>> you guys ready to get started another exciting day with the retirement board fun stuff ahead and american people exciting executive director report and very, very robust investment

calendar and discuss with i hope you guys are ready hold on our seats ladies and gentlemen, and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all all right. thank you for joining you wednesday february 10th one 06 this is at regularly squealed retirement board meeting mr. clerk madam clerk, any announcements? now announcements. >> roll call mr. nolan applying is commissioner driscoll mr. star's commissioner paskin-jordan commissioner stansbury we have quorum as you can see your item number 3 mr. clerk, call interest

. all right. public time to comment >> code section. >> taking public comment on the fact we does see the closed session has a right are here we'll go into closed session and returning awe at 230 thank you. >> mr. rose call the next item. >> item 4 a discussion item general public comment. >> our favorites time of the day general public comment. >> this is the time when the general public comment talks about anything they want to talk about so, please let's see i have

(calling names). >> all right. >> let's go. >> i'm rudy a retired teacher having taught in san francisco unified school district. 4 two years >> thank you for your work. >> thank you. >> you're welcome and i'm here to obviously to talk about the pre96 pokes that retired paraprofessionals and others motion of teachers and paraprofessionals and the city retirement city are of that group that retire before 96 they made a choices whether to stay in san francisco retirement system i move to the teachers retirement i want to point out i wanted to point out most of those people were my teachers added fairmont elementary school james and mission high school i

graduated they we were great teachers because of them i'm a successful at uc berkley directly out of memorial day the 60s and being the first grargs are generation my father and mother it go to college a huge thing i also want to point out if you are that the school district many, many year some of you might have been you owe them a debt you probably are successful as a sunlight of their work that is not fair to leave those effects out it violates the city's charter not fair very strong we need in support of folks and shoulder we're standing on i want you to be fair and other discriminate against the folks in our system next item, please. >> yeah. i attached a voucher

it is adjoining wrote this letter he unfortunately had to work he asked him asked me to come dear board members i'm the son of march and johnston my father john worked for the city and passed away 15 years ago any mother is the surviving spouse but now suffers from alzheimer's the disease requires twenty-four hour and care and my family had to object a reverse mortgage because of the skyrocketing costs i remember with prop c was on ballot in 1996 and remember in is john talking about that his whole family campaigned we read the voters handbook that he

p at the retire city workers there were falling way behind the cost of living i pefrm asked all the city voters to rotate to help my parents and other city workers i never knew how important prop c was i have the power of attorney i'll thank you first hand any assistance will be a tremendous help to a european survivor family this great enjustice the colorado for the retirees the 1996 ballot measure was written for in your authority and the charter clearly right thing to do so restore the cola to the retirees thank you and attached the voucher he

didn't make $18,000 a year on his retirement this is typical of the group to 90 years old that are dying all the time thank you for your time. >> thank you for your remarks. >> sarah johnson. >> good afternoon. i know your equal versed on the issue you've received plenty of consumption not only from pob but many, many retirees probation officer both post and pre1996 i have nothing new i hope you'll follow the charter and take the authority bits power of the people that voted into have you make those tough choices and please remember the pre1996 retirees we're all part of one family we need to be treated fairly and equitable

thank you very much. >> thank you that's fine. >> herbert wiener member of pob and 1021 as all talking i'd like to think the pre1996 standing next to me who were unable to come to the meeting their suffering amp or their disabled but the same individuals that were my coworkers they were worked together and they educated me on the job they were also my protectors and my advocates and he owe something to them by advocating they get equities of

being the beneficiary of the decisions that face me retired in 2003. >> now, when you don't go by the court decision and when you don't give equal benefits to the pre1996 retirees basically your teacher of the year up the city charter i don't think that the board members are cajole that at an moupts to disbabying the law and in fairness to the people preceded me and the people that standing next to me say follow the city chart to follow your conscience as well >> late card is john speak in general public comment.

>> two minutes. >> 3 minutes i don't know mr. clerk can you speak into the record. >> i'm going to speak maine to the cio report and so the cio has done a great job of hiring the leadership team it is time to put them to work as soon as possible it is now you're not henldz in any whatsoever so you have the 60 percent public and private equality that is a huge exposure you've not get to the yale model any time in the near future i would suggest the following bill is making his bet that this is good evening date of birth a normal direction or normal market and china and the

u.s. growth that the cio report will state that might be true i hope that is probably true by may not be true and risks of financial risks of connective growth you saw that in japan you're seeing those things two things the financial the 2 percent bond yield or lack you can't use that to hedge our portfolio and something had that has convince touptd you've with got a great leadership team in place i'll suggest nevertheless of the gentleman the plan i'll suggest you move this up a year he's a highly regarded person

shouldn't have so take a year and a half to get that fossil fuel invested and a contingency plan to go into more hedge fund if necessary if worst of the worst and i told you people he dislike hedges ensue you're only choices and in terms of ellen a great person she'll supposed to be looking at a 8 public plans with the managed i'll suggest she do that in time in maker and report on that i've been pushing an idea to use put spreads of the colors or whatever you cough in november hedged thirty percent of that entity and had a

of the equity more than the 20 percent down side in terms of cut off to maybe a half of a percent so i think that you hsa have to take competent approvals and get them to work really fast you're in month man's lands not hedged a public equities are down 11 percent this fiscal year. >> sir. >> i'll continue. >> is there anyone else who wishes to speak on this item - >> oh. >> hanging onto my card trying to do double duty i'm are the city and county of san francisco i'm not going to repeat what my dlaeg said about the pre1996 retirees but concerns any marin that it is taken a long time for

us a as a board to make this decision we understand that for some need not be an easy decide and due diligence your, in fact, following the charter but i can on this superintendant that perhaps the information or guidance or the advice has been begin is cellist conflicting i brought this up before i think perhaps you should give thought and considerations to go an independent council for a kind of advise a with regards to the chapter he believe that city attorney bright is a lot and any information is protecting the interests the city and not the interests of the members or fund i strongly suggestion you take into consideration we're all one family there are nothing the

charter that differences divides us those are the most vulnerable of the members we want to see by way of the longer it takes you to figure out this the more interest you'll owe them more than rather than less down the road none of us that that is but they don't achieve a very high payout on the monthly stipend so big please consider making this wholly and he appropriate advise to make the right decisions thank you very much. >> anything else wants to speak in public comment seeing none, public comment is closed. thank you very much mr. clerk, call item number 4 >> item 5 angle an action approval of the minutes 2015 special retirement board meeting. >> a motion to accept those

men's. >> motion by commissioner paskin-jordan and seconded by commissioner stansbury all in agreement can we take this all right. anonymous to accept the minutes. >> thank you that motion carries call item 6 mr. clerk. >> thank you. is there a motion or discussion for item 6. >> i'll move the consent calendar. >> motion moved by commissioner meiberger and seconded by commissioner paskin-jordan same house, same call? thank you all right. next next item, please. >> discussion item the investment community report.

>> thank you the investment committee met on january 27th as a body and basically this is be a little bit different investment community meeting this meeting was based on really having a thorough review and having our staff a competent very competent professional present to us in a way they manage on a daily business i work with the coy to make that come together he was impressed po to hear the.

>> what the staff encounters on a daily basis in working with managers and consultants bringing the best possible information making balanced decisions i was impressed with the presentation i'd like to pub thank the cio and i too want to take a moment and acknowledge the work put in by staff for the presentation by way of information for the folks the audience the investment committee was present with active information within the presentation it was discussed the strategy and important

update when was compelling about the presentation we had an opportunity to put a face oftentimes ooechlz and people own the team that are doing the analytical work it was great most impressive the team on the doing the due diligence my compliments to you, mr. all matters listed hereunder constitute a consent calendar, are considered to be routineer for pulling it together and compliment blessings with the foresight to structure it was important we opened the year 2016 by understanding the where we are and the direction we are going in i don't think they'd been done before but i was embraced one more senior member echo echo my condominiums but take a moment oftentimes the type relationships can be

adversarial and combative the investment committee meeting levels the playing field and bring people to the table it is great for the educational background with even though prior work experience and thoughtfully put together. >> anything else? >> staff members that spoke very well and gives includes but senior people that have important roles not giving us a chance to speak within or too big strategies that are not yet discussed to educate the board but what was done is to follow in a significant level. >> yes. that's correct commissioner driscoll on the senior staff the plan so present them in the future investment meetings that's on the -

>> commission the 3 new hires will be presenting on march 27 or march 16 excuse me. and also mr. ginsburg the staff was elated by the opportunity gave the commission an opportunity to kind of feel the work experience of the staff we put together a premier investment team the public plan space again thank you for the opportunity all the accolades to mr. ginsburg i'd like e i'd like to romanced this on an annual basis recommend to the cio and the executive director something we plan to do unanimously to keep the integration as a partnership

more than anything else it will give us an opportunity to upstairs the hurdle and the types of things on a daily basis but that's my recommendation moving forward. >> we hope no turnover. >> yes. >> any other members that want to speak if not really move on anything else do we need to take public comment an this item. >> yes. opening it up for public comment and item no. 7 a discussion on the investment committee report seeing none, public comment is closed. >> what he rays his hand. >> public comment is closed. >> okay. so could you please call item 8. >> a discussion for the report for calendar 2017 mr. shaw. >> robert shaw every year we present there report how our

