slowly. but i'm not sure what's happening there. >> there have not -- you know, there continues to be a pretty low rate of [indiscernible] for executive compensation, and i think it's been perhaps less of an investor focus area over the last several years. i think what will be interesting to think about is, you know, going forward into this 2021 proxy season is executive compensation in light of, you know, covid and layoffs and restructuring, and i think, you know, you will see probably pushback from investors around compensation that seems -- you know, may be in line with performance over the past year period, but also, you know, when wages have been cut or layoffs

occurred with workers. >> exactly. yes, i would be curious to see data around that. the other thing you talked about was the climate action 100 and [indiscernible] and various initiatives. have we seen any of our other managers join this, the climate action 100? i know [indiscernible] was probably one of the first instances. i would hope more managers would be feeling that. >> we do have other managers that are both participants. we have other managers who have expressed interest and are considering participating and then we certainly have, you know, many managers who are engaging with portfolio companies around climate risk but perhaps not formally through that initiative. >> okay. and then my other concern is, we talked about diversity and i like what you've done in terms of the work around that. do we use that same

[indiscernible] in terms of rps and other things, do we really apply the sfers criteria for the type of diversity we're looking for across the board, including [indiscernible] and other sectors? >> i can't fully comment on that. i guess what i can say is, you know, there is proposition 209 in place in california -- >> i know. that's why i -- >> i know. up to a vote, that's in november. but we do not -- i want to make clear that we do not ask about diversity characteristics when we send out an rfp or enter a new relationship or a new contract with an external party.

we're wanting to be not running afoul of (distortion). >> -- the board is engaging, we do request form 1 information which basically gives demographic as well as gender and racial diversity within an organization, which is part of the consideration. certainly we've never -- again, [indiscernible] can't target it but as we send out an rfp for consultants, we would request that information. we would certainly consider it. a manager's selection process is obviously a different process. >> right, exactly. and then my last question is on part of the oil and gas piece,

and i want to check if fracking is part of that piece because i don't see that in there, if they address fracking as part of oil and gas. >> we do not specifically differentiate between the type of extraction technology that a firm is using. so within our portfolio, you know, we have exposure to companies with all types of resources, and many of those, particularly in north america, right, are fracking. >> and they usually disclose it in lots of cases. that's why -- >> yes. >> any other questions for andrew? andrew, bill, i'll turn it back to you. but, andrew, thank you. that was very comprehensive.

and i do agree with carmen, there should be a way that others should know about the work that we're doing around esg because i think it's important because it's one of the issues that come up at the board of supervisors and other places what sfers is doing on esg. so we have to figure out a way to get some of the messaging out so they'll know -- because i think you've done a lot of work to really make sfers in the top tier when it comes to esg and the types of services [indiscernible]. >> we could certainly highlight it in our annual report. we have an investment [indiscernible] but certainly for the public consumption we could ask andrew to basically update us on all of the activities that were done during the year and include that very specifically as a section of our

annual report and that at least would be a start. we've issued press releases, and press releases are out there. but i think if someone really wants to recommend that they look at what we're doing, maybe the annual report, which should be available online, would be the best place to sort of highlight our activities. >> before we go to the next item, i want to comment about compensation. it's of special interest to me in the esg suite. i think that is the "s" part is underappreciated. i do think that capitalism and connecting capital and finance needs to work both profitably for institutionals while also delivering better outcomes for

people and also that there's work to do and work that should be done at the executive level, better recognizing and rewarding the value of work both on an absolute level, each and every individual, and also in relation to one another. >> i concur with you, bill, on that. that's a conversation you and i have had many times. that's why i like the focus on what's going on with the investment team on esg and that's why i asked the question as well, [indiscernible] to do something differently to address the "s" in the esg. >> if there are no other board questions or comments, let's move on to the next item.

>> open for public comment, right? >> yes. if you have not already done so, please press star 3 to be added to the queue. (inaudible). moderator, are there any callers on the line? >> madam secretary, there are [indiscernible]. >> thank you. >> (caller): hi, thank you. you sounded almost inaudible, so if everyone who is not speaking could mute their lines, i think that would probably help. my name is judd. i'm a senior [indiscernible] san francisco and sent over five years working with board and staff on making their level of

knowledge on climate risk and bringing in experts and data to that effect. i want to thank andrew for all of this work. this is truly night and day from the total inaction from this agency before you brought him on board and it is a truly great body of work by any measure. i also desperately wish this body of work had been kicked off in 2013 or '14 when reams of data and multiple experts were brought to you all. the level of action on this is not remotely commensurate with the climate emergency. your posture is divorced from science on the carbon budget. it seems like me like 22-year-olds crowding into bars without masks because they know on balance it's other people they're going to injure and kill and not themselves. i'm very glad to hear in this report that staff began development of a climate action plan to work holistically. i would argue it's quite belated and also quite urgent and would love to hear from staff about the time line for its release

and presentation to the public. to the board, if this only includes public equities, it will not be a real plan. esg for your public equity and anything goes for your private investments is not separate but equal and it's not a good base for a esg -- (inaudible). what if the city and county were foremost in the country and only incarcerating 45% of individuals experiencing homelessness within a year. even an elected official would not have that attitude. you would be focused on the real world and what the actual policy outcome is, not in relation to other cities. to that end we need not to see whether we're doing better than -- >> (caller): this is jack.

i'm a retiree. i appreciate andrew's report. and i have to say, when i first heard that the portfolio would be net zero by 2050, i thought, well, that's kind of a joke because fossil fuels will be worthless by then. the state has already committed to being carbon neutral by 2045. but i think i came to understand that this is not just talking about getting kid of fossil fuels, you're talking about climate action 100 and all of the companies and their carbon footprint. so that is really good. i'm really happy to hear that you're doing that. companies like general motors, caterpillar, all of these companies using fuels. we need to get rid of it. that's a great use of our esg resources. i'm not going to be able to stay for the report that's coming up later, but i do have to call your attention to page 12 of the climate risk memo which points out that in the last ten years, the index has gone up by about

90% whereas the energy funds have gone down by about 30%. so it's no wonder that there's only $108 million left of the publicly traded funds. but i would also urge you to look -- well, also the current divestment, $406,000 out of that $108 million, it's less than 1% per year. that's like a 100-year divestment plan. that's way too slow. you have to move that up a whole lot faster. i'd like you to take a look at the real assets update that came out in july -- it has a lot of energy funds in there too. the climate transition risk that you talk about is to understand and manage risk. okay. understanding it is very simple. science says climate change is caused by fossil fuels and we have to -- that's easy. manage risk. very simple. get out of fossil fuels. so don't think it's so complicated. you've made this way too complex. just get out of fossil fuels.

and i do support all you're doing to make sure that we have a net zero company benchmarks. thanks a lot. >> next caller, please. >> (caller): this is david paige. thank you. i have spoken before and i know the oldtimers remember me and my message isn't really any different than in years past. i want to endorse what the previous callers have said. i'm no fan of engagement. however, if the meat packing companies have improved their

worker safety because of any engagement that andrew was talking about, then that's great. and i also want to say thank you to andrew and all of you that are listening. i know you guys work hard and you do good stuff and you're trying to do the best you can. commissioner chu mentioned something really important, which is the universe of people in finance and investment isn't necessarily the same universe as the people in science and public health. in terms of divesting, as a retiree, you know, i just don't feel morally comfortable with any part of my money going into private prisons, for example. but i appreciate how you guys have divested from tobacco and firearms. so i'm hoping that you're going to, you know, do something radically different than in years past and make a giant

change in what you've been doing. here's what i'm proposing: the retirees like myself have been somewhat supportive of the idea that if you -- if it's not against the law and you can make money at it, then let's invest in that. you know, regardless of the esg. regardless of how equitable a player, a company we have to do business with. well, why don't we send out a message like someone was talking about earlier, not in the annual report or in press releases but with the deposit advice that i get every month. a simple survey saying, you know, andrew could put together something from the report of amnesty international or human rights watch -- >> that is time.

[indiscernible]. >> madam secretary, no more callers on the line. >> thank you. hearing no further calls, this item is now closed. action item 9. >> i would like to make one compliment and i didn't get my microphone on fast enough. (distortion). >> the prime minister of china, mr. xi. very similar to the aspirations

document that was recommended that the board adopted or recognize a couple of months ago about this whole useful area about esg and climate improvement. just a coincidence i believe is worth noticing. thank you. (distortion). >> item number 8 action item. rea(reading item). >> thank you, president bridges. board members, this is the first of five action numbers on esg-related matters, an update on our esg policy

[indiscernible]. >> i'll keep my public comments relatively brief for this item. divested from u.s. tobacco companies since 1998, just when the companies were entering the master settlement agreement with the states' attorneys-general. we've updated the list we've recommended for divestment. in terms of what's happened over the past year, i think we've seen continuing tightening of restrictions on electronic nicotine delivery systems or vaping products or e-cigarettes. actually sales of e-cigarettes have fallen over the year, about 14%, which is more than the decline of traditional cigarettes category. there's actually a decline in traditional cigarettes, it's

much less than predicted probably due to some short-term issues like stockpiling during the covid pandemic. i think from a regulatory perspective, you know, fda -- or fda and cdc are moving forward with relabeling requirements. the e-cigarette regulations continue to be implemented and approval processes, you know, going through. one of the biggest names, j uh-ujuul -- the struggling natuf that category. in terms of updates to our list, they're really pretty minor. they're described on page 2 of the staff memo. we're recommending adding one new e-cigarette company that's pretty lightly traded and we don't hold a position in that company and updating the name of

another company and then removing three companies since they've been listed over the past year. like for all of the following members in the appendix we have a list that includes companies reflecting updates in the nothing significant in the overall summary. >> commissioners, are there any questions for andrew on this,

recommendations on this action item? if not, then i'll entertain a motion if there are no questions for andrew. [indiscernible]. >> a second? >> second. >> moved by commissioner driscoll and seconded by commissioner chu that we adopt the recommendation to [indiscernible] current policy

will [indiscernible] approve a list of restricted companies as outlined in appendix [indiscernible] of the memorandum. madam secretary, public comments, please? >> please press star 3 to be added to the queue. for those already on hold, continue to wait until the system indicates [indiscernible]. are there any callers on the line? >> madam secretary, there are [indiscernible]. >> thank you. hearing there are no calls, public comment has now closed. >> thank you, madam secretary. [indiscernible] roll call then, please. [roll call]

[indiscernible] >> if he's present, he needs to vote. >> if kevin [indiscernible]. >> next item, please. >> item number 9 action item targeted divestment in sudan,

level iii of sfers esg investment policy. >> board members, this is an update on the board's policy by targeted divestment in sudan. relatively speaking, the experience for the human condition [indiscernible] continues to occur and andrew will provide further context. andrew? >> thank you, bill. we initially divested from companies operating in sudan in 2006 at the height of the genocide in darfur. over the last, you know, 15 years or so, there's really been progress -- it's slow progress but a march towards peace and stability in the country, and that has really culminated in some changing political stances,

particularly from the u.s., towards sudan. president obama and then following through president trump had loosened sanctions placed on sudan. by and large, there still remain, you know, some select sanctionsanctions and sudanese individuals on our state terrorism watchlist. but by and large the major sanctions have been lifted. last year the former president who was in power during the genocide and there was a coup. there was a sovereignty council which includes some civilians and military leaders on the pathway towards 2022 and they will democratically elect a president. so if you recall in february, we adopted revised criteria for the

way that we see and look at companies operating in sudan, where we said that given the forward progress in the country, that we're comfortable remaining invested in certain companies, those that provide things like health care equipment, telecommunication services, power equipment, other goods and services that citizens need and can actually help contribute to positive development and stabilization, in a way that would be beneficial to citizens. we continue to not invest in companies that provide military equipment or those that were deemed to be complicit in the genocide that occurred in the darfur region. what we do with the remaining set of companies and there's, you know, a large amount of work that adrian was really central in helping with here.

in our report is we screened them against their esg management practices and want to really get some comfort that the companies that we've identified that have operations in sudan are mitigating and managing their esg risks there. if we don't get comfort with that, then we may recommend them for investment restriction. the next thing we're really looking for in sudan is the removal of sudan as a designated state sponsor of terrorism by the u.s. government, and that's the big next step for the country, which is preventing them from receiving meaningful foreign aid and foreign investment. this is something that's actually in place, not due to the darfur genocide but related to the 2000 bombing of the uss cole by al-qaeda and then bombings at u.s. embassies in kenya and tanzania by al-qaeda

and that [indiscernible] by the u.s. government that sudan was complicit in those, the country did harbour osama bin laden for a period of time. so that part is actually proceeding. there's been one settlement reached for the uss cole bombing. progress has been made towards the other financial settlements. secretary of state pompeo was in sudan in august trying to negotiate those and it seems hopeful that that will move forward. so that's the state of play. it's also worth mentioning that [indiscernible] has been brought before the international criminal court in the hague where he's facing charges of crimes against humanity and this is seen as an important step in helping to get justice for the

citizens of the country so important that that is also moving forward. we recommend adding three companies to our restricted list here. one is the company petronas that was involved in directly financing militias in south sudan. it's important that there's comfort that esg controls are in place around their corporate activities and where proceeds from their energy projects are going. and then two other companies due to lack of any disclosure or transparency, risk management didn't feel comfortable that we could get a sense of firmly not putting them on the list. [indiscernible] pages 7 to 9 of the memo and again the list proposes for adoption a list of changes are in the two appendices in that report. i'll pause there. i'm happy to answer any

questions on this update. >> commissioners, any questions of andrew on trying to get divestment in sudan, level iii? action item. i'll entertain a motion. >> i move adoption of the report. >> second? >> it's been moved by commissioner driscoll and seconded by commissioner chu that we adopt the recommendations i in the report (reading action item).

madam secretary, please open up the lines for public comment. [indiscernible]. operator, are there any callers on the line? >> madam secretary, there are no callers on the line. [indiscernible]. >> thank you, madam secretary. it has been proved by commissioner driscoll and seconded by commissioner chu. roll call then, please. [roll call]

[indiscernible]

>> i'm muted on my screen but i'm not the controller. now he's muted. >> can you hear me now? [speaking simultaneously] >> can you hear me now? >> yes. >> item number 9. >> thanks, great.

