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CITY COUNCIL WORK SESSION <br />July 592017 <br />89 the city's investment policy is old and should be updated. On the matter of liquidity, she <br />90 sees it's different with each city but the liquidity has become more expensive to the city <br />91 with interest rates rising. <br />92 <br />93 Mayor Reinert asked out yield; he understands the safety element but wonders if there <br />94 can be a policy of the council requiring a higher yield (with safety in mind, but not <br />)5 costing the city money). Ms. Cornwell said the city cannot set such a goal; it is not <br />96 feasible. <br />97 <br />98 Ms. Cornwell reviewed the written report, including information on: <br />99 - the Trump bump is leveling off and is now resulting in a drop in the market; <br />100 - current market yields (with statute in mind) that dictates what bonds can be bought; <br />101 specifically noted was commercial paper not being viable; <br />102 - transaction fees were reviewed for the different types of offerings; <br />103 - commissions (can be double fees without direct bank access); <br />104 - the Wells Fargo group provides extra services and analytical services; <br />105 - portfolio history and book yield was noted (the city is a third above pier cities); <br />106 - duration and convexity. <br />107 <br />108 Mayor Reinert asked what the city can do for a higher yield. Ms. Cornwall remarked that <br />109 a two percent goal is unrealistic under current law and Ms. Cotton suggested a special <br />110 bench marking exercise may be more fitting. <br />111 <br />112 Mayor Reinert asked who is making investment decisions for the city and Director Cotton <br />113 said she makes the decisions using the city's existing policy and investments. <br />114 <br />115 Mayor Reinert remarked that this is the best and most comprehensive information the <br />116 council has received on this topic and he is thankful. <br />117 <br />118 The council recessed briefly to step outside city hall to view fire department equipment. <br />119 <br />120 3) Sale of Fire Apparatus - Public Safety Director Swenson showed photos indicating <br />121 how the new equipment will better reach residential properties. <br />122 <br />123 Director Swenson noted that, with the new equipment, the city has a decision about sale <br />124 of equipment. He is recommending retention of Aerial 11, so that both sides of the city <br />125 will have aerial equipment, provide redundancy with that service, and in consideration of <br />126 repairs that the city has invested in the equipment. He recommends sale of the two 1992 <br />127 engine vehicles through a company that specializes in trading fire apparatus. They <br />128 estimate a sale price of $40,000 to $50,000 with a commission expected to the company <br />129 if they locate the buyer. The mayor reviewed what the city paid for those trucks and the <br />130 possible gain/loss to the city. Director Swenson added that the longer the city hangs onto <br />131 the equipment, the less it is worth due to the certification requirement. Staff is asking if <br />132 the council is comfortable with the proposal to work with the trading company. <br />133 <br />3 <br />