at maclaren park. we hope grants and money will be available to continue to improve this park to make it shine. it's a really hidden jewel. a lot of people don't know it's here.

>> supervisor fewer: this is may 18, 2018 regular meeting of the san francisco local agency formation. i am sandra lee fewer chairman of the commission. i am joined by commissioner cynthia pollock on my left and hillary ronen on my left. i am also joined by alisa romero the clerk. my apologies for starting late. i was in another committee meeting. madam clerk, do you have any announcements? [agenda item read] >> supervisor fewer: thank you. madam clerk, can you please call item number two. [agenda item read] >> supervisor fewer: okay. do any of the commissioners have any changes to the minutes of either the april 20 or the may 2 meetings?

seeing no changes, i will open this up for public comment. are there any members of the public who wish to comment on item number two? seeing none, public comment is now closed. is there a motion to approve the minutes? yes. moved by commissioner ronen, seconded by commissioner pollock. without objection, these minutes are approved. [ gavel ]. >> supervisor fewer: madam clerk, can you please call item number three. [agenda item read] >> supervisor fewer: thank you very much. i believe we have a presentation from mike himes from the san francisco public utilities commiss >> good afternoon, commissioners. mike himes, director of cleanpowersf for the sfpuc. pleasure to be here with you this friday afternoon. i know that you are pressed for time. i do have an update for you. i'll keep my remarks fairly brief. i did distribute a few slides.

i can run through them. fortunatel fortunately, there's only a few of thing. just before i do that, i want to start by letting you know as we sort of do with all of these updates, we continue to serve our customers successfully in the city. we've got about 81,000 active accounts. th theumber that i reported previously. opt out rate has stayed the same. it's about 3.2% cumulative since we launched. our opt up rate to supergreen is 4.3%. went up a little bit since we last met, and i think as we've been reporting at previous meetings, we're in the process of our next phase of enrollment, and we'll be adding inciprely commercial accounts in july, but we'll be in total enrolling around 27,000 new

accounts starting july, and we've actually commenced notification. so last week, the first batch of our first notice, which is required under state law was issued. we'll be sending the first round of notices throughout the month, and then, notices will continue to flow to customers, four in total, over the next four-month period. so that -- that's really kind of the official kick or tstart the notification process. and that's enrollment. i wanted to also mention on the gulary side, just one side. there's a lot going on over there, but one of the more important things we deal with is the pcia, which is the exit fee. and i wanted to provide an update there. concluded last week, and so the next step in that case with the

california public utilities commission will be case briefs which are submitted in the month of june and then we're expecting a proposed decision to come out of the california puc as early as the month of august. that's a pretty aggressive schedule, so it may get delayed a little bit, but that is what has been reported to us from the commission. so let me jump over to the slides here. as you know, for some time, we've been doing procurement to acquire power supply to serve our citywide enrollment. this -- this slide here shows you what our power supply contracting looked like against our projected demand before we started this process, so that black line in the chart represents our forecasted annual sales for cleanpowersf.

and the bars underneath that, those sort of gray bars representing the existing contracts we had. so you can see there's the -- if we were fully contracted, the bars would be at the same time spot theline,right? so i just wanted to show you that prior to starting our contracting process, we had a lot of contracting to do. that's really the message of this slide. and this slide, the additional blue bars indicate the power supply that we have acqui over the past several months to serve the customers we're enrolling in the program. so you can see, for 2018, we're almost 100% contracted for our forecasted -- our expected sales. in 2019, we're 90% contracted. d you can see those percentages track the -- the portion of our forecasted

demand. i just wanted to show you this, that that's the progress we've made in terms of acquiring the energy we need to reliably serve the customers we're going to be enrolling? i also wanted to show you thic content for 2018, so this current year. and the way the energy supply content is tracked in the electric sector in california, it's done on a calendar year basis. so we actually just reported out our 2017 power content as delivered to customers, and i'm happy to announce that for 2017, the program was 43% california certified renewable energy and actually 100% greenhouse gas free for our green product, so that's our default product. i do have to attribute that partly to the fact that it was a very good hydro year, so the

hetch hetchy system produced a lot of additional hydropower that we could deliver to our clean power ser cleanpowersf customers. it was a wet year. that hydro condition varies over time. so this was our expectation, especially given this year was about normal, a little bit below normal. but that's an 81% ghg free portfolio to our green product, and of course 100% to our supergreen. so any ways, this is what our portfolio, the renewable energy or the energy content will look like as projected now for the end of 2018, and we're getting close to that 50% mark that we're aiming for. and this is for reference, so what this chart shows is our