>> councilor casciato? >> can you hear me? can you hear me? >> yes. councilor casciato! >> yeah. can you hear me? >> we have five yeses. >> yes. councilor casciato? >> yes. >> can you hear me? >> yes, i can hear you. yes. yes. >> five yes, sirs. the motion passes. [indiscernible].

>> item number 10, action number. targeted police vehicle investment of firearms and ammunition manufacturing companies and retailers. >> thank you, president bridges. board members, there's been a lot of activity on this item this year. there's been a spike in sales. a lot of research. two companies are added to the list. one is falling off. and there's also been a lot of engagement efforts as summarized on page 4 of staff's memo. i'll ask andrew to walk through the item. >> thank you, bill. i want to first start and just point out an omission from the tables on page 7 and 8 of two

companies that we are recommending to be added to the restricted list this year. >> [indiscernible]. >> okay. they are outlined on page 3 of staff's report and they are first cash and easy corp. and it was my oversight that they did not end up on the list in the appendices. so i want to note that. any potential motion shouldn't -- it is recommended include those two companies. so going back to the introduction of this item, as bill said, firearms sales are up in the last year, spiked significantly, and, you know, most estimates say that guns sales are up about 100% through

2020 as compared to last year. ammunition sales are up over 100%. i think it is fuelled by a number of different things happening at the same time: the shutdown and sort of need or perception of need for self-protection, social unrest occurring with social protests and, again, a need for self-protection. and the uncertainty of the election and the outcome of the election, particularly with a biden administration that's proposed, significant gun control regulation. so all of this has resulted in a spike of firearm sales. gun violence and mass shootings continue to occur with a lot of regularity, sadly, throughout the country. there have been almost 500 mass shootings in the u.s. to date, which has already eclipsed the

number that occurred in 2019, and this is even with the shutdown for several months. you know, on a regulatory front, as i said, the biden administration is proposing pretty widespread sweeping gun control regulations. of course it remains to be seen which of those may be adopted. in particular, tightening background checks is a focus area, and then cracking down on online sales or online-facilitated transactions and actually banning those is one of the proposals, as well as a focus on so-called [indiscernible] which are unregistered firearms or actually pieces of firearms that can legally be purchased online and then assembled that don't have an identification number or require any background check to purchase.

we have productively engaged, as bill said, with some retailers over the past year. on one hand, you know, dick's sporting goods is to some degree backing away from firearms sales and their whole hunting department in their stores but they continue to implement best-in-class retail practices going above and beyond federal regulations in terms of age limits and background checks. wal-mart is also doing the same. i think, you know, sort of reading between the lines, i think their belief is that the market is sort of better if they're players in the market and can do it responsibly rather than having transactions occur online or at retail -- or at gun shows where there's fewer regulations, no need for affirmative background checks. they did stop some of their ammunition sales when there was pushback from some of their

customers around this, but it looks like they're going to stay the course in terms of their updated policies there. in terms of our recommended updates, the one that is reflected in the table there is smith & wesson brand, which has been spun out of american outdoor brands as a standalone company that will exclusively sell the firearms that are the smith & wesson brands company, american outdoor brands will no longer be involved in firearms sales but hunting equipment and firearm accessories like storage cases, sight scopes, et cetera. they would fall off our list by criteria, smith & wesson brands and [indiscernible] will be on our list. we're recommending the addition of another trade name, armus, to reflect the same name for a company that's already on our list but more commonly referred to name to provide our managers

with, and then, as i said, the addition of two pawn shop operators, easy corp. and first cash, which, you know, engage in both new firearms sales but also pawning of firearms. we've been unable to determine that they restrict the sale of firearms that are illegal for sale in california, so assault-style weapons, so therefore we are recommending that until -- or unless and until policies are put in place, clear policies and communication of those by those companies, that we would add those to the restricted list as well. so i'll pause there. happy to answer any questions. hopefully the omissions from those tables are clear but can reiterate those again, if that's helpful.

>> thanks, andrew. are there any questions of andrew? this is an action item. are there any questions for him at this time? if not, i'll initiate a motion on staff's recommendation. >> thank you. commissioner chu? >> casciato, second. >> thank you, commissioner casciato. >> it has been moved and seconded that we adopt the recommendation for the board ... and the list of restricted companies identified in appendix b. madam secretary, please open the lines for public comment. >> thank you.

callers, if you have not already done so, please press star 3 to be added to the queue. for those already on hold, please continue to wait until the system indicates you have been unmuted. moderators, do we have any callers on the line? >> madam secretary, there are no callers on the line. >> thank you. hearing no callers, public comment is now closed. >> thank you, madam secretary. again, it's been moved by commissioner chu and seconded by commissioner casciato, roll col, col -- roll call, please. >> pardon me, president bridges. i would like to amend the recommendation to include those two additional companies that i mentioned. i don't know if that requires that being specified in the motion. those two companies are currently not on appendix b.

they're mentioned in the moment but don't appear on app deck apb in the report. >> i'll amend to include the staff's recommendation plus the two amendments that andrew articulated (distortion). >> the seconder concurs. >> thank you, commissioner chu and commissioner casciato. so we will amend the motion to include the two additional companies that staff memo does not include but was recommended by staff. madam secretary, roll call vote, please. [roll call]

>> the motion passes. five ayes. >> thank you, madam secretary. next item, please. >> item number 11 action item: targeted divestment of thermal coal companies: level iii of sfers esg investment policy. >> thank you. members, good news here for the most part. coal demand has declined over the past six years and this past year is a record steady decline. coal demand is significantly [indiscernible] both in the u.s. and europe. there are five new companies being added to the list, none falling off, so there should now be a total of 46. i'm going to ask andrew to walk

us through the item in detail. >> thank you, bill. so as bill said, you know, i think the trajectory of thermal coal has been on over the last several years continues to stay true in terms of demand decreasing, prices decreasing, coal demand continues to fall in the u.s. and europe, as bill said. you know, through the retirement of coal power assets. i think interestingly china's announcement to be net carbon neutral by 2060, you know, as the largest consumer of thermal coal will be interesting to see the impact of that announcement and how that strategy plays out on the thermal coal market. too early to say specifically.

no changes in terms of our recommendation here. president trump's 2016 campaign promise to revitalize the industry hasn't really been seen as widely effective and doing much more employment or coal prices in the u.s. we continue to reaffirm the recommendation that we stay divested from companies that get a majority of their revenue from thermal coal, and, you know, we last year began to return to look at companies that get a material amount of their revenue from thermal coal. so, in other words, 10 to 50 percent of revenue. and what we were looking for there was, you know, comfort -- we said that we would be comfortable recommending remaining invested in companies that have between 10 and 50 percent of revenue, but have communicated clear plans and are on a pathway to divest and sell off their thermal coal assets in

the near term. those that don't or haven't communicated that, then we'd recommend for divestment. so there are a few companies and those we have been in touch with, like anglo american, south 32, contrara energy that do have clear plans or entered into agreements to sell off and fully divest their thermal coal assets. we're not recommending adding those to our restricted list. but there are a set of companies that we are recommending be restricted but that do fall within that range of revenue and don't have any clear plans to exit the industry. so those are outlined again in appendix a and b in staff's memo. happy to answer any questions. we're going to continue to track -- you know, we want to make sure that the companies that have announced these plans

to exit the industry, you know, make good on that to the degree that they can find buyers for these assets, and we'll continue to track companies like glenfor which received an immaterial amount of revenue and an extremely small amount of their ebitda from thermal coal but are on an absolute tonnage basis still produce a significant amount of thermal coal, continue to track those companies and make any follow-up recommendations in the future. so hopefully pretty clear here but happy to answer any questions. >> thank you, andrew. commissioners -- bill, did you want to say something on this? no?

>> no. (distortion). >> commissioners, are there any questions for andrew on this item? it is an action item. if not, i'll entertain a motion on staff's recommendation. >> move [indiscernible]. >> thank you, commissioner driscoll. second? >> i'll second it. >> thank you, commissioners. it's been moved by commissioner driscoll and seconded by commissioners casciato and chu to (reading action item). madam secretary, please open the

phone lines to public comment. >> thank you. callers, please press star 3 to be added to the queue. moderator, are there any callers on the line? >> there is one caller on the line. >> thank you. caller, please state your name and your two minutes begin when you start. thank you. >> (caller)caller, please statee and your two minutes begin when you start >> (caller): okay. can you hear me? >> we can hear you. you may begin >> (caller): sorry about the

confusion from bay area and fossil free san francisco. i'm really perplexed. the staff report does not seem to indicate anywhere what the fund's actual exposure in this area is and i don't believe the previous staff report has for those areas either. i would hope that would interest the board. certainly it interests the public. and i'm perplexed it's not being presented. the discussed changes you all are making to these lists are only part of the picture. without you indicating your actual holdings and preferably a before and after of how that reflects your positions, these lists are somewhat detached from the management of the fund. so it's concerning that i can't tell from the staff report how much the fund is invested in thermal coal, notwithstanding these changes that you're making and that the board has not asked about those questions. lastly, i really urge you to move to an absolute tonnage basis with coal and not

percentage of revenues. it's the coal that matters. it's the coal that particularly offends the esg policy, not the money. so as a thought experiment, what if amazon or apple went into tobacco or guns or suicide machines? ultimately the size of those companies would ensure that the percentage of revenue from these abhorrent products would be low, would be below whatever threshold you would set. it shows that revenue threshold is a absolutely artefactual metric to use when you're talking about these concerns. ultimately if something is an esg concern, it is a quality and not a quantity. and so we have really been asking for this for four to six years, but you can move to a percentage -- excuse me, a raw amount of coal produced metric as opposed to percent revenue metric. that would be meaningful, and we urge you to make that case

today, please. thank you very much. >> thank you for your call. moderator, are there any further calls? >> madam secretary, there are no more callers on the line. >> thank you. [indiscernible]. >> thank you, madam secretary. again, it was moved by commissioner driscoll and seconded by commissioner casciato and chu. roll call, please. [roll call] >> i can't hear, darlene.

i think you might be on mute. >> thank you. commissioner? >> we have five ayes. the motion passes. >> i don't think you heard my aye. (distortion). >> just for point of clarification, i didn't hear you call my name so i didn't respond aye. but to respond, yes, i support the motion. >> [indiscernible].

>> i will call the vote again on item 11. [roll call]

>> i vote aye. there's something wrong with this computer. >> you have five ayes. the motion passes. >> thank you, madam secretary. next item, please. >> number 12, action item, update on strategies to address climate risk in the sfers portfolio - climate action plan. [indiscernible] -- on this item as well as the previous five, there's a great amount of information [indiscernible]. the tenor of the item is on page 37 [indiscernible]. >> bill, sorry to interrupt you but we can barely hear you. >> can you hear me now?

