>> supervisor avalos: thank you. >> thank you. >> good afternoon, supervisors. gregg coto from the san francisco treasurer's office. i'm here to talk about the city and county of san francisco treasurer's pool fund portfolio and to give you context over the period of time from 2007 up 'til present, the actual size of the portfolio has ranged from $3 billion to $6 billion. during the time that we've been talking about with the manipulation from it 2007 through 2011, the treasurer's pool fund did have investments in securities that had interest rates that were based on the libor rate and that was roughly about 5% of our portfolio. and none of these investments experienced any principle

losses. our analysis does show that due to an active trading strategy our portfolio yield and our earnings were not materially or significantly impacted by the libor manipulation. >> supervisor avalos: what does that mean in terms of dollars, not materially impacted? >> less than three basis points. less than 3/100 of 1% and we're making over 1% on our portfolio this year. >> supervisor avalos: what would that be in dollars. >> the three basis points i referred to would be under 1 million dollars at the most. >> supervisor avalos: okay. we have investments in commercial paper linked to libor to the treasurer's office? >> that's -- we were -- those libor based investments were the ones i was discussing. i don't believe they're commercial paper. we don't hold very much

commercial paper at all. >> supervisor avalos: in terms of what your review has been, what you looked at, your research, is it possible to share that publicly or is that something that's closed? is it possible to share the copies of documents that you reviewed for looking into the extent and magnitude of the scandal, and its impact on san francisco? is that something that's available to the public? >> i can certainly see -- i mean we didn't necessarily have documents. we looked at what our positions were. one of the things about this, why we weren't impacted is we are not an issuer like the airport or the office of finance. so what we do is buy the securities that might be based on this interest rate. so because we're active traders, if the interest rate was high, we traded on that. if the interest rate was low, we traded on that because we went into the market every day and picked the best investment for the city. so that's why -- i can certainly

provide you what information we have. but what we just did was look back at that period and saw what that impact might have been. >> supervisor avalos: okay. we could follow up on that if the future if we need to. thank you. >> good afternoon, supervisors. deputy city attorney tom lock rits. as the three departments have talked about, we've been looking at the potential impact of the libor manipulation on the city finances. we've been monitoring the ongoing litigation, and trying to work with the departments and determine what is the best avenue for the city to pursue.

and we haven't made that decision yet. and i think that supervisor avalos had a few questions for the city attorney's office along the way. i've remembered a few of them but not all of them. i'm not aware of any settlements where any investors have obtained any funds or recovered any funds. the settlement with the department of justice, with bar clay was with the criminal division of the department of justice. i don't -- it's been a while since i looked at the document. i don't recall whether there were convictions. but it was a settlement. and i apologize. i forgot the other questions but i'm happy to answer them. >> supervisor avalos: let me add a couple other questions.

what's the city's position right now on joining any class action lawsuits? >> well, as you mentioned, at the opening, there was a significant data point in the litigation on friday, which was a dismissal of a number of the claims that were brought. >> supervisor avalos: the city of baltimore? >> the city of baltimore and other claims as well, that were consolidated into the same court. >> supervisor avalos: i think what was thrown out was a portion of the claims that were about that there was -- the antitrust claims that were brought forward, and the judge had said that she did not believe that there was an effort to limit -- eliminate competition. and do you feel that her opinion is a strong one, that would hold up if there was any kind of an

appeal? were you able to review her opinion? >> i have not -- i have it here -- >> supervisor avalos: 165 pages. >> i got it on monday and i was out of the office yesterday. so i haven't fully digested it yet. that's one of the data points that we're looking at. we're also looking at the suit that you mentioned that was filed by the counties of san mateo and san diego. so we're trying to decide -- there are a number of avenues that the city could pursue, to seek restitution, or recovery of any losses. >> supervisor avalos: and then i'm trying to understand if we have a statute of limitations under federal security clause, or like a five year statute of limitation? >> it depends on the type of claim. and that was one of the significant issues that was addressed in the court's opinion

on friday, as what is the applicable statute of limitations, and when did the plaintiff have notice, and so that is also something that we are taking a look at. >> supervisor avalos: so i guess i have a concern that if, as a city, we take a wait and see approach, as we're seeing the statute of limitations, you know, the beginning of the manipulation, we see in the distance, does that limit our ability to recover from the earliest points of manipulation? if we wait and see, and there's time passes, and we see the beginning of the manipulation we won't be able to recover any losses if it happened earlier. >> it depends on the financial instruments that we're talking about and whether or not they are covered by an existing class suit. >> supervisor avalos: and so could you say how that might

vary from financial instrument to financial instrument? >> i would have to be -- i would have to go back to the client and figure out which instruments we're talking about exactly and figure out what the overlay is with the existing litigation. >> supervisor avalos: so do you know when you'll -- are you planning on looking into the baltimore case and the dismissal of the antitrust aspect of the claims? >> yes. >> supervisor avalos: is that something we can talk about off line, talk about it off line in the future? >> sure. i'm happy to report back where we are with the analysis of that decision, and how that case is going to move forward. >> supervisor avalos: okay. >> anything else? >> supervisor avalos: thank you.