2015 and he in this case proxies were yielded i want to make a couple of introductory comments in july we introduced a new orchestra arching policy regards to fossil fuel and environment issues that the majority of proxies were voted we voted against fossil fuel oriented items before this policy was put in place it is designed in much is way wale be voting in favor with those introductory comments i'm going to turn it over to michael if the institutional share services to provide more detail. >> thank you thank you for having me. today to come to the board to apprehend on the proxy voting and talk about the proposed

changes looking at 2015 i jutting just want to highlight a couple of items election of directors obviously the most previously lent topic and the proxy assess and just focus on that the proposals and touch on a couple of actual items the corporation elections 2015 supports for the drshgz raped at a high 96 percent and this is really has increased relative to the crisis whether nephews a lot of opposition to the corporate directors but slacked off a little bit whether there is descent against corporate directors it deals with behavorial issues they're not responsive to trusts or concerns and such a proposal not being

implemented raises concerns amongst the directors and also lack of responsiveness on board when it comes to high opposition votes the main one is negative compensation with the companies and not responsive to verify interests the results lack reprehensive of responsiveness and we have seeing areas of governance failing flurry call that to vote against the corporate boards for example, companies will vote and clarified their directors as living as directors annual accountability has caused shareholders to vote against and for a special meeting an example

we saw stakeholder dissent and fee shifting bylaws companies to shift expense mitigations from the company to investors about both those issues have raised concerns among the investors and others descents of troshgs is lack of attention attendance alsottention attendance alntioa >> - the second issue is proxy assess is a provision that gives the stakeholders to nominate their candidates to the board and 2015 was as big year particularly new york city fund supported you know hundred plus

sponsors to the boards ask them to give shareholders the ability and the companies did put this provision for up for vote but some doesn't so total one and 20 proposals with the u.s. corporations largely they s&p and 94 came it vote and 55 received do majority votes that's a high-level of support if the stakeholders community and assess were 64 .7 percent we're expecting to see this trend continue in 2016 but that was a key area for the investors in 2015 the other area as i said is a compensation this is again one of the most prevalent items

stakeholders get to vote own mandatory and the average level of support on exclusive compensation remains 91 percent instead 91.5 percent in 2015 scomplard to lower finger whether the stakeholders disaccepts is own is performance disconnect or where there is a lack of responsiveness by the corporate boards there's been high opposition when it comes to the compensation passage percentage a company and the board didn't respond you know voters vote against it on the ballots we have seeing an increasing number of companies as a result of this vote the s&p vote focusing on the big compensation and in 200648 percent of

companies had a compensation system and 2014 that number roses to 77 percent so 48 of companies have the performa systems and 2014 is the last time we calculated the number 77 have it the performance pay is getting traction and an area. voter in 2016 open the international side briefly seeing a focus on diversity related issues a lot of countries have adapted the best practices around gender diversity and so we're seeing a lot of issues and there is also focus on the european on the packages like spain has a

governor's code is focuses on the compensation he committee being independent and will oversee the compensation packages at corporate boards is switzerland has adams pay votes their binding same with the uc with the votes of the compensation is booinz so we expect to see a focus on the exclusive compensation to be center in 2016 as well in go 2015 last but not least looking at and japan has adopted a governance code with the board definition a lot of japanese group are dominated so a lot of focus on the under performance of japanese companies a focus in bringing in independent oversight for two independent boards to be named to those

companies we're seen shifts in 2015 the companies are recruiting dependent directors and the japanese board in order to approve performance so that's sums up the report for 2015 and we're here to take any questions you might have >> basically one question i know you've asked it a breakdown on page 2 mr. shaw about the results but it is nice to know whether we're with or against firemen's in terms of the shoulder i'd like to know if it passed i will know if we voted for against. >> my memory all the 4 issues have all failed.

>> i think that number is available data you can add that. >> i'll get you the information. >> every year. >> anyone else on the u.s. issues are those numbers accurate on page 2. >> they are their adequate from us a lot of e s issues were voted open across the marketplace the reason our total is low we don't own there is approximately between 35 and 4 hundred u.s. trait companies we own 15 or 16g hundred so here on behalf of the appellant and this is the small segment it is very small. >> and then the last thing by

exclusive coming this is versus the ceo type of role in terms of voting structure for probably the top discussion non-proxy voting and yeah. we are seeing one of the significant topics it get part they're the subject of proposals and spraeks of the cso and chair and independent chair those get average 29 percent of support so they're not getting support to effect change bank of america comes to mind why they had a provision that basically separated the roles and last year companies decided to combine the roles of the csos

feedback by investors on that move and there was a special meeting that basically was organized to see if they go back to the separation and looks at in the end the investors supported the combination in this instance so investors that are okay with the combined ceo chair as long as there are things in place and a separation of roles the chairman should be tasked with purposing management and recruiting and elevating the cso a conflict with the positions are combined a lot of companies with looking at to counter that to address that we expect to see continued focus on the independent chairs the access which is really the key area to great accountability the

second item we're good evening to be seeing a lot of attention from a governance prospective if you're look at the climatic change and such but the second hottest topic. >> may i ask a followup how do we votes on that on or about. >> the ceo versus the chairman of the board. >> i'll check policy and get back to you i don't have that but my guess case by case. >> a supplied that came up last time. >> is that - okay. >> it came up on the wells fargo. >> what was the split. >> it is a split. >> what we verify that that is an important issue. >> i will verify the policy and report back.

>> okay. well thank you for your presentation we'll go into public comment i have a couple of public comment cards first welcome back folks that are here as well as clara and others thank you. >> and thank you happy new year to you so talking about fossil fuel 24 board activated the social procedures calling for proxy voting in favor of climatic change in g h g in february 2014 and in may and june of 2015 from the office and myself came back to the board and pointed out that that of not being implemented properly and in july you can see in your report the top of page three

effective july 2015 you constituted a polly appreciate that being list here however, for the next item for 2016 that is reflected on president's top of page three is not reflected properly on page 21 for the guidelines for 2016 under stakeholder proposals number ten on policy on environmental stakeholders it is case by case which is erroneously said a year ago when we were here to correct it so that needs tobacco corrected to reflect the july 2015 basically any proxy issues are the climatic change second year he fossil fuel, etc. you vote for the savings section this choice

and we believe that level one that is what level one is so, please make sure that is implemented properly thank you. >> all right. next item, please. >> - street light valley and south state locals have taken positions i noticed on page 23 proxy votes for as well as manufactures i don't know what

that means does that mean proxies against or proxies there is no note regarding side ohio drfkz i'd like to get an explanation and know whether those votes happened before the july 15th or july 8th when the decision was made to take all of the proxy on a case. >> thank you claire anyone else to wants to speak public comment is closed. >> thank you okay. can you call the next item. >> proxy voting for calendar year 2016.

>> commissioners be robert shaw this is the second report we generally present in february our recommendations with regard to updates to the proxy voting policy and when we want to show the items recommend for changes and updates hidden valley high school in red towards the back of the presentation and with that, if you would open it up for questions on anything you have. >> opening up for questions board any questions what about to my left i'll come back to you. >> okay. >> mr. ginsburg no too many issues to talk about victor i knew i could count on you. >> how are we covered as the

commissions direction. >> the discussion in the committee in afternoon was that to the degree possible we will present those proxies to the board board for their vote and prapgz the case by case allows us to evaluate them individually to that the particular the participation is the stakeholders proposals the aviates generator will be for the proposal as opposed to and 4 men's against management recommendations in most cases. >> what you say most of the time you'll not bring it before us or someone take the latitude to make that dedication on that ground the boards policy

provides we'll give those to vote in favor of those policies what we're prepared to do and preparing and presented to the steekz we're now to provide overseeing votes in advance such as we can you'll know what votes and the ordinances and how the policy will be provided to vote we meet once a month to purify once the proxy is set the meeting is set. >> is that a case by case we report back if we don't have time or you will confer with the president and make the decision i want to see whether the chance of the command and the decision making will be. >> i believe this is a live action taken bets the boards

overrides the case by case report as pointed out earlier and we will correct that. >> yes. >> yes, we will. >> same satisfied. >> anyone else down there okay let's take public comment for item 9 open up for public comment i see you jed you put your name in there. >> okay mr. clerk did you get it, all right. thank you very much anything else wants to speak on item number 9 come up. >> oh. >> legislative aide to to supervisor avalos thank you for the correction on the proxy voting on environmental issues and hope to see you proactively voting and be able to truly

evaluate those before they're passed as opposed to last year there was a discussion last year stakeholder proposals by the i mc r all the members and hope those given special consideration for those voting against and the proposals and will encourage you to use those that's what we're paying them for to get an evaluation any staff reports includes the proposals i think last year there was the proxy recommended against self that was sponsored and that didn't include the many rational but thank you for your consideration and continue to move forward we'd like to see stakeholder ic a engagement with the fluls.

