if there's a vacancy of one of the officers. even if the vice president resigns, you would have to officially have an election that would be a new voic vice presid, right? >> right. >> makes sense. so if it's president or vice president there needs to be an election. >> taking it a step further, should we put in -- make it a rule about the rotation? >> i think that's already in here. >> it's not rotation in here. >> right now it says if the president and vice president are absent, the most senior member of the commission presides. but that doesn't speak to rotation of officers.

that is for that matter and who chairs the meeting. as both the chair and the most senior person, if you were not here we would go to the next most senior person. >> are we spending too much time on this. >> actually this is important. >> well, i think it gets complicated and especially if you put into the by-laws for rotations we have by custom. that has unintended consequences. >> i would be hesitant too. >> i would think if it is our inclination to stick with the rules as they are this moment. we follow the rules as they are at this moment and schedule an

election. and that when we get past that, and with more thought and time, to process it that it looks like we really ought to change the rules to plug this hole than we do that. >> all right. end of discussion. next item. >> is there public comment? >> item 12 prove number 4 to agreement number cs 9-1-1 r and authorization the general manager to negotiate and execute this amendment increasing the agreement by 3,800,000 and exceeding the term by 10 months. >> director water capital programs the sfpuc. this amendment is to make one

final amendment for the construction management contract for calaveras dam replacement project. we've known we would need to do this eventually but we wanted to wait until this time when we knew exactly what would be needed in terms of costs and duration. so this will allow us to finish the management of the construction contract as well as close out this very complex contract. if you have any questions, i would be happy to answer them. >> i'll move the item. >> i'll second. >> any public comments? all those if favor. >> aye. >> opposed. the motion carries. >> next item. >> prior to public comment, and we'll read the closed session items. item 15 is unlitigated claims

kin du truong 16 peter day ton versus city and county of san francisco, 17 han over insurance company asowyx holdings incorporated. and 18 is existing litigation david alfaro versus city and county of san francisco. item 19 existing litigation pacific gas and electric corporation and item 20 existing litigation city and council tee of san francisco versus pacific gas and electric company. item 21, existing litigation pacific gas and electric. 22 existing litigation pacific gas and electric. 23 existing litigation pacific gas and electric. 24 existing litigation pacific gas and electric. 25 existing litigation pacific gas and electric. 26 existing litigation city and county of san francisco versus pacific gas and electric. >> is there any public comment on the items to be discussed in

closed session? hearing none, may i have a motion to assert. >> move to assert. >> second. >> all those in favor. >> aye. >> aye. >> opposed. the m >> we have now come out of closed session. i would like to report on the items. 15, 16, 17 and 18 were settled and items 19-26 there's no action. may of a motion regarding whether to disclose? >> not to disclose. >> i need to make a clarification that on item 18, item 2, was not heard in this closed session. >> thank you. >> is for the plaintiff, sanchez. >> i have a motion on the table.

do i have a second. >> i'll second. >> all those in favor. >> aye. >> opposed. the motion carries. is there any new business? before we adjourn. >> so, this meeting is adjourned at 4:00.

>> the teams really, really went above and beyond and is continuing to do that today. this past year, the san francisco public utilities commission water quality division started receiving many more requests to test for lead in the public school system here in san francisco as a result of legislation that had passed from the state requiring all of the public schools to do lead testing. and so as a result, the public utilities commission and the water quality team in particular was asked to meet with the san francisco unified school district to begin to prioritize which schools to test to meet that state mandate. >> the team that tests, we're a full service environmental laboratory, and we take care of both the needs of the water quality division and the waste

water enter price. and on the water quality enterprise, we have to also have drinking water that meets all federal and state quality regulations. and lead in schools, we're playing a problem in remediating this problem of lead in schools. >> our role here in communications is being able to take the data that we have that we know is protective of public health and safety and transmit it, give it to the public in a way they understand we are really doing our jobs well and making sure that they are safe always. >> the public learned very quickly all the accurate facts and all the critical information that they needed to know, and it's up to these individuals and their agencies and their commitment to the city. >> i enjoy the work because i can help people, and i can help the utilities to provide a better water quality, make sure that people feel that drinking

hetch hetchy water is actually a pride. >> hats off to the water quality team because between them working on late nights, working on the weekends when the schools are closed, and working as a partner in the school district for the times they found a higher lead sample, they worked through to address that, so the team went above and beyond and is continuing to do that today.

