tv Government Access Programming SFGTV August 13, 2018 9:00am-10:01am PDT
9:00 am
manager when we're terminating them. sometimes people like to see the names on papers and sometimes they do not. but this thing about whether any manager would like to work with our system, i think they should take heart in the fact that how long we stayed with them despite their performance. and if you look at cardigan, why the heck did you hire them? we more than give people the chance, more than the risk they will take and this does not include the group that back tested data in order to hire them? but if staff believes that they're good people, it's not always numbers, it's the qualitative issues and we will invest with them and call it taking a chance. if we believe in what they will do, we will do that. so if anyone thinks that it gives them a fair chance to be hired they should see this as evidence that we will do that.
9:01 am
whether they bid for our work, that's their decision. but, again, i don't like bad numbers more than anyone else does but we believe in people and we'll take a chance to them. and they just have to prove how good they are. and most of the time we get it right and sometimes we get it wrong. maybe this is one of those cases. we have a unique history with them like a few other money managers who we said that we knew them before we invested with them. so that's it. >> any questions? a motion. a second? >> second. >> president stansbury: motion, and a second. why don't we open it up for public comment? any members that would like to address the commission regarding this item? seeing none we will close public comment. can we take this item without objection? yes? okay. item passes.
9:02 am
thank you very much. commissioner casciato, there is the -- what is your timing looking like? >> i'd like to go before the garage closes. the gate closes. >> president stansbury: i think that we have really just a couple items, we have a chief investment report. >> at 10 to i'm walking out of the door. >> president stansbury: okay. >> clerk: discussion item, chief investment officer report. >> okay, here we go. front page, you will see that we returned 1.02% for the month and equities up a couple percent, in particular our global equity manager aerostreet does really well. and the private market strategies were all slightly in the green. i did want to turn to page 2 and highlight one thing. and that is that we have added a
9:03 am
column off on the far right side and that is the dollar amounts of our unfunded commitments. again, we're on page 2 on the far right side in the new column. and that is to show just a magnitude of our unfunded commitments because it's grown quite a bit. and we were at less than $2 billion, 3.5 years ago. we are still in a good position and we monitor this all of the time and there's a lot of metrics and someday we'll walk through it. and commissioner driscoll asked to do a cash flow for casting and so we will walk through that in a future meeting but we are in good position here. but we want increased visibility for the board to see the dollar amount of our unfunded commitments. if we turn to also -- also to the graph, i'm not sure that i see a page on it but commissioner driscoll, you asked for the liabilities on the spurs
9:04 am
monthly net assets that is included. and i do have a couple obligations i need to walk through in the c.i.o. report. you know, first of all in terms of economic conditions, everything is still quite solid. and earnings growth has been really, really good and it's north of 20% for the last couple quarters. and as long as earnings growth is going to be good, the markets, that should put a line on anything that happens in terms of valuations and those kinds of things. the markets don't do well when earnings decline. and the -- i did want to point out on page 3 just the status of our implementation of the strategic asset allocation and you can see that we have come quite a long ways. you will see our rate in june of 2014, both our policy and our
9:05 am
actual. the bottom line is that except for private credit we are most of the way through on everything, okay? and the private credit is one that we still think is going to take about five to seven years but we are anticipating making a large recommendation next month. i just want to say quickly that liquidity in the bond market continues to dry up and i just want the board to an, whatte, a, it can take a long time to sell assets that we think are taking a long time to sell. some obligations in terms of reporting things to the closed session, board approved in closed session. beacon light which is a short manager we asked the board to approve $225 million and we have funded $100 million of that and future funding will come over the course of time. and d.c.m., which is a venture
9:06 am
capital strategy, we asked for $50 million and the board, and we received $35 million. and a strategy that the board approved earlier this year, we requested $100 million and we did get the full $100 million. and k4 private investments which is a software oriented mid-market buyout strategy, we asked for $50 million and we did get all $50 million. kitty hawk, we asked for -- this is real assets, real estate real assets strategy and we asked for £40 million euros and we got £35 million euros. and pepperton, we asked for $60 million in u.s. dollars and we did get $60 million. we have a couple additions, closings that took place, on thursday night and friday respectively that i believe that
9:07 am
