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Investments: <br />The City should experience modestly increasing investment earnings as a result of stable to <br />increasing rates in 2015 and 2016. Investment income for 2015 is $130,079 compared with <br />$122,042 for the same period in 2014. Our portfolio for June 30, 2015 was 24,997,220 compared <br />with $26,869,243 for 2014. <br /> <br />The Federal Open Market Committee (FOMC) continues to maintain the discount rate at 0% - <br />.25%, which is the same level as in 2014, 2013, 2012, 2011, 2010, and 2009. There are a <br />number of headwinds facing the economy mainly a slowdown in China and Europe. Market <br />expectations are that the Fed will start to move the discount rate up in the latter half of 2015 to <br />give themselves some wiggle room in the event that the economy turns down. A rate increase <br />may not be dependent on related economic data. Treasury bills are presently providing the <br />following rates-of-return: <br /> <br />Treasury Securities 2015 2014 <br /> 2 year .700 .460 <br /> 5 year 1.650 1.640 <br />10 year 2.290 2.470 <br />30 year 2.990 3.270 <br />Cert. of Deposit <br /> 1 year .400 .450 <br /> <br />Inflation does not seem to be a concern for the FOMC with year over year inflation around 1.4%. <br />GDP for the second quarter was at 2.3% and the first quarter was revised upward to 0.6% from <br />(0.2%). State unemployment for June was 3.9% compared to national unemployment of 5.5%. The <br />job market continues to improve but wage growth is still minimal and many (58%) of the jobs have <br />been part-time. <br /> <br />FINANCE DEPARTMENT OPERATIONS: <br /> <br />Second quarter: <br />The annual financial audit and preparation of the 2014 comprehensive annual financial report <br />consumes a lot of staff time during the second quarter. Staff also began and completed work on the <br />five year financial plan and began work on the 2016 budget. <br /> <br />Third and fourth quarters: <br />The third and fourth quarters will be dominated with budget related work which will culminate with a <br />truth-in-taxation hearing and adoption of the 2016 budget and tax levy in December. The third <br />quarter will also include certifying assessments for delinquent utilities, diseased trees, abatements <br />and other charges due to the City. Work on insurance policy renewal occurs in the fourth quarter. <br /> <br />Respectfully Submitted, <br /> <br /> <br /> <br /> <br />Mark Beer