>> we start with the pledge of allegiance. will everyone please rise and join us in the pledge of allegiance. [pledge of allegiance] >> president stansbury: roll call, please. [roll call]

>> president stansbury: great. thank you. in a moment, we're going to go into closed session. before we do so, we will call for public comment. being that there are no members of the public present, we will close public comment and go into closed >> president stansbury: we're just coming out of closed session. rememb we are returning to open session. is there a motion not to disclose? >> yeah, i move that. >> president stansbury: there's a motion by commissioner bridges, second by commissioner driscoll. is there any public comment on this? seeing no public comment, can we take this item without objection? great. item passes. [gavel]. >> president stansbury: we are

going to go to item number four, general public comment. seeing none, we will close general public comment. next item, please. [inaudibl [inaudible] >> president stansbury: is there a motion on the table? [inaudible] >> president stansbury: is there a second? >> second. >> president stansbury: motion by commissioner bridges, second by commissioner paskin-jordan. is there any public comment? seeing that there's no public comment -- oh, commissioner bridges? >> board member bridges: yeah. on the discussion of hiring boia, and there's a section in attributing to what i said, which is fine. i apologize for what was a waste of you all's time but

none of that was captured. i was speaking about the r.f.p. process. i'm not sure what direction is given to the person drafting the minutes. [inaudible] >> many, many minutes that we just sort of wanted to try to get the gist of what their comments were. but certainly, if you want us to go back and beef up your areas of discussion, we can certainly do that. but the issue was it was a long discussion. >> unequivocal sections, trying to capture what was said is what i want you to do. don't go backwards to that meeting. >> okay. i hear you. >> as for the termination of fidelity issues, i think there

are other issues we want to capture other than just performance. and i'll talk about that again when we get to the c.i.o.s report. it's just a comment on the minutes. i'm not voting against them or anything like that. >> okay. >> president stansbury: there's a motion. we have a second. we'll call for general public comment -- we'll call for public comment on this item. is there any public comment? seeing no public comment on this item, we'll close public comment. can we take this item without objection? great. item passes. item number six. >> clerk: item number six, action item, consent calendar. >> president stansbury: we'll call for any public comment. are there any members of the public that would like to address the commission on the consent calendar? seeing none, we'll close public comment. is there a motion? is there a second. okay. can we take this item without

objection? item passes. okay. why don't we go ahead and we will move onto item 15. is that where you'd like to start? you want to start on 14? did i miss one? item number 14 it is. >> thank you. good afternoon, commissioners. this recommended approval for a 2% july 1, 2019 basic cola impacts over 27,000 retirees bay area consumer price index increased almost 2.5% for 2018, so there is a nominal cola bank shown on exhibit b, and in years when the inpolice station is less than 2%, this cola bank would ensure benefits do increase up to that maximum 2% for most employees. >> what is the current bank at? >> i'm sorry? >> well, it varies on when you retired, so if you've been

retired for a long time, it's almost certain that you're going to always get that maximum 2% increase. yeah, it's on the last page. [inaudible] >> -- for folks who retire after 19893. that's a basic guaranteed of 2 22% of cola if even inflation is zero. >> your benefit would never decrease below your original -- i mean, from when you had first retired. >> okay. great. is there a motion? [inaudible] >> there's a motion by commissioner casciato, a second by commissioner bridges. we'll open it up to public comment. is there any public comment on

this item? seeing none, we'll close public comment. can we take this item without objection? item number 14 passes. item number 15. [agenda item read]. >> the rates have been quite a bit smaller than the 4% minimum insured in the carter, so we would like -- charter, so we would like the board to approve a credited 4% interest rate starting july 1, 2019. >> okay. do we have a motion? by commissioner casciato. seconded by commissioner chu. we'll open it up for public comment for this item. seeing no members of the public that would like to comment on this item, we'll close public comment. can we take this item without objection? item number 15 passes.