(distortion). >> the centrepiece of this item is on page 37, table 10, additional companies to [indiscernible]. i did want to also draw attention to -- there's just a voluminous amount of information in the report and thanks to andrew for organizing it all. there is a significant decline as far as exposure in the oil and gas industry relative t to e public equity indices. i also wanted to draw attention to the watchlist on table 12 and also to the engagement list on [indiscernible]. andrew? >> thank you, bill. as bill said, this report sort of includes a variety of

information. one is a bit of an outline of our climate action plan and steps we are taking to address climate risk in the plan and our steps towards that ambition, to be a net zero asset owner by 2050 and then of course the specific recommendations around oil and gas companies. to just give an overview of the climate action plan that we've begun to flesh out in more detail, this is essentially our road map to work towards that ambition of net zero by 2050. the oil and gas component is one part of it, but, you know, as bill said, it's an increasingly small part of our overall exposure, when we see climate risk manifesting in many other ways as an investment risk for us in other asset classes in other industries. so our climate action plan road

map and what we'll be looking forward towards 2020-2021 really does fit within the three pillars of our esg platform overall, the active ownership piece, continuing to engage with companies around climate risk, proxy voting, supporting shareholder resolutions around carbon risk management, goal setting, governance and strategy around climate risk management. continuing on this, you know, investment and divestment approach, investing in strategies that are aligned with the transition to a low carbon economy, which many of our investment strategies are, divesting from companies and industries that we feel like have high unmitigated climate risk, like thermal coal companies and like some oil and gas companies. we'll continue on the manager and due diligence monitoring piece building on that work that we've done with our public equity managers to engage and

understand how they're thinking about climate risk. and continue to apply metrics, analytics, so it's not just the carbon footprint but we're now trialing different tools that can measure alignment, corporate alignment with the paris agreement. we can understand which companies are invested within in and announce plans that are aligned with the objectives of the paris agreement to decarbonize by 2050, which ones aren't, these different scenario-based tools. so we'll be working to apply those to the portfolio over the next year. and then, you know, where opportunities for policy advocacy arise, we certainly will do so when that's appropriate for us to do that, but certainly we will partner with other asset owners, many asset owners, in addition to governments, corporations, are working towards net zero, and we need to be part of that dialog

and collaboration for us to be successful in this goal. so we will continue to build out those frameworks and those analytics, provide an update next year around that and try to set a suitable target for 2025 or 2030 in terms of our overall carbon footprint, something that is ambitious and fits with our overall ambition, but is something that is attainable and realistic. so, you know, the climate action plan really, as i said, looks at this range of climate risks across sectors, asset classes. but we do continue to pay close attention to the fossil fuel sector, just given its contribution overall to climate change. it's been an interesting year for the sector, right, to say the least, between the oversupply and demand disruption due to the pandemic, sending oil

futures negative for a period, to rebound a bit in the second half so far this year. but it's been a tough year for the sector. the industry, oil and gas, consumable fuel industry through september 30th had negative 38% return on the year versus 10% for the broader imi. i think case in point is sort of exxonmobil which has fallen out of the dow jones industrial index for the first time in i think almost 100 years, there was a period over the last couple of days when chevron overtook exxon as the largest market cap oil company in the u.s. for the first time, exxon is no longer the biggest energy company, nextera, the largest producer of renewables, is the biggest energy company by market

cap. just a lot of turmoil. we tried to prioritize some commentary in the report of different views on what may be next. in the near term, i think, assuming the reopening occurs, that production cuts have been effective, many people are calling for a rebound into 2021, 2022, potentially even, you know, depending on how production cuts, how drastic they've been for even the sort of super cycle of significant price increase over the next couple years. on the other hand, b.p. has said peak oil demand within 2019, they in their energy outlook, two of the three scenarios they outlined had a 2019 peak of oil demand. so it remains to be seen. we continue to look at this closely. like most of our peers, we continue to have some investment in the oil and gas sector.

as bill said, that's small. it'it's less than last year and it's about a quarter of what it was five years ago. so at 108 million total in the public equity and fixed income portfolio, this is a really small absolute exposure. but something we still continue to apply the transition risk framework to. we continue to engage with these companies. and i think the last year or so has been really instructive as to why engagement with oil and gas companies is so important for the climate future and the global future. given the commitments that have been secured at companies like shell and bp, totals, rexol,

many utility companies -- these are commitments by these companies i can pretty confidently made would not have been made if we had institutional investors at the table working with them on these commitments and remaining invested and these companies having an investor base that sees a future and a pathway towards decarbonization, reimagining of a business model. so i think this just really highlights the importance of maintaining a seat at the table where there are companies that are thinking about their strategy in the future. bill already highlighted for you table 10 on page 37, which is the full list of recommended oil and gas companies that we identified using our framework and applying that, similarly as we've done in 2018 and 2019. the framework identified one

additional company this year, apache, that we're recommending adding to the list of 10 current companies. we're not recommending removing any of the companies from the list. two companies did improve according to one of our metrics in the framework but we're recommending to actually see sustained improvement over time before we may think about recommending removing from the restricted list. and then there's three other companies that have actually fallen out of the universe due to either bankruptcy or being delisted, you know, having a share price below $1. but we recommended retaining them if they issue debt or if their share price does recover. the overall universe we looked at also really shrank this year by almost 25%. it went down from 153 or so

companies to 114 companies, and again, this is bankruptcies and other things so the industry is certainly shrinking our exposure, but we'll continue to apply this framework and take action with engagement, you know, based on the criteria that we outline. we're recommending a list of 11 companies for engagement activities where we have more meaningful equity, long exposure to those companies. many of those companies are ones that we are already in dialog with, are taking steps and being responsive to shareholders around climate risk management plans, but we've added a few new companies to that list and we will continue to work on engaging with those but also opportunities to engage and support engagement with a broader list of 24 companies as they arise in the future. so i'll pause there.

happy to, again, answer any questions either on the climate action plan or the list of companies. >> commissioners, are there any questions from action item -- are there any questions of andrew on either the climate action plan or the list of companies that he's recommended? if not, then i will then ask for a motion. this is an action item. >> i just want to recognize andrew again in his involvement in this report to include the results. so thank you (distortion). >> i'll echo those thanks and i'll make a motion to adopt staff recommendations. >> thank you, commissioner casciato.

>> second. >> commissioner driscoll with a second. >> yes, i do. >> madam secretary, please open the lines for public comment. (inaudible). for those already on hold, please continue to wait. moderator, are there any callers on the line? >> madam secretary, there are two callers on the line. >> thank you.

caller, please state your name and you have two minutes within which to speak >> (caller): thank you very much, madam secretary. i'm from fossil free san francisco. as i said earlier i really do appreciate all the work by andrew. and in only two minutes, i have to cut the pleasantries. the staff report says things like, quote, as of june 2020, we have less than half the amount invested in publicly traded oil and gas companies than it did the year prior. unquote. it does not indicate why. that is unbelievable to me, truly, and i've been watching you guys for six years now. so far today i've seen the fiduciaries in public make investment decisions on items 8 through 11 without considering your own positions and exposures and counting hundreds of millions of dollars in losses in item 12 without even questioning it. the value of your fossil fuel stocks by dropped by over $400 million since i started

coming here. how much of that is from your manager selling assets and how much of that is loss of value to the fund based on your inactions and you're ignoring reams of data and experts brought to you. that data is not presented and it makes me suspect that they don't want to present for the beneficiaries and the city that they're talk has resulted in material losses that will not only affect the grotesquely -- excuse me, that will not affect really anyone on this board or in this room. we have done a back of the envelope that i think over $300 million of losses have occurred from your inaction, and now that the public equity are down to just over -- >> 30 seconds. >> -- thank you. you should focus on applying the same iterative framework to your own investments that you always told us not to talk about.

it shows in your natural resources and despite discourse at the time, staff has made significant investments in the energy sector, likely primarily oil and gas, and that needs to be included in everything that we heard today as well. thank you. >> thank you for your call. next caller, please state your name. you have two minutes within which to speak >> (caller): hello, commissioners. i'm jeremy pollock, speaking here as part of fossil free san francisco. i first spoke to this commission about this back in 2013. i was a single man. i was an uninvested city employee. i'm now married. my child had his first birthday. i'm an invested city employee. my future and my son's future is in this retirement fund and it's just really depressing to look at the charts of what has happened over the last seven years of your inaction and tiny

little steps on divesting from this sector that the science is clear, the economics is clear, had no future, and the risk didn't justify holding onto these stocks. you know, i just want to ask you to please shut this barn door before these last stragglers get out. i think -- i'll second everyone's compliments to mr. collins and his excellent work here. he's developed a great model for evaluating carbon risk. but i don't see any analysis of how that corresponds to performance. and i think this report doesn't give you the information you need to make informed fiduciary decisions about these holdings. commissioner stansbury in the past has asked for these reports to include analysis how these companies -- are we losing or making money from these divestments? in your current list, i don't see how they perform --

restricted to perform. if you look at exxon and chevron, these are actually candidate to divestment companies that have not committed to carbon neutral. they have lost 12 to 15 percent over the last year. you can't identify conoco phillips that lost more than 20% that you continue to hold. the report talks about energy is the worst performing sector, 2018, 2019, 2020. >> sorry, time has passed. thank you for your comments. moderator, are there any other callers on the line? >> madam secretary, there are no more callers on the line. >> thank you. hearing no calls, public comment is now closed. >> thank you, madam secretary. moved by commissioner casciato and seconded by commissioner

driscoll. madam secretary, roll call, please. [roll call] thank you. five yeses. motion passes. commissioner bridges? >> thank you, madam secretary. i would like to thank andrew for his comprehensive reporting on our esg investing. it's a lot of summation, a lot of details, and i know a lot of work has gone into it from your team. so we are very appreciative. so thank you very much to the

investment team for giving us all the information and data we needed to make an informed decision. thank you, andrew, to you and your team. >> thank you. >> madam secretary, next item, please. >> thank you. item number 13, discussion item. risk review for sfers total plan. >> board members, good afternoon. we do have one more large item to walk through. it's an important item. this conveys our risk exposures across the plan. our primary active and absolute risk to our exposure in technology, health care, active management. anna and i are going to share this item. there's an extensive powerpoint presentation. there is also some in the word document.

anna, if you would pull up the powerpoint presentation, we will walk through it together. >> certainly. i will just start with a few comments that this is a total plan review. this is hopefully you will have a view of the total exposures and concentration for total plan rather than one recommendation than the other. these are the largest key risks in the total portfolio. and we also examined whether we were compensated for those risks. i also would like to start by noting that similar to esg items, this is an item that is an overview for risk management as per its. so it's an annual update on the

risk management. we will talk about the overall risk management framework once i pull up the presentation, but this is the annual report. we also would like to highlight that risk management is not an exercise by just bill and myself. every member of the investment team is involved and every member of investment team has contributed to this report, and i thank everyone in the investment team. special thanks for alo martins who put together the power point and made it much more readable. i also would like to acknowledge our partnership with multiple risk analytics providers,

including (names). you will see all of the -- and (names). all of them contributed significantly to this report. so let me see if i can share the report. are you able to see? good. hopefully we can. so as i mentioned to you, the comprehensive risk management framework has three main pillars. it's to review strategic asset allocation that is coming up next week and we've actually been working on it throughout this year, and we present annual updates. liquidity management that we covered expanse civil in the beginning of this --

expansively. there was dislocation due to covid, and measurement and monitoring of key risk drivers for the total fund. this is what we'll present in review today for the total plan and etf if we have some time. quickly we will go through risk performance overview. we will spend the bulk of today's presentation on the exposure analysis, highlighting key geography and sectors, understanding whether we were paid for those. we will talk about two different ways to assess leverage in the total plan. and we'll also cover core exposure for each asset class. and we will conclude with [indiscernible]. there are dozens of different ways we will look at the

portfolio and exercise scenarios in historical stress tests and single market factor. so let's start with the risk and performance. on slide 4, very quickly, i think what i like about this slide, less than 25 years ago we were only $5 billion. we are now over $28 billion. and as we look at the asset allocation, next week, i think we're targeting how is the plan going to -- will look like when it's a $40 billion plan and it's the asset allocation and the business model, as bill mentioned. you will see that there's a similar view in the weights, not the capital allocation, and you will see, if we zoom in on the last five years on page 6, that over the last five years, a lot of innovation in the asset

allocation, increased allocation to return, private credit and decreased -- significantly decreased allocation to public equity from 50% to actually at the end of march we were at 31. i'd like to quickly read to you the risk allocation, not just

we do plan to be compensated from taking those risks. we'd like to -- i would also like to highlight the treasuries are truly diversifying, the contribution to risk, and all other asset classes are diversifying [indiscernible] the capital allocated to it. on the bottom chart, the thick black line that says 12.2%, that's the estimate of the total volatility, annual volatility for our portfolios based on the policy weights. and i think that's a good gauge. we will present other estimates next week from both wiltshire and an analysis, but i think it's a good gauge of where we are and it's a good way to think

about the risk appetite, 12%. and as you see in the analysis later on, 12% annual -- expected annual volatility is approximately in line with a 70/30 portfolio. so a little more equities than the 60/40. here we outlined what i just said, that if you review growth assets of public and private equity, we see that 33 on the top right chart, 73% of risk distribution comes from growth assets. similar analysis for the current asset allocation, i'd like to highlight that we do -- while we do have a bit more in public and private equity, we also have a 3% allocated to cash, to compensate for the volatility, expected volatility, and be

prepared for escalation of the capital [indiscernible]. quickly here, whether diversification actually works, and you will see from this chart annual returns, that's what you're using, the annual return from each asset class, the red diamond is the total for that year. it's calendar year, not fiscal year returns. but the core thing is you will see the dark blue indicating public equity drives the performance. as we said in expected volatility, we see that the actual realized volatility mostly came from public equity. it's also worth noting that even though we expect quite a lot of volatility for private equity, that has not been the case. we haven't seen much of the volatility or certainly not to

the extent of the public equity in the last 20 years. similar results i'm going to speak to those. so the next pages examine one, three, five, ten-year and the performance and risk. and i highlighted here the annual volatility. it's interesting. even with covid and one of the largest market dislocations, one-year volatility is only 8.2%. if we compare it to what i said of the risk appetite, 70/30, it's about -- it's almost twice that 15.2%. and we also put mean public db over one billion, it's one of the peer analysis, and they have much higher volatility as well as 12%. so that estimate that we looked

at typically was an at typically was an

>> here what this indicates is that our -- these are rolling 20-year periods since -- once it goes back to 1989. and so what i'd like to point

out here is that our rolling 20-year period, so long period of time, 20 years is a long time, is that our 20-year returns really for the first time in recent years have fallen below 7%. they've fallen below 7.4, which is our current required rate of return and it's been below 7.4 for the last couple of years. 20-year return right now is 6.3 or 6.4%. so quite a change. i would also like to note that in -- 20 years ago, in 1999, the assumed rate of return per the actuary, it may have been (name), i don't recall who it was, 20 years ago the assumed rate of return for the next 20 years, from 2019, or say fiscal year 2019-2020, the assumed rate of return was 8.5% annualized.

