005, Naming Public Depositories, and Authorizing an Investment Agency Agreement Between the City of Oak Creek and Marshall & Ilsley (M&I) Trust Company NA.

Background: 

The City is often approached by financial product vendors offering their services to improve the City’s investment results. In an attempt to improve the City’s investment earning potential, the City Clerk and City Treasurer recently met with representatives of Marshall & Ilsley (M&I), and researched the services available through Marshall & Ilsley’s Investment Management program.  Although this type of research had been conducted in the past by the Finance Committee, there has been no active Finance Committee for nearly three years. The M&I municipal investment program offers earnings potential at least equivalent to our current program with Dana Investments, but fees are substantially lower.  We have certainly not been dissatisfied with Dana Investments program or representatives, but we must consider the overall costs of doing business as well.   Representatives of M&I will be present for the Council meeting to give a brief presentation and answer any questions.

A copy of the standard Investment Agency Agreement is attached to this report.  The trust agent , M&I Trust Company NA, is required to comply with Wis. Statutes and with the City’s investment policy guidelines.

Marshall & Ilsley (M&I) Bank is currently on the authorized list of public depositories, but to make the listing technically correct, we are adding Marshall & Ilsley (M&I) Trust Company NA as a separately identified depository.  

Fiscal Impact: 

In the Dana Investments account in 2005, the City earned an average interest rate of 3.38%, for earnings totaling over $235,000 net of fees, with fees of approximately $48,700.   Recognizing that the market obviously cannot be exactly predicted, it is anticipated that comparable interest earnings will be realized, with fees of approximately $20,000, for a savings of approximately $28,700.

Prepared by and Fiscal Review by: Beverly A. Buretta, CMC City Clerk

Respectfully submitted, Patrick DeGrave, Ph.D City Administrator