item number 16. >> clerk: item number 16, action item. review and adoption of july 1, 2018 actuarial evaluation report, presentation of employer contribution rate stress test projection. >> we have bill hallmark and ann harbor to present you the key results. >> good afternoon. we're going to run through the highlights of the results, talk about what the key changes were in the last year, and then, take a look going forward. on side 2, the chart shows last year's contribution rates compared to this year's contribution rates, and you can see that the average member rates stays about the same, and

the employer rate goes up from 23.3% to 25.2%. the black line represents the normal cost. that's the expected costa tributed to the current year of service, and so -- cost attributed up to the current year of service. the teal line we're calling tread water line. that's the amount of contribution that needs to be made to keep the u.a.l., unfunded liability at the same dollar amount if all of our assumptions are met, you have to contribute to that level inform tread water, and a lot -- to tread water, and a lot of departments aren't contributing that amount. this shows the role this system has taken in contributing significantly above that level, and all of the contributions above that level are going directly to reduce the principle of the unfunded

liability. those rates are before any of the cost sharing adjustments, so they're in our appendix. we have the complex table array of all the cost sharing adjustments for all the different classifications and so forth. but after the cost sharing adjustments, the employer rate would be 27.8%, approximately, and there would be no change in the average member rate, but it would be 11%. the actuarial liability increased this year to about $27 billion. the chart shows the liability in bar form from the prior year and the current year. the blue portion of the bar is the liability for people who are currently receiving benefits. that little gold sliver is for

people who no longer work in covered employment but are entitled to a future benefit. and then, the red portion of the bar is the liability for current active employees. the lines show the market value of assets in green and the actuarial or smooth value of assets in the -- the teal. on the actuarial value whibasi we've increased to 87% funded level, and on the increase, we're up to about 97% funded. those are very good funding levels compared to other systems around the country. on a market value basis, the unfunded liability decreased from about 3.3 billion down to 2.8 billion. >> what is calpers currently at? >> much lower.

something like that. >> in terms of our funding status compared to other california pension systems, do you have any sort of sense of where we are? >> i would say you're probably in the top three or four. i would say three or four others -- contra costa are over 97%. >> the fresno systems are over 100, and then, there are a few around 90%. i think contra costa, a couple of l.a. systems are in place, but there are a lot of other systems that are much more poorly funded. >> thank you. >> but this chart identifies the sources of the change in the employer contribution rate from last valuation to this valuation, and i wanted to note that when we were here november

and were showing you the projections, and you adopted the 7.4% discount rate, this 24.2% contribution rate is actually 20 basis points lower than the projections we were showing back in november. and the main reason for that slight decrease is really the assets, the preliminary assets that we were using were lower than the draft -- or the final assets. the final assets were about $175 million higher than those preliminary assets. really, what i'm saying, nothing has changed much when we were back here in november in terms of the contribution rate. the main sources for the increase of the contribution rate are that july 1, 2018 supplemental cola, the discount rate change from 7.5 to 7.4%,

and then, the fourth year of that five-year phase in for the 2015 assumption changes, those three things increase the contribution rate by 3%. and then, your favorable asset experience along with fully paying your charter -- a couple of charter amendments decreased the contribute rate by about -- contribution rate by about 1.4%. this graph is showing the changes in the unfunded liability in the past ten years. the bars represent the annual changes in the accrued liability and the components, and the line represents the net change in the unfunded accrued liability. and you'll notice the good news, in the last two years, you've seen decreased in your unfunded liability in 2017 and '18. so the u.a.l., though, has increased, and i apologize for the typo. it's by 4.1 billion, not

4.9 billion, over the last ten years. the majority of that or nearly more than half of that is due to assumption and method changes, which are represented by the purple bars. in 2011-12, '14, and '18, those changes were all changes in the discount rate and they assumed rate of return. in 2007 and 2018, those were based on the demographic changes, the studies we do every five years. in 2018, there was a very large increase in the unfunded, and the majority of that is due to mortallity assumption changes

that some of the national tables had, and at that point, we needed to include mortallity changes, as well. the net last five years, you'v actually see actuarial investments gain from 2014 to 2019. but back in 2009 to 2013, you're seeing those gold bars, those are the actuarial losses on assets mainly due to the 2008 financial market crash. >> okay. while i see -- i see the dot on the line graph, but for 2018, what was the dollar value decrease in the u.a.l.? it's like 25, 50 million-ish,