no questions from the committee. so thank you. are there other presenters that are part of the city presentation? okay. i want to thank the city staff for presenting their work on their research and analysis of the impact on the city. clearly, based on what's been presented to us, the statements made by the city that we are not majorly impacted by this -- by the libor manipulation, however there is an impact to the city and i think where there is an impact, really we have an obligation, either to our funds in our different departments like the airport, or to our retirement system beneficiaries that we actually pursue what we can in terms of recovery of losses, despite the difference. i also think that the city of san francisco, being a major

city, major financial player in the municipal finance industry that we actually have an obligation as well to stand with other municipalities to make sure that we are supporting their efforts in any recovery as well. i will have more comments after. want to go to public comment on the issue as well. uposo i have a number of cards o call for public comment. and folks hear their names called, they can come up in the order they're called. bahar taloo, -- yarborough, elizabeth a alexander, jesse mitchell and -- >> good afternoon. my name is with sciu, about the

fraud, what it cost our communities and what we can do about it. i'm not sure i can get through it in the three minutes but i would like to follow up issues specifically on the other kinds of predatory deals. you have heard today about how the biggest banks rigged interest rates on the world interest rate to increase profits. it's the biggest financial scandal in history. up to 800 trillion of financial securities, derivatives and loans are tied to it, with the counties and their pension funds. banks have admitted guilty and agreed to pay more than 3 1/2 billion. we need to get that money back. so you've heard that across the country there are already about two dozen lawsuits by cities, counties, pension funds that have taken action to recover their losses and without netting out their losses against any

gains and doing it for the maximum period of 45 months, not the 18 months discussed earlier. finally today you have heard from staff that libor fraud has cost the city millions in losses at sfo, the pension fund, as our elected officials, the the board of supervisors has the legal, moral and financial obligation to protect the city's resources. we urge you not to take a wait and see approach but rather take proactive and aggressive action to get that money back for san francisco. the facts are strong and unchanged even in light of the federal ruling last week. while the judge dismissed some claims like antitrust, other legal avenues to recover losses remain open. we can monitor the progress of the federal class academies lawsuits, but if -- action lawsuits but if we sit on the sidelines we will lose the able to recover our losses. we need to look at our options under state and federal law and

do it quickly. every day we wait, every day we could be losing ability to recoup these losses because of the statute of limitations runs out on some of these claims and a number of class action lawsuits don't actually cover state based claims open to us so the idea of waiting to see what happens with other suits don't cover the full extent of san francisco's losses. finally, we need to call on our attorney general to explore the possibility of prosecution and investigation of the banks under state law. we need to aggressively advocate for getting back every penny using all legal avenues and we know all public entities have suffered losses so we urge you to call on your counterports at school districts, public utilities and their pension funds to take similar action. once we add up the damages we are looking at hundreds of millions of losses to san francisco and millions more

in damages to bay area taxpayers. >> supervisor avalos: just a question. could you say -- talk about are any attorney generals around the nation taking up -- playing an active role in helping municipalities and counties recover from the losses? >> a number of attorney generals across the country have active investigations. and that's what we have heard so far. so i don't think publicly there's been any fines or any lawsuits filed. but they are in the stage of investigating to i think decide the way forward. and i think cities calling on them to be more aggressive and to jump in, given that there are some time limits would be helpful. >> supervisor avalos: in california do we see a strong action from our city attorney general? >> what we have seen is that they're investigating the issue. >> supervisor avalos: okay. anything else to add? >> i'd like to talk about the other kinds of deals. what we know is that libor fraud is just the tip of the iceberg.