>> is there anyone else who wishes to speak on this item on item 9. >> all right. public comment is closed. >> thanks for the presentation is there a motion motion for the proxy vote. >> yeah. i'll make a motion. >> motion by commissioner meiberger and second. >> yes. >> i'd like to make a comment. >> as amended correct. >> i discovered on page 20 of the report under stakeholder proposals case by case for the ceo and chairman of the board i know we do a case by case for the wells fargo a couple years ago this was a standard position on the board we need to split this is to be nailed down whether or not it exists good

direction for you to folly may be wrong. >> we'll follow-up thank you. >> okay. so motion made and seconded mr. clerk you got that we'll take that without objection. that item passes unanimously >> discussion item for the chief financial officer report. >> the basis is down 4.7 percent most of that due to the decline last month down 23.6 the global market is down 11 percent turning to the next page i want to highlight one thing considerably larger you saw at the bottom of the page you see

the numbers highlighting our total unfunded capital candidates totally 4 point one billion dollars this number was more like in the 2 perhaps less than that two years ago. >> what this signals the market continues to flatten or decline i'll expect to see the capital calls we need to be liquid fortunately, we are quickly the total in real assets and private equity you have a decline the market leading to more attractive prices so you can easily see that number up to the low 30s in a short order

turning to the graphical chart that repeats the $27 billion in the spriveng 2014 or 19.3 the market is down for the last it 2 months there are some comments i want to make in the narrative the first is is that the returns. the calendar end were 2.25 percent for and then martin this is an early indication we performed the top 05 percent relate relative to the pears peers and the economic condition here's a couple of comments on the second to last paragraph the last full paragraph on page 2 china is not on the vertical of the and the u.s. committee not

on the vertical of a recession why the market is so worried to put 24 into complex back in 2008, the united states economy consisted of $16 trillion in debt and at banks 16 trillion in debt anticipated the gp g was 16 it was one to one in china they have about $31 trillion in bank debt and a gp g of 10 this is what is warrior the market there is a 3 fold size of bank debt in china and in china if they have a recession how much of that going back that is stunning the market the second thing the united states economy the r gp d

is 7.7 percent a survey by bloomberg and week or so ago 19 percent of economic mist by year end is to say the digester and blueberg did a survey of cbos stephen the ceo at black stone while it is possible the market correction could be more significant we at black stone don't see a recession but slowing and in the end sloan slow down of concern sections as a result and merry astonish ceo now even though housing industry stephen hilton i'm not seeing any signs the recession december

was a vthd most and january innovate nothing on the horizon but houston gm chief financial officer states first arguing why people think there is a bear market in the u.s. says on on the other hand, a number of people including giving me believe the auto industry is plateauing with many years of performance still ahead and lastly kansas city a large transportation is think of the all the goods around the country a good indicator of weakens i was at a rail conference and found one railroad you exclusive we're in a recession and manufacturing recession but the consumers is

doing okay that's the most part the consumer is 70 percent of u.s. economy and it makes sense the global supply of energy went throat roof so it was a mismatch between them and the industrial and manufacturing weakens make sense because the economy is over access is weak but the u.s. consumers is okay all that said is i do have one worry and that's in the least two sentences here under the second item. for the first time in our history we have gone 10 years without 3 point zero gp i growth that's not happened since the great depression and the second the longer o long recovery

despite the stimulus is a concern all of that ammunition is to restart the economic engine and it really has not worked well, we dojdz something much worse in 2008, but the federal government saying i'll back that and you know massive federal stimuli us but not restarted a year economic recovery and certainly in overseas it is even weaker i certainly have concerns i want to put that in proper context a few lighter things the d f g last month to authorize 25 millions that closed we saw all the 25 millions and hill house

we passed one pea 25 millions we were not going to get anything but got one hundred million dollars that closes 11 days later special thanks to the private team and to our health council for this >> first of all, regarding the recent hires good news on the existing member of our staff a promotion to announce tonya is promoted to director of private entity for venture capital we're delighted tonya is a star perform eras. >> entire team but we're really happy for to and hope she's here for many years to come. >> several of you met

christopher earlier comes to us after 8 years leading the researching in real assets and illegal e ellen joined us on wednesday 20 hours of experience for 12 hundred minutes and she's a veteran 20 request years in investments seriously and has a large volume of work that i put on her plate to give one is insuring the liquidity is good and assessing the reflex management practices of at least 8 of our peers the public says that a number of things to do really, really don't do a good job of managing risk so want

ellen to look at percentage and whatever emerges and third update our policies and beliefs and fourth an agency gate findings of the target of the portfolio and lastly we thought that would be appropriate she's the risk officer they she partner with francis as is managing director and join david and i in closet analysis for the things and this recommendation is coming to the board in april. >> i believe that's it i'm going to turn it over to the board for conveys any questions. >> on the right and left, yes please captain.

>> it will take me a moment to get to the question in october at the investment meeting there was 7 percent area f that didn't change thirty years we turned over 7.5 to for the contributions and is mr. hall mark still here he was here earlier this is my question whether or not not that the other funds are doing that whether the investment rates return and come down do wage inflation numbers come down that is something to watch i know you're talking about investments i'm wondering your project by project certain images last week the negative things in germany because their programs have not

yielded worked so i'll concerned about the economic assumes we have for rates of return and was this whether we have to alert the stakeholders contributions may have to go up. >> that's a loaded question projecting entering met 7 to 10 requesters the capital market is long run more like 20 or thirty years thank you it is an educated guess in the case you get historical precedence countries are evolving and changing innovation you know go through peaks and valleys and evaluations of peaks and losses right now an item rat view of returns over the next 7 to 10 years

that stoppage is on the high side but low side in the global market that leads to our community expectation forerunners both stocks and bonds as we've said before affordable housing if a will a necessary driver going forward as far as the assumptions we come together with any pc and we need more time. >> we must look at now because i'm glad hallmark came back into the room there is a sixth differences we need to talk about whether or not we need to commissioner tang mr. hall mark this new norman for the

descriptions in why growth has not come back in the prospective of how wages have performed in a period like this i'm looking at the spread we want to be ahead of the contribution. >> not expecting an answer but those are questions that maybe coming at you. >> i have a question he want you to expand on the liquidity we're liquid enough up to thirty percent liquid assets you said i'm assuming the portfolio. >> the question i have has to do with with the hedge funds but part of allocations selling treasurers and other bonds into hedge funds do you see any liquidity in buying the hedge

funds. >> depending on what the instrument are in the fixed income treasurers will be completely liquid we don't plan to trim treasurers much at all the other parts of bonds market are having trouble the high bond market is not fuks well and hedge funds are liquidity every month or two if you want to lock up your capital and exchange those it can a depending on institutional constitution. >> the bottom line i don't think that vesting in hedges will change you are portfolio i'm looking at the concern of long term investments by 7 to 10 years. >> all right. >> i would point out you need

to look at the h s i. >> i was in los angeles we had a late breaking news on february 4th last month the board approved h ssi i don't know we know the exact amount sometimes, we get the official dollar amount it is closing i'll e-mail that to you. >> all right. let's here on behalf of the appellant and madam chair thank you. let's go ahead and move to public comment on item number 9 any member of the public please come on, sir >> excuse me. item 10.

>> so this is not in must way from the staff of the cio you can't do it the way you do it you can't forecast a 50 percent bull market i'm a big fan but all the things that people are not seeing a recession they never see a recession he can dig out several quotes they never see is that didn't mean something bad will come they'll not see that so your efforts to kind of calibrate the risks will not work there is risks coming out of left fields 60 percent of your funds in the highly risky

comboipt i don't see any so if under those not a great bent over backwards you don't have this news the hedge fund allocation get screwed up okay utilized is have a contingency to put 10 to 15 percent in headlong funds by the end of june it will not happen because people are not learned a thing from the opposition and i'm not going to explain why but this is not going happen this is a - itself third chris choice you can buy a i'm in favor the herb's forms whatever you want to do just have bernell at the

launch meeting come up with a contingency plan you have to p have that in case those things don't work i don't know what the percentages you'll not go into a recession not ♪ bear market anyone knows when i ran a hedge fund i could sell everything like that it takes you 3, 6, 12 months to also or do that by the time a recession starts accountable not do anything you have to have a contingency plan in advance that deals that the risks of the 60 percent public and private entities the private entity is doing great they're turning the market and there is all this capital commitment and by way of that return will collapse if they collapse the public market

all the late stage like market to market once they go public but the bottom line at the launch meeting they have to come up with contingency plans professionals the business for 20 years they know exactly what to do >> unfortunately your time is up. >> any other members that want to speak. >> madam chair can i comment. >> no, no. >> okay public comment is closed. >> thank you so much what's next. >> number 11 the manager report. >> the floor is years. >> good afternoon, commissioners before you, you see the

activities reports for the ss d c pi want to open for questions regarding this report and lieu me to make a comment that didn't say they've been working on this because the rfp we work released last month she's been working on that this is the top committee meeting the recommendations will be to the board or a month or two before that is released there's a lot of work going on. >> thank you commissioner driscoll. >> anyone else. >> equal let's gone to public comment. >> anyone else would last week to speak on item 11 new.