targets over the next 12 years. so you can see with the green segment of the bars, the renewable energy content increasing each year. we have a target that was set by mayor ed lee and adopted by our commission to meet a 50% renewable energy target by 2020, and you can see that reflected in this chart. and then, the blue represents -- you know, we call it additional greenhouse gas free. that could be renewable energy or it could also be hydroelectric power. but the overall goal here is to squeeze out any conventional power over that timeline so that by 2030, the city -- the electric supply served to the city by cleanpowersf is 100% greenhouse gas free. this is to give you a context of where we're going in the

future. and those are the slides i prepared. i do want to add a little bit more detail to the contracts, and then, i'll wrap couple of more things that are exciting for me to announce, and that is the general manager of the puc under authority granted by the board and the commission entered into two long-term contracts, a 22 year purchase agreement to take energy from a 100 megawatt -- to be constructed 100 megawatt solar facility that will be built in lancaster california to meet our customer demand. that plant is expected to come on-line in the middle of 2019. and in addition to that, a 15-year power purchase agreement with a developer to construct 47 megawatts of wind

tin tehachapi region of california, which is mojave. and what they're doing it taki down wind turbines that were built in the 1980's and replacing them with larger more efficient wind turbines, and that contract is expected to start delivering at the end of 2020. so both of those contracts will create new jobs in california in the clean energy sector. we are pulling together these statistics, theuc will be making that announc sot, but i wanted to share that news. we're excited to say we're going to get some steel in the ground as a result of this commitment that the city's made. and then one other announcement with regard to contract, the puc entered into a 4.5 year

contract to purchase energy from the geisers. we're happy to also sort of enhance the local content of our power supply as we embark on the citywide enrollment effort. >> supervisor fewer: thank you. >> yeah, and i'll stop there, but i'm happy to answer any questions. >> supervisor fewer: thank you. any questions from colleagues? no? okay. seeing none, let's open this up for public comment. are there any members of the public who would like to comment on item number three? mr. brooks. >> just one minute. >> supervisor fewer: you have two minutes. >> okay. eric brooks, san francisco green party, our pa san francisco, and californians for enerice.ho so the -- this looks pretty good. it's a -- i think it's a nice, short presentation. one thing that, you know, on

slide five, the projections of us getting to all renewable and greenhouse free looks really good, but now, i want to start pushing the envelopgain as a climate crisis activist that -- that that actually is good, but it's not where we're going to need to be by 2030 if you look at transportation. so by 2035, not only do we need 100% of our building electricity to be renewable and greenhouse gas free, but we also need transportation to be the same. and that means that we're going to have to expand what the sfpuc's doing as far as public powers and expand cleanpowersf so that it's producing enough -- these are producing enough electricity to power the entire transportation system in san francisco and replace all the buses that currently run on biodiesel, which is bogus and actually

worse for the climate crisis. we need to changeed-o be ready for that to happen in 2035. so i just want to flag that for lafco and for the sfpuc to start thinking about that future because we need to get this, and those numbers that -- that are on this look good, but they won't quite get us to that point. and then, anothng ier thiant to point out, if i can get the overhead -- yea so mike showed this graph, and i think it shows something really important, and that is that we're able to have competitive prices by just doing short-term contracts for renewables. pg&e and others claim they have to have these 20 and 30 year time frames, that they can then charge us -- [inaudible]

>> supervisor fewer: thank you, mr. brooks. are there any other pubic s s for this item? seeing none, public comment is know closed. [ gavel ]. >> supervisor fewer: there's no action to take on this matter. madam clerk, can you please call item number four. gend[aitem read] >> supervisor fewer: thank you very much. mr. gobel, i believe you have a presentation or us. as you take up, i'd like to take a moment to anowledge our new financial officer, mr. brian gobel. you've hit the ground running and i'd like to tell you we're looking forward to working together in this body. miss calvillo provided tremendous support to this commission in the last ten months since losing our staff position, and i'm so grateful for her work. with that, mr. gobel, i'll turn it over to you. >> thank you, madam chair and

commissioners. i am here to present your final lafco budget f fiscal 2018-'19. before i get into the final budget, though, i just want to review your expenditure status. a lot of these numbers with similar to the numbers presented to you at the last two meetings by former interim administrative officer angela calvillo, but they have been updated for you today to reflect the new expenditures since your last meeting. so i'll show you the first slide here is lafco's expenditures as of may 15, 2018, the available balance is just under $220,000. as you know, this mou between lafco and the puc has been extended through june of 2019. here are your expenditures to

date -- i'm sorry. this next slide is the lafco general fund balance. this slide shows the general fund appropriation expenditures and year-end balance for lafco from 2007 onward, and we have set aside a reserve of about $45,000 or 15% of the annual budget, and again, these expenditures and balance are updated as of may 15, 2018. the current available balance is around $82,000. here is your ex-pentures to date. on this side, lafco spent about $130,000 to date this year.