the board has received print copy of. first regarding polaris, this is a growth equity strategy in the portfolio and we asked for $30 million and we got $21. and solis which is a distressed credit oriented strategy in our buyout -- excuse me, in our out state return strategy that we asked for $300 million and the board approved that. we did fund the first $100 million on august 1. and with that that's the close of the c.i.a. report. >> president stansbury: are w we (indiscernible) the funding? >> yes, they are calling capital as they see opportunity. >> president stansbury: and questions from the board? >> not really questions but, one, the cash flow that we talked about is a big issue and
9:08 am
it will be a subject for the investment committee to talk about because it's a large task that he and his team has to manage. and in the immediate term though is the fact that it's not simply that private debt which would take several years to get to that allocation target but now we're overwreat and that's a tactical decision. and we're underway real assets and we're at 4%. and so we look at a public equity as a private equivalent and i look at those three groups together. >> it's a long bull market. tactically the decision is that
9:11 am
9:12 am
-- i will keep this quick. we had our meeting on july 25 where we had interviewed the three semifinalists, which are indicated in commissioner bridges report. and we are authorized to conduct offsite due diligence. we were busy flying all over the country visiting these vendors. i wanted to report that they were very beneficial and helpful and able to learn things that were not seen on paper and that will help us in crafting our recommendation to the board. we plan on finalizing our recommendation to the committee on september 19. we're targeting an october board recommendation, but that could change and that's my update.
9:13 am
>> thank you. commissioner bridges? >> my report is not different than the report in that we had a very lengthy meeting july 25 and committee supports everything in her recommendation that we did review the semifinals of all three and the onsite due diligence, so looking forward to hearing the recommendations coming back from the visits to understand all the details of the offsite and due diligence. once we hear all of the recommendations from the travel and research, then we'll come back as a committee and make recommendations to the full board. >> thank you very much. let's open it up for public comment. any members of the public that would like to address the commission on this item? seeing none, we'll close public comment. anything further from the board?
9:14 am
great. on item number 13, i'm going to continue that, pending feedback from our newest commissioners. and then why don't we help on to item 14, please. >> clerk: item 14, travel expense reports for the quarter ended down30, 2018. >> we'll take it as submitted. any members of the public that would like to address the commission on this item? seeing none, we'll close public comment. anything from the board? >> a lot of due diligence going on out there.
9:15 am
9:16 am
>> the september 19 meeting of the investment committee is on september 19, following the deferred compensation meeting that morning. thanks to commissioners, we have a commissioner coming to speak at the meeting. we want to start promptly at 1:00 to take advantage of the amount of time we have with him. he's a world-class investor, very strong views on the credit market. so my request to the board, please be on time so we can start on time. if you can't be here at 1:00, sit in the back of the room and don't come waltzing up here. hopefully we'll start at 1:00. >> we'll send out a reminder to everyone. anything else from the board? seeing nothing, we'll open it up
9:17 am
to public comment. any members of the public that would like to address the commission only about the good of the order? >> i am a great believer in punctuality. in the last 50 years, i don't think i've been late five times. all you members waltz in whenever you feel like and you give the impression that you are only concerns about your own time and nobody else. i think that you should be on time. people behind me probably have other commitments and meetings. so when you start late, it may make them late for their meetings. thank you. >> thank you very much. are there any other members of the public that would like to address the commission regarding this item? seeing none, we'll close public comment. >> there are no reports -- board
9:18 am
9:19 am
timely manner. we have groundwater samples, you name it, we have to sample it every day. i have ten technicians, very good team. we work together to attain this sampling. >> a sample is only as good as when you collect properly. if sample is not collect properly according to not the proper protocol, the sample could be biased, could be false positive or could be false negative. so all this to have good so you can manage the sample collectors, as well as the schedule, and she is pretty good, and she is very thorough. and so far, i think that she is performing a very good job. >> this job is really not an i job. i wouldn't be able to do this job without my team. you can assign them any job,
9:20 am
9:23 am
>> third thursdays at the commons is a monthly event series to really activate krisk centkrisk -- civic center, fulton mall, and other locations through social operation. >> in 2016, an initiative called the civic center progress initiative was launched, it was launched by a bunch of city agencies and community partners, so they really had to figure out how to program these places on a more frequent basis. i'm with the civic center community benefit district, and i'm program manager for the civic center commons. also, third thursdays will have music. that was really important in the planning of
9:24 am
