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As of September 30th, $233,157 investment earnings for 2019 are higher than 2018. Investment <br />earnings are as follows: <br />2019 2018 <br />$233,157 $203,239 * <br />* The 2018 investment earnings include the City’s owned municipal bond interest of $43,192 <br />that was repaid in 2019. <br />Since the City’s cash and investments are needed for cash flow in the City’s operating and <br />capital activities, it is helpful to understand the maturities in order to structure future investment <br />opportunities. Below are the future maturities for the City’s cash and investments. <br />The Federal Reserve has dropped the Fed Funds Rate twice by .25% each time during the 3rd <br />quarter (July & September). This has had a negative effect on the interest that is earned in the <br />4M money market account. The 4M account paid 2.17% in May and was down to 1.91% in <br />September. As of today, the rate was 1.73%. To offset the drop in 4M rates, staff has been <br />forecasting cash flow needs in order to identify available funds to invest funds into higher <br />earning investments. <br />On a positive note, 61% of the City’s investments are in non-callable investments. A non- <br />callable investment cannot be called prior to maturity. In other words, if we are earning 2.25% <br />on a non-callable investment today, we will earn 2.25% on that investment until maturity even if <br />interest rates continue to fall. <br />The City budgets investment income as part of the budget process so it is helpful to understand <br />the coupons (interest rate) for the cash and investments. The coupons as of September 30, 2019, <br />are as follows: <br />As of September 30, 2019 <br />Coupon Amount Percentage <br />To 1.00% $200,957 1.47% <br />1.00% to 1.49% 0% 0% <br />1.50% to 1.99% 3,263,483 23.87% <br />2.00% to 2.49% 6,635,443 48.53% <br />2.50% to 2.99% 910,000 6.65% <br />3.00% to 3.49% 2,663,808 19.48% <br />6.00% to 7.60% 0%0% <br />$13,673,691 100.00%