coffeehouses in month neighborhoods that are on their own- that's >> can i get public comment before going into closed session , i don't see public comment. we will now enter into closed session. do i need a motion to do that? >> we need a motion to go into closed session. .> i i moved.

>> we have a quorum back. why don't we return to open session. i need a motion not to disclose discussions held in closed session. >> i will make that motion. >> any opposed? that passes. we are on the first item. do i need public comment? okay. could i have general public comment? i think i have a public comment card here from brian. >> was that for -- >> let me see which one. it is item ten. we will see -- save that for item ten. general public comment can come on up. talk to us about hedge funds. >> anyhow, my name is joan stenson. i am a 44 year member of the pension fund. in my -- i need to and a half

minutes, not just to. i wanted to give you a ten year investment strategy which will outperform 95% of hedge funds and 95% of pension funds over the next ten years. this is a low to moderate risk strategy. it will be very low cost, low volatility, and there will be an average annual return of 8-9%. the first thing you need to do is divest from all of your other investments. the second thing you need to do is invest 50% of your assets into an smp 500 index picked the third thing you need to do is invest 30% of your assets into intermediate bond index. the third thing you need to do, the fourth thing you need to do is invest 10% of your assets into utility, and you need to have 10% and a cash position.

when the stock market drops 25%, which it has done in the past nine recessions since the second world war, you then put that 10% cash into the smp 500 index. you now have a 63 return, 60 3% stocks, and 10% utilities. then with all of the money that you will be saving on management and performance fees, you will be able to buy a san francisco pension office building. we conduct business in an office building. >> any additional public comment in that case, we will move on to item number 7. excuse me.

>> item number 5. where is that? i sear it -- i see it. >> there are the minutes for december 12, 2018 meeting. >> and i have a motion to approve? >> all in favour? >> any deny? >> we need public comment. >> can i have public comment? >> no public comment. we will close that and we will move on. >> just a second. is that a motion? >> commissioner to. >> thank you. >> i can move on to six. item number 6 is action item, consent calendar. >> okay. >> is there public comment on the calendar? no public comment. do i have a motion to pass the consent calendar?

>> move to approve the consent calendar. >> do i have a second class. >> second. >> none denied. that is half. on to item number 7. action item. the approval of investment guidelines. >> very good. last month the board approved an investment of up to $500 million in select equity groups, and international equity strategy that owns 32 stocks. this month we are back to presenting the guidelines for the strategy. >> thank you. we provided the details and guidelines as part of the board materials in front of you. that consistent with the board recommendations of december and this is a separate account. as part of the process, we have to have these investment guidelines approved by the board

the benchmark is -- it is concentrated fully above 30-60 stocks. the tracking error will be high. it can hold up to 30% in cash, and as i said, it is a separate account and will be subject to all the investment restrictions we have in place. tobacco, firearms, coal, thermal gas. i think the guidelines are pretty straightforward. i don't want to go through all the details unless you have any questions. >> are there any questions from the commission? >> one question about this. we have had several hires in the last many months. there is no performance or incentive for this one, or is there? >> it is a basis point. they had an option for a performance fee, but it was not attractive. >> it is not like -- thank you.

that doesn't need to be in the guidelines, or does it matter? >> it is an investment management agreement. it is part of the agreement. >> thank you. >> okay. any other questions? >> public comment. >> public comment on this item. item number 7, no public comment close public comment. >> move to approve. >> do i have a second? >> all in favour? >> aye. >> motion passes. no denial. >> thank you. >> item number 8 is an action item. recommendation to terminate the institutional asset management. >> board members, this recommendation, we have been an investor in the fidelity select international international strategy for quite some time. the strategy performance has

been pretty pedestrian. we are looking to upgrade the portfolio and to increase our access returns throughout public equity, and as part -- part of that is upgrading the roster of our managers, hence the hiring of select equity, as well as some of the others. you have seen a few terminations and this is the latest. >> we stated some of which built -- some of what bill said. i will be brief. they are supportive of our termination agreement with fidelity. they manage 190 million. we have written a brief memo that describes our rationale. i would emphasize this is a matter of fit more than anything else. unless an e.p.c. would like to make any comments, i will turn it back to the board for any questions. >> is there any questions? >> this manager -- of this project is a preferred manager.