these events. >> we wanted to have an artist that appeals to a wide range of tastes. >> i'm the venue manager. good music, good music systems, and real bands with guitar players and drummers. >> we turned uc center and fulton street into a place where people want to be to meet, to laugh, and it's just an amazing place to be. there's a number of different exhibits. there's food, wine, cocktails, and the idea, again, is to give people an opportunity to enjoy what really is, you know, one of the great civic faces in america. when you look from the polk street steps, and you look all the way down the plaza, down
9:25 am
market street, daniel burns' design, this was meant to be this way. it's really special. >> the city approached us off the grid to provide food and beverages at the event as kind of the core anchor to encourage people who leave a reason to stay. >> it's really vibrant. it's really great, just people walking around having a good time. >> this formula is great food, interesting music, and then, we wanted to have something a little more, so we partnered with noise pop, and they brought in some really fun games. we have skeeball, we also have roller skating lessons, and we've got a roller skating rink. >> if you're a passion jail
9:26 am
skeeball player like me, and you're deciding whether you're just going to roll the ball up the middle or take a bank shot. >> our goal is to come out and have fun with their neighbors, but our goal is to really see in the comments that it's a place where people want to hold their own public event. >> i think this is a perfect example of all these people working together. everybody's kind of come together to provide this support and services that they can to activate this area. >> there's no one agency or organization that really can make this space come alive on its own, and it's really through the collective will, not just of the public sector, but both the public and our business partnerships, our nonprofits partnerships, you know, neighborhood activists.
9:27 am
>> i really like it. it's, like, a great way to get people to find out about local things, cuisine, like, it's really great. >> it's a really good environment, really welcoming. like, we're having a great time. >> we want to inspire other people to do this, just using a part of the plaza, and it's also a good way to introduce people if they're having a large scale event or small scale event, we'll direct you to the right people at the commons so you can get your event planned. >> being a san francisco based company, it was really important to connect and engage with san franciscans. >> how great is it to come out from city hall and enjoy great music, and be able to enjoy a
9:28 am
comtail, maybe throw a bocci ball or skee ball. i find third thursdays to be really reinrig rat reinriggating for me. >> whether you're in the city hall or financial district or anywhere, just come on down on third thursdays and enjoy the music, enjoy an adult beverage, enjoy the skee ball; enjoy an adult playground, if you
9:33 am
9:34 am
election? >> sure. i'd like to nominate brenda to be chair, and vice chair, kristin. or should we do these one at a time? okay. i'm way ahead of myself. >> second the nomination of brenda for chair. >> i third it. >> note mr. hughes is in the room now. >> well, we saved him a seat. >> all in favor? [voting] >> and i'd like to nominate kristin chu as the vice chair. >> second. >> second. >> all in favor in. [voting] >> good. thank you.
9:35 am
any public comment on the election? seeing none, let's go onto the next item. >> item four, approval with possible modification of the minutes of the april 21, 2018 meeting. >> any public comment on the meeting minutes? seeing none, move for approval. >> i move for the approval of the meeting minutes. >> i second. >> the minutes are approved. >> item five, presentation from the city services auditor regarding the c.s.a. work plan
9:36 am
and possible action by the committee in response to such presentation. >> good morning, committee members. i'm the chief audit executive for the city services auditor of the controller's office and i'm here with my colleague, director of city performance, to provide a quick overview of our work plan. so just really quickly, as you know, the city services auditor was established by city charter. as you know we have pendic f which lays out certain functions for city services to complete. we receive a budget set aside of 2/10 of 1% for the city's budget. we also receive g.o. bond proceeds amounting to approximately 2 million, and we have a total of 68 f.t.e.'s in
9:37 am
the total organization. so this slide shows the large department that covers our general bond. functionally, c.s.a. has two units. so we have audit, and we have city performance to ensure that we fulfill the charter mandate for appendix f. as it relates to our work plan process, it's actually driven by your charter and administrative code. we also do risk analysis, and we receive information or requests from our executive leadership as well as our department, and we have our bond and capital programs, as well, that dictate our work
9:38 am
plan. >> tanya ran through that really quickly. you're familiar with our planning process and mandates, but ask us questions at any time. these lists our charter requirement, which you are familiar with. we are now growing ourlene program, and that's probably or biggest single addition to the capablity of our unit in the last couple of years. we were training a lot of city staff inlene methodology and then training our department to do processing with departments citywide. the others, you are familiar with. i will note also the data academy, which is a training program to teach city staff basic software that they need for their jobs in a very simple format, and now we teach them more complex things, and we're really proud of that. we hit the three year mark --
9:39 am