>> public comment is closed. thank you. >> thank you mr. clerk item 12 and discussion the committee report. >> commissioner stansbury. >> so at last time we talked about one of the items that was having another offsite we're exploring that some dates and speakers maybe a couple of speakers we talked about there's a portion of the policy that allows us to bring in a third party that reviews and monitor the board and provide feedback to us in terms of of our performance how we follow policies and synergy etc. so you'll see that in one of the items that is on the agenda and

forward to the control before board some policy guidance for e s g it has to do with with setting policies and procedure like the not making the investment decision that's the purview >> anyone else take public comment item 12 no public comment public comment is closed. thank you mr. clerk, call the next item please. >> next item please action item for the evaluation policy for the thirsted party by if a qualified and expert, sir. >> as you commissioner stansbury indicated two items out of the governance committee with romance to the full board they adopt this is the one under

the performance elevation every 3 years an independent party and the recommendation the board approve the governance committee pursuing this qualified independent third party to perimeter with the board in its 2016 performance evaluation and the committee recommends the full board approve this. >> okay. any discussion this is an action item go ahead and take public comment. >> some of this work will be done with under the supervision with the new governance consultant we hired we hired her last month it says independent.

>> if you want to speak please chair. >> what we botanical bringing in someone for a period of time say six month or 9 months stipulate but they'll look at minutes and how we make decisions and how it lines up with the policy separate from our current governance consensus on a product basis that answers the question whether the redundancy whether this is experience. >> for the governance consultant all they do is assist the board in the process so they not involved as an independent third party vault performance

results in the i hope it workouts. >> yes. commissioner meiberger and is the process of who makes did decision to hire them a public process to hire this individual and firm. >> absolutely. >> above. >> it is a public process paying them with trust money bringing them under the same circumstances for example, osborn at the last retreats types of contracts the public process who will make the decision to hire them. >> hire. >> the governance committee. >> okay. >> said to get an idea. >> through the chair what's the goal that the

committee is looking for in this and did you envision the budget for this. >> the policy that was has been so forth historically has been to sort of allow the board to bring the independent person to provide feedback to us something we had a as a board we provide feedback to each other but the separate mechanism we have a consultant who is not relying upon current revenue and telling you what you want to hear the mechanism to evaluate us and try to line up. >> what's the goal. >> we're going to put money forward and let me say we whether or not we pay them one

or 20 k we've spent the day at the hotel and i don't see we got anything meaningful out of it i want to this our goals and oifshz because quite frankly i don't want to spends a with osborn little to nun. >> that separate that is a one-day offsite that is sponsored to be training and best practices that is an evaluation and reporting back we envisioned a lot of time not a one-day so at the end of the day the real goal to assure we are implementing best practices say compared to other boards if we evaluate ourselves at the end of

the day, we'll pat ourselves on the back but have a independent. >> i don't agree i think this it is not pating ourselves on the back but once again we did nothing with that i'm open-minded but i want to benchmark success. experiencing this money quite frankly i found out what we paid osborn i couldn't believe that smart and nice guy but at the end of the day why i don't have process for that practical share this i didn't see that thank you fire marshall comments i'm on the committee i have other boards that work with deft people for deft coaches and

different things they use i think i agree with commissioner stansbury al osborn i felt i got a lot of things out of it how good government and what are of best practices and he went through a lot of criteria and situations he didn't analysis you are board as a boards more of an organization but it was not that itch different not about what we do and kind of a refresher to remind us what is how to act as a board follow-up on our you know to abide but the rules of the committee and things like that i think that many pefrjs have

outside consultants that will help the board to work together when we had our analysis done nothing we've down with that the analysis said we don't respect staff we haven't done anything was that this person they look at the comments and can be various comments not a 360 to hear what staff would say to make us a better board but the point they'll hopefully make more effective and efficient and make sure wear bidding by the rules we have you know in the governance committee that we set and take that extra step if implementing our analysis of how we dealt with each other we did

the self-analysis for the board we made comments and every year we make those comments and nothing happens so hopefully, this person i believe commissioner stansbury had talked to other boards and he's talked to different people that are consultants with the prengs we should give it a try but i don't view it as education or updating like al those born side >> this is an industry best practices at the end of the day, we choose to ignore remedies or

implement them that is up to us as a board. >> anything down here? no >> thank you. >> i will say a thing about the doing the survey you might and after the fact the will evaluation the identifiable to improve governance should we need to one major reason the governance is the key to managing the key to managing reflex there's been report to us suggesting about improving our behavior one thing that was nice mr. osborn we might have to do this again but about we either want to change our behavior we can't hold staff account it is board behavior board has it

pursue good governance and help from staff but they have been a number of comments over the last several years never discussed we don't discuss problem they continue i think we should and need to improve this is one of the steps along the way besides the new person hiring we need do it. >> perhaps you can make a suggestion during the good of the order and talk about that. >> that is on the governance agenda. >> no action item. >> oh. >> make a motion and thank you very much. >> one quick comment the tack away from the retreat he of the one of the executive directors said the staff didn't trust of the board. >> that's not a reason we'll

not go there not now right now to public comment seeing none, public comment is closed okay. this is item 13 an action item may i have a motion to authorize the staff to identify the recommendation that is forwarded. >> i'll be happy to move this item. >> thank you. >> fred. >> you're out of here. >> (laughter). is there a second we'll take that without objection. that item passes >> i'll vote no. >> let's do a roll call vote please. >> this is item 13 to do do performance valuation and mr. nolan

ms. christensen mr. star's commissioner meiberger commissioner paskin-jordan commissioner stansbury item passes 6 to one. >> please call item 14. >> item 14 an action review of the terms of the reference for the governance committee. >> this is you. >> the board created the committee last year and didn't have a reference to the governance has approved the draft terms and recommended to the board they approve it commissioner stansbury. >> i think this is for - >> i'll second the item all right. and you have the floor. >> if we go forward with this how is it possible the items get in because of board. >> policy and strategy come to

the committee any kind of presentations go through the investment committee and this would be for policy and strategy only and everything will be as those items are passed and recommend to the full board. >> thank you plus a double hearing on all the issues. >> any other board members have questions or comments. >> i'll second the motion on the tarnl. >> all in favor, say i. >> i. >> opposed? the i's have it. so ordered move on to item 15 which is somebody let the secretary. >> discussion for the finance committee respect

mr. star's the item speaks for itself the 2016-2017 and 2017-2018 budget. >> all right. thank you fewer comments with any members of the other. (writing on board.) have any questions or comments and if not open up for public comment would any members of the public like to comment on item number 1 the finance committee report? >> going once going twice public comment is closed. okay. this is a discussion item mr. executive director my further comment. >> no we'll close the comments mr. secretary call the next item. >> >> action. the fiscal year 2016-2017 and 2017-2018, sir >> we presented the draft

budget for the finance committee last month they suggested two changes one change to add a public information officer that will be a new position to the department responsible for public relation and public information the second was a area marking of money from commissioner stansbury and mr. ginsburg to offer up to two year along internship and a kind of outreach or a college it graduate or graduate student kind of an outreach and so we have the h.r. department if approved how we will issue those

interpreting types of position and with that, the committee recommended the board did you want the budgets the numbers have changed more numbers he since the finance committee and even a less modest of an increase plus on the discretionary budgets then that originally recorded under 4 percent now 4.9 percent in year one and two as a result of asking for in any positions like the public officer to the question on the funding we voted on as part of third party page 8 and i think that is calls board govern consultant we have why'd what that service costs at

$75,000. >> i'll move the budget in entire outlet so i will sever the hedge funds managers allocations an $8 million on fatigue 4 and sever the hedge consultant on page 34 at $500,000 and i will sever the research on page 4 so put everything else forward. >> for clarification what is the the amount. >> 4 hundred thousand 4 hundred thousand a there's a motion on the floor to adopt the budget except the

ones mentioned. >> can i ask a question for the maker of the motion to strike. >> i anticipate they'll be separately i'll go forward but. >> that part is fine. >> why are we booifkt the budget. >> that's his request. >> anyone want to second the motion. >> i have a question why would we do that. >> they asked for it as courtesy to agree to. >> are we good evening to play verbal argued 0. >> that's a good request i lost confidence in the ability to forth with the hedge and problems with the rfp process

he support of rest of the budget but want to send it it out a whole that way i'll not argue against the budgets so i'll trying to have a more smooth simple way it deal with the components. >> i'm glad to second the motion to commission put the motion on the floor open up for discussion parking garages. >> the board has voted on at least two occasions to move forward with the hedge fund process we hiring someone who left a firm to come and work for us and as december we affirmed the vote for hedge funds so, now in february to try to separate it out to yet flip-flop again

seems totally inappropriate i can understand hesitation but 90 is new employee next week and suddenly stop like the last minute here isn't appropriate. >> lascivious that motion on floor to adopt it feel free after this you may put that as motion to adopt those. >> i'll not be voting for the budget in my opinion the budget is all-or-nothing. >> all right. anything else want to make a comment >> to did you want the budget for the 3 items the commissioner mentioned. >> lemon say a few changes

things fall i'll support the motion and voted in favor i think the hedge funds $8 million is large i think that the first time we've seen the dollar amount it is a i think a large amount and i have in all conscious not vote in favor of the beneficiaries and people to pay for the hedge funds i'll vote with the motion as stated also i think that mr. star's didn't want to prejudice the budget rather than vet separately against the hedge funds but let's everyone vote in favor of the hedge funds. >> those are the type of political games our congress people play let's talk about the flip flopping.

