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CITY COUNCIL WORK SESSION July 5, 2017 DRAFT 3 the city’s investment policy is old and should be updated. On the matter of liquidity, she 89 sees it’s different with each city but the liquidity has become more expensive to the city 90 with interest rates rising. 91 92 Mayor Reinert asked about yield; he understands the safety element but wonders if there 93 can be a policy of the council requiring a higher yield (with safety in mind, but not 94 costing the city money). Ms. Cornwell said the city cannot set such a goal; it is not 95 feasible. 96 97 Ms. Cornwell reviewed the written report, including information on: 98 - the Trump bump is leveling off and is now resulting in a drop in the market; 99 - current market yields (with statute in mind) that dictates what bonds can be bought; 100 specifically noted was commercial paper not being viable; 101 - transaction fees were reviewed for the different types of offerings; 102 - commissions (can be double fees without direct bank access); 103 - the Wells Fargo group provides extra services and analytical services; 104 - portfolio history and book yield was noted (the city is a third above pier cities); 105 - duration and convexity. 106 107 Mayor Reinert asked what the city can do for a higher yield. Ms. Cornwall remarked that 108 a two percent goal is unrealistic under current law and Ms. Cotton suggested a special 109 bench marking exercise may be more fitting. 110 111 Mayor Reinert asked who is making investment decisions for the city and Director Cotton 112 said she makes the decisions using the city’s existing policy and investments. 113 114 Mayor Reinert remarked that this is the best and most comprehensive information the 115 council has received on this topic and he is thankful. 116 117 The council recessed briefly to step outside city hall to view fire department equipment. 118 119 3) Sale of Fire Apparatus - Public Safety Director Swenson showed photos indicating 120 how the new equipment will better reach residential properties. 121 122 Director Swenson noted that, with the new equipment, the city has a decision about sale 123 of equipment. He is recommending retention of Aerial 11, so that both sides of the city 124 will have aerial equipment, provide redundancy with that service, and in consideration of 125 repairs that the city has invested in the equipment. He recommends sale of the two 1992 126 engine vehicles through a company that specializes in trading fire apparatus. They 127 estimate a sale price of $40,000 to $50,000 with a commission expected to the company 128 if they locate the buyer. The mayor reviewed what the city paid for those trucks and the 129 possible gain/loss to the city. Director Swenson added that the longer the city hangs onto 130 the equipment, the less it is worth due to the certification requirement. Staff is asking if 131 the council is comfortable with the proposal to work with the trading company. 132 133