the five year mark in three years in trying to grow that program. again, just to touch on a couple of our major projects. you saw a project of our work land discussion in our may meeting. between then and now we've finished out the process that tanya just described. we've finished our balancing. we'll touch on some other things in a little bit. department of public health, probably the biggest single technology acquisition that the city's doing over the next couple of years are electronic health records. we're working with them on that. at the transportation agency, we're just finishing a program which tries to simplify and stream line the public noticing
9:40 am
process. we're supporting the city's capital planning department with a number of moves and changes and new building sites, the ongoing work to empty the ha hall of justice, and a permit center at 49 south vanness. our performance program, you've seen the growth of it in recent years. the on with the new mayor, we are interested in meeting with her and her staff on how she'd like to move forward. we're assuming just in preliminary discussions that they're going to be taking some of the indicators that were shown in the score cards and starting a process across city agencies to move those things forward. she's very well aware of our program. we mentioned the data academy, and then, the department of homelessness and supportive housing now entering its you third year of existence, right, and we're still under the
9:41 am
mandate, as are all city agencies getting this up fit up as quickly as possible, helping them with challenges like the new software system that they're undertaking, building sites. again, there's a lot of work that we can do to help that work go successfully. very important kriss cal important and a kriss cal leadership position for everyone in the city. and then i'll hand it back to tanya to talk about audit programs. >> good morning again. just to adequately ensure that audits promote best practices and accountability, support informed policy divisions, this represents a balanced portfolio of work based on risk. and the result of our work is high quality audits that conform to best practices. as our operations have become more complex, diverse, existenter connected over the years, our work plan has also
9:42 am
grown to be more complex and robust that grow to involve multiple agencies across functions citywide. so for example we've developed our ongoing construction and capital audit program involving our chapter six departments to reflect the city's increasing investment in capital projects. we've completed numerous varied construction audits, close outs, change orders, along with risk assessments. we've also created our information technology cyber audit team to proactively assist departments in identifying improvements for safeguarding our critical i.t. systems and information, regulatory compliance and redundancy. to shed more light on critical multidepartment light processes and associated risks, our work plan incorporated performance audits that involve multiple agencies to reflect the
9:43 am
complexities and interconnectedness. so this just gives a broad stroke overview of how our work at c.s.a. audits have changed since i've been here. i'll discuss it a little more in depth. so in this coming year, we will be performing a number of construction audits. as you know, this committee has asked us to do audits of the bonds to ensure that our bond spending is in compliance with the voter mandate, and with that, we've enlisted the services of comings. and in the past year, cummings has completed five g.o. bonds, and this coming fiscal year, we'll be doing four more g.o. bonds, and we'll be performing a large performance audit at m.t.a. on their capital program
9:44 am
delivery. in our citywide compliance program, the overall goal of that program is to look at compliance, internal controls, and benchmark against best practices. so as you can see on our slide we'll touch on processes such as purchase cards, payroll procurement cash and so on. and we're conducting audits of nonservice providers to ensure that departments are properly monitoring our nonprofit organization contracts. we are currently conducting a performance audit that spans across seven departments regarding citywide monitoring practices for nonprofit organizations, and that audit will be begun, more than likely, at the latter part of the fiscal year. we will continue with our performance audits as it relates to the mandates audits that are mandated by the
9:45 am
administrative code such as political activities and franchise fees. we look at whether departments are complying with policies, procedures, are doing their work in an economical, effective manner, but also, we want to look from a perspective of forward thinking. and so we do that through our surveys and through our benchmarking of leading practices in the relevant areas to help our departments think about how they should go forward and to ensure that our recommendations are sound and to help city operations become better. so we'll be conducting audits around fees and permits as well as looking at the ethical culture of the health inspectors. we'll be implementing a citywide inspections program at fire, at planning, and at building, and we'll also be
9:46 am
looking at the ethical culture of our inspectors this coming year. we're going to be looking at the staffing of homeless shelters, citywide i.t. procurement and public health city option program, and we will have a divisional audit at the p.u.c. over their real estate department. as it relates to our information technology and cyber security work, we do that work in collaboration with our department and other stakeholders, and we also work in collaboration with the department of technology with the city information security officer. and so we'll continue our work around security and information controls audits across the city as well as continuing with assisting with post implementation services with the new financial and procurement system. and as peg mentioned, the procurement department has the largest procurement ever from an information technology perspective in the city, and we'll also be working with the