>> increase a there's a motion on the floor and dueling seconded. >> why not pull out the fees and you know. >> the g s d fees pill those out. >> we can entertain a motion. >> there's a motion on the floor. >> there's a motion on the floor that has to carry first before we entertain others so the motion on the floor is seconded we can go for a vote anyone that want to comment can come up don't be shy no monopoly no public comment okay public comment is closed. >> any more further discussion this is around 16 thank you. >> i can appreciate perhaps

mr. that $8 million the 100 percent city of los angeles it operationally is that something staff didn't permit but this board passed so the budget be had to be loaded because the board didn't make a decision i think we're willing to start think day one of the city was not the reason that $8 million but more than that mraurgz wants to taken out but the money for the consultant we'll run the consultant as well as the data if you don't like the $8 million

like the fees we paid to the private general partners we didn't see that so i don't know where this motion will go i want to help you mr. star's than not kill the whole thing. >> and reaffirmed in december. >> i think that's a partial question to me. >> i still will not support it i feel that commissioner stansbury is talking about a flip-fl flip-flop fair to say i lost confidence there is a huge

defensive lost confidence an rfp process and we've conducted it in a manner has an opportunity done before an rfp process this commission delighted a 5 member panel i do not believe that this reflects that we are the process with 4 men's e.r. members the panel reviewing the rfp and the 5 to do a catch up those types of issues are in the process where i've lost confidence and that's why i want to veto no to put the money forwards i'll continue to an critic because it not doing good if it is a flip-flop for the let's take a vet but most importantly what commissioner stansbury had been talking about

and focused on not the change in votes but what took place is this confidence of the person that was before it we should be tarnishing that. >> so i listened carefully to the panel being here to remind the board there was a two hour discussion on changes to the rfp and then a motion to support staffs recommendation without the two hour discussion and points we made when that failed we went forward with all our collective input into the rfp it was evans collective wisdom to preview improve the rfp let me tell you don't people from staff and with an from san francisco and two peep the businesslike

samoan from calpers and spurs that is honestly the the president intent of that board if people want to read every word to find wiggle room let them do that it is promise to that what this bystander decided on i managed all you have been our guys input i never revealed any position it was 3 days before we voted i gave everyone the opportunity to be forth right and that's the spirit and now i'll defend it the fact i lost confidence in it should be what we should be talking about. >> explain how to panel of 5

people has cause you to lose confidence. >> very simple the may that of panel is not inconsistent with the direction of this staff not even 5 people started with 4 and mathematicly a different evaluation. >> who's the fifth person. >> under fran he will will be here on monday his full-time job to be reviewing the rfps the rest of the panel is donating their time to review the rfp. >> so to the issue of having this slow down your volunteering your time. >> a what is unprecedented the retirement board into the rfp

process that policy is delegated to staff we have done our best to recruit and bring on the fifth member as quickly as possible and is leaving a 19 year career and times to make sure you be smooth the process first of all, i'll be no, sir. i didn't and discrete and have a full-time challenge to review the rfp the board members have led a number of times but not decided to eliminate any of the proposals and so there was no real deliberation on the merits of proposal in those committees i'm confident that before we bring the recommendation to the full board that all 5 members as dictated will have participated

in the recommendations and we believe with we'll be bringing most likely at least two sets of remedies for the board to decide the strategy. >> to cut through that that is we're losing credibility as a board country's we can't make a decision and questioning our staff and procedures and we have to make a decision and move on honestly, i hear this people talk about is that really isn't good, good for our board. >> the decision in december what triggered me to feel cajole to make a job offer for someone to leave a career. >> on this process we as a board maybe we made a mistake we as a board decided to the decision to have those people volunteer their time which means

we'll not get them frequently their volunteering their time to come in and help our staff that should have making made this decision we decided bring in outside people that slowed down the process what i wonder is that a common practice other boards that bring in outside poem and ask them to work for free and make a decision. >> we have had recommended to ask someone in the industry if they had time to participate on a volunteer basis and it is common he typical that people will you know spend their spare time to help us out. >> that part is going to slow down the process when you're asking people to volunteer and not narrow that process by saying we want

somebody to come in and volunteer their time to help you are staff already you'll be around his schedule if it is a full-time worker staff needs to come back to our commission and say this is unwieldy and slowing down us and you're causing different commissioners to lose confidence i don't know that is part of progress or one of the commissioners but i think that we need your input to come back if in is not working your scoring two or three people to do this and it takes over the year it is an issue. >> their think schedule to have reviewed all rfps for the evaluation team and tends be here to you know their rudy from

uc and shawn it santa clara valley and period of time and i can't pronounce mirmz last name and myself and david to so after all us will be here to make recommendation to the boards on april whatever the day. >> at that point you have to say to a commission that has lyft confidence is that going do have him regain the confidence to move forward we're taking too along the market is falling we're not hedged people are losing money. >> let me speak one the diverse of a 5 member and 4 member search that was intended

5 member search so - he requested a job on february 13th that job was not approved and not offered until nova 11. >> why. >> i have no idea. >> due to our commission that is a lot of things to do so, so jay may know i know - >> i know those two dates. >> the reason that this supervisor has lost confidence because a we are 100 percent out of our control it was gone on out in event and were prepared to meet an november 20th to over

the job to someone because we been recruiting that position for quite sometime is that then came the motion to put consider rescinding the hedge fund we didn't have this and on december 9th was the board meeting in which the board moved through the motion to rescind investing in the hedge funds within the next week we offered the job and they accepted 24/7 that 23w4 days that was the fifth hire the other four it took a couple of months i believe the revenues were received by about may if i recall it took a couple of months getting volunteers to get one and 50 and plus hours was

not easy is what i suggested. >> full-time employees. >> yeah. >> they don't have you know. >> they're not allowed to accept money from a pension. >> who made that decision. >> i did. >> we were directed to have volunteers so we went out and crude did two are nearby they're both very experienced hedge fund investors one ran a hedge fund himself the manager and the other worked at one of the larger solutions it looked like a great mix in terms of their experience and we already have a third member of the team which is ann hektd which we hired as independent experts we've hired

and paying them to participate as part of the evaluation team so the one recommendation are direction from the board that is done basically, we hired american people mp c with the expertise but went ahead and followed so, now rfp was delayed the hiring of the fourth member in order for us to solicit the hiring firm own a - >> okay. i mean we're getting into too much there will a commissioner that voting against this i don't know the reason i guess if the reason is delay you know. >> i understand that it is tied to the budget but i would

say we're within two months of showing you the product of this committee and four days away if hiring the fifth member of the team again we'll be paying 8 hours a day to review the rfp and now the bucket stops the process we're not approving that. >> we'll not stop it. >> what is to adopt the budget. >> so after that is done you can put a motion on the floor to adopt. >> the program the budget then we would not be going forward. >> complarsz class - let's

move on it really is getting. >> if i have e he were a staff member i would leave and subject to this board and seeing you as congress give me a break this is embarrassed. >> let's accept it bucket my god we've been working on this so mr. ginsburg. >> mr. star's so i want to be clear he understand we were going in circles so to make sure by severing this you're suggesting taking it separate are you saying that you will not vote to moved on the hedge funds

but the portion of the budget that is separate and pass that the second position you want to hold in limbo i'm trying to understand where you are. >> i will anticipate someone going forward and putting the motion to approval this program and would anticipate that will have a digester of the boards to go forward. >> why are we doing this. >> i'm trying to get an understanding i think people are confused that's why this is a parities. >> i think he wants to defunds the hedge funds allocation the budget this is what we're proposing to do by cutting out the necessary resources to

support this program other than the position we hire the hire that is coming on next week i think he said he'll vote against the funds for the hedge fund allocation it the approved and vote against that he assumed a majorities of supports in december to funds that program. >> commissioner stansbury i was good evening to say from a ethical prospective you have to go home and speak to yourself someone is planning on starting on monday we'll fund it at the last minute that strategy has not changed this is not changed we thought that was a good idea a year ago that has not changed the original thing that changed is this. >> and the hedge funds not on

the hedge fund. >> nothing has changed hedge funds are krushdz. >> we voted on it not sitting here and rehashing on the ethiccy but truly that board that combrarz. >> i have to the finished my thought i think there is confusion where we are going with this and to come up the budget i want to make sure we are not - hijack the process so i want to make sure we understand where we are and what's happening so commission the second i think so the first

part so. >> i'll read you make the motion to approve those 3 items of the million dollars, the $500,000 and $400,000 associated with the hedge funds and someone will second that and then my guess it will the vote will take place and it will be 5 to 2. >> charm /* chairman. >> i'm happy to look at the changes that have taken place. >> we'll come to a vote please restates the motion. >> victor made the motion. >> move the entire budget

severing the $8 million for the hedge funds the 5 hundred for the consultant and the $400,000 for . >> and there was a second. >> he seconded. >> okay everyone is clear on the vet. >> public comment. >> okay call public comment. >> you took public comment. >> you have a two part process the constitustature. >> i asked mr. star's to restates everyone understand i'll do a roll call vote please.

