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<br /> <br />The Federal Reserve dropped the Fed Funds Rate three times in 2019 (July, September, and <br />October). This has had a negative effect on the interest that is earned in the 4M money market <br />account. The 4M account paid 2.17% in May and was down to 1.46% in December. To offset the <br />drop in 4M rates, staff continues to forecast the cash flow needs in order to identify available funds <br />to invest funds into higher earning investments. <br /> <br />On a positive note, 92% of the City’s investments are in non-callable investments. A non-callable <br />investment cannot be called prior to maturity. In other words, if we are earning 2% on a non- <br />callable investment today, we will earn 2% on that investment until maturity even if interest rates <br />continue to fall. <br /> <br />The City budgets investment income as part of the budget process so it is helpful to understand the <br />coupons (interest rate) for the cash and investments. The coupons as of December 31, 2019, are <br />as follows: <br /> As of December 31, 2019 <br />Coupon Amount Percentage <br />To 1.00% $0 0% <br />1.00% to 1.49% 3,013,078 19,24% <br />1.50% to 1.99% 4,416,800 28.21% <br />2.00% to 2.49% 4,634,588 29.60% <br />2.50% to 2.99% 910,000 5.81% <br />3.00% to 3.49% 2,684,449 17.14% <br /> $15,658,915 100.00% <br /> <br />Other Items <br />During the 4th Quarter, $230,533 was received from the State for the railroad quiet zone project <br />that was constructed in 2016. These funds were recorded in the Capital Infrastructure Fund (450) <br />since this was the fund that funded this project. <br /> <br />During the 4th Quarter, $73,000 was received for the 2019 B-2 storm sewer repair. These funds <br />were also recorded in the Capital Infrastructure Fund (450) since this was the fund that funded this <br />project.