cuts to pay for the billionaires and pay for the hedge fund speculators. as has been said by the people here, the hedge fund people are interested in profits, they are interested in driving speculative profits, they are not concerned about the city employees and the poor workers of san francisco. we need our money and research to go to public housing for working people. instead we are getting privatization. instead we are getting an attack on public workers that can't afford to live here. service workers have to spend 2-3 hours driving to san francisco. why is that? >> do we only have space for millionaires in san francisco, only have space for developers in san francisco. this board, driscoll who is a union member, says to

hedge funds . it's not okay. i say it's staff management who says it's okay to invest in hedge fund. [ applause ] >> good afternoon board members. i'm joshua, i work for the children of san francisco. i have a very large risk because i'm relatively young,

not as young as i once was. that's why i have an ira. my pension is very important to me. that's why i took a pay cut to work in public service. i took that because i wanted to work in public service but one of the ways to justify that myself to my family was i'm trading income now for reliable income in the future. if you want people to work for the city and county in the future because many of my brothers and sisters are going to retire and you are going to need new workers, you have to give them some kind of value proposition and that is reliability. the other thing is that hedge funds are talks of the social fabric in america. i deem to

be more diplomatic than that but i can't do so. they extract money from people and give it to people who manage hedge funds who also work very hard. i suspect compensations in millions of dollars would make these people comfortable in their lives and those of us making thousands of dollars, i'm sure it would help when we retire. i think i have said everything i can. thank you.

>> hello commissioners, my name is jed. as a 15-year citizens of san francisco, last month i'm glad to see so many folks involved in their public process and their public policy and as someone who has been visiting this board for some time, it's nice to have a little bit more room to stretch out and also good to see sfgovtv here so those who could not take their lunch break to be here can see this meeting when they get home tonight. thank you very much for that. i'm really impressed. i have only been to a couple of the hedge fund related meetings but to see after so many months of abuse and receiving the same very clear message from your

members that you continue to put forward a plan which continues to contain hedge funds, that says to me that your staff really really wants hedge funds so i think that's important to recognize, but, after this amount of time hearing the same concerns that haven't been addressed given that these are your constituents, i as a citizen of san francisco wonder when the due process is going to play itself properly. i would like to speak about transparency. i spoke about this before. ultimately one of the things we are hearing from your constituents is that this lacks transparency even the hedge funds which makes up a substantial amount of your

portfolio is private with black boxes with less equity and that is contradictory to any environmental and social government and in the past have stated this. a couple months ago this board reaffirmed companies doing business with tobacco and sudan and now any hedge fund investment that your allocation might very well invest in with tobacco and companies that deal with the government of sudan. how is that representing this board's decision to already activate in social investment procedures. how does this giovanni -- jive with the

board, it's particular for any management. that's not how san francisco runs or the mayor or this board thinks it's running. i think it's right for you to do what is good for the constituents, thank you. >

i'm a retiree from aciu. i hope you make very good use of those 2 months because so far it has been very hard to trust and very very hard to trust, and that's all i got to say for now. thank you sir. [ applause ] >> if you can hang on. margaret i will call you now.

>> good afternoon, again, margaret young. aciu capital stewardship. i was surprised to get another opportunity to come backment i know was some amusement for the term of wikipedia for the search of hedge funds. i just searched the website and they gave me 10 different attempts to finding hedge funds and the one i like best is from bill donaldson, is he good enough. the term hedge fund is undefined and he goes on. there is no term that defines hedge funds making hedge funds an allocation, in and of itself and i strongly

support commissioner driscoll's strategy that each should be looked at carefully and we hope over the next 2 months that you as board members do demand an objective process that look at the down side as well as the upside. as board members you are being asked to make a prudent decision. which means you need to weigh and balance the pros and the cons. that's all we've been asking for. we have been strong supporters of infrastructure investments which gives lower risk and good returns. we have been supportive of the things i have asked today and i'm heartened by the things that

provide better stable hedges against wall street than those on wall street who hedge on wall street. that's what most hedge funds are. again, we are heartened by the proposal for 2 months and really ask that you be honest with the designated representatives of aciu and when the proposals are made that they are communicated and communicate directly back and you respond and not wait until the day before the meeting to respond when we ask you questions. >> good afternoon, i'm an active member also chapter president

at hfa human services. first i want to present to the board some additional, a new batch of signatures from not just aciu but from city employees. i have last count 370 additional signatures that i would like to turn in. and i want to say, reiterate what martha said as you look close to the petitions what the active and retirees are asking for are zero investment in hedge funds. please consider that. this is what people are asking for, not 5 percent, not 10 percent, 0 percent. i appreciate the board members are giving us more information about your rational about wanting to consider the hedge funds because i didn't hear that last time.