that includes the separation payout for the executive officer -- executive director salary and benefits. legal services cost approximately $43,000. service costs by other department such as sfgovtv, and others around 13,000. th and then, on the cca work order side, the cost charge as of may 15, 2018, is about $2300 for the executive director's salary and benefits that occurred prior to his separation. a refund from nce for an incomplete portion of the study, and then -- mce for an incomplete portion of the study, and then $450 for the executive officer cca work. so here is your proposed budget

for 2018-19, and i've included a rundown of each line item in your memo. none of these numbers have really changed a lot since the april 20 budget presentation. this amount includes the estimate for executive officer services, and i would like to recommd tody that y heappr final budget for fiscal 2018-19 in the amount of $273,000. that will be used about $24,000 that we can return to the city and county of san francisco. of course the commission reserves the right to retain the full amount of $191,000 in fiscal year 2020. one thing i want to note is there is a chance to change the amounts by the committee for the hiring of a consultant. i want to thank former

administrative officer angela calvillo, and if you have any questions, i'm happy to answer them. >> supervisor fewer: commissioner ronen? >> supervisor ronen: i'm just wondering, given the sort of focused -- and i'm looking forward to hearing the presentation today about our work around creation of a municipal bank. likeliod that we're going to need some specific studies, given how complicated this whole endeavor will be. i'm wondering if we just want to have a line item in our budget for, you know, anticipating that we're going to do a special study rather than returning money to the general fund. and i don't know what the bureaucracy looks like to get it back, but i just think it's going to be very likely that we're going to need that money for a special study. so i'm just curious what my colleagues think and what you

think and what counsel thinks about my suggestion. >> supervisor fewer: sure. commissioner pollock? >> commissioner pollock: just. i appreciate this conversation happening here. i just want to thank mr. gobel for hitting the ground running in two short weeks, pring this -- the budget and information for us, because this is good -- a good discussion with today being the deadline to pass our budget, i do -- i do think that we should have something in there that -- that says, like in past years, that we would reserve the right for the full amount, and that we anticipate returning the money for -- to equal the 273? just sort of looking at the proposed fisc year budget, i -- i don't see -- yeah, what you're talking about in terms of the money for -- to begin an

rfp process for a special study. so am i overlooking that? part of this was - you know, trying to determine specifically what studies we're going to take on and what money we would need, but i'm certainly happy to look at a line item that -- that talks that? we h ve an estimated remaining balance of 51,000, which we can carry over, but i'm definitely open to a line item because it does look like we're going to proceed with work on the studies. >> supervisor fewer: how much were you suggesting to give back to the city? >> at this point for the next fiscal year, we had 24,000 that we could give back. >> commissioner pollock: 24,342. >> supervisor fewer: 24 -- i concur with supervisor ronen and supervisor pollock -- i mean, commissioners, that we may want to draw on that money.

i actually don't feel an obligation to return any of that money to the general fund. i think we should keep it, considering we didn't last year. we gave some money back, but we didn't have -- we hadn't gone through an exploratory process that we would li to work on. we have identified items that we would like to work on, and i think you may need assistance in hiring an consultant in the expertise. we know from past experience that i know we have carried over before -- i mean, we have given money back to the general fund. but in this case since we are just launching, you're brand-new, i would actually suggest to this board that we don't return any money to the general fund. that is actually money that is due us and also it would give usually way to hire an outside consultant to assist us in some of the topics that we are really interested in. >> that sounds great.

