DB&T Pays City Over $2 Million in Interest

1/3/2024 -- FOR IMMEDIATE RELEASE

The City of Dubuque and Dubuque Bank and Trust (DB&T) have collaborated to successfully resolve issues related to interest earnings owed to the City.

DB&T recently paid the City $2,053,691 in interest earnings following a review of a banking services agreement between the City and DB&T from 2007 to present and the City’s accounts covered by that agreement.

An analysis conducted by the City Finance Department and DB&T confirmed the 2007 agreement required DB&T to pay the City an interest rate based on the Federal Reserve rate. When Federal Reserve interest rates declined in 2020, DB&T paid a fixed rate higher than called for by the agreement. However, DB&T did not adjust the City’s interest rate when the Federal Reserve interest rates began rising after a prolonged period of decline. Due to changes in personnel at DB&T and the City of Dubuque, this oversight was not identified at the time.

Following a competitive selection process that included eight different banking proposals, the City recently awarded a new banking services agreement to DB&T. It was during the preparation of the new banking services recommendation for the November 18, 2024, City Council meeting that City staff identified the discrepancy from the agreement in place. It was brought to DB&T’s attention and quickly resolved.

City staff and DB&T are now finalizing the terms of the new agreement, which will include additional policies and procedures to ensure agreement compliance, including:

The City Finance Department has assigned a staff member to closely monitor accounts to ensure the correct rates are applied per the agreement.
The purpose of the City’s Investment Oversight Advisory Commission is being amended to include cash management responsibilities, providing another layer of review.
The implementation of quarterly meetings between DB&T and City Finance staff will be scheduled to discuss City accounts and any new financial opportunities within the City’s accounts.

# # #

MEDIA CONTACTS:
Randy Gehl, City of Dubuque
rgehl@cityofdubuque.org
Ryan Lund, Dubuque Bank & Trust
RLund@htlf.com