well, our actual return over that same period has been about 6.3 or 6.4. so it's [indiscernible] when you compound that difference over a 20-year period. and with that, we can turn to the next -- unless there are questions, we can turn it other to the next section, which is the exposure analysis of the plan's risk exposures. >> thank you, bill. i will start with the country exposure and highlight that the largest country concentration is in china. we are 7.1% overweight on china, which is a large overweight, largest country overweight. we are also -- before i move on, i'd like to make sure that this overweight is calculated versus the benchmark that we use for

cash overlay, which is 68% msci equity and 32% u.s. bonds. so it's -- again, it's very close to that kind of risk profile for the total fund. but we are a little underweight united states. we are substantially underweight japan. and across europe, we are underweight germany, and i don't see -- [indiscernible] and the u.k. next, page 21 is a very important page because that's where we, both on the sector and country exposure, these exposures are intentional and we will examine whether we were compensated for this key risk drivers. here we could see we're very

large overweight on the information technology. we have 23% of total plan assets are invested in i.t. so almost a quarter -- we're getting close to a quarter of plan assets being invested in technology. and that's mostly in public and private equity, but we do have sector exposures through debt as well. the next largest concentration is in real estate. again, more than half of it, 10%, comes from our direct real estate equity allocation, and the rest comes from real estate debt, either from liquid credits through mds and cmds or absolute returns where it's mostly structures, credit, and we also have some of it in private debt. the next largest overweight is health care. it's very intentional. you will see that it is highly

profiled, specifically in public and private equity but also have some of it in debt, royalties, specifically private credit [indiscernible]. the underweights are in financial and utilities and materials and industrials. so a lot of color on page 22, but i'd like to highlight, just look at the bottom of the chart and look at the evolution of our concentration in technology. five years ago, sfers invested 12% of total assets in i.t. now it's 23. so almost double over the five years. now, bill -- as bill outlined in the staff memo, the technology sector is broad and it's massive.

it includes software and hardware and semiconductors and securities and data and data analysis and fintec, it's brought and growing. as you will see in the presentation next week, the -- we are big deliverers in technology and innovation, and again, this is an intentional growth and intentional growth in the overweight of the i.t. now, this slide, let me walk you through it because it's important to understand how we approach the answer to the question were we compensated for our [indiscernible] in health care and technology. before i -- let me just flip to page 33. this is public equity sector exposure, and you can see 7.6

overweight in technology. very big overweight in technology. and health care overweight 5.2% versus the benchmark. so this was very intentional, large in i.t. and health care in our public equity portfolio. let's see if we were compensated for this type of tilt. back to page 23. page 23. so this is what's called [indiscernible] sector performance distribution. our colleagues helped us over the time horizons. i will tell you that i have seen in my life a number of performance attributions. i've never seen positive numbers

across the board. it's amazing. now, what is it that we are looking at? we are looking at cumulative active return. so this is the return over msci global benchmark. cumulatively over the years. so let's focus on five years. over the five years that i said that we increased our allocation significantly to i.t. and health care, were we compensated for that? so if you look at the bottom row, overfive years, the cumulative active return, the outperformance over the benchmark for first public equity portfolio is 11.36%, the numbers are here in percentages. that's quite substantial. more than half of that comes from two sectors: health care and information technology. now, let's open up say health care. the active returns, or

cumulative return over five years for health care is 2.43%. and it's interesting that if we were to invest just in health care index, so we were in this sector and we put all the money there, the sector outperformed msci equity. so we would have -- it would have made us 87% cumulative over five years. but the managers that we selected added to their stock pick, through their stock, specific stock investors, another 1.65%. so that tells us that not only did we pick the right sectors to overweight, we also benefitted from active management within those sectors. we selected managers that added through stock through their

stock selection acumen. similar for information technology, and that is interesting that it's consistent through all time, the forward time horizon. as i mentioned, the health care and technology overweights are mainly in public and private equity. let's see similar analysis for private equity. i apologize, the format is different because the data comes from a different system. this is thanks to our partners at askia, formerly (name). again, let's pick five years. here session the internal rate of returns, the i, rrr over five years. -- versus cambridge's health care backbench, 14.6. so again we benefitted from

selecting managers in health care. similar in information technology, our team managers -- and here this is not just the managers, this is from bottom-up investments in technology delivered 16.3% versus cambridge's benchmark of 16.1. and the last point that i'd like to make on this page, if you look on the bottom row, pe total portfolio, the irr is 14.2%, which is lower for both it and health care. again, that tells us that the tilts toward i.t. and health care benefitted that portfolio. next we move to our geographical tilt. as we mentioned, the largest geographical tilt was in china.

here we define china even broader. we'll define it as greater china, including hong kong exposures as well as taiwan and macao. so if we include greater china exposures, then 11.2% of funds, of total fund, is invested in greater china. this is a bottom-up analysis, so we do include global managers that like companies in china. or it's close to 2.9 billion of the fund is invested in greater china. now, were we compensated for those? again, most of the china exposure, as bill covered previously, came from public equity and private equity. so here we highlight that our

china managers year-to-date delivered 17.6%. by a wide margin beating any indices. so we were paid for our china tilt within public equity. now, private equity china -- now, it's very new exposure for us. it's about 5 years, i think closer to 4-year average exposure, duration on our portfolios. even then, the year-to-date irr of china managers is 20%, well over total which is 16 and cambridge's china benchmark is 19. so we have covered three largest key exposures and concentrations within total fund: i.t., health

care, and china. the last one that i'd like to highlight is the exposure to active management. i'll present two measures of active management, and as we've seen that we've benefitted from active management -- increasing active management, the measures that i'll present are looking at our public equity portfolio. so receipt now wha right now whg at is a tracking error, that's expected volatility of active returns, returns over msci benchmark, msci equity benchmark. and we measure that volatility here using an analytics kit. five years ago that estimate was -- so the standard deviation of active returns was about 57

bips five years ago. now it is 300 bips. so more than five times. so over the last five years, we increased active risk by this measure, by the measure of [indiscernible] in our public equity portfolios by more than five times. we look at another measure of active risk. it's called active share. that is measuring how -- our portfolios from this benchmark. or the other way you could say is, what is the overlap with the benchmark? five years ago, active share was 32%. that means that 32% of positions -- of position weights weigh different from the benchmark and 68 were the same as benchmark. so we were quite -- and 32 for a

portfolio of two dozen managers is not a bad measure. but over the last five years, we increased active share of our public equity portfolio to 52%. that means that more than half of our positions are truly active and different from the benchmark. and as i mentioned in the brinson attribution on page 23, we were paid for that -- for taking that active risk. unless there are any questions, i will move on to two measures of leverage. >> could i just make a quick couple of comments beginning on page 23? i'll just be real brief. so board members here, let's look at the five-year column. so on highlighted there, our

current weight in public equity to health care is like 17%. but the weighted average over the last five years has been closer to like 13 or 14%. but look on the total column, the 2.43 as a percentage of 11.36. that means health care has been 13 or 14% of our exposure, but it's been about 22% of our excess returns. that's really, really good. in addition to that, technology on a highlighted -- its current weight is 27. it's about doubled over that time, over the last five years. the weighted average of about five years is maybe 20 or 21, something like that. but you can see here it constitutes just under 34% of our excess returns. so even though we have a large weight to both sectors, we've

outperformed by even more than those large weights, by a material amount. and then one thing i'd like to point out on page 24 is looking at the cambridge technology benchmark. the technology benchmark for cambridge includes a whole roster of venture capital managers that we don't have access to. really, any public plan doesn't have access to. and those managers are elite. i don't know exactly what their returns are, but from word of mouth and conversations with peers that are in the e & f and family office, their returns have been really, really good. so i think if you look at this on an adjusted -- i'll ask cambridge if they might be able to put a composite of what's investable for us, is i think in technology we have outperformed

by more than this line item appears. and just as anna highlighted, here we have 51% of our private equity portfolio in technology, another about 16% or something is in health care. but look how much those two sectors have outperformed the rest of our portfolio? the rest of our portfolios are in 12, are investments in technology have earned more than 16 and in health care they've earned 22. our sector weight and our decisions, manager decisions in both sectors have added a ton of value over the benchmark and then the same would be about china which [indiscernible]. thank you, anna. back to you. >> okay, bill. now we'll cover two estimates of leverage. i really don't like saying

leverage from growth and net exposures. these are really an assessment of gross and net exposures. gross exposures cover every bit of exposures. they're not volatility adjusted but they cover currency [indiscernible] and any derivatives that we have and any of the short-term positions that we have, all of it is here. and the reason we're doing it is to make sure that -- to see if we count everything, what is exactly we are putting to work and you will see that in public equity we've increased -- so our gross exposure is 48% of the total plan while the net is 38. 49 versus 38. private equity, we have a little bit more, and i expect that comes from fx hedging on the

growth exposure. real assets, not net and gross, are the same. absolute return is the largest, because that's where we have loans derivatives. by the way, these gross exposure calculations by and large do not include netting. and so when we look at it on the total fund, i think it's an interesting way to look at it and saying that the net exposure is a little higher than 100%, so 106%, and the gross exposure is less than that. so this is one way to measure risk, is how much money is put to work in different instrument. it's not apples to apples, but it's one good measure. and then we tried to assess a different leverage of the fund in a different way, calling it an economic leverage. and here the public equity is 100% because every dollar is

added invested in public equity is actually invested in a company. private equity here -- venture capital do not use that much leverage, or not at all, but the buyouts do. so most of the leverage comes from the buyout allocation. real assets, again, the natural resources we didn't assume much leverage but the real estate, which is about 60% of the fund, 60% ltd, loan to value. absolute return, again many thanks to our partners, asset managers who tracked this diligently, polling every manager for their estimates -- not estimates but the actual leverage numbers, balance sheet leverage, so the estimate is

418, and similar, private credit is a conservative 30% leverage. leading to the total fund leverage estimate here on less than 1.5 x. next i will quickly cover the -- it's key exposures for each asset class. again, here i mention that for public equity or exposure geographically is china, 11.4 versus 3.7. we're also overweight united states, underweight united kingdom, japan [indiscernible] germany. sector, recovered that previously. largest overweight in i.t. in health care and underweights in

energy, materials, real estate, and industrials. i'm not going to cover treasuries. i joke with vicki that this is where i expect absolutely no surprises, retract treasury index to the bit. you could see that. liquid credit, however, is where we take quite a bit of credit risk, intentionally. and i'll just draw your attention to, first, the duration is lower than the benchmark. the bench is u.s. bloomberg averages bond index. so 5.1 years for sfers liquid credit portfolio versus 6.3 years for the ags. but look at the yield to maturity. 6% expected yield to maturity for liquid credit versus 1.3 for the ag.

and that comes from a strong tilt to credit quality. if you look at the average credit quality s & p equivalent is double-b plus versus double-a minus. this is only 6 notches down. so we took quite a bit of credit risk, but we feel that we are compensated for that with a 6% yield to maturity. a lot more information -- the private sector i cover quickly because there's been a detailed overview during the july presentation by both our private equity and real assets as well as cambridge. so here i just will highlight that our private equity exposure is 51% in i.t. so more than half of our private equity exposure is in

technology. and also i'll mention that we have more than a quarter in asia pacific versus 15 for the benchmark. private credit, i'd like to highlight how diversified we are in different industries on the direct lending as well as others where we find different ways of either real estate investments or other private credit opportunities. real assets, real estate, again, very diversified. a bit of underweight in office and apartments and retail. thanks to blackstone, you could see that -- and here we're

comparing to [indiscernible] index which is different. we're not able to get the data from fund to fund. we could not look through the benchmark. but here one thing that i will highlight is that we take more risk and we have larger allocation in credit strategies within our absolute return portfolio. again, this is intentional. and we have strong underweight in equities to make sure that we bring a diversified return from absolute -- from the absolute return allocation. that concludes the exposure analysis, and i'm cognizant of time. i'll briefly just highlight the stress test and scenario analysis that we do, and iuest hundreds of stress tests on the

single market factor stress test. and here we highlight core factors where we have stressed this, which is a global equityey index. and we'll go through that. from changes from last year we removed s&p stress tests and if you looked at it, we didn't feel that it added that much. but we added the dollar stress test because we felt that is something that had a large allocation and in the narcotic market. and you can -- national market. and we were plus or minus 20% and based on this analysis we d) not expect a meaningful impact to our portfolio. opening up the msti, very strong stress test, so more than that, 40% down in world equity.

