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<br />Interest rates were at historic lows in 2020 and 2021. Due to that rate environment, investment <br />interest earnings for 2021 were lower than 2020 and 2019. <br /> <br />2019 2020 2021 <br />$312,294 $257,404 $143,835 <br /> <br />Interest revenue will increase in 2022 due to the Federal Reserve Rate adjustments that are <br />expected to occur in 2022. <br /> <br />As in prior years, a mark to market adjustment is required to be recorded at year-end in accordance <br />with GASB (Government Accounting Standards Board) and GAAP (Generally Accepted <br />Accounting Procedures). A mark to market adjustment refers to the amount that the City would <br />receive if the entire investment portfolio would have been liquidated in one day. This mark to <br />market adjustment is netted against investment earnings on the financial statements. Since the City <br />held investment with higher coupons in 2020, there was an increase in the mark to market <br />adjustment in 2020. Now that those investments are starting to mature, our mark to market <br />adjustment is decreasing for 2021. The mark to market adjustment on the portfolio were as <br />follows: <br /> <br />2019 2020 2021 <br />$27,498 $154,376 $(24,004) <br /> <br />A listing of the investments by type and maturity is attached to this report. <br /> <br />I am available to answer any questions regarding the City’s finances and this report.