we would look -- we like the manager. they are on watch now for turnover, which is citing in your store cited in your staff memo. their performance has not been good for a wild. more recently, more disappointing, and they have experienced some loss of assets. we are fully supportive of this. the main reason is a manager you just approved, who we hope will get better performance with the more concentrated portfolio. >> the move is to hire the managers. >> are there any questions from the commission? mission or driscoll. >> a couple questions. fidelity does operate and invest other funds for s., correct? do we have any problems with the alignment of interest with them? >> no. >> thank you. i do not want people to misconstrue the memo as written, and alignment of interest means many things.

you, meeting mr coker and staff refer to what we've decided to try and do back in may of last year. we have a desire and are willing to take on more risk and pay for it to achieve better returns. if that is where the disconnected work -- occurs, that is fine. there's nothing wrong with fidelity. >> i would move to agree with that statement. >> thank you. >> any additional questions? if not, can i get a motion on this item. >> i move it. >> i second. >> second. >> public comment. >> do i have public comment? no public comments. public comment is closed. let's take a vote. do i have approval for this item >> i aye. >> any opposed? >> none opposed. >> the motion passes. onto item number 10. >> item nine. >> item nine. >> it is a discussion item.

chief investment officer report. >> this would be a good month, but if there is, amongst the mud bath in the market, and amongst december, our performance was relatively speaking, was terrific. the snp lost 9% last month. and at peak to trough, as of december 24th, it was down almost 15% and for the month we lost 2.07%. comparatively, 7030, whether you defined that 70 as u.s. or international stocks would have lost 5.8, or 4.4%, and within a single month, we outperformed both of those by more than two and three and half% respectively the quarter was also bloody. the u.s. and coble equity

markets were down 13 and a half, and about 12 and a half% respectively. we lost 3.77%, relatively much better. 7030, whether that is u.s. or global, would have lost eight -- 9.1 and 8.5 respectively and we lost about 3.8%. the fiscal year to date, what we are really sensitive to is what our fiscal year returns are. the interim volatility during the year doesn't matter, but our frontage status is measured at the end of every fiscal year. for the six months ended, the two equity indexes lost 6.6 and 8.8%. not good at all, but we lost a little less than 1% and on the calendar year basis, excuse me,

relative to 7030, those would have lost 4.2 and 5.7 and we lost less than one. >> so take 218. >> that is next. fiscal calendar year. calendar year, the smp lost 4.4. they lost 8.9, and we were up two%. >> 7030, if the 70 west the smp, they would have lost five-point 2%, excuse me, 5.2 and 7030 global equity would have lost 6.3. >> what about -- do you have a 64 tee? >> i could easily calculate that but the numbers would be marginally in the same direction these days you really need to have -- to have any chance of

earning seven and a half, you really have to have a very low allocation. >> remind me again one more time we were down how much for the year? >> for the calendar year. >> for 2018. >> for the calendar year, we made 2%. >> 2%. and if you had to give a percentile of performance compared to others -- >> it is a little early. in march we will have december year year-end performance. however, alan has some visibility into that, and he can comment on our relative returns for 2018. >> we have very few actuals, but the numbers that he cited with respect to a 6040 are on target. i do have one plan that has recorded and they tend to be close to median, and they are down three and a half% for the year. i think the media and public funds will be down anywhere from three and a half to four%. you are positive too.