you can see that the sensitivity, i call it the sensitivity analysis, if you look at the last columns that we call data, and you can see the sensitivity of that class. if you look at the top column, the top row, last column, the da -- public equity has data to msci at 1.05. that means that whether msci is down 40%, we expect the public equity portfolio to be down 42%. second column. we expect private equity to be down almost 30%, etc. this is based on recent correlations, daily -- daily prices over the last year. so based on this analysis we expect in this year, that our portfolio will be about 25%

down. or lose 6.4 billion dollars. and i'm going to -- and those historical stress tests -- here i'll just go over the new stress test, historical stress test, that we introduced with covid- covid-19. let's go to g.f.c. and the way that we define g.f.c., the historical stress test, we don't do the correlations and we just replace the market movements over -- almost 18 months from october 8, 2007 to march 9, 2009. so the peak and the trough in market movements and we replay

it. is that going to play fully and then public equity will go down 47.1%, and private equity is down 37% and real assets 34.8%, etc. so in this g.f.c. attached stress test our portfolio is expected to go down 30.5%. and lastly, let's replay the covid scenario. this is very interesting. and we just look at the 18 month span for g.f.c. and the scenario, again, taking the peak of the market and the trough of the market, in less than six weeks starting february 12, 2020, and ending march 23,2020. so over that span, the public equities would be down 28.2%. real assets will be down 23.5%.

the aggregate portfolio is expected to be down about 20%, 19.8%. again, that was not our experience because we actually have the land in public equity valuation, but this is a simultaneous shock which gives us an assessment of how to think about it, what to be prepared and also it gives us an assessment of liquidity management. however, it's not necessarily good gauge for our fiscal return. i'll stop there, and i know that bill wanted to add a couple of comments and we are going to open up for your questions. >> just one or two quick questions and then we'll turn it over to the board for questions. one is these percentage losses that you have seen in the stress test, these are not reflective of a fiscal year loss, they are

peak-to-trough. and peak-to-trough could mean something in a month, and it could mean six months, it could mean as during the bursting of the internet bubble, meaning more than two years. so i wanted to point that out that. it's peak-to-trough and not predictive of the fiscal year. often time when you have a large loss, it's followed by a very rapid recovery, very large recovery. for example, this year covid, the market was down 35% in a month and then we finished the fiscal year up. and i think that the s&p 500 is up 9% or 10% or something for the year. so, you know, it's turning out that february 20 to march 23rd was a non-event, though it felt like a horror was opening up. i wanted to just point those one or two caveats about the stress

test. with that we'll turn it over to the board for questions. i also wanted to note that this is a really long item. it's very important. it's very important for us that you know this. and we do have four or five active tilts in the portfolio -- technology, health care, china, active management, and there is a fifth, and we have highlighted it in the memo, and that is our exposure to real assets. and that consists of two segments. real estate and natural resources. real estate is arguably office and hotels and it could be arguably more impacted by covid over an intermediate time period. and natural resources, i am of the opinion that this is the time certainly over the next decade, perhaps much sooner than that, that we will hit peak oil. for the first time oil has

competition. it didn't have competition for 90 years. now it has competition from gas and now it has competition from variables. investor sentiment is important to determining asset values and it's an asset class that is out of favor. people are not willing to pay for it, even though prices are low. and, lastly, i do expect demand that this is a change for demand for oil. so it's going to take time to work through our management resources and investments and we have uncertainty about real estate. and there's still places to make money in natural resources, and through infrastructure. we have a keen eye on renewables, we don't bring many to you, but we look at many. we're very aware that the human experience needs to change how we produce energy.

and the other active tilts that we have, health care and technology and china and active management, they have all worked splendidly well in the last three to five years. those are three things that we wanted the board to take away from this presentation. next year we will make sure that e.s.g. and risks are presented in two separate months. so as to not crowd the board. with that we'll turn it over to the board. >> thank you for your presentation. we open it up for the board comments. commissioners?

>> i'll start. i have a lot of questions but because how loaded this presentation and how major it was i'm going to not ask all of the questions. but i'll have a couple though. with the total risk review and you have picked the three major ones, i'm curious, is there any other data regarding our risk to two major item it's -- interest rate and currency? >> (indiscernible) [garbled] and we could touch upon the impacts that include those -- i believe in (indiscernible) and i believe that there are some (indiscernible). we didn't highlight them because of the impact (indiscernible) on us.

>> absolutely. so commissioner driscoll, during this question we didn't have trough depth. if you look at the picture, kind of the sensitivity analysis, we show on page 45 -- we have up and down 200 basis points. these are very strong shocks. and they do result in meaningful impact, but nothing compared to equity shocks that we just discussed. so i would just draw your attention to the interest rate shock to 200 plus and minus. this is the sensitivity to the interest rates. and then your next was the currency risk. again, we shock at 20%. so these shocks are three standard deviations of expected volatilities. again, we do not expect

meaningful impact in this. hopefully that answers your questions. >> basically it does. if your estimates are correct, and it's a risk not worth hedging out. so this risk is one that we will accept and focus on the major ones. secondly, in terms of the use of word risk throughout this loaded wonderful presentation, are you mainly talking about volatility? >> it's a wonderful (indiscernible) and i'm so happy that you asked that because risk is never meant to be one number. if you remember, even active risk, we measured it here, and represented two measures. we look at others as well, such as tracking errors and active share. for the total portfolio we'll look at different types of concentrations, right? we look at volatility. we look at stress and different

types of stress. we also look at scenario analysis that we didn't have a way to look at. so the answer is, no, it's not just volatility. >> commissioner, i would like to go back to your question on currency and whether it's worth hedging. the risk -- the currency risk in terms of other risks. if we were to look at the annualized volatility of every stock, say, in the 2500, and the volatility of the index, so just take all 2,500 stocks and take the standard deviation of a stock in any given year, and the volatility is 40% to 50%, in some years it's 100%. as it is this year. this year it's running at about 100%. the variability between the top

performers and the bottom. compare that volatility to the volatility of sector returns. it averages about 10%, 12%, 13% year. countries are also about 10% or 12%. the least volatile of the four is currencies. so the place where we make the most amount of money, and the place where you have the most amount of money is in stocks. currencies would be least. >> any other questions or comments? >> commissioner driscoll. >> the microphone is on. >> sure, thank you, commissioner.

>> it says on page 3, volatility number there compared to our peers -- it shows significant and indeed four other charts, the 1, 3, 5, 10, and the 30-year plus one, and it's about volatility. and trying to draw our attention to it and that leads us into the asset allocation mix. >> absolutely. commissioner driscoll, absolutely i agree with you on that. because we'd like to highlight and we have asked and discussed it in february and saying that the estimate for volatility is very important, specifically for where it's overestimated. and we have presented methodology to decrease the expected risk or volatilities that we use for -- and we will

present next year and allocation and the liability studies from an a.t.c. >> i forget exactly which page you wrote it into, the question. it had to do with what is the board's risk tolerance or appetite for risk. it was said several different ways. we have never been individually polled for it, and no need for an individual poll, but there is a question about how much risk we should accept or plan for. it's all done on expectations and then you have great results and you're showing us. relative to our peers, i can show you on the five charts where you made all of the comparisons and for the 1, 3, 5, 7 and long term, only the last one where our volatility was higher than our peers, but then you go back and look at the total return number. you alluded to this in one of your sentences, that you either take on more risk or -- i forget

how you said it -- to change it to increase our total return. you pointed out if we need to increase 200 basis points of return we'll have to do something. my point is that the tradeoff for taking on more risk to get the return, the long-term return, that you're showing there, was it worth the 9% volatility to get the 2,042% return over that long period of time? it's difficult for us to understand and answer. >> commissioner, the answer to that question is, yes, and you can see that in the short preparation. that is total risk, total return per unit of risk. whether the volatility was up or down. and the sharp ratio is slightly highigher than our public plannd peers and not as large a variability over the last one, three, and five years but it'sae been marginally positive.

so we have been compensated for taking that additional risk.sito >> yes, we have. been the question is -- is it >> ye e efficient enough?is this is, the integral with the asset allocation and the security market line and we keet talking about more efficiency. i think we all could throw in more mixes, likes one of our mo managers i think that trades in 160 different markets pursuing the perfect most efficient portfolio. i'm not suggesting that wethe pm should do that, i'm trying togew show that if wee keep pursuingwt fficiency, if we'reha taking o eye offff total returns, i thinr that we're going to miss something. i'm going to try to point thisot out two different ways. one, the way that it is phrased on -- i forget which page that it is -- but the statement is "staff's objective is to have s

objectivists who have greater returns than our peers. it's a great objective, but i don't offense, i don't agree with that as our objective. i think our objective has to be what is the rate of return we can achieve with the amount of risk we want to accept with all of the constraints and restraints that we have on us. >> commissioner, i think you're absolutely right. i think that's a great idea. >> so by the way, under the word summary at the top of page 9 is where that sentence is.

you said today, you're looking for some direction from the board on what to do or not do. i think the long-term volatility was 8 or 8.2. >> yes. >> that was the result. okay. going back to the last assess allocation mix we adopted, after many months of study and work by you, our investment teams, and the cmac, the allocation mix we adopted, you want to guess the mix we adopted? >> i'm going to guess 13. >> good guess. bill, we adopted 13.5. we're trying to show our stakeholders and members that

we're willing to reach out to accept the best risk. i'm not trying to dismiss our peers, but what can we achieve, and then, we've got to convince the mayor's office or budget to let us have them. >> i think they're all great points. fantastic. thank you. >> that concludes my comments, commissioner bridges. >> thank you, commissioner driscoll. are there any other comments from other commissioners at this time on staff plan recommendations? >> we're happy, and i see you next week, so maybe at that time we can try to poll the board on their risk constitution? >> i was going to ask you, is it possible, i haven't seen the

total agenda, so we would roll this into that? >> i think so. i think we should. we should find a way to do that. >> okay. we can talk about it offline. you can talk with us offline about that. >> yeah. >> this was a discussion item only, so are there any questions from other commissioners about sfers and the terms to the plan? and bill, we can follow up before next week, as well. okay. any other questions or concerns? if not, we'll open it up. this was a discussion item only, but we can open it up, the lines, to public comment. >> clerk: thank you.

callers, if you haven't already done so, press star, three to be added to the queue. those of you who have already done so, please wait until the system indicates you have been unmuted. operator, are there any callers on the line? >> operator: madam secretary, there are no callers. >> clerk: thank you. hearing no callers, public comment is now closed. president bridges? >> [inaudible] and we'll do the follow up and talk to you afterwards to see what we can do for presenting this at next week's meeting, as well. i know you put a lot of time and effort into this, so thank you very much. >> thank you, commissioner, and thank you, board members, for hearing this item. >> madam secretary, next item, please. >> clerk: thank you. item number 14, discussion

item. chief investment officer report. >> thank you. commissioners, i'll be real salient. our report lost 77 investment points. it resisted the decline last month, as it has done pretty well in every month except one. except for march, the downside capture was that. provide equity up, you know,

12 -- private equity up 12%. it's been backed by a very strong i.p.o. market. public equity has also posted a very strong rebound, record setting rebound, actually, and is now up about 9% for the year. where we have major tilts in technology and china, they're up about 15% this year. you heard me comment about natural resources there. i coudo have some comments the at the bottom of page 20. asia alts recommended an

allocation. blue torch, which is a new relationship for us, credit strategy, the board approved $15 million last month, and it did close at 15 million. in june, the board approved an allocation of $75 million to their flagship fund as well as [inaudible] fund. good news today is we just did receive an allocation for the $50 million in the flagship funds. [inaudible] one of our flagship

investments in the life science phase, very difficult capacity here. we did request $75 million. we received $50 million. that was primarily because of our going back and forth earlier in the spring -- excuse me, yeah, early spring, march, april period -- about just where we stood with regards to liquidity concerns and our capacity, and so, you know, that may have been a fallout or a little bit of a casualty, so less an learned for us, for me, for our staff. all of us on the board, as well, for planning, pacing schedule, and a commitment, and being able to honor that across all foreseeable forecast

conditions. real quick, managers under review, please note the additions to the item. if the board would like to learn more, please contact myself, pert, or hahn. we're right about at the center of where we thought we would be. 1.6, and median allocation was 1.95. strategy updates on page 6, this completes the cycle that you're hearing this year. he just heard the e.s.g. and risk assessment items.

and finally, we have some important meetings coming up. we have an investment meeting coming up next month. i do want to take a moment to thank the board

>> you heard about orby med. it's one of our very largest relationship in the life science spaces, both private as well as health care royaltys. and matrix, performing something around 20 or 30% so far the first eight months with our relationship with them. the board meeting, quick note, on page 7, it's not november 11. november 11 is actually a holiday, veteran's day, and so the board meeting has been moved to tuesday, november 10.

last item, i am thrilled to announce the hiring of bob doe. bob is our inaugural manager of investment operations. you'll read his profile. bob brings experience. he managed investment operations for a very large investment platform and also managed investment operations on behalf of -- on state street for calstrs, and calstrs raved about bob. bob, welcome to sfers, and you're well come to say a few

words. >> obviously, i'm very excited to join this family and very excited to be a part of my first board meeting. i've been a part of management operations for the better part of 19, 20 years, both the custodial and assess management side. i'm proud to bring my experience and knowledge here. mainly, related to what -- i think kind of the three things i'll be focusing on really is what i kind of call proper location, control, and processes, so looking with the team to make sure that everything is square -- our processes belong where they are, we have controls in place. and then, what i call is looking for places that we can have efficiencies rgs right? where we can look at our systems and auto mamation where can be better where we are, get better at data and technology and definitely want to work to identify those. and then really, just working

with ourselves, our vendors, and our peers to identify industry best practices, to make sure we're really at the forefront of building out policy, programs, and practices. we're looking to be very up front in the way we invest and managing a list of the markets that we go into. and i want to shuck sure, on the investment -- make sure, on the investment opportunity side, that we do that and we don't fall under. definitely looking to really build out a team and be very cognizant about how we build it out. like myself, it is going to be the inaugural person, but i am going to be looking to build out the team and how we move into the future. >> we have 20-some-odd investment professionals who have been waiting anxiously for your arrival.