something like that? >> i think it's 45 to 50. >> okay. >> it's in the report. >> okay. thank you. >> the supplemental cola represent 1.1 billion of that u.a.l. increase, and those are represented by the green bars. we had supplemental colas in 2010, '11, '17, and '18. and in 2016, there was no supplemental cola granted for that year, but those are those retroactive supplement cal col for 2013 and '14 that allow certain people those supplemental colas, even if they're not funded. the liability experience was about a decrease of .7 billion and that was mainly due to

lower than expected salary increases and lower than expected colas for the old safety cola group, but you can see they're very, very small compared to some of the other sources. and then, lastly is the fact that your contributions are in excess of the normal cost expenses and interest on the u.a.l. or in other words, your contributions are -- over the last ten years, you've been able to pay down your unfunded liability. specifically in the last five years, you can see the red bars from 2014 to '18, have contributed to decreasing that u.a.l., and that's when the new

amortization kicked in. >> can i ask a question on that. >> yes, absolutely. >> looking at the chart where it shows contributions as decreasing the u.a.l., can you explain the -- >> sure. >> -- why each year, it's so different. i mean, i would think that the contributions are consistent kind of across the board, right? >> so what we're measuring here is comparing the actual contribution to the normal cost plus the u.a.l. of normal market assets, and that fluctuates each year with the market value of assets. for contributions, we smooth things out, and so some of that volatility you're seeing here in the size of that bar is really just reflecting us smoothing the contributions

while still trying to pay down the u.a.l. while the market value fluctuates. >> is that from a method change? >> that's -- in part, that's -- well, that aspect has been there throughout because we smooth the assets over a five-year period. >> okay. i'll circle back offline. that went right over my head. >> it's just -- we try and keep the contributions as smooth as we can while trying to account for environmental changes, but they don't smooth as rapidly as the measure of interest on the u.a.l. >> okay. thank you. moving forward to slide eight, is the historical and projected

contribution rates. and to note, the blue line is the 2017 valuation projections, and you can see those projections from last year to this year have not changed much at all. there was investment gains this year that have overall reduced the projected contribution rates going forward, but they're slightly offset in the short-term because of the supplemental cola that was also granted, and that was paid over the next five years, you see the supplemental rate increase over the next five years, and also due to the 2015 assumption change. the last year for that will be fiscal year ending 2021. historically, from 2010 to 2015, you see that sharp increase in the contribution rates, and again, that's the investment losses from 2018 --

or i'm sorry, 2008, plus some of the assumption changes. and then, in 2016 and '17, there's slight decreases in the contribution rate due to actuarial gains in the investments, and then, that graduate increase from 2017 to 2021 due to the gradual phase-in of those assumptions. >> so we wanted to point out, we've added a new section in the valuation report in advance of a new standard of practice that requires some assessment and disclosure of risk. so we're not going to go through -- well, a bunch of the stuff that is in that section is the projections that we have traditionally provided you, and so we will be going through that, but i just wanted to

explain what this new section is and how it's laid out. the standard requires us to identify the risks and assess the risk at some level. the assessment does not have to be very detailed at all. but we are required to recommend another assessment if we believe it would be significantly beneficial. in the draft, they didn't have the word "significant" in there, and my question was when would it not be beneficial? so we got some clarification, and you'll see some language in your report that says, you know, we're providing sufficient risk assessments at this time and we're not officially recommending a more detailed assessment. it also requires us to disclose some maturity measures that are

relevant to understanding the risks, so there's some assessments showing the maturity of your plans compared to other plans across the country. most of this information, it has been from the past reports and has moved into that section, but there's some new information and some new language explaining it and setting up the risks. these are some of the sample charts looking at some of the measures compared to other systems. the bars are the distribution of other systems, and the diamond is where esfers stands. the higher you are on these charts, the more sensitive you are to risks. we can go into that in more detail, and we did talk some

about it in the july or august board meeting, but we just kind of wants to summarize what we put in there. we identified three specific items to assess. investment returns are the obviously one, the risk that your actual future investment returns will be other than 7.4, and those assessments are the traditional projections we've done for the different scenarios and we'll touch on those in a minute. interest rate and assumption risk. one of the things that has caused the -- how much assumption changes have increased the unfunded liability, part of that was the moretality, and part of --