>> commissioner pollock: i hadn't thought about it, but i just want to say that $24,000 in the context of the city and county's budget is miniscule, so i don't think it's going to throw a big hole in their budget process? >> supervisor fewer: no. >> commissioner pollock: so i would say -- and i could ask counsel what you think in terms of, like, the way we word it, should we consider to -- consider an opportunity to return any, would it need to be included in the language? >> i'm not sure this is working. good afternoon, commissioners. i think that you have identified that you will be doing studies, but you haven't gotten to the place of identifying which studies and

particular line items, that it ul b prudent to go ahead and hold onto that money, include it in your budget. certainly, if the money doesn't get spent, it can carry forward to the following year and evllye returned to the general fund. ou decde to go the other direction, however, i would encourage you to do it in the same way that you've done it in the past, which is to include language about reserving the right to come back at that money if it is returned. but since you have identified a particular need to do studies, although haven't identified which studies and the exact amounts, it would make some sense to go ahead and hold onto that money, rather than returning it to the yep fugene fund and asking for it back. >> commissioner pollock: and would we be able to insert a line item reserving the right -- not reserving the right. but insert a line item that's going to say future studies or work to be done on identified

areas in terms of our focus on lafco without -- i guess, what we would approve today would be an update to the slide, correct? >> so what i would suggest is that you request that your executive officer work with the clerk of the board to come up with the appropriate way to indicate that on your budget and to extend that. there is a challenge in doing it that way, to go ahead and return the money with the reservation that we spoke about, but i believe that there is a way to do it, and include a line item in there identifying it for special studies and any necessary consultants without putting any greater specificity for just that. >> commissioner pollock: because today is the last day to approve the budget. >> correct. >> commissioner pollock: okay. super. >> supervisor fewer: okay. mr. gobel, do you have any questions of us? >> so would the line item that

you're requesting be for $24,000 then? >> supervisor fewer: yes, the full amount. >> the full amount. >> supervisor fewer: we won't be returning. >> commissioner pollock: okay. >> supervisor fewer: okay. so let's open this up for public comment. mr. brooks? >> yes, eric brooks again. good afternoon commissioners, speaking for -- i think i'll just speak for san francisco green party and our city san francisco. back in the day when all we were doing wasf, i can did make sense to give that money back to the city. commission fewer, you as a supervisor have been in on a hearing on public broad band which raises a lot of question about whether the direction we're going is the right direction, and we may need a study that probably would cost around $20,000 on public broad band in the near future to make

sure we do it right and it's a true public internet system, not an internet system controlled by a corporation. and likewise, i'll highlight you again, commissioner fewer. you were at a hearing about bayview-hunters point and treasure island and the tock objectionic waste out there and how that impacts our facilities like transit and plumbing and electricity, etcetera. we may need to do a study on treasure island because that's -- treasure island and bayview-hunters point because that is such a politically -- how do i say it? politically manipulated issue in the rest of city hall, that we may need to step in and say wait a minute, here's when reality about this radio activity and toxic waste situation. so there may be issues that we

may need the lafco to weigh in on, so i just want to give a big thumbs up on what you're doing, which is keep your budget and probably what you're doing in the feature. thanks very much. >> supervisor fewer: thank you. any other public comment? seeing none, public comment is closed. colleagues, is there a motion to approve the budget as proposed by mr. gobel and then as amended by us. >> supervisor ronen: so moved. >> supervisor fewer: okay. so that was moved by commissioner ronen and seconded by commissioner pollock. >> commissioner pollock: i would offer a friendly amendment that we are approving the budget for 297,342. >> supervisor fewer: very good. can we take those amendments with objection? take them. [ gavel ]. >> supervisor fewer: and then motion to app -- [inaudible] >> supervisor fewer: oh, excuse me. is that right? >> supervisor ronen: we had make a motion to take that balance and put as a line item for special studies or

special expert as for input needed. >> commissioner pollock: i see. so that was not the motion for the full budget? >> supervisor fewer: it was a motion to approve the full budget with our amendment, which is to add in a line item for the -- and notn tur full amount. >> commissioner pollock: okay. great. we're on the same page. i think it was just putting the amount. >> cle yes. just to restate the motion for you guys, to approve the full budget of 297,342 that it receives from the city of san francisco and approve a line studies in the amount of cial

247,392. >> supervisor fewer: do we need to approve that motion? >> clerk: yes. so we have commissioner ronen moving and commissioner pollock seconded. >> supervisor fewer: great. and we can take that without objection? >> clerk: yes. >> supervisor fewer: good. thank you very much. so madam clerk, will you please call item number five? [agenda item read] >> supervisor fewer: thank you very much. we have a presentarom molly cohen of the san francisco treasurer and tax collector's office regarding the municipal bank funding and municipal bank feasibility task force. thank you, miss cohen for offering to present today. i think this commission is very interested in how to support and supplement the work the task force on this issue.