that's a good thing and before this meeting i looked up. the only way we are able to get this information is through the media, third hand. the media interviews you and we hear it from the media and that's not the way it's supposed to be. a couple of things, we are hearing that the staff is recommending the hedge fund investment because sort of the hedge, there is mr. coker is quoted in november 10th article saying that the propose, he proposed hedge fund investment to increase the stability of the pension system funded status, improve performance in down market and reduce volt tilt and return in pattern. that's what we are hearing and the staff is recommending this and there is a number, the staff

believes the hedge fund program is lower risk and protects the portfolio in the market decline. i'm sure you have heard this before but i would like to reiterate, there is on the san francisco federal reserve website an april study. the study finds that hedge funds may have been central in generating systemic risk during the crisis during last crisis. additionally there is another quote in the study which says more importantly we find that hedge funds may play an even more prominent role in transmitting shocks to the rest of the financial market and thus may amplify systemic risk more than previously thought. again, the board members are telling us what you want to do is hedge our down turns and less systemic shock by investing in hedge funds. are you really doing

that? the federal reserve in san francisco is showing us a study in san francisco showing the direct opposite. we ask you to consider all the evidence and act prudently. you are representing all of us that are retired and will retire in the future. thank you. i name is michael, i'm a retired police officer for the city of san

francisco. the current aspect of allocation of our trust fund is not working for us. i support your deferment to change the allocation of these funds. i realize the lightning rod on the application of the proposal on the hedge funds i don't view it necessarily as the lightning rod. it's the failure to make changes in the asset allocation in total. i would like to recommend mr. coker and i'm the only one in the room to recommend to mr. hewitt to recognize that if we end up in the same way we were in 2008 and 2009 and activate. during that period of time, no hedge fund. our

fund lost $6.6 billion, 33 percent of assets under the current asset allocation that we now have. we could not repeat that. we could not repeat that. it was mr. coker and mr. hewitt who brought to all of our attention that this has to change and i commend them for that, regardless of how this works out. regardless of how this works out. the asset allocation that we currently use is the danger. i commend you for now looking at other items that maybe of assistance because the asset allocation needs assistance. when i came into this system in 1966, dan troep was the general manager. we invested in one asset class,

six income government bonds and corporate. if we had continued to invest in one asset class, we would instead of having $20 billion we would have probably $4 billion. i have watched the changes. and was only when claire murphy came in that we saw the big changes in our fund. yes, venture capital, yes, equities, yes, global equities. these have helped sustain us. what we are looking for now is to reduce the contribution of the taxpayer and reduce the contribution of retired employees and enjoy it. the asset allocation is key and i would also probably say i'm the only one in the room that would support the use of hedge funds in this allocation. thank you.

>> excuse me. fred flag man. if you interrupt again, i'm going to ask you to leave. we want the courtesy of each speaker to say what they would like. >> herbert weiner retired city employee. first the administrative fees will apply. the cost

were refunded by the retirement system. secondly, not all hedge funds work well in economic down turn. while the performance of the funds is a legitimate concern in times of recession, other securities that are less costly with good performance should be our aim. thirdly, municipality and pension funds are investing themselves in pension funds and calpers. thirdly, hedge funds to find benefits the heart and soul of the retirement system. we should not be doing business or trading with the enemy. secondly, there is a lack of transparency and accountability to shareholders. while the fund performance and times of recession is a concern and a time for beneficiaries, this is a disastrous situation where we would be locked in