it is significant. i will bet you that will be in the top 10%. making money in the year where the markets was negative is substantial. >> do you have the significance -- >> for the calendar year, pretty much everything helped. the private equity was up 21%. real assets were up almost 16%, private credit was up almost 13% these are not beta returns. these are beta plus alpha. we know that the alpha in all three of these portfolios was very, very good. the hedge fund portfolio lost one point 6% for the calendar year. we know that the index lost more than three-point 5%. again, 2% outperformed. there has also been some

outperformance in public equity, it is a mix of asset allocation, a very diverse this -- diversified, and manager selection throughout the portfolio. >> thank you for the information one number that we will need to look at and we shall at the end of the march meeting are the quoting numbers. the absolute return portfolio's contribution is one of the main reasons why we went into it and was to reduce down -- drawdowns. it is interesting to see how those numbers appear since you talked about the private equity and the real estate market, they are on different correlation with the public equity markets. we will see if our asset return commitments commitments is delivering what we expect. >> we will be able to show that. and again, 70-30 on a calendar year basis. you have all liquid assets. these were lost, 5.2 if there were u.s. centric, and if it

were global centric, equity and u.s. bonds lost 6.3 and we know our hedge fund portfolio lost 1.6, i believe it was. we knew it was quite additive. >> did you have any additional on the split? >> i have the same numbers built in. >> moving on to the rest of the report. the bottom line is awful numbers in terms of the market. our performance is going to really stand out. there is a market discussion. the main thing i really wanted to convey here was that we had an extensive conversation for a couple of years about whether or not to buy put options. and if we had bought 20% out of the money puts last july, even for a status of the market throughout the second half of the year, those puts would never have been in the money.

so if they expired on december 31st, they would have expired worthless, and they would have been worthless throughout the year. the peak and the decline was 19-point 5%. they are never in the money, and if we bought them on july 1st, from that point forward the decline was about 13 and a half% also to show how difficult buying put options are and making money on them is even when you approach that 19-point 5% decline that began in early october through december 24th, not only did you have to get the premise that the markets are in decline, and they are going to decline by a lot, and in the time frame of your contract, but then what happens, even if it met all of that, and it did decline by a lot, and the timeframe of the contract, what happens after you have lost 205 or 30%, to continue to hold them

and hope the market declines further, or do you sell them. in this instance if the market recovered pretty rapidly. a recovered 6% of the week after christmas. we had a post- christmas rally, in the market was up a couple of % -- couple of percentage points in early january. so buying put options as a protection strategy to do that tactically is incredibly difficult. to do it strategically, meaning you just do it regularly as part of your investment strategy, we also showed earlier that this was very costly over the long term. after this long discussion that we had regarding put options as these options would never have been in the money even though the market reclined -- declined substantially.

we spent the better part -- we were arguing the point that the diversified strategy was a long term approach and the markets that we have been through demonstrated their wisdom we had in not compelling us to write put options which would have been expensive. and even in a situation where the markets went down, would not have covered the cost of doing them. we did offer -- author and e-mail which we would have seen to apologize for taking the time to explore that option. moving on to the report, on page the market is down, 6% calendar year, eight% global equity for the year, is that on page 4, look at what has happened to evaluations. earnings have been good.

it is no longer overpriced. the market now represents decent investment value, good investment value based only on one metric and that is valuation the worry that we have had about valuations being in the top relative to historical norms is no longer the case because earnings have been quite good in the markets have gone south. in terms of closing, the private market strategies, the board approved we were close. c.m.c. is a china-based growth equity strategy. we asked the board for 100 million. the board approved and we did get 100 million. the fifth wall, which is the venture-capital strategy, we asked for 25 million. the board approved the same. we were given an allocation of 25 million. lightspeed which is a china -based venture-capital

strategy. we asked for $40 million to be allocated across the two strategies. we were allocated 27 million to the flagship strategy and 9 billion to a select strategy. we got 36 out of 40. mpg is a private credit strategy we asked for $75 million. the board approved 75 million, and we were allocated the same. personnel, we do have an ongoing search for a managing director of private markets, and we do have free security analyst positions that are open, and recruitment is ongoing for each of these. we have made considerable progress on all of these searches. we will have some news on at least one or two of them in a month or two. on investment committee, the december meeting which was concentrated on the risk exposures and the exposures for

our portfolio as a whole, as well as the pacing schedule of our private markets and how we account for and think about liquidity and what kind of market regimes and environments can do to our asset allocation and how we plan for these things this has been rescheduled for a week from today. january 16th and it also is all three hours of your meeting. we do have several speakers, not speakers, presenters. i will participate in it as well and we have guests coming from the cove, and also from cambridge. and with that, that is my report are there any questions or comments? >> questions question. >> we have comments. the speakers are workers. we are expecting them.