9:47 am
department of public health around that implementation. and you'll hear later more about our whistle blower program, which is on my slide. we'll continue with our follow up process. the value in an audit is not the findings, but it's actually the implementation of the recommendations, and so we really work hard to ensure that we have a robust follow up process. we follow up at every -- at six month intervals to ensure that departments are implementing our recommendations. and i'm proud to say that our recommendation rate is 98% of our recommendations over a two-year period. and we will continue with assisting with disaster recovery, and most of our work, when we're having a disaster or the city is assisting with other disasters, we're ensuring that our records are intact and we're able to receive back the -- recover our costs as it relates to the services that our city has provided. and we're also doing audit work
9:48 am
to support the department of police accountability, the ethics commission, and at the police department. >> so that's a lightning quick run through of our work plan. the narrative, which is published on the website, has a high level summary and major service area topics of our planned work. there's a table in the back which is the largest, i think 100 audits and projects by size, the number of staff hours we expect those things to take, but just to remind everybody and for the public's benefit, the detailed work plan that is underneath that is a couple of hundred lines of different audits and projects that are linked to the work orders that are in our budget and each of the assessments and risk analysises that tanya mentioned. we're happy to answer any questions that you might have on the -- either the general level or the detail level of
9:49 am
those and discuss it if we have an audit that needs or a project that meets a concern or an issue that you raise. we might have something in our work plan. we've certain tried to fit what we do to the go box interest and mandate. one other project that i would mention in that vein is we do a wrap up of general obligation bonds which i may remember from last year. we made a number of improvements to it, and you include it as an attachment to your annual report, which has scope schedule and budget for all g.o. budget programs. it services our program purposes and serves yours, as well. so i'll just stop there and ask if you have any questions or feedback if you've had a chance to look at the work plan, and we're happy to respond to anything that you'd like to raise.
9:50 am
>> yes, do you want to give a few words and then the liaison report? skbl i can be the liaison to the c.s.a. i think we're at a $9 billion organization -- or 11 -- $11 billion organization, and i think it can be hard to make these types of decisions in an organization this big. and i really applaud the thoughtfulness of the group in making these. they're not just sort of throwing darts at things, they're actually following a specific process year over year. i think that process and the work of the group has resulted, in my opinion, is a very successful body of work coming out of both the audit side and the permit side, and so i'm more than happy to endorse the work plan for this year. >> any other comments?
9:51 am
>> i would like to make a few comments. i would like to echo what we just heard, that this has been a very successful effort on the -- for the audit committee. i think the city is lucky to have the kind of leadership that it does of all of you that are working on this. i think what i have seen is a growth in the approaches that you've taken to performance and audits. the issues that i've been focused on more recently is that most of what we do, we approach as a city from the agency perspective. we look at how departments are functioning and what their mission is and how they're leading those missions. and that's the right thing for the city to do to ensure that the taxpayers are getting their worth, and there's another perspective, and that's taking
9:52 am
it from the direction of the citizens. so for example, if you're looking at the hall of justice, the capital improvement plan, has -- is there a process for input on what's needed from the standpoint of people who use that facility, not just the people who work there and whose job involves that? for example, for years there's been a hard time getting child care facilities at the hall of justice, and yes juror expect to show up and have a place for their children while they're doing that, and there's been an actual resistance to all of th that kind of stuff. when you're looking at disaster recovery, part of that is going to be right off the beginning, as you know, is going to be estimating what the costs are for replacing and repairing things that have been damaged. in '89, when i was involved in that earthquake recovery, the big issue was of course residential properties that
9:53 am
were damaged, and the need to decide whether or not someone could go back into those properties, and there were not enough city building inspectors to go around and do that. so essentially we deputyized private building inspectors to go through and decided whether the situation would warrant someone briefly going into their house. so that makes me think when we look at disaster responses, are we training private building inspectors so that they're ready to go in the event of an earthquake, because you don't have any advance notice that it's going to happen. so those are the kinds of things that come up when you're looking at it from the perspective of the person who needs the services as opposed to the people who are providing the services. so i had a list of some examples that are cost cutting in some ways for specific