>> absolutely. oh, thank you so much. absolutely happy to be here. really excited to present in front of all the commissioners today. thanks inform brian gobel, executive director for having us here and find some ways that we can find some ways to collaborate with lafco moving forward. so a little bit about the municipal bank feasibility tark force. we're here today, i'm here today in no small part because of the work of members of this commission. the idea of a municipal bank is something that's been progressing in circles. a little bit of background on both the municipal bank and the task force. so in general, a municipal bank is a bank that's owned by a municipal entity or public entity. could also be a state or a federal government. we have put together a task force to look at the

feasibility of san francisco starting a municipal bampg. it -- bank. it's going to be about a six month process. we brought people together in february . it's going to runill august. we have people who are active in racial and socl justice, in banking. we have folks who have operated banks in the local interest, which are community friendly credit unions and banks. we have some people who know about bank formation and we have a lot of govent officials who just sort of know a lot about how the city works. we meet once a month, and in between meetings, members of the treasurer's office including me sort of, you know, develop plans and research and sort of go in front of the task force with some different proposals? and also, we're constantly meeting with members of the public and advocates and subject matter experts in other jurisdictions. and i should just also add in a

thank you to the board of supervisors for funding this project because it is funding my salaries and also some salaries for consultants and professional services, that buzz word again, soefly do not want to forget to mention that. so just a little bit about ci banking. ng t i will frequently tell folks who are interested in municipal banking is that it's really a spec rum rather than a binary. it's not an on-off switch. there are many different ways that you can organize a municipal bank, and there are lots of different products and ices tt you can offer? and this little slide highlights that. what this is showing is that depending on what you want to accomplish, there are lots of different ways you can accomplish that, from something very minimal like just a city program or revolving loan fund all the way to a full scale retail bank. and so obviously because this is a municipal bank feasibility task force, we're going to be looking at five and ix is,

which is a wholesale bank or retail bank. so a little bit more about how we're conceding of the task force. in general it's called the municipal bank feasibility task force, and i have feasibility with a quark here because we realon tt's the right question to ask. a lot of jurisdictions -- including jurisdictions we're very friendly with and talk with, they' into a task force, they've done a feasibility, and they said pe is to expensive. it's too compx. there's these ll issues. like, can't do it. i don't think and we don't think that that's the right question. we know a bank is feasible, we know it's gog to be expensive, we know it's going to be complicated, we know there are state law questions, but rather, the question then becomes, is this a good policy. what we hopeuceodutf o the task force is a robust and thorough analysis, a real cost-benefit analysis so that board of supervisors and ultimately the members of the public, they can decide whether

they think this is good poli and part of how we determine that is based on what we're trying to get out of it, and so that's why we have the solution, which is do we want a municipal bank for affordable housing, do we want it for cannabis, do we want it just to divest from wall street. deg oin what we really want to get out of the bank, that's going to affect sort of how our cost-benefit analysis gets structured, and ultimately whether the board of supervisors wants to allocate finite city resources to the bank. so about the solutions that we're trying to achieve, one thing that i've worked really closely with the task force on has been really rewarding but also been really difficult is trying to get folks to prioritize what folks want to get out of a municipal bank. you can talk to treasure cisneros who says everybody else wants a different things.

banks allow us to do tons of different things, but ultimately particularly when we're thinking about motion denied ellig, we ng -- modelli need to think about this topic. thank you supervisor fewer for asking for the budget and legislative analyst's report. we took everything that members of tubli mentioned and we brought that in front of the task force and sort of had the task force pick which things they thought were most important. when we sort of picked five topics. then we made them vote again. we're really mean. we wanted people to narrow in. as you can see, affordable housing was the most popular, infructure, under banked individuals, and cannabis. as we'll discuss moving forward, it's honestly not enough just to have those broad categories? we're going to need to keep drilling down? but that is the work that we're very excited to do. so next thing, and just always

want to be honest with folks, banks are complicated. they're highly regulated, and there's a fair amount of state law that we might need to change? so i don't want to belabor this point, but just each one of these boxes are going that we're going to need to think about and work on, and that's something i think actually board of supervisors could, you know, be a great ally with us moving forward. for example, we'll need to get a bank charter tha works for us. right now, any money that te treasurer's office deposits in a bank has to be fully collateralized to about 125 to 150% of the value? so that's obviously something we haddy needs to think we'd need to think about. a whole host of things, and i'm happy to get into them. as sort of a legal nerd, it's pretty fun, but also pretty