two, hopefully board members will come to the investment committee meeting. there has been a lot of work put into it. it is not exactly phase one, there is more work to be done and presented to us so we understand how we are managing risk. >> that is a good point. i am glad you said that. we are going to be giving you a lot of information, but it is not everything in our toolbox. there is more and anna will briefly introduce what those other components are and some other things that will be showcased to the board over the course of the next year. >> any additional questions? just a comment here. i had an opportunity to look at the liquidity pacing schedule and i thought they were very good. i know we will have a further conversation on them when we get to the meeting in a week's time. i would like -- this is something i will bring up as well. i would like us to be thinking about, as a board, which kinds

of reports we want to be seen come back to us and what kind of schedule as well. i would ask you and the team to think about that a little bit. >> okay. commissioner, thank you for taking the time to meet with anna and i. >> i have a couple questions. can you tell me a little bit about the small-cap for the attribution of the downed performance? it will be on page 3. >> page 3. >> this strategy would have lost on a percentage basis about 13-point 2%. >> so that is 13, but what is the minus 42 -- is that money

out? >> that is market value change. that is the gain or loss on the amount of investment during the month. that is not cash flow. >> it is not 40 2%. >> those are dollars. >> forty-two dollars. >> forty-two dollars down. we have not taken that. >> to read that line horizontally, we began the month with 328 million and we lost 42.1 million, and we ended the month with 286 million. >> okay. >> since you asked, systematic managers who have a value biased bias to them all struggled in the quarter. >> does anybody stand out? i know sam has had a tough order who, of all of these active managers, who has the toughest when he had to review that? i know there has been a lot of technology and that is there

issue. >> they did quite well. try not to get too distracted by a one quarter. our china managers, though they have performed well relatively on an absolute basis, they have lost us a lot of money. it is where one of those things we have to remind ourselves we are long-term investors in prior discussions earlier, there are several members under review, and we will continue to be active in making changes. >> no one on a relative basis outperformed. you are now looking and did not expect that. >> not that some of these numbers are preliminary, but some of the managers we hired recently performed dick's exceptionally well. we had a conversation with a generation earlier today in the fourth quarter, their index was down around 9%. they were down one. it is a relatively emerging

markets. they are losing money, but they are losing far less. >> as long as relative is good to, i'm not worried about that. >> they lost one point 5% last month. and the snp was down. >> these are recent changes we've made. on a relative basis, some of the new hires have held up quite well. >> that is great. okay. any other comments. that was a discussion item. do i have public comment on that item? >> they said they lost one point 6% in the hedge fund. but if you would have taken my advice he would have lost any money because he would not have be invested in hedge funds. i don't know if you realize, the golden age of head funds hedge funds has come and gone. 10,000 or more hedge funds. and the only way they could get a hedge fund is by insider trading.

before you lose hundreds of millions of dollars, you have to divest from hedge funds. hedge funds are vultures. we have most of our members are union members and the last two months, you had young ladies testify here about toys "r" us, private equity -- let me see the name of the private equity. private equity. i don't know if i've got any. they are one of those vulture headphone does hedge funds. and another vulture private equity company his kkr. both of those were involved are destroying and they did nothing to help them. i don't know if you've done anything to help them, but a hedge fund that did something as the new jersey pension funds. they have a lot of clout over hedge funds and private equity

companies. yes. future public pension funds pressure them. because of the pressure from new jersey pension fund, they have entered into discussions about providing financial assistance to the workers in toys "r" us. they bought a slice of the retail at a discount and have refused to give any financial assistance to laid-off employees you had all those young ladies testify. did you even make a phone call to them and say, hey, we are investing millions of dollars. why don't you do what they are doing and try to help these employees. most of you board members are union members. you should be the first ones was to do something. >> thank you. >> thank you.