into expensive cost and loses that would affect our entire portfolio. i oppose the adoption of hedge funds. and encourage the securities which has done extremely well. by the way, each share is over $200,000. if we get enough of those, we'll be solvent for 2 centuries. thank you. >> claire vonsky representing the retirees. i too have petitions and e-mails to add. i have examples of our e-mails. the green page at the bottom is the only petition

that supported hedge funds and in the meeting that we took our sample of signatures not 1 person signed. so it was kind of interesting. i do want to add that i strongly support most of the comments that been made here. all the comments made by my brothers and sisters are very prudent and we have been reactive. i have got a couple of reams of paper that we've been collecting at all of our meetings that speak to the issue that we are here to address. i think we want to see greater transparency. we want to see that all of these recommendations are evaluated and we have the opportunity to also read and review the information that is shared with all of

you so we have the opportunity to decide if that's prudent for our means in the future. i think it's very concerning. my members have said to me, the hedge funds, they are very clear. that says that is what the membership represents. i have e-mails from all over the country. the 88-year-old firefighter's widow is terrified that she will not have her income continue. there are a number of people here very elderly living out of state barely sustaining themselves on the pension and reacted to the information in our reccfs newsletter in views and i included a page that had letters come back and only one individual indicated that the board should do what it thinks is

prudent and that's more of a support for hedge funds and probably only 1 person in our membership. i wanted you to look at your mixes here. obviously the constituency i represent prefers the mix too. i see the 7.6 rate of return, but i don't think you are including your overhead, you are not including the fees that you are going to pay, you are not including all the staff salaries, you are not including all of those cost and they are part of the valuation and the money coming out of these funds to go forward with those investments. if you add all of that together with whatever you are proposing to invest with the higher asset allocation, that you

would find those anticipated asset class returns will be lower. i only taught elementary math so what can i tell you, but based on those figures that's what i see. in the county we had to include overhead and figure those in to the aspect of the cost of running the department. that is not included in this. i would like to see a reevaluation of those expected returns with the inclusion of your overhead, of your fees, including the 20 percent they want to take. and i would also like to add that it was brought in the past that many hedge funds invest against defined benefit plans. if you are to consider hedge funds, you are actually paying people to cut

your throats and to cut our throats because you are investing in the very projects that seek to destroy and dismantle deferred benefit plans. lastly i would like to point out to you the operating engineers three, they went into hedge funds some years ago. quite frank lau e what i'm hearing they don't anticipate any kind of stability anytime soon and they are in the toilet because of hedge funds. it's not prudent for hedge funds to make those considerations. index funds, maefr. for the rest of these asset allocations. i think there is some interesting proposals. i think we are all interested in finding out more about them before we can tell you exactly what we would like you to do with our money. it's the city's

money, the public's money but our money first and foremost. this will backfire on my brothers and sisters who are still working and are paying already and will pay more in the future. i think this is very very important. i applaud you in delaying, if this means we are going to get better information and more balanced information with the transparency that we all need then maybe when we come back in january or february, that we will have something different to say to all of you staff and to our commissioners to those of you who represent us. i have been on your side of the table. i know what it's like. i also know that you have your first and for most obligation to represent us. it's very

disconcerting come here month and month and to hear no. what is it that you don't get about no. i'm hoping in the future that we won't have to say no and that we can support the decisions you are going to consider at that time. >> any other speakers? >> seeing none, i will close public comment. i have a motion on the table. >> i want to thank everybody. i appreciate all the comments today. my position has not changed. hopefully

there will be good consideration and the it will be moving to the mixed discussion as well. we would like to hear a lot about that as a potential asset allocation mix. what i want to point out today as to the real risks involved in terms of transparency. if you look at the windows behind you, the building right behind you is written in big letters, the word truth. we want the truth. you should open the windows and turn it around and open it and have it at your backs. >> any other speakers? >> absolutely. step forward please. >> i think you already spoke, john.

i'm opening up for people that have not spoken. i'm sorry. >> hello. my name is david hill. i work for san francisco public library. i'm filling in for hardy, i wish she was here. she has the most charming english accent. she would have said the same things that almost every speaker here has reiterated except for our friend. speaking of the hedge funds fees and ads