reliance on misleading statements. there has been literally enforcement actions against government issuers. there is those that we will be discussing. in many cases, they were paid their principal interest in full when it was too. there has been no damage. nonetheless, there is enforcement action. when i say no damages, let me speak to the fact that in san diego, which i am familiar with, even though there is no private litigation's because there was no damages, the city is nevertheless out of the financial market. at the end of the day, their

expenses were north of $40 million to defend themselves. there is not a slide on this next point but in addition, there is a section 17. this allowed the sec to bring in action on negligence. with that being the type of enforcement action, who are the possible defendants? the sec can bring in action against a governmental issue or as the entity. they can bring an action against government officials and employees. they can bring in action against employees.

the sec has on its web site and complete compendium of all of the cases that they have brought in the index. to date, there has been no action as the body. this is the only advice by which they directly speak to your responsibility. before i go into the orange county report under which we're operating here. let me focus on slide 12th.

this is important. there are these various context that we discussed and there is potential liability for the city, whether it is official statements, continuing disclosure filings, this broad concept of any communication to reach investors, they are all establishing liability for the city as the city. so far, the only advice that we have about your potential liability is dealing with official statements, not these other documents. i would like to keep that discussion between the liability of the city and yours as board members. orange county, this is the first major enforcement action that goes back to 1996. you probably know a lot of the details in this. some of these are reflected on slide 13. in short, the argument was that

the board itself new and what the investment strategy was in the county and the county was very defendant on that strategy and repay investors. for they were borrowing short and invest in long in claims of arbitrage. this is the only advice that we have directly speaking to your responsibilities for board members.

a public official might not authorize disclosure. once again, recklessly the concept of -- the cannot approve something that will be wrong. it does not mean that each one of you must read the official statement that you approved what the report says is that in the sec view, you have acted recklessly and bringing in to question the ability to repay the securities and notwithstanding such knowledge, failing to take steps appropriate under these circumstances.

this is the only advice that we have as your spouse but as board members. what i want to do is go into it the other cases. -- this is the only advice that we have as a responsibility as board members. what these speak to is that in the sec if you, it is not simply whether there is existing fact that is going to be immediately impact your debt service in the near future, it is also a are you paying attention, are you aware of the material trends that could impact your abilities in the future. this is the first sec action

against a governmental issue were. although that only applied to the city and not the officials, there is a separate action which was settled in 2010 which for the first time the sec went after individuals personally and they imposed monetary penalties out of their own pocket on these officials. there was four officials in san diego that ended up paying personal fines. what the sec concluded was that the city through its concluded -- through its officials failed to disclose material information. that information, the allegation was that there was substantial and growing liability about the pension plan as well as retiree health care and their ability to repay those obligations. the sec referred to this as the

elephant in the room. the argument was that the staff knew, the city councilman that there had been these various pension negotiations and the payments would grow significantly and they could be high enough that they would impact the service but there was never proper disclosure, never proper discussion of it. why was the material? the allocation was under sending its puncheons -- its pensions. these were expected to quadruple by 2009. this is dealing with misleading disclosures from 2002 and 2003. none of that was disclosed. the argument that the sec made was that the city would have difficulty finding their future contributions without either new revenues reducing benefits or

reducing city services. all that has been in place. those projections made about what to bring the annual payments occurred and the city of san francisco has been reducing services in response. we also dealt with misleading disclosure concerning pensions. we highlighted the key facts in slots 22 and 23. this is the first sec enforcement against the state. the rest has been against cities, counties, other government issuers. this one was for negligence. the mere negligence was sufficient to bring action against the state of new jersey. slide 24 is the one i want to

highlight. it is a very interesting statement by the sec and the strongest statement that have made about what they view, as far as written controls and training. what they said was the state was aware of the underfunding of pensions but due to a lack of procedures, the state made material misrepresentations. the sec, for the first time saying, the failure to have written controls, the failure to have training, was actually the cause of misleading disclosure. the sec, as we discussed, does not have direct jurisdiction over issuers. they are seeking it. they are using enforcement actions to make the strongest