any additional comments? okay. public comment is closed. can we go on to item number 10? >> action item. recommendation of r.f.p. finals for third-party administration of the s.f.p. 15. >> okay. i see we have a member of the public comment. if the public wants to provide comment on that -- brian? the first person. okay. >> thank you, commissioners. before you is a staff memo, as well as our consultant supporting our recommendation at this time, i would like to have talent to provide a 50 minute walk through of the process and how we arrived at our recommendation. if it serves the pleasure of the vice president once that

presentation is complete, i can provide steps to round out the discussion. to the left of me is greg, he is head of b.c. consulting. to his left is jenna steele who specializes in record keyword searches. he was the primary contact for the r.f.p. >> i will take us over the overview for the search process standpoint and turn it over to jan as we dig into the can of this. and page 4 of the presentation in the overview section of the materials we identified the team that really worked on the day-to-day basis on the project. we do, just in terms of rough numbers, we have roughly over 100 defying contribution clients , representing over 300 billion in assets. the average size client is 2 billion in assets. we do roughly 8-12 r.f.p.s a

year, and 2-4 are government plans. just to give you an idea of how many times we touch the market in this area. we used our very standard process, there was nothing different as it relates to our work with staff here. we have identified the process here on page 5. it really walks through. you will see a timeline and more details as we go through the pages. but again, trying to give you a sense of how much work was involved and how many touch points there were. page 6 just codifies many of the different topics that were covered in our database. we asked over a thousand questions every year for other record keepers in the industry, and collect all this and for -- information that we have in a realtime basis. looking at the overview for the r.f.p. on slide eight, just identifies some of the background information. ultimately the minium -- minimum qualifications are out on the

far right-hand side, and a couple of the key themes there was we were really looking for a top-tier large provider. at least 40 billion in assets under administration. at least ten years of experience providing this administration. and at least 10 billion under trust and custody. really looking at record keepers that fit the bill of san francisco and city and county. ultimately there were four at record keepers that responded. there were four premier record keepers in the business. these were in power, nationwide, credential, which is the incumbent. we went through a process as shown on the timeline on slide nine and narrowed it down to credential, and empowered to ultimately do on site interviews as well as bring the semi finalist into interview.

into the committee. are there any questions about the high overview of process before i turn it over to jana to talk about the candidates and the recommendations? >> questions? no questions, okay. >> excellent, thank you. as part of this process, we collected information from the incumbent record keeper around the current state of the plan, the services that were offered, as well as the profile of the planned, as far as participation and the supports that was offered to the plan participants currently. we provided this information to each of the record keepers that submitted a bid and asked them to confirm first of all they are able to administer the plan, as greg mentioned, these are premier record keeper candidates and each have been confirmed that they would be able to provide the base services required, in addition, we worked with staff to identify areas of enhancement that might be appropriate for the plan in the future in order to get an idea

of how the vendors could differentiate themselves in terms of additional services. we analysed each of the proposals and provided feedback to staff and provided a summary of this to the deferred compensation committee. what we saw is that they have had the most experience in government plans, however there were some issues for considerations that were raised as far as their current book of business, and the potential for turmoil as far as staffing and services were considered. we also looked at nationwide. there were considerations and concerns there, specifically around the trust solution, and these were identified as being the highest. they are also more manual

processes then we want to move forward with. credential of course, has a known ability to record keep the plan, but in comparison to the record keepers, they have the public plans. there have been changes as far as organizational services. >> we also looked at foia. they do have a very flexible -- flexible record keeper -- record-keeping system. they have a conversion lead assigned to this particular product -- project which we thought was vital. following the review of the candidates with staff and the committee identified three semi finalists who were each met with