difficult, s just sort of want to make that point. and then really where we're going to be spending sort of the bulk of our time and the meat of our work both as a task force and as sort of staff, and we've actually brought on an consultant who's an expert in bank formation and operation with is what i call these big questions. so one of the big questions is capitalization. so a bank needs to have some working capital. that's sort of typically 10% of its deposits. the question is how much, where is it going to come from, the general fund, philanthropy, and just to get a sense of scope and ill scale, other banks that have been funded in the past in the bay area have had between 10 and $30 million of capital, so that's a big perhaps to anchor. then the next question is deposits, what is our deposit base going to be from in government, there's some legal concerns with government. as i sort of mentioned on the last slide, businesses and

individuals would be a great source of deposits, but you know add some additional costs. there's issues of insurance. and then, of course issues of revenue, which that is sort of really what do you want your bank to do, how are you going to make money? i think there's a lot of stuff thatnt t we wado that will be in the community development vain? so we might be doing it at less of a profit, but ultimately, the bank's got to make some money, got to be on a path of profitability? and last, is questions of governance, so how do we want the entity to be structured? should it be an l.l.c. or a nonprofit, what's the size and composition of the board? how are the board members appointed? and this is something that sort of the advocacy like friends of public banking of oakland have done a lot of thinking with this. so we want to make sure we're working with the advocacy community to make sure there's adequate community input into sort of whatever structure gets

created. and then of course tax status, another big question that we've had some folks on o task force who are lawyers looking into. just to give you a sense of the analytical plan, we are midway of our task force meetings. we just finished meeting three of six. unfortunately that does not mean we're midway through the work. we're just getting started, but we're now getting into the meat of things, which is really fun? but we'll be working in collaboration with our cotant d the task force to look at pure banks, so look at sort of loan output, balance sheets, income states. then from peer banks and subject matter experts, if we want people want to do loans, is it accessory dwelling units or really try to figure out where municipal bank could have added value? and then, once we have gaps, ri products andervi ss look like, who are they aimed at, what's the target market, what

sort of rates will we need to offer to be both competitive but also to, you know, achieve the goals that we want. then, we'll be modelling the pro formas, literally looking at balance sheets, you know, financial projections, profits, i.a.r.'s, etcetera. and then finally what we want to present is board of supervisors and members of the public is cost-benefit, which is if you want to achieve 100 small business loans, here is what it's going to cost you, and here's the amount of deposits you'll need, capitalization you'll need, etcetera. so really excited to -- so as i ioe'reinishi we're midway through the task force. we'll be finishing up in august with a report to come out shortly there after. happy to work on the task force as well as with lafco, and happy to take any questions you may have.

>> supervisor fewer: thank you. any questions, colleagues? >> commissioner pollock: thank you so much, miss cohen. this is really, i think interesting, and we are the perfect nerdy audience for you. so i know that you're still getting to the final report at the six meetings and how you will, i guess, report out to the board of supervisors? will you report out in the final report city departments and policies that could further the work with the -- i guess the findings that you have and the, you know, here's what you should do if you want x, y, z? >> yeah, absolutely. and i think what we view this report as is do you want to -- >> commissioner pollock: sure -- yeah, no, please. >> commissioners, amanda freed from the office of the treasurer. we have been consulting very closely with other departments.

we have another person on the controller's office, we have the director of the mayor's office of housing and community development sitting on the task force, and then we've also been working very closely with oewd and other bodies to understand what is the status quo, so what is the city doing in the areas that the task force wants to look at for a municipal bank so that when we look at a cost benefit analysis we can take into account what the city is already funding, and then, those funds would be shifted into the zephyr. >> commissioner pollock: so in terms of that, you'll get their weigh in, but you'll also have -- these are the next steps going forward? >> i think our aim is to give to the board some framework to move forward. to say here is, you know, a cost-benefit analysis of how to do this and perhaps two options

or three options, and then hear feedback, and it'll be a collaborative effort. i don't think it'll reside only in the treasurer's office because i think once it gets to that point it becomes a lot of policy matter, and of course we'd love to stay involved and continue to help move it forward with some of our expertise, but we know that we will not be the only -- the only folks in the room. >> commissioner pollock: sure. i definitely know there are many folks that should be in the room, and i appreciate you sort of herding all of the information together and giving people a framework? i think the only thing that i am concerned about is that, you know, that we get a really amazing report and things just go stagnant. and so i -- that's the really big concern that i have. and i don't know if it needs to be this body or the board of supervisors or someone at the state level needs to take the ball and run. but i just wonder if there's a road map that you'll include that just sort of says, if you want to begin this, someone needs to take it -- take it further. >> yeah, commissioner, i think

