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i <br /> City Council Regular Meeting Minutes <br /> March 26, 2002 <br /> Page 5 <br /> 1 CREDIT RATING IS A-1 <br /> 2 • Lower interest rates <br /> 3 <br /> 4 INVESTMENTS-FIXED RATE OF RETRUN <br /> 5 • Hold till maturity <br /> 6 o 100%of principal is returned <br /> 7 o Interest earnings are at a fixed percentage <br /> 8 <br /> 9 • Subject to market conditions <br /> 10 o Liquidated or sold before maturity <br /> 11 o Penalty for early withdrawal <br /> 12 o Sale could result in gain/loss of principal <br /> 13 <br /> 14 GOVERNED BY STATE STATUTES <br /> 15 • Types of Instruments <br /> 16 o Certificate of deposits <br /> 17 o Commercial paper <br /> 18 o Zero coupon bonds <br /> 19 o FNMA's <br /> 20 o . Federal Home Loan Mortgage <br /> 21 <br /> 22 INVESTMENT PORTFOLIO <br /> 23 • September 11`h <br /> 24 o Uncertain Stock Market <br /> 25 o Market conditions favor investments with fixed earnings <br /> 26 • Value of portfolio-December 31" <br /> 27 o $11,411,258 Market Value <br /> 28 o $11,444,619 Book Value <br /> 29 o ($33,361) <br /> 30 <br /> 31 RATE OF RETURN OF PORTFOLIO <br /> 32 • Ehlers- Independent Review <br /> 33 • Rate of Return <br /> 34 o Average Rate of Return was 1.08%higher <br /> 35 • Unrealized Loss <br /> 36 o The ratio of Market Value o Book Value is very low <br /> 37 <br /> 38 Mayor Pro Tem Sparks commended Larson on his excellent presentation. <br /> 39 <br /> 40 Councilmember Horst inquired about the overall portfolio, and where the $1,300,000 for <br /> 41 the redevelopment of the parks was coming from. Larson stated that, presently, the city <br /> 42 still has the money. He stated that the value of the investment portfolio will begin going <br /> 43 down, once the project is well underway. <br /> 44 <br />