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Regular City Council Meeting Monday, September 16, 2019 Page 3 Chair Hodder reviewed the topic of establishment of the policy guides used to for cash reserve fund and noted the commission continued to have questions about what the policy should entail. Mayor Roe thought there may have been a bit of misinterpretation from the May 18th discussion. He indicated he was the one that was suggesting a policy and thought what he was talking about was that the City needed to write down the mechanism of doing the sweeping of the excess funds and develop a policy that says the city is going to do that along with the funds being looked at and where the money would go rather than a policy on how the city will spend the funds. He agreed with the Commission that how to spend the funds once swept is a broader discussion and does not need to be put into a policy. Chair Hodder indicated that explanation provided clarity for the Commission. Chair Hodder reviewed the topic to modify the cash reserve target level with the Park and Recreation and operating fund. Mayor Roe asked if this item was going to the Parks and Recreation Commission for their consideration as well. Mr. Trudgeon indicated at some point it was, but he was not sure of the status of that item at this time. Mayor Roe thought once it goes through the Parks and Recreation Commission, the next step would be to bring forward the revised policy language. Commissioner Murray reviewed the alternative investment options and noted he and the commission have been working on this for a couple of years. Councilmember Etten asked based on the two-investments mentioned which Commissioner Murray felt was safer for these dollars. Commissioner Murray indicated the FCC does not allow him to answer that ques- tion. He believed the League of Minnesota Cities is investing in Vanguard's Eq- uity's index fund. He noted he talked to Vanguard and was told that even in a bad year the investment has yielded about six percent. He would lean toward the in- dex fund and did talk to Finance Director Miller about ways to spread it in over time to lower the risk and is probably the way to go. Councilmember Willmus indicated he would be willing to look at this further. This could be an opportunity to diversify the portfolio a little bit greater than the city currently does.