we're in full agreement. we've seen these reports as molly said, from a number of other yourself jurisdictions come out and really be deflating in a -- jurisdictions come out and really be deflating. ultimately, it's not up to the treasurer, right? it will be a much bigger policy matter, but we want to make sure that there is a pathway to move forward. >> commissioner pollock: that's awesome. thank you so much. >> supervisor fewer: thank you very much. commissioner ronen? >> supervisor ronen: sure. thank you. one, with the sort of five areas of sort of interest, sort of that are prompting this sire to create a municipal bank, i don't know how to even phrase this question. it -- given the complexity, if we started with, you know, creating a bank around one goal around, is it then easily possible to add additional

goals and -- and purposes as we move forward? >> yeah, absolutely, and i think that's something that we talk about a lot is how you can have a phased approach. for instance, you can sort of start serving a bank, and a banker's bank, and then you can move to originate loans yourself and offer to members of the public. rly,la you c move to mortgages, and small business lending. and we definitely want in the report to show how that phased path could look. >> supervisor ronen: got it. and you know, are you also looking -- of course, i cld ask you questions all day because this is so interesting -- yes, we are your perfect nerdy audiences. so complicated and so interesting. but -- so are we looking at this as a revenue generator, as

well. the other issue is given our $10 billion budget, there's so much money creating that sits there for a certain amount of time drawing interest, and could we, rather than allowing, you know, a corporate bank to profit off that interest, you know, capture that value and bring it back to city programs? how -- how's that factor into your analysis? because when i think about -- so, affordable housing would be my number one, you know, rank. i'm agreeing with whoever's on the task force -- >> they're great. >> supervisor ronen: -- with that being the number one goal. but as i said, you could take each goal and go further. but i want revenue sources for whatever, whether it be new sites adu's, and that's generating revenue, so is that

a major focus? >> yeah. it's something we're definitely looking at, and a municipal bank just to sort of stay on business has to be on a path to profitability. a real question is a lot of the lending that we'll want to happen sort of will have to be happening atloer rates than additional banks will be offering, so we want to be spurring new lending? and the question is how can you cro cross-subsidize it with another form of lending. bank of north dakota makes money every year, and gives money back every year to the general fund, so clearly it possible, it's just a lot of work, and i think it depends on the services that you're offering. >> another question is based on the research that's been done across the country that the start-up costs are significant. we're certainly hoping to get past that and give you sort of

a road map to get beyond that, but i do think the initial start-up costs for a bank with sobering. and so i don't want to sugarcoat that it's easy to get to this state. >> supervisor ronen: got it. and then, the slide that had the spectrum of opportunities, so we -- you know, you gave the examples and -- in that we already do some of these, so we already do the down payment assistance loan program, we have a revolving loan fund. do we operate it or do we contract with a bank? >> we're contracting with a local cdfi. >> supervisor ronen: oh, same with the dlf? >> that's being managed by the community development. ng an >> ssor vinen: so in a way, we do have a bank, but in a very small way. so with our dlt program, i

guess we didn't have to go through all regulatory burdens or benefits? i would all say benefits of creating a bank. we were able do thisprogram t tout -- i see. >> yeah. so part of -- really, the main part of starting a bank is especially deposits. if you're only doing los, you're a commercial lender, which it's a much less regulatory burden. >> supervisor ronen: so even if we're just accepting deposits from ourselves? >> it's an open question, i'll say, and maybe that can be lafco's number one job. we have some legal opinions that have -- that vary about whether you just accept deposits from yourself, are you a bank or are you not? >> supervisor ronen: interesting. very interesting. so in terms of our work on this body, could you give us some of your thoughts about what would be helpful for us to focus on that would be complimentary and useful? >> yeah, absolutely. so i mean, i think what

probably makes the most sense, and we discussed this a bit are around these questions of governance and structure. for instance, would you want the bank to be an llc, would you want it to be a nonprofit? what would the board look like? there's a lot of complicated questions around tax status in that an entity that's owned by the city, how would it be treated under tax purposes? how would it be treated uer bank law? and is it a bank holding company which comes with all these legal requirements, but it's not clear if a municipal entity owns a bank, do they all r th subject? so i think there's a lot of questions that fits into lafco's jurisdiction given that you function around city entities and governance.