statement they care about what they think should be imposed upon you. once again, britain controls and disclosure training. -- written controls and disclosure training. why you want to do both of these written controls and disclosure training? within the rigid controls and training, there is a greater likelihood that there will not be an omission when they come to market. the other key fact is, even if one were to occur, the sec cannot bring a case unless, at a minimum, there is negligence and possibly recklessness of intent. what we are trying to establish by adopting britain controls is to establish a defense that says, even were there to be a problem, we have done what you assets to do. you told us to do britain

controls and training. we have done that. why with the sec wants to bring enforcement action against us? it would not set an example to the market. 26 and 27 -- 26 is a slide that shows the key features within the original statement. 27 reflects certain observations, one of which is apparent that it is always easier after the fact when things go awry to say, was everything accurate about the disclosure? because of that, if there's any question about whether or not to disclose the tendency of the team is to disclose. the sec, in the orange county report, those of us who have to interpret it, in reading it closely, they allege that the

board members new material facts and did not bring it to the attention of the financial team. how do we interpret that? what advice can give you if we are not aware of whether that is the case? is it necessary that the board members, in each case, review the complete, official statement. the answer is no. the sec as short as you can reasonably rely upon financial staff as long as you are comfortable that they have the necessary experience and qualifications. we have a series of questions and i'm going to summarize these on slides 29-31. your situation is, the sec says there are two things you can do. read the document as a whole and approve it or authorized the staff to do the approval. you have a blend of the two. what you do is approved it in preliminary form had authorized

the staff to finalize it. what you should be doing is saying, are there any known existing facts, and i have used the litigation as the example, where there may be a material judgment? and you want to know how that is being handled. this situation where you have been briefed in a closed meeting with the city attorney's office, you are aware that they have it, you have to be comfortable with that disclosure. the other concern, besides the things you have been briefed about, is our concern, as members of the financing team, the city's attorney's concern, are there any meetings you have of which you have knowledge that you like to bring to our attention? we can do the best with what we have to put together a

comprehensive documents, but are there things that you know that we may not know? if you have any doubts whatsoever, bring them to our attention and if you can rely upon that judgment, you are then protected. what i want to establish, as far as your comfort in relying upon the staff, this is slide 34. we focus on the strong statement in the new jersey order that was the lack of written policies and training that led to the problems. having read that, and based on the experience that the deputy attorney has, they have hired us

to come in and helped draft written disclosure controls, policies, and also do the training. when you are determining whether or not you are comfortable relying on a financial staff, he lined up on the city attorney's office, recognize that we do have detailed written disclosure policies, you are conducting the training, the in the sec has asked us to do. in addition, there has been a working group established within the city's. this is comprised of all of the key city officials that had knowledge of the financial and legal matters going on in the city. to make sure that, collectively, they review official statements and that it is accurate. have engaged outside counsel to help with these procedures and have the deputy city attorney for disclosure. once again, we established, we think, with the city attorney's office, the strongest possible

defense. we have done exactly what the sec has asked us to do. we cannot guarantee that that will assure there will be no mistakes. what we can do is assure you it that we have done the best we can to defend you. were there to be some problem, you have a strong defense that you were not reckless, you were not deceitful, you did exactly what the sec asked you to do. with my 30 minutes, i have used 25. i normally take 90. i have curtailed this significantly to. what we did was, we have -- there are hundreds of sec enforcement cases. what i would frequently do is go through a number of the key thing -- the key cases that affect issuers. for this presentation, we cut for that. you do not want to know all of those facts. what you want to know is our collective judgment as to how to proceed. we did highlight the one that

speaks to you directly, the orange county report, and we took that into account. i would be happy to answer any questions about the procedures, the cases, anything else dealing with disclosure. president chiu: any questions? ok. thank you for your presentation. are there any members of the public that wish to comment on this presentation? >> i was promised someone would sing after i spoke. president chiu: i think we would love to see how walter would make securities rhyme with something. let me see if there are any members of the public who wish to comment on this item. seeing none, public comment is closed. unless there are any further