the committee and presented a summary of their services. following the committee's approval, staff met with each of the record keepers at their location and drill down into a couple of the areas where the committee and staff had identified additional services would be valuable to plan participants including the capabilities of integrating pension, benefits into not only the projection tools, but also being able to automate those services based off of publicly available information. thereby respecting and maintaining the boundaries of sharing personal information from the participants to the record keeper. we also explore the opportunity to have an online enrolment process for participants where they would be able to enrolled online in the plan instead of having to go through a more cumbersome paper product --

process. lastly we looked at the opportunities to map assets from the gold maker strategy that is maintained by credential into an ongoing strategy with the least disruption for your participants following the review and analysis of each of the different areas, including the discussions across around on site and reference checks, which were conducted by staff, and included those reference contacts identified by each of the candidates, as well as additional outside contacts and checks. the recommendation of the consultant and of staff at this point in time wise to move forward with the new record keeper. are there any questions? >> do you have questions?

>> madam chair, i have reviewed this report thoroughly, and we have had it for the second time now. i am good. >> background, we have documented a piece of it, when it was presented in the final recommendation, it was presented to the committee in september. there was a request from one of the committee members that we delay or continue the item to give staff an opportunity to meet with interested groups who might have questions surrounding the process, as well as the recommendations. we in fact did hold it open until october 24th, and the chairman and i were both invited to meet with the public employee committee. my recollection was that the meeting was the day before the community meetings. that would have been october 23 rd. we were given the opportunity to explain the process where we are out in the process and the

reason we take this out to bid is we answered questions, and we came to the committee. the committee at that meeting voted to forward it to the full board, but during public comment at that meeting, there were some public comments presented that i was asked to follow up on and so what we did is i followed up on comments that were attributed to one person on particular, and provided that report back to the committee at a special committee meeting on december 27th. we presented the results. there were comments related to bias in reference to calling and a bias on the part of some evaluators. like i said, we present that report back and at the december 27th committee meeting, the

committee again reaffirmed their decision to forward it to the full board with the recommendation that the board approved with the new record keeper. >> after thorough evaluation. >> that is right. i'm sorry. as an additional due diligence for the committee as well as myself and staff, we engaged mikita to review the four proposals that were presented, and with their expertise at having conducted these types of r.f.p.s in the past, to provide us guidance as to whether the recommendation that the staff and consultant had brought forward was supported or reasonable based on the information, the proposals going back to the proposal and so

maybe at this point it can be explained the process that they used when they got that assignment, and what their conclusions were. >> thank you. that is what i would recommend that they give their review at this point. >> okay great. >> great. thank you for having me. as the directors just noted, we were asked a month and a half ago or so to just take a look at the four responses to the r.f.p. by way of background, the investment group as consulting firm similar to callan. in terms of our background, we consult on $640 billion worth of assets today on defined benefit plans and contribution plans. we work with over 12 record keepers across the client base, and we do record keeper searches on behalf of our clients as well in terms of the information we

were given to complete our review, it was just a copy of the four record-keeping responses. we kept it to that. when i looked through and there is a memo in the materials for the december 27th meeting and included for you today, in the memo that we presented, we outlines the four areas that were graded -- graded. we basically looked through the four responses in each of those areas, and the areas just by way of reminder, where organization, administrative cake it does capabilities and technology, fees, in communications and service plans. we tried to highlight areas of strengths and weakness among each provider in the spaces. looking again to determine whether the process seemed reasonable in our opinion, the recommendation to move forward to. and ultimately we do believe that the recommendation to utilize it as a prudent one. there is a lot of support when working through -- looking through the responses. i also wanted to note, and i

shared this at the december 27 th meeting, from our perspective, and i think this was noted as well, you have four a very high quality record keepers that you are selecting. you are truly conducting a process to ensure that you have the best fit for your program. i think that all four of these record keepers can provide the types of services necessary. it is really a matter of ensuring you get that best fit and looking what the strengths are in the various areas and making sure that you have a provider that can help you and help your participants moving forward. i'm happy to stop there and answer any questions about our process, or if you would like, i can highlight specific areas within each of those four categories, but i want to be respectful of your time as well. >> do you need additional information? >> i received their review. unless other commissioners have questions. >> okay.