>> no pressure. >> to wrap this up, we do have two recruitments pending. we do have an analyst to support justin and an analyst to support ana. justin and ana have been here alone for six months. and special thank you to their work. they're all very important items. we look forward to seeing you next week at neex weak's meeting. science and tech and asset allocation are important items. we look forward to seeing you next week. board members? >> members, are there any questions on the c.i.o. report? this is a discussion item only. if not, thank you, and we would like to welcome bob, as well,

to sfers, and look forward to working with him. so welcome. madam secretary, at this time, if there are no questions or comments on the report, we'll open up the lines for public comment. >> clerk: thank you. callers, a reminder to press star, three to be added to the queue. operations, do we have any callers on the line? >> operator: madam secretary, there are no callers on the line. >> clerk: thank you. hearing no public callers, public comment is now closed. president bridges? >> thank you, madam secretary. next item, please. >> clerk: item 15, discussion item. deferred compensation committee report. >> president bridges, i would suggest that you accept this report as submitted. these are for the last three deferred comp committee meetings that date back to march, august, and the most

recent one in september. you were chair of that committee for one of those meetings, and commissioner casciato was chair for the other two, unless you'd like to walk-through what took place, but this is the minutes for the three different committee meetings. >> thank you, mr. peters. commissioner casciato, is that okay with you? do you have any comments or anything to add to that? do you have any comments? i have nothing to add to his comments. commissioner casciato?

commissioner casciato? hello? he's not on? he's not -- he can't hear us? >> you can hear us, but we can't hear him, so maybe we can take the report as submitted. >> we can take the report as submitted. >> he's nodding his head. >> okay. this is discussion item, and commission, we will take the report as submitted. are there any questions from commissioners on the report as submitted? again, this is a discussion item for the deferred compensation committee report.

if there is no discussion, we will take the report as submitted. madam secretary, at this time, if you could open up the lines for public comment. >> clerk: callers, a reminder to press star, three to be added to the queue. moderator, are there any callers on the line? >> operator: madam secretary, there are no callers on the line. >> clerk: thank you. hearing no further callers, public comment is now closed. president bridges? >> thank you, madam secretary. next item, please. >> clerk: item number 16, discussion item. deferred compensation manager report. >> good evening, everyone. thanks for your time today.

i'm here to present the deferred compensation management report. in the interest of time, i can just briefly go over some of the highlights of the attached report. attached is the sfucp deferred compensation report. i wanted to provide you with some more updated numbers as of the end of last month. so as of the end of september 2020, we've had an aggregate total of 55 coronavirus related loans issue for a little over a total of 15.1 million. we've had a total of 542 coronavirus related distributions, for a total of a little over $18 million. next, i did want to speak on a participant issue that arose recently. we were made aware of an issue that a participant had when they were setting up a

withdrawal. i wanted to let you know of the situation and the steps that we have taken in response to this. in case you weren't aware, there was a participant that encountered some obstacles when trying to withdraw some money from his account. he subsequently sent a letter documenting his experience. after receiving his letter, we researched the circumstances surrounding his withdrawal request. his calls were reviewed, and we also looked over the webpages he visited and the correspondence that was sent to me. after conducting this review, while we concluded this wasn't a systematic issue, changes could be made to prevent this from happening in the future. voya has agreed to address training with their call center

reps, specifically regarding the timing of installments and when those installments would be available to the participant. they will update their website and forms, and we are planning to update our wording in our sfgp guide. as a full follow up, we also sent another letter of correspondence to his address of record last week. i'll keep you updated if anything else arises, but i don't anticipate there should be any further issue with the situation. also wanted to mention, on the topic of communications, currently, we're in the middle of national retirement security month. this month is a national campaign held by congress to emphasize the benefits of saving for retirement.

if you visited our sfgcp website this month, you probably have seen our special section dedicated to national security retirement month on the top of our webpage. if you haven't, we highly encourage you to do so. and if you do that, you'll see the links that we have to the daily webinars. additionally, on top of that, we are also holding live daily webinars throughout the month, and these presentation topics rotate weekly. there are topics from voya on the topics of financial wellness and links to the biography fliers for our retirement counselors to encourage members to reach out and contact our reps, and the sfgcp has been sending out

communications to participants at various points throughout the month. we're trying to tie in the weekly themes for the presentations and the communications. so as an example, next week, the webinar will focus on on-line access and tools available, and we will be encouraging members to register one or both of their accounts on-line. those are the topics that i wanted to cover. if you have any questions, i'm happy to answer them, and if not, i thank you for your time. >> thank you, steve, for the record on deferred compensation. this is a discussion item only. commissioners, do you have any questions for steve at this time? if there are no questions on the deferred compensation

manager's report, madam secretary, can you open the phone lines for public comment, please? >> clerk: thank you, callers. please press star, three to be added to the queue. moderator, are there any callers on the line? >> operator: madam secretary, there are no callers on the line. >> clerk: thank you. hearing no callers, public comment is now closed. president bridges? >> thank you, madam secretary. next item, please. >> clerk: item number 17, action item. approval to issue request for proposals for sfdcf investment consulting services. >> members of the board, as you're aware, your board policy requires that consultants who are hired and report to the retirement board, that the services for investment consulting would go out every

five years. coan has been providing consulting services for the sfdcp since june or july of 2016, so the contract would expire in june. so what we're proposing, we've presented this to the deferred comp committee at the september board meeting, and they forwarded a recommendation that we revise the attached r.f.p. to solicit bids from qualified providers. i will note that the r.f.p. will be updated on page 9, section h. it will be updated to reflect the new language on the san francisco campaign and governmental code. that was outdated long. the key dates on this r.f.p. is

if the board approves it today, we intend to issue it on friday. we intend to give them until december 14 to submit proposals, and that we would be on time to present recommendations from the evaluation team to the february deferred comp committee meeting with hopefully a recommendation from the deferred comp committee meeting and coming to the retirement board no later than april of 2021, so that if, in fact, we time these contract negotiations, we'll have sufficient time. so with that, i'll be happy to answer any questions. >> thank you, executive director. board members, this is an action item. are there any questions for our executive director on the proposal for the r.f.p.?

again, this is the request for proposals to the sfdcp investment consulting services. >> yeah, this is [inaudible] the question i asked at the committee meeting that i didn't have an answer to yet. who will be the scoring committee that will pick the finalists for the presentations in february? >> [inaudible] will be diane with justin. she will be returning from her leave right after the first of the year. steve moyes, acting director. i will also be part of the evaluation team, and we're hoping that we can solicit the participation of someone from the public market's investment team or the investment team to help us evaluate the proposal. [please stand by]

>> clerk: we have four yeses. motion passes. president bridges? >> thank you, madam secretary. next item, please. >> clerk: item number 18, discussion item. presentation of sfers audited financial statement and required communications for years ended june 30, 2019 and june 30, 2018. >> commissioners, this is an item that has been continued for a number of months.

it is to present the finding of the audit for 2019 -- june 30, 2019. like i said, it 's been continued since early this year. each year, the department hires a consultant to come in and do an audit. n.g.o. has done the audit the last few years, as well as recommendations. it's strange for us because they are just finishing up the final touches of the 2020 audit, which the city, i believe, will be issuing in november, no later than december, and hopefully, craig will be back early next year to

present the 2020 results to the board, but we just needed to get this presented to the board, and so i will turn it over to craig at this point. >> all right. thank you. thank you, jay, and thank you, everyone, members of the committee and the board. i'll keep this kind of brief because as jay mentioned, there wasn't really anything in the audit. we did an audit for the years ended june 30, 2019 and june 30, 2018. we issued our independent auditor's important on june 30, 2019, and it's the highest level that an independent auditor can give a department. with the required communications, a few things that our professional standards

require us to communicate to the state board of retirement. i'll go over those briefly. as i said, there wasn't anything -- we didn't have any disagreements with management during the course of the audit. management didn't look for second opinions with other accountants. we didn't have any difficulties in emergency roperforming our we didn't have any corrected statements or material misstatements, as well. couple more things that are kind of significant to the audit that we're required to communicate is that there's certain areas of the financial statements where management has to make estimates about the balances or the numbers in disclosures, and the two most significant ones are the fair values of investment and the actuarial information which are based on actuarial estimations

and actuarial statements. we found all the estimates and assumptions are key assumptions, and all the estimates and assumptions to be reasonable. and with that said, we didn't have any other audit findings, we didn't have any, you know, internal control deficiencies [inaudible] or material weaknesses in internal controls, and we also doesn't have -- note any noncompliance with laws, regulations, or contracts. so everything was in pretty good shape, and that's kind of a testament to the finance -- the finance and the financial reporting team that sfers has with the board's oversight. >> i would join frank again in congratulating and thanking the accounting team. this is my 20th straight year

where we've had what i've considered to abe aad great au. there are no material discrepancies, so i think we have a great team, and again, thank you to n.g.o. we are finalizing our latest audit, but we'll see him back early next week. >> yes. >> and with that, we're happy to take any questions the board members may have. this is not an action item, it's just a presentation of a report to the board. >> thank you, mr. hughes, and craig, for this presentation. commission, do you have any questions for either of them [inaudible]? if not, we cthis is a discussi

item. so madam secretary, you can open up the public comment lines. >> clerk: just a reminder, callers, president star, three to be added to the queue. moderator, are there any callers on the line? >> operator: madam secretary, there are no callers on the linum. >> clerk: thank you. hearing no further calls, public comment is now closed. president bridges? >> thank you, madam secretary, and thank you [inaudible] for presenting these communications to the board, so thank you very much. madam secretary, next item, please. >> clerk: item number 19, auction item.

approve request to adjustment industrial disability retirement allowance from 50% to 90%. >> members, this is a standard request that we asked of you. in this case, james perry was awarded a disability retirement and set at an initial allowance of 50%. his worker's compensation case was completed, and he was provided with a 90% rating. under the charter, we are permitted to ask you to allow his increase to 90% until he's provided with a service retirement, and i'm happy to answer any questions. >> this is an action item, and i'll ask the board if there are any questions on this item.

if there are no questions, i would also entertain a motion. sorry. i'm waiting for commissioner casciato. >> i want to make a motion to [inaudible] i said i make a motion to adopt this item. >> thank you, commissioner casciato. is there a second? >> this is brian. i will second. >> thank you, commissioner

stansbury. it has been moved by commissioner casciato and seconded by commissioner stansbury that we move the retirement percentage from 50% to 90% for james perry, iii. madam secretary, if you can open the phone lines. >> clerk: thank you. press star, three to enter the queue. ma moderator, are there any callers on the line? >> operator: madam secretary, there are no callers on the line. >> clerk: hearing no callers on the line, public comment is closed. president bridges?

>> yes. let's have a roll call vote on the item. [roll call] >> clerk: thank you. we have four yeses. motion passes. >> thank you, madam secretary. please call next item, please. >> clerk: next item, number 20, discussion item, executive director's report. >> i will keep mine very short,

however, i do want to point out that we've been extremely lucky since the shelter in place order. we've been able to hire two of our t members of our leadership team into permanent positions. ba do is on the reporting side, and we're more than happy that bill and his team have adopted him and have assured us that they will be always available to help him be successful in his job. a second key hire that we have brought on board last month and a project that i've been working on for 15 years, and that is to get a quality assurance operational risk office started in the department, and i have been working with mr. derwin brown

for nearly two years, i think over two years, frankly. tried to convince him that he needed to leave the l.a. county plan and come up and join us in san francisco. he agreed to do that. he started work at the end of last month. he has over 20 years of experience working with lucera. 15 years of that were working towards building -- they started 15 years ago -- was spent working towards a quality assurance program at lucera. i believe the last five years of his job at lucera, he was the chief of the quality control department there. just wanted to let ba and bill

know, this wasn't an extremely long meeting -- no, i'm kidding. this was an extremely long meeting. i will offer derwin an opportunity to speak to the board, hopefully, he's still here. >> thank you, jay. hello and good evening, president, and fellow commissioners. as jay mentioned, i have 20 years in los angeles county. in 200 1, our c.e.o. split the retirement operations into three separate divisions, which

was member services, benefits, and quality assurance. the manager who hired me went to quality assurance, and i went with him. and he started building the actual quality assurance in 2001 and 2002 from the ground. we started with procedures, documenting procedures for our business processes, developing criteria, adding measurements, doing analysis, doing regular audits. from then, i moved up to supervisor within quality assurance, where i was fortunate enough to be the project manager for several data cleanup project that [inaudible] on our radar to take care of because one of the things that we had -- and i'm sorry if i'm taking up too much time -- but we had a data

conversion program that i was involved in. i'm very happy to be here with you guys, improving the processes, contributing as much as i can, and being a part of this great team. it has been a pretty short meeting, and my patience is still here, so i appreciate the time of day, and thank you, karen, and thank you, all. pleasure to be here. >> thank you. the other thing i would like to point out that's not on the agenda is we had presented to you [inaudible] the board has declared a vacancy, and commissioner driscoll's appointment will be ending in february. so back in june, we sent a proposed schedule. you adopted it, and you declared a vacancy. we've worked with the department of elections -- i

should say darlene worked with the department of elections. they have agreed to reschedule. just wanted you to know that we will be sending out notice of that vacancy tomorrow, and that we are going to have the period for nominations start on october 19 through, i believe, september 14, which is september -- december 14, which is a friday. we will vote in january, and just wanted to give the board the heads up that we will be opening up the nomination period effective monday, october 19, and we'll be sending notices out to labor organizations, to the city, the department heads, and to employees and retired

employees. with that, i'll be happy to answer any questions that any board member has. >> thank you, executive director huish, for your report. we'd like to welcome you to the family. and yes, this is a long meeting, but we ask you for your patience as we go through this report. commissioners, are there any questions for the director? if not, madam secretary, we'll open up the publhone lines for public comment on the director's report. >> clerk: thank you, madam president. members of the public, press star, three to be entered into

the queue. moderator, are there any public callers on the line? >> madam secretary, there are no callers on the line. >> clerk: thank you, moderator. seeing no further callers, public comment is closed. president bridges? >> thank you, madam secretary. >> this is [inaudible]. >> thank you. >> thank you. >> >> commissioners, at this time,

we have the floor open if you have any comments, suggestions, or anything you'd like to state for the good of the order, you can do that now. so it is open for any suggestions. >> commissioner driscoll again. to my fellow colleagues on the governance committee, i'll be asking darlene [inaudible] help in terms of getting out guidance to the governance committee in the next several weeks. thank you. >> thank you, commissioner driscoll. anyone else? if not, we'll open the phone lines for general public comment. >> clerk: thank you. any callers on the line, please press star, three to be added to the queue. moderator, are there any callers on the line?