mortality, and par of it was changes in -- part of it was changes in the markets. so we just put in, what if we had to reduce the expected rate of return by another 100 basis points, so you can get a sense of that sensitivity. then, the last thing was the supplemental colas. with the audit, they raised the question whether we were capturing the supplement cal colas and whether there was a risk there, so we thought we would show that risk and our assessment. the assessment and the report basically shows that our current methods do take care of the supplemental colas, even though we don't testify a liability for them in advance, we only recognize them in our contributions once they're granted. but then, we amortize it over a period of five years, and our stress tests show that

methodology works. >> can i -- for the sake of time, a lot of this is stuff that we have -- things are putting together the summary stuff. i know some of this is new. if you maybe can just hit on another one or two sort of high points, and we'll -- >> yeah, so our plan is this works for you, i'm just going to setup the scenarios, and we're going to go to the last page. we're not going to look at the different pieces here. so the scenarios we've done are based on the hypothetical scenarios that are not intended to give an actual projection of what would happen, but to give you an idea of the actual stresses in the system. those are based on five-year capital market assumptions, and we showed the distribution of those assumptions over one-year

and five-year periods. we've created one-year shock systems that are based on the 95 percentile turnover one years, and then one-year and five-year significants that are based on the 75th percentile and 95 percentile over five years. so what happens to funded status, what happens to contributions in each of those scenarios, and i'll let ann summarize them. >> so this is a summary of the scenarios that bill was just explaining, and you can see -- okay, the yellow are the one-year shock, so there's a one-year very negative or very positive shock. one-year moderate and one-year significant. what's interesting to point out

in the short-term, the next one or two years, there's not a large difference in the contributions in these scenarios. you're only seeing about a 6% range in that contribution rate where the return for that one year -- for the next year would be -15 for the negative scenario and a +15 for the positive scenario. so you have this cushion right here in your plan right now because you have about $700 million in the difference between your actuarial value of assets and your market value of assets. there is the scenario what your rates could be given market rate returns. >> so just in conclusion, the projections are similar to the

last valuation. next year is the last year we are increasing the 2015 assumption change cost, so there is an expectation of an increase next year, but that's -- after that, there's an expectation or a trend of much lower contribution rates, but that all hinges on investment returns, and there's a wide range based on what your actual returns are. >> what was our return last year? 13 -- >> 2008 was 11.5%. >> that's june 30. >> 11.5 was the -- >> it was 13.5 in 2017 -- june 30, 2017. >> i'm sorry. >> it was 13.5 for june 30, 2017. >> i lost the year.

okay. thank you. [inaudible] >> motion by commissioner casciato. can we have a second? >> second. >> there's a second by commissioner chu. we'll open it up to public comment. are there any members of the public that would like to address the commission regarding this item? seeing none, we'll close public comment. can we take this item without objection? okay. item passes. thank you so much. >> thank you. >> number 17, please. [inaudible] >> and this item is just the culmination of the presentation that you just heard. >> there's a motion by

commissioner casciato. do we have a second? >> i'll second. >> there's a second by commissioner bridges. we'll open it up to public comment. are there any members of the public present that would like to address the commission regarding this item? seeing none, we'll close public comment. can we take this item without objection? item number 17 passes. thank you very much. >> thank you very much. >> thank you. >> thank you. >> thank you. >> thank you so much. >> mr. huish. where wou where would you like to go? how long do we -- do we want to go to -- or do we want to go to nine first in terms of timeline? yeah, item number nine's an action item. do you want to go to nine

first? excuse me, kurt, did you want to do item nine before seven and eight? >> yeah. >> okay. [inaudible] >> thank you very much, board membe members. this is a recommendation to terminate a quantitational income strategy. >> as bill described, staff is recommending an napc of l.s.v. unless any p.c. would like to make any comments, i'll turn it back to the board for any

questions. >> board members? >> i support this recommendation. perhaps you could boil is down into one sentence why you want to do this. the spokesman is to your right and across the room. >> you want us to say that here? >> no, in case there's a phone call because they're not going to be able to read this to them over the phone. they've already written the article, and it's going to fly out tonight. in case there's a phone call or a real clear statement, we're making other changes to this. >> okay. we don't typically make comments to the press. we tell them what the recommendation does and whether