mr. nolan no commissioner meiberger you dropped the budget without those 3 items. >> correct. >> no commissioner driscoll no mr. star's commissioner paskin-jordan commissioner stansbury no. >> the motion fails. >> another motion to pass to accept the budget motion by commissioner paskin-jordan and seconded by anyone seconded by mroiblg a roll call vote vote excuse me. i'm sorry what did you say. >> i don't believe i've taken public comment. >> oh, on that particular second motion i thought we took the. >> now you're taking the action to approve. >> thank you very much okay. >> public comment i heard you

guys mumbling. >> claire, claire. >> you have two minutes. >> i'm sorry thank you, commissioner commissioner cohen in terms of process that is a simple and elementary process that occurs all the time an item if someone on the board or membership wants to sever out a couple of issues and take the vote on the main motion you sever those items will the commission said you have to separate - >> this item where the commission biefktd and i'm trying to explain he would have done it quicken by keeping those and taking those items and

voting on that separating as parking garages would have likes now you've put together the end result it is the same the process is different i believe you've spent a lot of times discussing what you didn't need the discuss the process is simple i ask to know you can separate the items and take a vote and may ends up with the same vote or may not but recognizing that someone was taking out items of best take the vote and good luck. >> so that's the item okay public comment is closed. at this time folks thank you. >> reflects this topic we've been on i don't believe that total amount had been spent that coffers the possibility over the budget wise but staff if have a

way it presents it in both cases that number it i think inflated the board did not decide. >> okay roll call vote. >> comments. >> no. >> mr. nolan commissioner meiberger no mr. ginsburg. >> i'm sorry not a problem we're voting to accept the budget as a whole i vetted yes and my colleague voted no. your up. >> we can refer to her mr. nolan mr. star's commissioner paskin-jordan commissioner stansbury mr. ginsburg going back to a quick comment

what captain commissioner driscoll said is true a double amount of expenses for the headlong fund and hedge funds funds and hedge fund consultant one of the other and the costs go down so the motion before you to accept the budget as is. >> we had the bucket the decision was not made so we put money on the managers side. >> sorry i was - we appreciate our she said i. >> just in the case you didn't hear that the motion passes everyone. >> i told you this is the best show in town mr. clerk item 17. >> action item review of the

annual report fiscal year ending 2015. >> okay. we will recommend you adopt it to publish it on the website. >> you thank you very much move to accept by mr. star's and public comment on item 17 public comment? and okay public comment is closed. >> colleagues. >> the one item i don't see here a good cover page to the report. >> we've learned not to show that board pictures so it will be a surprise whether you see it on the website. >> obligate it. >> since we had good comments i know one of the charters some of the key individuals the investment staff wouldn't mind having a group shot it is good

education for the public as well as a selling on or about but they'll be in next years support they didn't exist i mean they exist but not employees some of them are young. >> okay refocus let's do a roll call vote pursue politicians commissioner meiberger commissioner paskin-jordan commissioner stansbury motion passes. >> thank you. i want to i'm sure we need to go gak back it item 14 we didn't take public comment this is is terms of reference to the environmental social committee i'm sorry one speaking is the gentleman still here? oh, no.

>> he's gone any other folks that want to go back to public comment for item 14 do we need to suspend the vote okay. he need another motion to resends the vet motion by thank you - so that motion was made by mr. star's and we'll take it up next month my apologies next item please i'm sorry we need to >> i. >> opposed? the i's have it. unanimously item 18 an action receive the two percent cost of living adjustments in the chapter 2015.

>> good evening commissioners this is a standard thing we bring before the board annually i wanted to point out a small subsection of the employees that don't fall under those the old safety retirees with they are different formulas this is the cola and the maximum 2 percent grant. >> we're going to recommend that. >> thank you all right. let's have a discussion seeing none, on the body go to public comment. >> let's go to public comment and move this motion anyone on item 18 all right. that motion passed a motion by mr. star's

and seconded by commissioner >> i. >> opposed? okay the i's have it. unanimously thank you, ma'am great yerba buena. >> next he next item please on a determination of approval the continues 4 percent interest rate. 2016-2017. >> again, this is a standard item we binge before the boards noounl we're recommending the accept this at 4 percent for the fiscal year coming up. >> so moved second. >> there is a motion and a second. public comment? open public comment is closed. >> public comment is closed. okay. the motion made by commissioner driscoll so marked by commissioner >> all in favor, say i. >> i. >> opposed? the i's have it.

thank you, again could you please call the next item. >> >> a review and action of 2015 funding evaluation report. >> we have the folks to sorry present our annual funding evaluation and you've met them before i'll let them start welcome thank you. >> so we've glutton the experience study back in the fall changed assumes and collected the data now to present the relatives the evaluation and these results determined the contribution wrats far the fiscal year ends 2017 the headline that the transcribes go

rate is going down 1.4 percent for the cost sharing judgements we had a calculation on the level the charter and based on where the employer contribution rates the adjustments to the employee be contribution rate after the cost sharing the contribution rates go down to 18.8 percent out of the payroll all the numbers we're presenting today are the result and the projections don't include changes for the supplemental? before any changes for t2013-204 after that we estimate the employer contributions increase

$8 million compared to 2016-2017 and the contribution rates b will go down the department rates. 2015 will 3.9 percent this is a drop based on the market value but that is fairly constant at 86 percent the assumptions increased the liability about $8 million we are phasing the events in and overall we had gains on the smooth assets and gains on the liability and towards payroll all that that came teeth to give us the 1.4 percent in contributions. >> it exhibit shows the status of funds of the evaluation dates and compares took to last year's

reluctance and the unfunded actual liabilities increased into $3.1 billion to a higher amount as the funds ratio is relatively constant because of deferred gains were recognized into the last year's that is the funded ratio and the rush on the actual value was about 10 and a half percent for f 2017 and on the unopportunity liability from 2 plus to $2.5 billion direct your attention to the bottom of the slides the interest costs and on to market-rate that increased if 90 to one and 91 payroll to 7

percent about a quarter of total contribution rates including employee is towards that urban funded interest from the unfundamentalis interest. >> the overall mile-per-hour increased 4 percent and from $2.6 billion to $2.8 billion increase in payroll, however, look at the pie chart even though we're seeing increases the active numbers the retirees

number is 60 percent of the plans liability so you're seeing for liability you're seeing a ratio of actives to inactive uses hsa as people return this is a summary of the contributions and both employer and employee contributions to the top two rates are tricks before adjustments i want to focus on the bottom half of the exhibit the total the first rates a breakdown into 3 components the normal cost rate of benefits the cost of your benefits for the active membership and the administrative expense rates and our unfunded liability rate so our normal coasts in the

administrative cost is 19 percent of payroll which is about 2/3rd's of the total contribution rate and whether i say total for both employers and employees so 2/3rd's of the contributions towards benefit with a third towards the liability. >> this chart shows the gains and losses over the last 10 years the representation of the gold bar and net plan experience is the black line and i want to point out the assets on the market value is on the troyer so you're seeing the losses in 2009 over the period of 2009 to 2013 are phased in and in the last 5 years of the liabilities you're seeing gains and that's mainly

due to the salaries increasing as expected and the old safety co-last being less than expected we've adjusted from you are experience studies that was approved in november this is a reconciliation of the net employer contribution rate showing the impact or what caused the contribution rate to decrease from 22 to 24 percent there are two items that have the biggest impact on the attraction ate those are the assets and the changes in the demographics that were adopted the actual assets are more than expect 1.7 or 8 percent decrease offset slightly by the changes the demographic functions that

increased the contribution rate by 1.2 percent we want to poet that changes in demographic assumption with a 5 year fatten in of the impact change accused by the - the normal cost rates that is the full impact of the change on the normal cost rate but the amortization payments a change of within billion dollars due to the change in the demographic functions that is tasered and being phased in over 5 years and the next item we talk about shows that phasing means and looks like. >> sure commission august 0th so the assumptions are plural include and not include the total outlet and the

supplemental co-last are not in here and the change to the 2013-2014 and this shows the assumption changes how they work compared to the not phasing the assumption changes and i want to reiterate it is just the change we provide the liquidate of the pension fund and not the cost benefits those changes are amp tied over 20 years the blue lame line represents - this is a straight line a 2.74 percent increase over the 20-year period with the if phasing the