>> i will say something later. >> i have questions after. it is not necessarily on this item though. >> do you have questions on this item? then we should probably ask them >> i wanted to ask the city attorney, we received a letter today from one of the representative unions with an unfair labor practice charge with regard to this item, and i wanted to know if we have had that in previous situations and how this impacts our decision-making. >> i don't know if this was in previous situations, but i think that the director or the board can make the decisions. it is not entirely risk-free, but i think there is enough here to suggest that the requirements have been satisfied. >> so when you say not entirely risk-free, what the request was

as there would be a meet and confer and there would be an opportunity from representative members to meet and ask questions and understand the process better. i don't think they believe it's been satisfied. i just want to hear what you have to say about not necessarily being risk-free. >> i believe there was a meeting and i believe i wasn't at the meeting, but my understanding is no questions were asked -- the questions were asked and answered fully. if that is the case, then the questions have been answered. i was not at the meeting. >> do you want to jump in? >> the original request was that there was a requirement that this retirement board to meet and confer with labor before we issued the r.f.p., which is something that i can say we've never done, not only in my 20 years, but i think commissioner driscoll will confirm that you

never considered the selection of a third-party record keeper for the deferred program is anything that was subject to meet and confer. when i got the request to meet and confer, at a point in time after we issue the r.f.p., and after we formulated our recommendation, i referred them to the city, and i was advised to communicate back to the labor organization that it has been a long time practice. that the city believes it is within the authority of the retirement board to select its vendor, and it does not rise to the level of a meet and confer. >> the opinion then is -- just to clarify, it is an opinion you're being advised on and it does not rise to the level of meat and cover? >> that was my response back to them and then they appealed that they went to the board on the issue that the issuance, not the

outcome, with the issuance of this r.f.p. should have been subject to meet and confer. the meeting that i referred to earlier that robert is referring to is the committee agreed to continue this item to give labor the opportunity to arrange meetings. we were available for a period of nearly six weeks to meet, and in fact we were eventually invited to a meeting. but certainly we were asked to give a presentation of how we got to the point of the r.f.p., our recommendation, and we were there to answer any questions. >> we have two letters. the other letter comes from the president of the police officer 's association saying that in a minimum, these cities should have checked in woodley union leadership. did that happen or not happen? >> never in the practice --

checked in with union leadership >> okay. this question will be for the city attorney. what will happen through this unfair labor practice carrying process, and if it is found that it should have risen to the level of meet and confer, how would that affect the r.f.p. issuance? would have to be rescinded? >> if the decision is in their favour, it would invalidate. >> that is -- does that go to the local department of labor? >> it goes there. >> but that we could vote today on it, and if that happens then we can rescinds that? >> i understand. my question is, how long does that process take, because they

are happening concurrently if we do approve today. so hopefully we are approving, and after that we would be moving toward entering into the contract, and the process would begin. this matter goes to arbitration. how long does that take? >> this letter was sent to some of the retirement board members, and it did not get to a lot of us because the e-mail addresses were incorrect. >> which one are you referring to? schema hummingbird roger and rosenfeld. >> what they have asked as they request a retirement board to refrain from changing third-party administrators until these matters are resolved. now that we have this letter, i

would recommend the board approve this and i will consult with attorneys and they will give us advice as to how far we can proceed when negotiating a contract. the alternative is that we would delay the decision or the process of the recommendation for an indefinite period of time >> how would that impact the current third-party administrator if we were to delay the process? >> i'm confident they have agreed to the extension pending a transition. will have to approach them anyway because the delays is at the end of this month. so we have two options. we could ask for the item to be deferred pending the outcome of the hearing and arbitration, and/or approve the contract with conditions.