it was approved. >> the recommendation made last month? >> yes, which we made in open session. we're not going to make that comment again. >> i'm just trying to have you help the spokesperson who may speak to the media if they answer the phone. >> our advice is just to refer them to staff's memo. >> right. >> any questions from the board? >> so moved to support staff's recommendation regarding l.s.v. >> there's a motion by commissioner driscoll. do we have a second? second by commissioner casciato. we'll open it up to public comment. are there any members of the public that would like to address the commission regarding this item? seeing none, we will close public comment. any discussion amongst the board? can we take this item without objection? item passes. thank you very much. why don't we go back, and then,

we'll start going back through -- in order. we'll go back to item number seven -- sorry. [inaudible] >> so, you know, as stated, this was our proxy report. if kurt and andrew have any comments, and then, we'll answer any questions from the board. >> so each year, our proxy consultant provide a report on proxies voted in the prior calendar year, and also on an annual basis they review the approved proxy guidelines and makes recommendations for modifications. andrew? >> thanks, kurt. hello, commissioners. so the full report is there for your refer. i just wanted to draw your attention to a few items related to our voting activities for 2018, and then, we're joined by andrew lindberg

from i.s.s. he's the head of custom research for the americas, and he'll give us an overview of sort of the general trends of proxy voting in 2018. >> sorry to interrupt. i probably should have called items seven and eight together. so maybe we can be brief on seven and then move onto eight when we're done, and then, we can speak about those trends. >> yeah. sure. so just very quickly, on seven, just wanted to remind the board that we continued to vote in line with our custom voting policy. that means that we generally support progressive corporate governance measures like proxy access, the ability to act by written consent, right to call special meetings, independent board chairs, board diversity, disclosure of climate risk, etc. we continue to oppose excessive

executive compensation, poison pill measures, golden parachute measures. in addition, we continued to support the shareholder resolutions filed by the members of the series investor network on climate risk and sustainability, so we voted in favor of 65 of these shareholder resolution, a very few received majority support, but there were a few at kinder morgan and a couple others. it's important to note that a couple were withdrawn because management was able to sit down with companies and enter into a constructive dialogue. so maybe i'll close there. we can then move to the next item, and then, andrew could offer a few comments. does that -- >> is that agreeable? okay. great. so why don't we open it up to public comment.

seeing that there are no mem y members of the public present that would like to address the commission, we'll close public comment. thank you for your report on item number seven, can we move onto item number eight, please. >> item number eight is our updates to our proxy voting guidelines for 2019. as kurt said, for each year, we review our proxy voting guidelines that we've consulted with over the years, work with our proxy consultant, i-s-s make sure that they reflect any changes to the corporate government's landscape and review what constitutes good corporate governance. we took the liberty to make some updates to the formats of our proxy voting guidelines. this was just to improve the readability, presentation of those guidelines, hopefully make them more accessible and useable for staff and removed

any superfluous information. really wanted to go into the more substantive changes we're recommending. we're recommending ten total changes. i think the three key ones that i would like to highlight is one, we're recommending an update to how we vote on management to say on pay proposals and remuneration policies to just take a closer scrutiny on pay magnitude, and pay and performance alignment, internal pay disparity, and then, performance based equity, so this means we may vote against management more this proxy season than on pay proposals. second, we're recommending an update to our u.s. director election policy where we will

generally vote against the chair on nominating committees and generally other directors at russell 3,000 or other s&p companies when there are no women on the companies board of directors. and then third, we're recommending an update to the u.s. director elect policy so expand the definition of what we call a material failure of the board to also include the failure to adequately guard or manage certain e.s.g. risks. so the other change i think are a little more routine. we wanted to highlight those three and certainly can answer any questions on that or on proxy season 2018. and maybe we'll just pass it to andrew for a few general comments. >> excuse me. thank you for having me in

today. i would say there are a couple of key issues in the corporate governance or the e.s.g. landscape that we've noticed in the last year. the first one of course being board diversity. diversity comes in a number of different -- comes in a number of different ways, but one of the key focus among investors are share olders this year in 2018 has been in terms of board gender diversity, so bringing females onto all male boards or increasing the level of gender diversity at u.s. companies, looking at the landscape today, about 24% of companies in the russell 3,000 do not have a female director on the board. this is -- you know, there's been some improvement in the last few years, but it's still trailing a number of other developed markets where this is dealt with in ways other than proxy voting. of course in the u.s. context, this has historically been dealt with through the property vote or through engagement.