contributions rate starts or the pamphlets start at half a percent and increases over the 5 year period it reaches an ultimate rates of 3.2 percent and that levels is 15 years the 3.2 assuming the payroll will increase as we expect it, too. >> any questions or comments. >> we wanted to show you the historical and principles trends this graph shows the liability as a gray bar that is projected and the other historical and the green and blue or the market-rate and actually values so as you can see there was a peak funded level in 2007 we were were one and 25 percent

funded and dropped to 89 percent going forward expecting contributions to bring us back towards 100 percent funded for the promotion. >> and in that year that that was higher we were spreading the allows. >> what was the real market. >> why have that at my fingertips we'll get that. >> that was the market so i'm sorry that's at market-rate fund status not the actual value. >> you don't know what the

actuuaria this is the projectio assumes all are met historically we had a very significant ramp up in contribution rates between 2009 and 2015 this year was the first come, first serve or first year we're going down but the project if all assumptions are met is relatively flat for the next few years and we still have some gains on the assets not recognized and those gains are

offsetting the phasing for the assumption changes it states relatively level longer-term those are approximation being paid off the full amortization. >> we every year we run some economic scenarios for you based on the investment capital market assumptions we used one year shot and 5 year scenarios that are pulled off of the distribution of respect terms positive and negative scenarios so you can take into account there all on the top with the negative version on the bottom and the positive on top the

black bars indicates that under the supplemental cola that requires it 100 percent funded and have access earnings the black bars are where the cola payable many of the scenarios we prolonged a cola to be payable and the negative they're not the positive one year shots 19 there a 20 percent return followed that bumps us over 100 percent funded and it remains above 100 percent funded the negative one year shots minus 12 plus in the current year and that drops down the

status you'll see increases the contribution after coast sharing we are showing the scenarios after we've adjust it the full board here on behalf of the appellant full evaluation we showed the graphs and you can look at them but just with that one year shot drives the rate up to 27 percent if we have positive shots in all the cases it is driving the rate down low. >> we have one year with with 12 percent loss drives it it up an is financial crisis.

>> yeah. a little bit higher the one bad year it was a bad year and be on the trajectory. >> okay. thank you. >> anyone else? >> so you can see similar dimensions the scenarios the moderate scenarios have month gradual adjustments to the contribution rates and obviously the significant scenarios and positive very well enunciated negative very parolee funded can drive high contributions so with that, we brought the models we can look at other scenarios if you want i side hear the investments report

saying the year to date minus 4.7 minus 4.7 year to date; is that right. >> so if we didn't hear in the contribution rates that's 7 and a half percent a year after that so with that, we'll take questions. >> with the amortization in the 4, 7. >> is that is as of a certain date. >> that's saying if you got minus 4 pointed 7 and so we' 7 l minus 4 pointed 7 and so we' 7 l

recognize - you'll see that build up the contribution rate after that. >> all right. so move on. >> yes. okay thank you for your presentation let's go to public comment, public comment is on that item seeing none, public comment is closed this is an action item any last minute discussions before we entertain a motion. >> take the questions before. >> please since this didn't scomplud the supplemental cola what's the rule we'll recognize that and there's a lot of work being done stepson the checks are going out we recollection the july one

evaluation. >> it effects the contribution rates. >> a 5 years amortization that amount. >> we'll be bringing that before the board. >> okay. >> that mean it's our choice or - either it is spread over 5 years. >> we will be bringing some options before the board. >> one year or another recommended time period. >> forgive what is the one year the life cycle for the one year payment of the cola do we know >> for the supplemental cola. >> are you referring it the supplemental cola. >> the one year costs what we paid out i don't understand. >> don't you guys look it over

the. >> the actuary has innovate seen the dictated i saw today and requested the data if the it department we're working on that. >> okay. thank you. >> on that subjects i know that sdpishz but we recognize the whole thing; correct? >> averaging that out i mean the population diminishes for the whole group. >> right so when it comes into the evaluation we'll have people are higher benefits which we will value over their lives and that present value will be recognized the evaluation. >> okay. >> all right. so we've taken public comment on that item see if under those a motion out there >> i move we adopt the report. >> okay

all right. a motion made and seconded >> all in favor, say i. >> i. >> opposed? say nay the the i's have it. unanimously thank you for your presentation and all right. next item please. >> adopt - none moved before the motion we took public comment next item please. >> item 21 action adoption of attorney contribution rate of 24.40 percent for fiscal year 2016-2017. >> thank you thank you that that is the amount that was calculated under the actual report we've just adopted we're remdz you adopt that. >> public comment first public comment? >> public comment okay public

comment is closed. thank you a motion to adopt motion by commissioner paskin-jordan and seconded by commissioner meiberger. >> i didn't see what that number was i'm sorry. >> whoops. >> okay. thank you. >> that's it. >> that's it. >> okay >> all in favor, say i. >> i. >> opposed? the i's have it. unanimously could you please call item 22 discussion the executive director report. >> very quickly 3 items one the results of the retirement board election were made official earlier this month

actually yes. they were sound-proofed on the second of february commissioner driscoll was elected to go another 5 year term we want to update you on the compliance with the protect our benefits order this is on the money was mailed out we mailed out the two retroactive cola payments including even though adjustments for the basic cola in 201417 thousand retirees who are currently receiving benefits a group of 6 hundred for staff to do additional research continuance for benefits that need to be pro rated and get the vast editor of the benefits for it out we got

it out a month early question see the interests on the by the april 30th are pension benefit and on schedule toledo that so what was interesting was we sent anyone that have direct deposit got it on friday well, some of them the banks posted it they've not seen the letter and it was refreshing he told retiree groups to center folks calling them saying you don't i think you paid me, too of we got a lot of calls think friday also i'd like to remind you a deadline it is form seven hundred time again, i provided you the information and as soon as we get the official memo from the

california fair practice and ethics commission you're required to submit online i i believe their ask everyone to file even when you filed electronically with that, i'll be happy to answer any questions you may have. >> any questions for the director. >> commissioners any questions for the director all right. seeing none, go ahead and take public comment please come on up public comment. >> 10 to one retirees the reports on the election the report that is the packet says him or her home people the percentage of people that voted approximately the number of people that voted the percentages so is that report. >> it was posted open that website. >> on the department website.

>> any other members that want to speak to the director's report annex public comment is closed. thank you. >> the matters is the boards hands. >> shall we accept it. >> second now. >> okay. so thank you you're welcome. >> go ahead. >> could you please call the next item. >> >> decision raise your hand order. >> community basgo to the ord >> our second thing of the day general public comment second being good to the order so, yes commissioner meiberger. >> i'll be quick that is never

the case. >> i want to make a few comments about the budgets so the increment your embraced to be on the board but i hope we're openly up for people that might be a changing their minds and those types of kinds of things question have been open and not over critical we discussed go of the members with experience we in any information i mean, i'm on the list of everyone that has information on hedge funds let me call one and be brief hedge funds get krushdz that is usc today, the hedge funds are crushed again, this are and bill at&t kings down and others down

marry this is all in one month criminally and tree and partners down 7 percent as of january and ohio drive management down i think one of the issues people change their minds hedge funds are not what they promised to deliver they've not dmrifrdz and an article in the la times about hedge funds saying there not a higher co-relation i think we need to be aware of the information that is new information when we voted since for hedge funds i'll be embarrassed from the board didn't take the information take into consideration and to say oh, we hired someone and

question don't want to fire them rights away that is disingenuous do we regard that hire then higher than our fiduciary responsibility that has to the shrunk individuals or any kind of harm we think in terms of a new person being hiring anyway, i suggest we be more open minds and not be critical of them especially they're in the aware of what to look at it is important news on an issue and advertised better to look at hedge fund if they don't provide what they say i think we should be open to ideas and not to critical that's it and encourage

people to share their views. >> as a reminder this is a time on the calendars members are called go to the order the retirement board members ask an issue to be calendar not a time a free-for-all to put out what you've been holding ♪ the meeting anyone that wanted anything discussed that can be calendar i want to repeat an irrational as a educational item we'll need to decide it is education on the many strategies that are in the strategy area he believe that the keeping you informed didn't plan on us pursuing all of that but a wide range the strategy the strategy

areas there say you, say 5 categories we don't have to pass them all that irrational is customization and it helps but those are words we know some of them but not actually know how a manager because of the waiting the waiting the dollars will vary across this that's why i'm asking the commissioner lee plan for educational section think that coupled with the decision we have yet to make i think that is scheduled for june which model will it be funds or direct or a combination that's the decision the board should make and we need education >> you heard that. >> commissioner driscoll a

strategic about education. >> this is a comment. >> ms. wynns as a follow-up to that when people quote all things are bad or negative or from newspapers items like that i think it is very good in this session the plastic sfwraej blah their hedge funds or thing going up like managed futures and than that and things gone down to throw everything in the bucket i'm looking forward to go through the strengthen in the area of hedge funds and which ones have done well and looking forward to that. >> thank you. >> mr. ginsburg and have a high e hybrid in the 3 months

ago we had an item on the calendar on the mayor's office housing program and for the review looking at that situation i want to recommend to executive director and do board that we retain independent council to look at whether or not in the solution i think we advise them or something i personally have expertise and i don't know if so something we can pursue but like to see that reigned in the recommendation. >> how do you say that. >> to evaluate whether or not it is befshl to the impact the

risk to the retirement funds. >> i think. >> you are investment officer can help by experts. >> right. >> okay. i think we may have to work out the language specifically for staff so there is clarity so we're focused. >> right. >> it is think independent evaluation innovate an internal. >> when you say independent you're not talking about legal advice and depict expert that wants to be - >> investment yeah investment. >> not internal. >> okay. >> mroeblg anything. >> i want to clarify he meaning legal. >> that's the order.

