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CCP 03-26-2001
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CCP 03-26-2001
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<br />The renort shall exnlain the total investment return and comnare the return and comnare . <br />the return with budl!:etarv exnectations. <br /> <br />The total return for 2000 was $835,514 on an average portfolio balance (including cash <br />equivalents) of $13,987,888, which equates to an average yield of 5.97% for the year, This <br />compares favorably to 2000 interest income expectations in the range of 5,0% to 5,5%, The 2000 <br />yield also compares closely to the benchmark 2000 average rate for a two year U,S, Treasury <br />note of 6,25%. <br /> <br />2000 interest income of$835,5l4 resulted in a $285,714 positive deviation (52,0%) against <br />budget, The primary reasons for this performance were higher than expected yields and a larger <br />than expected portfolio balance arising from construction start delays for the City Hall facility <br />construction project and the approximate $2,200,000 Ingerson neighborhood street improvement <br />project not moving forward, <br /> <br />The report shall contain a discussion of the outlook for interest rates and the economic <br />trend for the upcoming year investment strategies to be implemented, and budgetary <br />expectations for investment income. <br /> <br />The general outlook for interest rates in 2001 is for them to be lower than average 2000 levels, <br />Many economists believe the United States economy will be negatively impacted by slow <br />growth and by concerns in other international economies with Japan being the most noteworthy, <br />Slower growth and lower import prices should keep inflation low and stable, around 2,5%, By <br />year-end 2001, we may be seeing the yield curve for all maturities in the range of 4,0% to 4,75%, . <br />The estimated annualized rate of return for 2001 should be in the range of 4.5% to 5.25%, <br /> <br />2001 interest was budgeted at $656,000 on an expected average portfolio balance of $13,500,000 <br />with an expected yield of 4,90%, <br /> <br />Attached Schedules <br /> <br />Attached are related schedules for your further review: <br /> <br />1, Investment Portfolio Analysis, December 31, 2000 <br />2, Annualized Investment Portfolio Return, 2000 <br />3, Investment Ladder, Note and Zero Maturities by Year, 2001 - 2005 <br /> <br />This report will be discussed with the Operations and Finance Committee at their April 2001 <br />meeting, I herewith submit this annual report to the City Council pursuant to the annual <br />rep~:~nt of the Investment Policy, <br /> <br /> <br />Terrance R. Post <br />City Treasurer <br /> <br />4 <br /> <br />. <br /> <br />(Enclosures) <br />
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