we're learning every day of illegal and unethical practices by these banks who peddle high cost risky deals to entities just the way they peddled high cost loans to unsuspecting homeowners which is labeled as predatory loans. finance industry has been peddling similar kinds of deals to public entities pushing public predatory financing through deceptive and fraudulent practices and taxpayers are paying the price. like gouging on fees and interest rates an example is the san francisco airport interest rate swap that actually has cost san francisco taxpayers $100 million since 2008. those deals have in fact blown up. and to add to your point, supervisor earlier, the municipal finance market is today $3.7 trillion business. it is to fund central service, but instead we pay billions every year to the biggest banks

while communities are forced to sacrifice and accept cuts to services and education. wall street gets a free pass and those least able to afford it have to fix the problem. we have to figure out the full extent on losses on libor fraud and recover that money and the beginning of a thorough review of in he bad deals that should be renegotiated that could save san francisco taxpayers millions every year, and the willingness to renegotiate to ensure the predatory practices, whether illegal or unethical are put to a stop for good. >> supervisor avalos: thank you. what you stated in terms of the airport losses, in their swap is much higher than what the airport has said. what do you see as the difference? where does the difference come from? >> the way we look at it. we look at the swap contract that exists now. this deal was made to actually save the city money.

as the staff said it was a hedge on variable rate bonds intended to save money. it was never supposed to be costing us money and has now cost us $16 million a year. i think the way staff was describing it was looking at having the swap and the variable rate bond compared to having a fixed rate. we're not looking at that. we're saying looking at the contract that exists now, this is a contract where we made this deal because we thought it made sense. what happened was we agreed to lock in a fixed rate of about 3.4, to 3.9%. and then in the swap the banks would pay us back their variable rate at the time. this deal was made before the financial crisis so at the time, you know, we're paying about 3, 4 percent, around they were paying us back around the the same amount. now after 2008 when the fed cut rates to zero to bail out the banks the variable rate was dropped down to nearly zero.

so since 2008 we are still locked in, the san francisco city is still locked in to about 3.4 to 3.9% and the banks pay 0.4%, almost zero. the difference between that spread is $16 million a year. since 2008. and over the past -- if you look at the past five years that's almost $100 million. and we can't get out of these deals because there's a penalty to get out. what we're advocating is we should call on the banks to renegotiate this existing deal. we're not saying we should cancel a contract or refinance into a fix, but work with the banks to say we should lower the rate that the city's locked into because it is out of whack with the reality. these deals were based on expected rates, when we made this deal, precrisis. they don't make sense. they have done so in other places, as we said the asian art museum, there's actually an article that we can pass out that describes that there was in fact a renegotiation of the

swap. we know that the banks have renegotiated in the city of richmond so we know that banks can and do renegotiate these deals, when we work to try to make that happen. and there's no reason why we shouldn't try, even if we can save 1% that is significant money for san francisco taxpayers. >> supervisor avalos: thank you. >> thank you. >> supervisor avalos: next speaker please. >> my name is neilly yar borrow, a member of district 10. i am here to call on the board of supervisors and city staff to recuperate the money that the banks took from us through libor. that money blonks to san francisco and we need to get that money back. whether it's five cents or 5 million, we want our money back. the banks manipulated the interest rates to profit themselves at the expense of us. they rigged the system and thought they could get away with

it, just like the banks sold homebuyers predatory mortgages that cost families their homes now we found they did the same to us and our government as well. all of us here in san francisco work hard every day, and the taxes that we pay from our hard-earned money need to go to services for our communities. as our elected representatives, you have the legal and financial and moral responsibility to protect our city's resources, whether it's five cents or five million, we want our money back. now more than 20 lawsuits around the country have been filed, including at least nine public entities in california. the city of san francisco needs to join. therefore, i'm calling on you to find out exactly how much we lost from the libor fraud and take legal action to get our money back for san francisco. if it takes an extra hour on the computer, it is your job to investigate. as a mother with a daughter

entering public high school this fall, i also want you to make sure our schools and other public entities investigate their losses and get that money back. again, i say, whether it's five cents or five million, we want our money back. >> supervisor avalos: thank you. next speaker please. >> good afternoon, supervisors. elizabeth -- vice president of politics for sau local 21 and i work at the tenderloin clinic. over the last six years we have been sustaining terrible budget cuts. you're the budget committee. you will be looking at this again. we have sustained terrible cuts to rec and park services, children sss, homeless services, muni routes, bus routes, having cut healthcare, and health clinics have emerged and mental health have almost been decimated. in terms of workers their paychecks have been cut, we've