>> writes. any time you approve a contract subject to us being approving -- subject to us approving a contract. if we are not able to contract because of the r.f.p. process that is determined somewhere down the line, then it invalidates all of the reactions including your approval for the r.f.p., the committee work, and the action. >> i'm sorry. i just want to continue on my line of questioning. if we were to approve the subject, would we be exposing ourselves to any financial obligations if we were to rescinds that contract based on the outcome of arbitration? >> they there will be legal fees associated with this and they have to be born out of the

budget of the deferred committee that is happening anyway. we certainly wouldn't hire them until we got the green light. >> through the chair, are you saying that if we were to approve this subject, it would be approved to the subject of arbitration, we would extend the current contract, we have to current contract. >> we have to rely on legal advice. is subject to whatever legal advice is related to the probability or possibility of us prevailing on there peerk otherwise they could keep delaying the court hearing and basically give the incumbent and other two or three or five years so there has to be legal advice.

which is the same thing we always relied on when we are trying to negotiate with any vendor. >> how long will it take? >> i will be able to report back to next month whether we are negotiating or not. >> it seems to me that maybe we should make our decision in the next month. >> but then that will delay it again. >> we could keep going on and on and on for years. >> i just said one month. >> is there a benefit? >> this aspect started several months ago. >> i understand. i am just trying to avoid a situation where we sign a contract with somebody and the outcome of the arbitration says that we've made a mistake. i'm not saying that we have, i am saying there is a possibility from city attorneys that there is a risk to move forward with signing a contract with the awardee given the fact that they have filed an unfair labor

practice. that is my only point. >> could we write that up is subject to? >> i would say we proceed if we get the green light from the city attorney. we proceed to enter into a contract. if it is later voided, it would not be the first time in the industry that this would be voided, and we would uniformly issue another r.f.p. and go through the process, whatever the board told us we needed to do if, in fact, that was the finding. >> i want to hear you. >> i'm not trying to do a history lesson. but we will get to the punchline if i am a recipient of the letter from local 261, as well as the p.o.a., two different

attacks on the letter. basically they do not want us to proceed. i think the significance is in the meet and confer requirement. i am not a lawyer but i am very familiar with that requirement. that was the basis of us and the plaintiffs back following the 1976 charter amendments that created what is commonly called tear two. we said the city did not meet and confer with any of these. we were not the only union involved. my union was the lead litigator. however, you went to the supreme court and was ruled as a nonmeat and confer item. meet and confer legal issues have been raised many times around the state, particularly different cities and different counties. i'm not a lawyer, but i don't

believe the issue. i think they may have addressed that in their letter. it is meet and confer, not meet and create. they are pursuing both trap -- both tasks by the way. it can take a couple of years to get them perfect. or we can't knowing some of the people sitting on the board. >> do we have a recommendation from the city attorney? >> sorry for speaking solely, there is a lot of thoughts going here. >> there is several parts involved here. there is a valid cash cost. the timeline for this whole decision was based on credentials and contract ending january 31st, january 29th, and this is why the board issued the r.f.p.s after they were publicly disclosed in committee meetings, and there were union representatives here for that day to see it, as well as the

bidders before the board's approved the r.f.p., in the timeline to do all the due diligence, scoring, evaluations, reference checking so the board could vote in october. but we are asking you to postpone it a couple months, and postpone it another month, well here we are today. they are the soft dollar costs. the costs -- there are no costs charged to the participants but there are costs as one. is a soft dollar cost that by this being the additional work being done by people, that means particularly our staff is not able to do other tasks associated about what the participants made. i am curious to hear what the credential will have to say today because i do remember very clearly them speaking at one meeting a couple of weeks ago where they were concerned about the reputation.

i think they have a very solid reputation, however, part of the information we were evaluating in october and november and december were written and oral statements made by them and participants. not only did i find them irrelevant to the whole process, because i told some of the people to bid. our members have benefited from competition both on fees as well as services. i can go back to the consultant to tell us how to improve the plan. that is one reason we went unbundled. is another reason how we were able to drive the fees down as the bidders start doing all of their usual business. for some of the statements that were sent to us that we went out and checked, we keep rechecking our references. some of them i d