>> operator: madam secretary, there are no callers on the line. >> clerk: thank you. hearing no further calls, public comment is now closed. president bridges? >> madam secretary, i think that was our last item, and that's the end of the meeting, so the meeting is adjourned at 7:15 p.m. thank you everyone for your patience. thank you very much, and have a wonderful evening.

>> we are here today to discuss a very, very important issue that has been plaguing our community, even more so under covid. some call it sideshows. it's something that, under covid , is happening all over san francisco. two weeks ago, we have one of the worst incidents that we saw in the city. it went on for an hour and a half, almost two hours. at the end, three individuals were shot and one individual died. i want to be clear, this is still under investigation. it is not necessarily associated with the activities that were

happening that night, but it's something that certainly shows and underscores that these are dangerous events. these are events that cannot be tolerated in san francisco. these are not professionals, these are not individuals that have professional training to do these types of stunts and tricks with their cars. i want to say clearly that we have zero tolerance for these in san francisco. at the end of the day, i also want to extend my condolences to the family in sacramento that lost their life. this individual was about to have a child. i don't want that to be lost. i think we need to pay respect to that. yesterday, chief scott and i, after working on this for a couple of months, along with the mirror's office, introduced a piece of legislation that would increase the ability in san francisco to impound vehicles. i want to be very clear. if you do involve yourself in

these activities and we are able to videotape and document your car and your activity, you have the penalty of being arrested and put in prison for up to six months. we have the ability to impound your vehicle and first defence is no less than two weeks. second offences longer than that and third event, just shy of 30 days. if you get involved in these, the police chief we'll talk about the unit and the task force that they have assembled to put together on this. we will take your vehicle. we will impound your vehicle and there will be consequences to your actions. i want to thank all the neighbours and all the individuals that have been involved with this. i want to recognize our captain who is around here. thank you for working with us on this. and especially thank you to chief scott and the mayor for all of her support and hard work on this. now i would like to introduce

our mayor. thank you. >> thank you, supervisor. thank you for being here today. i really want to take this opportunity to recognize the leadership of our supervisors. since i have been mayor and since he has been supervisor, we have been doing a lot of work for the community. we have heard from a lot of the residents and merchants on the need for this community. and what i appreciate about his work is that he is bringing the resources, he is bringing the attention, he is bringing the support to what is a neglected part of the city. and even for the first time in over 20 years, one of the first affordable housing developments in the city, just on the streets , he helped to save units that were almost lost to market right with low income families. the reason why i go back to that is because it's so important, it

is so critical to make sure that we have someone who represents the district and answers to community and answers to the needs of the residents here. in in this particular case and the slot -- sideshows, the supervisor answered the call. he reached out to me and reached out to the team. it was not just because of the complaint of the people who live here and work here. it was the cause and currently a dangerous situation. it is dangerous for the participants, dangerous for the spectators, dangerous from all the folks who are in range of this particular event. let me just say, i grew up in san francisco. i have seen sideshows. i know people want to participate in them. i know people think they are fun and they are exciting and especially during covid. people feel like there's nothing to do. they want to go out and participate and see these things , but sadly, we are

putting lives at risk. we are participating in these events. sadly they could result in someone's death and that is why we're here today. we don't always want to use this heavy hand of law enforcement to address issues, but in this particular case, because of the danger, you have left us with no choice. in san francisco, they will not be tolerated. we will do everything we can to address them in a manner in which it is fitting of what is happening. do not come to our city with the sideshow crap that creates the problem that we don't want to see in our neighbourhood. do not use this as a play to congregate for that purpose. we will do everything we can to make sure it doesn't happen and this is just the first step. we hope that you comply. we hope that you will also be considerate of what happens at these particular events.

we understand that people want to do this, but they are dangerous and this is no fun if someone is killed. with that, i want to take this opportunity to introduce our police chief, bill scott. >> thank you. first i want to thank the mayor and supervisor for their leadership. i want to reiterate a couple of things that have been said. first and foremost, these exhibitions of the stench driving, under the law are illegal. it is reckless driving. i can't tell you how many times people put their lives at risk for these exhibits. i want to point out a couple of things and highlight some of what the legislation offers and how it can be helpful for us. number one, this legislation sets expectations of accountability.

if you participate in one of these events, if you do trick driving, if we see it online, we see it in person, it is outright dangerous. if your car is impounded, the first offences it will be impounded for two weeks. second offence, if the car is impounded, it will be impounded for 29 days. your car will be impounded no more than 30 days, but definitely no less then what the law allows. we want to be consistent, we want to set expectations of accountability and consequences in the city, and if we can prove that you are behind the wheel, you will be arrested. what we are doing in the police department police department, a couple months ago, as a supervisor mentioned, we trained a spot of officers to deal with this event. we cannot do this alone.

our law enforcement partners in the bay area, this is a regional problem. we see all across the state. we are working with partners and other jurisdictions who had similar issues and we are communicating. when he the public's help in that because when you see these things occurring, we don't want people to put themselves in harms -- harm's way. if you have any video surveillance at your residence or your business or videotaping with your cell phone or video camera, please share that information with us. a lot of people will posted online and that is okay too. if you are going to posted online, give it to us as well. part of what needs to happen for this work effectively is we need to be able to put the driver behind the wheel. then we can do something with that case. i want to say to the incident that brought us here today, we know and i know and we have heard from the public.

there is a lot of frustration when these things occur. we have to have a thoughtful plan to respond to these events because of the danger. the one that the supervisor was referring to, there were hundreds of spectators. there were 50 cars and more participating. when two officers arrive at that scene, they can't just rush in. what our experience has told us is that often times we are compensated. we see officers surrounded, cars vandalized, we see, not in this city fortunately, but we see officers run over. we have to bring the appropriate resources to deal with this situation. it takes a little time to rally the resources.

the units that we train up, we want them to specialize in being able to deal with these situations. it is a resource driven need here. we understand the frustration, but we want the public to know that we are working to make the situation better. we have trained our officers and we are working with supervisors. we have the mayor's support and the legislation. it will bring consistency and consequences. lastly before i close, i want to give examples of what we are talking about. this event a couple of weeks ago , as i said, there were 300 spectators, 300 vehicles and unfortunately a man was shot to death in the immediate vicinity. we had over 100 calls.

people are concerned for their safety. you can't blame them. people are tired, yelling and screaming, if anything, you are bad news. when the officers arrive and shots were fired. now they are dealing with a life or death situation where three people were shot. they needed to get medical aid and save their lives. it complicates the matter. often times what we have found is these events, often times turn into conflict with shots fired. a good example, august 24th of this year, there was a motor vehicle, a daytime event. they were stunned driving. they were burning rubber and approximately 100 spectators cheering them on. at one point, one of them lost control of the car and almost hit several spectators. we did not have anyone killed in

that situation. i could repeat it over and over again. we have -- we had other incidences in the recent past were events of culminated with shots being fired and people being hurt. here is the message. if you participate in these illegal and reckless events, your car, if we catch you will be impounded and it will be no less than two weeks on the first incident. no less than 29 days on the second incident thereafter. if we put you behind the wheel, if we can prove that you aided or abetted in the participation and the facilitation of these events, you will be arrested. even if you want arrested that night, if we have the evidence and video through the evidence that we need to prove then we are coming after you.

that is the message that us, the mayor, the board of supervisors and the people of the city want you to hear if you are participating in these events. thank you for your time and thank you for your leadership. >> thank you, chief. i want to underscore one last point. let's make this clear. people that also set the perimeter, people that use their vehicles a set of these events in criminal terms called aiding and abetting, those two will have their vehicles seized. we will have the ability to go after them. it's not just the individuals that are driving the vehicles. is the individuals that are participating in and major participants of setting up the

events. that is something that chiefs got in i have spent a lot of time talking about. the mayor feels really strongly about this. we have to have accountability. it will not just be the individuals who were driving the vehicles and doing the stunts, it will be the people who are aiding and abetting and setting up these events. we also, as a result, and i want to thank the mayor as part of the budget process, will be getting over 15 cameras on this camera and video evidence is one of the most important factors in these crimes. this corner that has been plagued a few times, in the next few weeks we will have 15 video cameras put up. we have been working with a captain in his office to increase foot patrol. it is not just about the activity itself. it is about setting the environment to make sure people understand that we take the safety of this neighbourhood as a top priority. [♪]

>> we think over 50 thousand permanent residents in san francisco eligible for citizenship by lack information and resources so really the project is not about citizenship but really academy our immigrant community.

>> making sure they're a part of what we do in san francisco the san francisco pathway to citizenship initiative a unique part of just between the city and then our 5 local foundations and community safe organizations and it really is an effort to get as many of the legal permanent residents in the san francisco since 2013 we started reaching the san francisco bay area residents and 10 thousand people into through 22 working groups and actually completed 5 thousand applications for citizenship our cause the real low income to moderate income resident in san francisco and the bayview sometimes the workshops are said attend by poem if san mateo and

from sacking. >> we think over restraining order thousand legal permanent residents in san francisco that are eligible for citizenship but totally lack information and they don't have trained professionals culturally appropriate with an audience you're working with one time of providing services with pro bono lawyers and trained professionals to find out whether your eligible the first station and go through a purview list of questions to see if they have met the 56 year residents arrangement or they're a u.s. citizenship they once they get through the screening they go to legal communication to see lawyers to check am i eligible

to be a citizen we send them to station 3 that's when they sit down with experienced advertising to fill out the 4 hundred naturalization form and then to final review and at the end he helps them with the check out station and send them a packet to fill and wait a month to 6 weeks to be invited in for an oral examine and if they pass two or three a months maximum get sworn in and become a citizen every single working groups we have a learning how to vote i mean there are tons of community resources we go for citizenship prep classes and have agencies

it stays on site and this is filing out forms for people that are eligible so not just about your 22 page form but other community services and benefits there's an economic and safety public benefit if we nationalize all people to be a citizen with the network no objection over $3 million in income for those but more importantly the city saves money $86 million by reducing the benefit costs. >> thank you. >> i've been here a loventh i

already feel like an american citizen not felt it motorbike that needs to happen for good. >> one day - i pledge allegiance to the flag of the united states of america and to the republic for which it stands, for liberty and justice for all. >> you're welcome. >> (singing). >> (clapping.) >> introduce the san francisco field officer director ribbon that will mirror the oath raise

your hand and repeat the oath i hereby declare on oath repeating. >> citizens cry when they become citizenship to study this difficult examine and after two trials they come back i'm an american now we're proud of that purpose of evasion so help me god please help me welcome seven hundred and 50 americans. >> (speaking foreign language.) >> she wants to be part of the country and vote so much puppy. >> you know excited and as i said it is a long process i

think that needs to be finally recognized to be integrated that is basically, the type of that i see myself being part of. >> out of everybody on tv and the news he felt that is necessary to be part of community in that way i can do so many things but my voice wouldn't count as it counts now. >> it's everybody i hoped for a bunch of opportunities demographics and as you can see yourself

there's a good life for everyone. >> that's why. >> you have people from all the walks that life and they're standing in water 8 hours to be an american citizen and contribute to the city and that's really what makes this worthwhile. >> ♪ ♪