restructured pension payments to deal with the losses. currently, our union is being attacked. it's 45 classifications are being asked to take wage cuts. and these are classifications that are mostly held by women and people of color. we were here talking to you before about this. workers haven't blamed, services have been blamed. we've been cut and it hasn't fixed the problem. witbut here we have in front ofs the people who caused the crisis and it's time we have to go after them. we have to go after the people who caused this crisis. we have to look at what is the structure of public debt. we know that interest rates can be renegotiated. we always -- you always look at our side of the house as if we're the negotiable side but the public debt isn't the negotiable side. we need to go back to the people who hold our public debt, hold them accountable, renegotiate to a fair level. we did with the asian art

museum. we got the money they owed us back. we have renegotiated some of those fo swaps. because they know that they're unfair and they've renegotiated them other places, in oakland, our union has joined with religious leaders and with other community organizations to go after the sachs swap. there is unanimous council went after goldman sachs for the swap deal. this is something being done throughout the bay area, throughout california and throughout the country. we need to lead on this. it's our obligation. it's our obligation as financial leaders. it is our obligation as civic leaders. and, you know, we're coming into a budget season where we're being asked to cut again. i would actually, instead of having to be in front of here for the next several months what are we going to cut, what are we not going to cut, what services are we going to cut, i would much rather join together and look at the public debt and go after the people who can

actually solve this problem. thank you 16r7b8g9sz thank you very much. next speaker. i will call more speakers. rebecca more row, ber neta adolf, david fleming, christy aceem, chris daly, brenda baros. and seanie zin. >> good afternoon, supervisors. my name is jesse mitchell. i'm an acce member, action committee for community empowerment and a resident of district 11. i've lived in san francisco for many years and am frustrated by recent cuts to violates services and increased fees on residents. when i learned that the banks have been cheating us out of our tax dollars i felt we needed to prosecute them and demand they return the money. as a small business owner in it san francisco, i understand the

importance of honest financial practices. once again, major international financial institutions have shown that they can't be trusted. we must hold them accountable for every penny they cheated from us, to speak from the heart here. my first encounter with financial bullying was in junior high school. and it was about my lunch money. and i didn't really know what to do about it then. but i'm getting a similar feeling here that no one -- people are seeking a way to find out what to do about this financial bullying and i wholeheartedly encourage you to get every nickel back. we woke up recently to parking meters on sundays. so somebody could get $2 million more a year. well we've already talked about more than that, as a potential gain. so i think the impact of a

little bit of money goes a long ways here. and thank you very much. >> supervisor avalos: thank you. next speaker please. >> hello, committee. ross rhodes, a member of ais, and i don't have a paper to read off. i'm going to talk from the heart. you know, i appreciate what you guys are sitting here, trying to do. and i really think a lot of you, avalos, for stepping up, and really speaking out and doing what you're doing. that's why one reason, even though you're not a supervisor in my district i got out to get you reelected. so i commend you on this. but i'd like to say that, you know, this city is cash-strapped, and we have these bankers and libor and the rest making these dollars off of us. and we're here losing our programs that are essential to the city. our aids programs, our youth

programs, our park programs, all have to do with your constituents in each district. and when we're cash-strapped the way we are and we see there is money out there that has been taken from us we can see in the analysis that every department here in the city was, you know, hit by this. we can't take that attitude of wait and see. we have to step up and be leaders. and that's why we voted for some of the people that have won their reelections, because we looked at them as leaders. and it tells you that you don't have to have money to be a supervisor. and eric mar, you can -- to that because it was people power. it was people that seen the leadership in the individual and that's what made us come out and vote, and made us come out and walk the streets, even though he wasn't in our district, but he was a leader. and that goes for other supervisors that are in here.

when you show leadership, you get people to really see and enhance what you can do for your community and your city. i'm a native san franciscan and i'd like to say that i'd like you to continue and go after these banks, the -- that's holding this money. do it and bring it back to the city, and see how we grow, inner city-wise. thank you. >> supervisor avalos: thank you. next speaker please. if you've heard your name called, if you could please line up by the windows, the tv over there, that would be great. >> my name is ber neta adolf, i'm a member of aids. i'm also a resident of district 11, and here in support of supervisor avalos. i'm also here to call on the board of supervisors and the city staff to recoup our money. i'm a retiree, a public

employees retiree. and our retiree system has lost money. also, we've always had a system that was self-sufficient. but somehow i'm told that the city had to step in. so when i hear that, you know, gains and losses balance out, that's not good. because a loss is a loss. and i think we need to -- we need to fight for every penny that was lost. because these banks manipulate the rates, and we need our money back. so i'm just calling on you to do what's right. thank you. >> supervisor avalos: thank you. next speaker please. >> good afternoon. my name is david fleming, work with -- i'm a san francisco rep and work at san francisco general hospital as a registered nurse. born and raised in san francisco and worked for