questions, again, i want to thank you for the presentation. my colleagues and i do understand the importance of due diligence when it comes to ensuring that everything that we are approving is consistent with everything that we know. thank you for that reminder. with that, why don't we go to our adoption calendar? my apologies. i neglected to call the 4:00 special item. >> public hearing of persons interested in the decision of the planning commission additional use offer -- conditional use authorization to install antennas on mission

street. also, items 18, 19, 20. supervisor campos: i would make a motion to continue this matter to december 13. president chiu: there is a motion to continue these items to december 13. i understand i'll be a 3:00 p.m. special order. >> on december 13, we currently have a free o'clock for the fillmore community benefit district. president chiu: why don't we have a second 3:00 special order for that day, given that it will be the final meeting of the year? with that, supervisor campos has made a motion to continue and there has been a secondary let

me ask if there are any members of the public that was to comment on the motion to continue. seeing none, public comment is closed. on the motion to continue, if we could take that without objection. that will be continued to the 13th of december at 3:00 p.m. now to the adoption calendar. >> items 21-28 will be enacted on by a single roll call vote on last a member requires an item to be discussed separately. supervisor elsbernd: item 24. supervisor chu: 71. president chiu: if we could take a roll-call vote on the rest of the calendar. supervisor chu: aye. supervisor cohen: aye. supervisor farrell: aye. supervisor kim: aye.

supervisor mar: aye. supervisor mirkarimi: aye. supervisor wiener: aye. supervisor avalos: aye. supervisor campos: aye. president chiu: aye. collapse there are 11 aye's. president chiu: these resolutions are adopted. >> to support a full legislative process for the 2012 farm bill. supervisor elsbernd: i moved to continue this for one week. president chiu: there is a motion and a second. if we could do that without objection, this item will be continued to the 22nd of november. madam color, can you read the in memoriams? >> this will be adjourned on behalf of supervisor kim and president chiu for the late ho.

on behalf of supervisor avalos for the late jesse morris. president chiu: is there a more business in front of this body? >> that concludes our business for today. president chiu: ladies and gentlemen, we are adjourned. this is a regular meetg of the san francisco planning commission. i would devise everyone to turn

off their electronic devices during these proceedings. we have a crowded room today so just let me make an announcement. we will not accept any disruptions. we ask that you take any discussions outside. there is no standing in this room. find a space or go outside. once overflow has been established, we will let you know where this is that. he may not stand in this room. moore? sugaya? fong? olague? antonini? miguel? borden is abscent. we have the calendar items

proposed for a continuance. item number one is case 2009. 01. this shows the proposal for the continuance for january 12. the staff has informed me that they are looking to a continuance to february 9, 2012. this is for 1111 california st., proposed for a continuance to january 19, 2012. case 147 south park avenue, for a continuance to january 19. case 2010. 1013 thd, proposed for continuos to december 15, 2011.

13, 14, and 15. this is for 3218 mission street. we're asking to continue this item to january 26, 2012. case 2010 for 5358 mission street. and item 15, case 2010. january 26, 2012. the city attorney will have a statement to make, regarding the last three continuances. but with that, i am not aware of any other items on the calendar proposed for continuance.

>> and are there any other items proposed for a continuance? -- >> bob barney? -- >> i represent the knob hill association. i want to thank you for granting the continuance and we look forward to seeing you on january 19. and is there additional public comment on the items proposed for continuance? seeing none -- >> i am robert garcia. i am the president of the merchants association. i would respectfully request

that you take a look at this. they have done their own study, -- >> this has to do only with the items proposed for a continuance. and is there additional public comment on the items proposed for a continuance. scene 9, public comment -- >> -- >> the coalition for san francisco neighborhoods ask me to give this to you today. does is for the continuance for 1111 california st., to look at the conditions and the documentation that have been given to you about the actual use of the site. there were very concerned about the misuse of their name and their organization names,

theoretically in support of these conditions negotiated last year. what i am giving you is there a letter, saying that there is a problem if you need these conditions and regret that this was done without the proposal. -- >> do you support this condition? public comment is closed. at this time we would like to hear from the city attorney -- >> good afternoon. i am qaeda stacey from the city attorney's office. we recommend the continuance of these items because of the recent case law. a recent court of appeals' decision ruled that the city's permit and requirement for the medical campus facility