>> nobody. >> all right. let's take public comment. >> can't resist of last shot rp sf it is over a year since issue of buying the building for retirement system has been brought up by the members a look at and jean was there when we brought up the issue i'd like to see that calendar and i think you have other item that concludes my report commissioner meiberger and mr. star's with regards to reader requests and information and requests and lastly take the opportunity to congratulate commissioner driscoll on re-election and thank you for spending our time and energy on those complicated

issue and jay for his time and presentation port commission an annual tradition for that when the other player was here and we're really happy at our agency to have him come and address and commissioner meiberger and others have made presentations i invite you to come and meet the membership we're interested to hear from you but especially thank you jay he was well received but everyone got a valentine's day presents and the other thing we mentioned valentine's day and it's healthy month which means that chocolate that healthy so have at it it is very healthy. >> any other members that want to speak. >> herbert wiener chocolate

advocate well, first of all, i wish to thank jay hewitt for the presentation it is last with humor. (clapping.) >> we needed a clap for him. >> i'd like to to have an evaluation of the hedge funds well also the other entities to do well and how they compare what the hedge funds that is important in my opinion there is entities i have found in pay pal last week he feel good about that to give an example i want to thorough evaluation and it should be balanced and, yes change courses in mid-stream let's do that with the cars going off the cliff it's time to

activity gears it is my thought >> anyone else? >> i'll see you ♪ the gym >> closed session. >> 24 discussion item retirement board reports any reports don't look like it thank you very much public comment on this. >> all right. public comment is open okay public comment is closed. >> thank you very much thank you, everyone for joining us we'll get ready to go into closed session we'll take public comment on the closed session anyone want to talk about a or anyone companion on the closed session. >> thank you, everyone okay public comment is closed.

we're not officially into closed session. >> motion by commissioner paskin-jordan and seconded by mr. >> all in favor, say i. >> i. >> opposed? unanimous please go ahead >> we need be back in the records with your adjourned mr. clerk any more business before this body no, no we're good morning welcome to

francisco board of supervisors budget and finance meeting for wednesday february 3, 2016. i'm mark farrell and chair thg committee and joined by sfr visor katy chang and norman yee. thank you to [inaudible] for covering the meeting as well as linda wong. do we have announcement? >> please silence all cell

phone squz electronic devices. [inaudible] items acted apauchb today will appear on february 9 board of supervisors genda unless otherwise stated >> thank you madam clerk. can you call item 1 and 2 together? >> resolution [inaudible] the public interest and [inaudible] demand the construction, acquisition improvement seismic strengthening and betterment of critical [inaudible] homeless shelter and service facility and related cost necessary or [inaudible] find thg estimates cot of $350,000,000 is too great to paid out of the annual revenue [inaudible] item 2, ordinance called and provider for special election to be held in the city june 7, 2016 submitting to voters to incur

bonded debt of the city. >> colleagues we have these items we continued from last week here at committee and brian strong was director of capital planling planning is here to provide a presentation. >> thank you very much. brian strong director of capital planning. good morning. happy to be back before you. let me just get the presentation. that may be the best that i can do on this right here. there we go. so,

today we are bringing back before you health and safety bond. last week it was introduced in december and came back, came to you last week. we needed to make some amendments to it. we are actually going to submit it to you today and then we are making additional amendments that are caughtifying the agreements we made before and already explicit in the budget analyst report that you had already seen. so, the bond is a $350,000,000 bond and make vital city facility to protect public helt and safety. we adjusted the bond to reflect 3 really primary

project areas and those are reflected in the amendment to the-in the amendment you received today. so, the first area is public health, public helths safety and that is what we talked about consistently for a number of years. which is zuckerburg general hospital that is referred to as building 5. it is the existing hospital and 1970's era white concreate building on the campus that needs to be seismically improved. we will talk about dph helths centers. southeast is a $30 million bond and also wanting to address other dph centers across the city. both the hospital and health center,

barb raw garcia will speak to that. the next item is ambulance deployment. we amended the measure to also add $14,000,000 for neighborhood fire are ion improvements. as host aware there is a strong need for improvements to fire stations across the city. that brings the amount for fire station and fire facilities up to $58,000,000 and chief hayes white and deputy chief ken bim bardy are here and will speak to that portion the bond. finally there is a aadditional program which is homeless suvs site which will address monderization and other

full sillties to improve homeless service and sam dodge from the mayors office will speak on that bond. with that i'll fass pass it on to barbara garcia. >> good morning supervisors. we are excited to be here today about this bond frmpt the first case the hospital campus this makes critical earthquake safety improvements and focuses on the ont psychiatric emergency department which will stay in the original building so this provides safety for that service. it will look at impruchbment through ambulitary care program. many the ambulatory care programerize throughout the

campus so this will bring us together. we also have a over 100 year partnership with uc and this will help them with the seismic standards the uc regions to allow them to fully operate with us and move them out [inaudible] the hospital schedule and budget is $222,000,000 budget and as you can see the budget goes from april 2017 to 2019. this one stabilized the building will serve as a centralized outpatient program for 600 thousand visits per year and will house urgent care in the psychiatric emergency service. we have many health centers throughout the community and for the last 10 years i worked on how to improve and expand our help center in the bayview. today we have

a renovation going on there to insure that it is reflective of the new way of providing care and so we have a $2,000,000 improvement and are looking how to expand southeast to have a integrated model. [inaudible] this is a $30,000,000 project that will provide for a model of care of integrating mental health, substance abuse service and as well as primary care services. we will also look at the networks of the health clenics, which had all most 300 thousand prime care visits and specialty care so southeast will have a $30,000,000 expansion and $20,000,000 for projects going forward providing seismic safety and also providing models of care for integrated

care. southeast health center $30,000,000 with construction starting 2016 and through 2019 and the others going 2016 through 2020. i'll hand it ouf to the chief of fire. >> good morning. thank you to the director of public health barbara garcia we are happy to bridge this foryard and talk about the need for the bond. there will be $44,000,000 is geped. we are housed at 14 feent evans, it afstismerary solution that begin in 200 seven and inadequate and what we will get from the new facility is much more efficiency. we

believe we should see decrease in the response time. this facility would meet essential facility seismically safe standards and at this opinion we have a shared facility with the logistics unit and the inadequate part comes in we are only able to restock one ambulances at a time and the new one we can stalk 3. we move from 24 hour basedoombulance to a deployed peak period staff model which proved very well for us so we believe it is seismically safe and will insure the dispatch facility remains operational after earthquake and on a day to day basis provides a lot more efficiency. the next slide that i wanted to point to is the

$14,000,000 that will be added to address needed up hp grades and modernization to our ages facilities. this will build on the good work voter squz legislative body of government passed in 2010 and 14 and we will continue to modify and upgrade and make seismically safe our facilities. we have nearly 50 facilities, 44 fire stations and 6 support facilities so we look forward to this bond placed before the voters and legislative body is very supportive of public safety and in our abilities to be able to save lives and property in the city. at this point i would like to turn it over to sam dodge who is the directors of the mayors office. >> thank you. good mornic supervisors thank you for having us. the

homeless service sites priorities include improving and expanding services delivered here in san francisco to the homeless population and making sure we vasafe and healthy environment for those service to be delivered and improving the efficiency and effectiveness of the street average programs. so, we really have a unique situation where we own some of our largest capacity, we own our large m [inaudible] south facility and own the 1001 shelter facility and need to address health and safety deficiencies in our city owned sites and to make sure that these sites are good for families and for single adults we are serving. we also really need to have a more proactive program when it

comes to serving the homeless and that means have a good home for the outreach team reaching out to the street and bringing the services beyond the wall the shelter jz making the shelters accessible to people that are outside of the system of care. we need to expand that innovative model. our cuncht shelter system works for many people, but there is many people that it isn't working for and we have to opportunity with capital investments to make sure we build a system that can help end homelessness fl vast amajority of people if not everyone. now we are going through a process of department formation and bringing all our different homeless services together into one department and part of this work is going be working on a capital plan that followed these priortiz i outlined. our homeless service center sites programs will include

these listed and will work on the construction and planning schedules as listed. with that, any more from me i look forward to your questions and i have a few people here that are-that want to speak to some of this and hopefully they can speak soon so we can get them out of the door. we are trying to open up a emergency shelter today and have to do work on that. >> thank you mr. dodge. colleagues any questions? mr. rose can we go to your report for items 1 and 2? >> mr. chairman and members of committee of page 8 of the report we showed the break down cost