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money market accounts. We anticipate we will have two large tax settlements each year, along with the regularly-scheduled debt service payments. The Treasury yield curve has increased in all levels from September 30, 2016. Most recent purchases have been credit quality municipals (Mum's) and certificates of deposits (CDs). Muni's and CDs have been several basis points over agencies with call features. Investing in shorter-term investments has presented far fewer options since the decline in the commercial paper market. Three-month notes are yielding 0.51% and the 10-year notes are 2.45%. See the graphical illustration below: Treasury Yield Curve 3.50% 3.00 2.50% 2.00 9/30/16 1.50% 12/30/16 1.00% 0.50% 0.00% 1 mo 3 mo 6 mo 1 yr 2 yr 3 yr 5 yr 7 yr 10 yr 20 yr 30 yr Cities generally use a short-horizon benchmark such as the two-year Treasury Bill (12/30— 1.2%,with an increase from .77% on 9/30) or some similar measure. Our current portfolio yield is roughly 2.10%which is several basis points over the treasury yield benchmark. This is calculated by taking the yield times the current value for each investment and dividing the resulting amount by the total portfolio value. As investments purchased in earlier years mature,we will be able to replace them and lock into some longer term interest rates,but they may have to be reinvested at lower interest rates as market conditions change. It is typical to lag the market as interest rates change. This will lead to more predictability in our interest earnings. Our primary reserve account is our 4M Fund which is a money market account where many cities pool their funds. It currently yields .1%with daily withdrawal privileges. The city strives to maintain a strong diversification portfolio so liquidity and exposure risk are reduced. Attachments ■ Investment summary N:\Public Bodies\Agenda Packets\01-17-2017\Fin2l\xrnfo sr Investments.docx