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At the end of thefirstquarter, the City’s portfolio consisted of 72% of the portfolio maturing overnight,5% <br />maturing in 1 year, 17% maturing in 1-2 yearsand 6% maturing beyond two years. <br />By Investment Maturity <br />6% <br />17% <br />5% <br />72% <br />Overnight1-12 Months <br />12-24 Months24-36 Months <br />Currently, the 3-month T-Bill is at0.02%; 2-year, at0.71%; 5-year, at1.49%; and, the 20-year is at2.62% <br />(seeyield curve below).Rates along the short end are the same as they were 3 months ago, and there have <br />beenno changes to the overnight rate. <br />Yield Curve <br />3.00% <br />2.00% <br />1.00% <br />0.00% <br />Treasury Bills <br />3 months agocurrent <br />On December 16, 2015the fed increased the target rate from 0.00% to 0.25%to a target rate of 0.25% to <br />0.50% marking the first rate increase in seven years.Although rates have shown increases over the last 3 <br />months,mainly in short term rates, the most recent economic data and global financial conditions will likely <br />prompt the Fed to delay the rate hike schedule. At the January meeting, the Federal Open Market <br />Committee (FOMC) decided to keep rates unchanged. Currently, the consensus is for two more rate hikes <br />in 2016, ending theyear near 1 % for the Fed Fund Rate.While staff continues to monitor rates and <br />economic conditions,the strategy for the portfolio will,as always,focus on ladderingto pick up yield along <br />the curve and maintaininga constant cash flow and liquid position. <br />2 <br /> <br />