we are potentially seeing a change to that. some of you may be aware that california's introduced legislation that would mandate california companies or companies whose principled executive officer right side in california to have a woman on the board by 2019, two or three women on the board by 2020, depending on the company size. this is a positive development on the regulatory side, and other states are beginning to follow. new jersey, back in november, essentially introduced the same language in their legislation that would require companies based out of new jersey so have the same levels of diversity at their public company boards. so whether this is -- whether this will withstand any sort of challenge in the legal system remains to be seen, but at least for right now, companies are being advised to comply with this legislation, so certainly a positive sign. looking back in 2012, about 17% of directors were female last year. that number's up to 25%, so

we're seeing a positive growth, but it looks like there needs to be a little more pressure. that's really what the goal is, as andrew mentioned, one of the recommended policy changes, is recognizing in 2019, there's really no excuse at a russell 3,000 company not do have a female on the board. that's a low hurdle, and i think that's one thing that many key investors or companies are willing to take. the other thing i'd like to highlight is in the context of shareholders resolutions, touching on environmental or social resolutions, 20 or 25

received majority support. a real change in investors' philosophies, touching on things such as climate change, and sustainability reports, but even some social issues, which is a first in 2018. there were two proposals aimed at manufacturers or distributors of firearms. one is sturm ruger, the other one at american outdoor brands, and so those proposals received majority support, and eye third proposal addressing the opioid crisis at depo med received majority support. this is a first for me of seeing these types of proposals receiving majority report and an issue on the proxy. i don't foresee that going away in 2019, and as andrew mentioned earlier, about half

of these proposals on environmental and social issues, about half of them are withdrawn, and the company is beginni beginning to disclose and provide more information to shareholders. >> commissioner driscoll. >> not about the content of what you spoke on, but one, i want to thank mark coleman on number two, who did the report. is this task that mark performed going to be passed over to mr. collins -- not that mr. collins doesn't have enough to do already, but -- >> proxy, we've decided -- andrew's resisted, but andrew will be responsible for our proxy voting. a lot of what was done here was done in tandem with both mark and andrew. >> okay. thank you. >> any other questions from the board? seeing none, why don't we open

it up to public comment. seeing no members of the public that would like to address the commission, we'll close public comment. is there a motion? >> so moved. >> motion by -- >> second. >> motion by commissioner driscoll, seconded by commissioner bridges. can we take this without objection? great. item passes. that was item eight. let's move onto item ten. >> item ten, discussion item. chief investment officer report. >> very good, board members. you might recall in december, the december equity market was the worst since the great depression. the s&p 500 was down 9% for the month. while turnaround, january was the best january in 30 years. the equity market was up more than 6.5%. we were up 2% in the aggregate.

i do want to turn your attention to page two, two items. if you look at the information under the current block, we currently have 34.9% in public equity. that is quite low compared to peers. that is by design. our plan is designed to achieve high -- do two things. earn high long-term returns and provide better returns in down markets, okay? so -- and we achieve high and long-term returns both through asset allocation and manager selection. you'll also see in private equity because the denominator fell, private equity fell pretty significantly in the fourth quarter, is that private equity, we're now 2% overweight. this is within our expectations that our range could range between 13 and 23% versus a

policy of 18, given the variability of daily priced assets in equity. i'll turn real quickly to the narrative i highlighted in area one, you know, the market returns in december, in january. january was really boosted by two things. one was positive statements from china about some reconcilia tory statements, so the market has been buoyed by that, and the other was added jobs. the job market continues to be very, very strong. next month, alan will be providing our quarterly and fiscal year, etc., our calendar year, etc., performance report. you're going to see on a relative basis, the numbers are very, very good. item number two on page two,

the e.m.g., i've highlighted here. we've met about six times, i think seven, including yesterday, and you'll see we -- these are the seven working points responsibilities that we've identified so far. i expect this to be tweaked once or twice over the next quarter or two, but these are the assignments and responsibilities that we're acting on. some closings that we're reporting on -- >> we'll take the closings as submitted unless there's anything really important you want to point out that was -- >> no. is that okay? very good. very good. okay. so i'm going to move -- and would you like to move through the charts and just save those for another time, given the hour? >> why don't you hit on some of the high points? >> one thing i'll point out is look at the chart on page five, the lower part. the equity market was down for the year. but what d