>> i think questions that come up with the state legislative questions, and we're aware of which pieces of legislation that would need to change depending on what model we move nkorward with, and i abilitto vet those and discuss those with lafco and have the city come to consensus about what we want to ask the state for would be extremely valuable. >> supervisor ronen: i see. and miss cohen, are you an attorney? >> yes, so i'm not licensed to practice in california. i have to give that caveat. >> supervisor ronen: first of all, i want to say this is very interesting, but i don't know if lafco's attorney has an -- for the governance question, it seems you need an attorney specialized in this area, and i don't believe mr. gobel ans attorney, let alone a banking attorney, and i don't know if

the firm or you have the expertise. >> we do not have the expertise or this, but certainly, we could make a referral fore the expertise. the question is that type of professional service is a little more expensive than other types of professional services in terms of lafco studies in your budget. so oftentimes, a special study may have legal components. they may not be driven entirely by legal questions. and so i think that maybe would be the legal challenge here. so certainly, the limitations of my expertise aren't really much of an issue because we could find you the right people, but i think maybe the budget might be a bigger issue. >> supervisor ronen: that was definitely my thought. i don't know that the 24,000 that we just designated will do it. >> to the extent it's relevant, we have some law firms that are interested or have been provides services to folks pro

bono in this area, so i don't know if that's a service we could draw on. >> supervisor fewer: oh, that's great. maybe we can have mr. gobel follow up with those firms that are actually interested in pro bono work with us. >> supervisor ronen: absolutely. and in terms -- so your suggestion right hand the legislative changes that would need toe made, can you speak more to that? and you know, about -- arell of those state law changes or can you ask them are there anything at the local level or are there federal changes that need to be made, as well. >> federal law on cannabis would be great. if you could put that on your to-do list, it'll be done in no time. i'm trying to think if there's anything local, but i can't think of anything.

mostly state law around banking and charter and insurance requirements, and deposit requirement. >> supervisor fewer: so i know that the state of california now offers two charters for banks. it's commercial bank or it's a credit union. is there any talk statewide about the state offering a public bank charter? >> yeah. so it's something that the advocacy community has been working with. i know that there have been some conversations with the folks in the assembly finance -- banking and finance committee about that, but i don't know how -- how far al those talks are, and it's something that we've thought about as part of the task force whether we want to try -- we have some banking attorneys on the task force, and whether we want to try to get them proceed bproceed -- pro bono to get some legislative language. >> supervisor fewer: also ask some state legislators that we

know that are our friend if there's interest in sacramento to do this and connect us with ma maybe consumer groups, etcetera. i think there's an appetite. we even heard from some people running for governor about a public bank. i think it's catching on, so maybe we could do a little bit of investigation on that. >> one of the things that molly has been organizing since she got here is a group of similarly situated jurisdictions. so some are extort,nd some are city and county across the country, but predominantly in california. we're all kind of borrowing and sharing. i do think as we get to legislative changes that will be a great group to discuss that with? and then there are i think two bills still pending at the state that would modify the bank charter authority specific to cannabis.

and while they are not completely relevant to a municipal bank, i think they'll give us a good bellwether of what's going on at the state level and who's coming out for or against, so we understand if we want to sponsor some legislation n legislation in the future, how that might go. >> supervisor fewer: fewer okay. thank you. let's open it up for public mment. are there any members of the public who would like to comment on item number five come on up. >> yes. eric brooks again. sorry to keep commenting, but you're working on a lot of different things. speaking on behalf of green party san francisco and our city sf. i've been a social and justice activist since the mid80's. i don't talk about this at city hall public comment with, i've

anchored a deep study of global socioeconomics, and i keep very up to date on what's happening in economics, and i want to say -- i kind of want to add another layer of importance to what you're doing here with a public bank, and that is that currently, we're facing a situation with global neoliberal capitalism where it has become so bloated with debt and credit based money that it is going to collapse again like it did in 2008, but probably worse. currently the logan will gdp is somewhere near $200 trillion. the amount of credit that has been created by private banks and other banks has become something like 800 trillion to

1 quadrillion. so literally we're -- the problem we're facing is one like in 2008 but bigger. a collapse will happen, and if we do not have a public bank in place, by the time it does, we will be in trouble. we'll face what we faced in 2008, and analysts are saying this is going to happen in years, not decades. so... [inaudible] >> good afternoon. my name's curtis. i'm with the public bank sef coalition. we're a new coalition. i just want to say we're really excited about this? i just want to first commend molly and the treasurer's staff. i think they've done really an amazing job for what they were given? i just think personally, it may actually be good not t foc on specific issues yet and