>> all right, welcome, everyone. [applause] today is the day, dr. colfax. today is the day. it's the day that our kids get back to the serious business of play, and so i'm thrilled to be here with our mayor, supervisor safai and our director of public health, and many community leaders and wonderful people to celebrate the re-opening of playgrounds all across the city starting right now. we are here at mersed heights, so we're not just opening up the gates to playgrounds but we're also cutting ribbons on five amazing playgrounds that have just been waiting for children that have been renovated through the let's play s.f. initiative, which is is an incredible partnership between the recreation and the park department and the parks alliance, san francisco voters who support park bonds, and through let's play s.f. we're

actually transforming 13 playgrounds that have been loved to death across our city and to creative places that spark imagination, connection, and healthy bodies and minds. so without further adieu it is my great pleasure to introduce our parks champion-in-chief who has been a great nudge to make this happen. thank you, mayor. >> thank you. and thank you, phil, and thank you to all of the families in san francisco for your understanding and your patience as we deal with a very, very challenging time, one that none of us could have ever predicted. and i'm so excited to be here at mersed heights because i know how hard this community worked to get this park to be a priority. for so many years -- i see mary harris over there shaking her head hard.

for so many years, and a lot of the people in this community, they have been fighting to make sure that this part of town receives the support and the attention that it deserves. there are families here and there are generations of kids growing up in this neighborhood and in this community. and they deserved the opportunity to make sure that we rebuild the library, which your supervisor is pushing for. that we rebuild the parks and all of the other amenities that make life so great in san francisco. and here we are, because i'll tell you, supervisor, not too long ago i know that we came here, and we cut the ribbon -- or we broke the ground -- and this happened really fast. this is pretty amazing. and, you know, to make a park like this to happen, and it is absolutely beautiful! it is so amazing.

and i am so happy that today finally kids will be able to play in playgrounds all over san francisco. this is amazing. and i'll tell you that the reason why i'm so happy, because it is hard for children right now. you know, our private schools have opened and our public schools haven't. kids are not in school and they're in front of a screen on a regular basis. and that is not good for them. we know that it's not good for them. it's why i have been putting, of course, as much pressure as i can on the public to do our part to wear our masks and to wash our hands and to socially distance ourselves, and as much as we want to be around each other we have to make sacrifices for our children. so that they can go back to school, so they can play in playgrounds, so they can have a well-rounded life, because just

imagine -- this is hard on us as adults. just imagine how much harder it is on kids. how tough it is, and how we are seeing even now -- even though we're providing devices and internet and other resources to kids, the achievement gap is still growing wide. so we have a lot of work to do. and that's why today is so amazing. and it's so exciting. because it's not just that we're opening up all of these playgrounds, we have renovated a number of playgrounds in san francisco, and so kids are going to have an opportunity to just enjoy something new and exciting in the city. i am excited and i'm grateful to you, phil, and i'm grateful to the parks alliance and the let's play initiative and all of the friends of mersed heights, you will hear from some community members here today, because this

work happened because of this community. this work happened because you had an incredible leader in supervisor safai. so with strong leadership, with strong community support, with collaboration and with years -- wait -- decades of advocacy, you have made something incredible happen for the kids of this community, for the kids who are part of this learning hub, who are hoping that this press conference is over as quick as possible so they can come and play in this playground. in fact, it won't bother me if they play on the playground during this conference, just let them have a good time. because that's where we are now. and what this also does is that it gives us hope. it gives us hope that the time that we've spent in isolation, the time that we have spent, you know, doing what we needed to do during this pandemic, we know that there's a light at the end of the tunnel. we know that good things can happen if we all do our part.

and so i really, really, really want to thank all of you so much for being here, so much for continuing to support our parks and the bonds that the voters have always voted to support because that's how this happens. and it is amazing, and it's a beautiful day, and, supervisor, you should be so proud of what you have been able to accomplish for this community, unlike never before, and we are so grateful for your strong advocacy and leadership. and, ladies and gentlemen, i want to introduce the district 11 supervisor, supervisor safai. [applause] >> thank you, madam mayor. this day is super special. i'll just say that. when i first started working in this community, the mantra was, why are we always treated like the forgotten part of san francisco? why are we not getting our fair

share? why are the working people -- why are the hard-working people that get up and make this city run every day treated like this? and if you saw this playground, if you saw this fence, right, phil, it looked like a prison yard fence. it looked like something that you would never want to bring your family to. the same at mersed -- excuse me, allis-chalmers that is open today. and they used to ride by that to say look at how awful this park is, will you please give us money, because down the street was daily city and it was shining. but i can say with full confidence that this community fought hard, this community advocated and never gave up. i want to give a special shoutout to renard menro, working here tirelessly on a little island by himself, using every little resource he has,

going into his own pockets often, to make sure that this community had something. i want to thank miss wilma gardner, she couldn't join us today and she lives right across the street there and said i want to see this park rebuilt before i die. that's what she told me when i met her years ago. and i'm sorry that she couldn't be here today. there's a lot of people that couldn't actually physically be here, but all of their blood, sweat and tears went into this. i want to thank phil ginsburg and his staff. they have made a commitment to ensuring that the neighborhoods that have the most children, like ours, under the age of 18 get their fair share. and all of their hard-working staff. and i want to especially thank miss mayor, madam, london breed, because every single thing -- now don't get jealous of the supervisors -- every single thing that i have brought to her to talk about this community she has said, yes. when we asked her for a new library, she said, yes.

when we asked her for a new job center, she funded that and we opened that up a year ago to this day. when we said three years ago -- not recently -- but three years ago when we said that the african american community is hurting she said, asha, you don't need to tell me, i know. and i said we're investing in this, and she said, yes. so this is one big step forward and i want to thank all of the people that have been involved in this, and all of the people that have dedicated themselves to this, and to all of the children and families that will enjoy this for many, many years to come. this is a new day in district 11, thank you very much. [applause] >> thank you, supervisor safai. the mayor and the supervisor, you know, eloquently articulated the importance of this moment. playgrounds are happy, they're joyous, but for children and their development and their social and emotional development

and their ability to problem solve and the ability to take risks and the ability to share and to collaborate, this is really serious stuff to get kids back on our playgrounds again. i think that the mayor said it, that kids have taken it on the chin a little bit during this pandemic, let's be honest. and i'm grateful to the mayor and to supervisor safai and the community for screaming out on behalf of our children. we have to now do the right thing. playgrounds are open. we need to keep our kids safe and our families safe. so, please -- yes, there are rules and there are capacity limits. there are -- we are supposed to continue to social distance and continue to wear a mask, right? do not eat and drink in these spaces. let's all do the right things so that our children and san francisco families can be healthy. so the last point they want to make before bringing up our next speaker -- yes, thank you, mayor. okay, do not -- if you are a

parent, when you bring your kid to a playground, do not do this -- pay attention. no cellphone. pay attention to where your kids are and how they're engaging on these spaces. again, the goal here is only to allow our kids to have the freedom to play and to do it in a healthy way. one last point which is that this should be a reminder as both the mayor and supervisor safai mentioned about the importance of investing in our parks. san francisco has the best park system in the united states of america. it is 150 years old. but we have to continue to invest in it, continue to nurture in it so we no longer have fences that look like jails and playgrounds that aren't deserving of the children who use them. so i want to thank all san francisco voters for supporting the 2012 clean and safe neighborhoods park fund, without which we would not be here today. our most important partner in all of this are our friends at

the department of public health who have as a tough a job as anybody right now in trying to figure out how to allow us to safely resume some sense of normalcy. and i am incredibly grateful to dr. colfax and dr. aragon and their team for working with us and truly understanding the importance and the urgency of opening up playgrounds. so dr. colfax, the mic is yours. >> well, thank you, director ginsburg, and really to acknowledge our gratitude to mayor breed, supervisors safai, director su, and mr. robert ellis for their leadership in this work. you know that there's been so many challenging days during this pandemic. and so many sad days. and this is such a day of gratitude and beauty. look out it here, and look at

the kids playing. this is a pivotal moment as we work together to slow the spread of covid and realize that our children must go back to doing the things that we know that are important for their health and their family's health and the communities' health. the reopening of the playgrounds is an opportunity to get our kids back something that we haven't done since march, march. incredible. we at the health department are so happy to be here as we have worked to get san francisco to this place. to back to where kids can get in an environment where they can thrive, starting with school programs, community hubs, and elementary schools, step-by-step, and now playgrounds. we have made tremendous progress as a city. and we know that the sacrifice and the dedications of our families and our communities have made the contributions that have succeeded in slowing the

spread of covid-19 virus. and i thank you. we thank you. and we want all of our children -- all of our children -- to continue to enjoy the reopening of activities. and so parents, we need your help in ensuring that we open playgrounds as safely as possible. when visiting playgrounds, please be sure that your family follows the health and safety rules for playground visitors. prepare your family for less children and for socially distanced fun. and i wouldn't be doing my job, you know what comes next, if i wouldn't remind people to, please, wear a face covering. they are required for all playground visitors, aged 2 and over. please limit your stay to 30 minutes when other households are present, so that other people can also enjoy the playground. and, please, practice that good

hygiene. and although playgrounds are outdoors, we still want to be cautious. we need everyone's help in sustaining our gain and the progress that we have made. so let's have fun today. let's take advantage of these beautiful seasonal days that we have in san francisco, and, again, thank you mayor breed, supervisor safai and director ginsburg for your partnership and work. and everyone, let's continue to play it safe. thank you. [applause] >> thank you, dr. colfax. so we're now going to hear from two important community members that have fought for children and for families in this neighborhood. our first speaker, renard monroe, the executive director of youth first. you've been amazing. thank you for your partnership in our community hub program. i want to acknowledge executive director, dr. mariea su, my partner in crime and all things kids and families.

but, ménard, you are running a model program and you're doing it for kids who really need the support. and we're so grateful to you for your help in keeping these spaces safe and clean. please come up and say a few words. [applause] >> good afternoon. this is a bittersweet moment for us as a community, because there are some people before ménard who really put in some hard work to make sure that we have this space for the children and our community. and i need to acknowledge a few people who didn't make it to see this day. our neighbor, she lived right there, her name was karen mccoy. [applause] she fought and she fought and she had phil's number on speed dial trying to get this place

renovated. she didn't make it to see it, she passed away and i'm thankful for her and her daughter, they both passed away. they fought for this park and i'm appreciative of that. and delores, who is also a resident fought for this park. and mary harris and al harris, okay, a lot of people put in -- wilma gardner, a lot of people have been fighting to make sure that this community gets what it needs. i'm just happy to be part of the process and i'm thankful for today and i'm thankful for our mayor to allocate the funds and phil ginsburg, he's been awesome. it's been awesome. and i appreciate you. he comes out the first day they put this together and went down the slide with the kids and impressed the kids. it's just one of those things where san francisco is supposed to be about community. and these type of events are so important, especially in a times that we're living in and the covid-19. i definitely want to thank our supervisor safai.

[applause] for all of his hard work and pushing for our district to make sure that we can have spaces like this. also i want to thank our community as a whole, first and foremost. our residents right here, up and down the street. using this park every day, and we're so happy to have it back open, to have our kids back playing safely and in an environment, and something to be proud of. i'm proud of our district. i'm proud of where we're going. okay, we have organizations and c.b.o.s who are really making a push for this district to get the resources allocated here. and all of the things that we are doing just to make sure that the community gets what it needs and to make sure that children have a future. so, thank you. [applause] >> thank you, renard. so another community leader that had my phone number on speed dial, my phone number, my email

and my twitter and my telegraph handle was edna james. and edna couldn't be here today, but she has asked one of her closest community partners to come up and to say a few words. robert ellis. robert is the vice president of the o.m.i. community action organization and a member of the friends of mersed heights playground, and to say a few words about the power of community when it comes to getting things done. robert, the microphone is yours. >> hi, i wish i had been first. all of these accolades have been handed out and it's well deserved. and i want to thank our mayor breed for all of her dedication, all of her dedication to the city. and not only she is smart, but she's pretty.

so that's a good thing. like i say, i want to thank phil definitely -- if you stand here and you look around you can see the transformation of this park and the future is still bright. i have been on di dixie street r the last 50 years and i have seen the park deteriorate and now it's like a phoenix rising from the sun. so you see that it's bringing a whole new atmosphere to the community. not only for the children, but also for the adults and for everybody in the community and the city. and i'm certainly glad to be a part of it and i want to apologize -- not apologize, but i want to give my regrets to miss james, the well documented partner was unable to be here

today. so i want to thank everyone that invited me and phil and just say, phil, you're doing a wonderful job. keep up the good work. and god bless you. thank you. >> just a few quick acknowledgements and then we're going to wrap up and if there are any questions you have a few people here who might be able to answer them. just a couple of questions. but i i want to recognize through the san francisco park alliance that without the san francisco park alliance, make no mistake that we would not be renovating or ribbon cutting five new playgrounds. their partnership is invaluable and they lead with their heart and they care about the parks. thank you, san francisco park alliance. [applause] and then last to my own team, lisa brampton, lisa, thank you for all that you have done to bring private resources to help to supplement what the voters

have done to allow us to renovate these playgrounds. to our park supervisor, brandon young bright and early here, mayor, making sure that this place looked super clean. so, thank you, brandon, for being here. and to dan mauer, our project manager for this particular project, and to all of the rec and park staff who really had to hustle to make sure that you can see these markings on the ground and you can see all of the signs in the last 36 hours we have put out maybe 750 signs and have marked playgrounds and, yeah, my staff always rises to the occasion. so a big shout out to the rec and park staff. let's let them play. >> i will ask everyone to place

your hands on your heart to say the pledge of allegiance. please unmute everyone.