9:54 am
subpopulations. i used disabled and seniors, as one. i used women as another, about what's happening to minorities and to african american populations in the city, declined from 12% to 5%, and what do we see about what the city has provided either in housing inspection for the quality of housing that people have or their transportation to get the jobs or their schools or whatever. there's a whole lot of things. so my hope was that in today's meeting, you would take from us or my colleagues would concur, a request to come back with some is proposals more specifically tailored to a perspective of the residents in a cost cutting way. you've made a lot of steps in that direction, and you sent me an outline of what those are like, and they are -- they are
9:55 am
good, but they are -- continue to be focused from the departmental perspective as opposed to the citizen perspective, and there are not too many places, other than here, where citizens have an opportunity to come and speak and raise those issues. so that -- that's my proposal, is that we ask for inclusion of cost cutting, citizen oriented reviews. >> any other comments? i think robert, you had a comment. >> well, i -- again, from -- i just go back and look at the mandate for go box authority or role or oversight of the c.s.a. it seems like it's a limited scope to review benchmarks, review whistle blower issues
9:56 am
and review audited. to the extent those efforts cover the citizen input, i -- you know, we can look at that. but i just -- i'm not sure i quite understand what that would mean or what specifically we're asking the controller's office to do with respect to our authority under the charter mandate. >> as i understand the establishment of the c.s.a., it was part of dissatisfaction with the city's performance on streets and sidewalks and parks. and so the proposal came originally from the chamber of commerce to ed harrington, and he outlined a program for auditing that included specifically those areas, and then, sort of an add on, whatever else. so if you look at it from the genesis of this, it was very focused on the infrastructure of the city. it was not focused on the
9:57 am
services of the city, except in the broadest sense. and so what i'm saying is that here, we have gone now since, what was that? 2002, something like that, so a decade and a half. a lot has changed in the city, both in terms of how many things the city needs to provide and in terms of the population that we have. and also, for the first time since 2002, we have a major change in the leadership of the city. this is the first mayor we've had who has come from a district election where they've worked closely with residents in a particular neighborhood. the first time since that time that we have a board president who comes from a district that has income inequality and housing challenges and job challenges. and then, we also now have the city controller just reappointed to a new term. so it is a time to take a deep breath and just step back and
9:58 am
see, do we want to look at this from a higher level. that's all i'm asking. >> my observation, mr. bush, is that while -- while the points you make are worthy to be explored. i also heard mr. carlson's comments reminding this committee our very specific function as related to what, you know -- relating to our responsibility. so i -- my comment and my take is that while these may be varied issues, and the timing, mr. bush, you mentioned, i think this may be a time for the city -- some aspects of city government to be looking at this, but i don't really think goboc is the best vehicle
9:59 am
to explore these because our mandate is very specific. so i think if you have a wish to explore these changes to c.s.a.'s function, this -- this is not the right venue to do so. i think you go to the board of supervisors to change these -- these responsibilities or to increase these additional aspects of audit and performance done by the controller's office. >> i don't see anything in the charter that precludes us from taking these steps. i think that you're taking a very limited view of what the language -- i don't think we're precluded -- when we say we're going to do performance audits, what are we exactly auditing? and i'm not even suggesting that i have the answers or even know exactly where it should go. i'm sure asking that the c.s.a. staff come back and give us their ideas on what else they
10:00 am
see they might add. >> so just a suggestion which might help. i had sent a couple of example doe s, where i agree the opportunity to work in an interdepartmental way is one of the huge advantages of our function, and we try to take that seriously and staff things which need staffing, the healthy streets outreach center was the example that i had e-mailed where this is all the departments th departments that are working together, and the intersecting service and resource demands that are represented by that. there's a new operational function at the 1011 turk street. we're providing the staff and measurement resource support so that they're able to measure what they're doing, show result. this is an example of the interdepartmental work, citizen focused work as well. i guess probably the example
38 Views
IN COLLECTIONS
SFGTV: San Francisco Government Television Television Archive Television Archive News Search ServiceUploaded by TV Archive on