and lingers and they chew on it and think about it. and it may not make a big impact but it's something that opens up the door or starts the conversation or the beginning of something. i would like for it to be a start, whether it's a start of research or start of pondering, yeah, what does it mean to be an artist? and how do i decolonize my mind?

>> february 12, 2025, at this time. >> thank you, madam secretary do you want to call the roll. >> mr. o'connor. >> present. >> mr. driscoll. >> present. >> commissioner bridges. >> present. >> a quorum, mr. president. >> thank you, next item. >> clerk: item number 2 communication, we welcome the public's participation. there will be an opportunity for general public comment after and there will be an opportunity to comment on each discussion or action item on the agenda. each comment is limited to two minutes. public comment will be taken in-person and remotely by call-in. for each item, the public comment will be taken and remotely and then, from people in-person. comment right side opportunities to speak during the public comment period are available by phone, by calling

415-655-0001 access code 26624884211, press pound, press pound again. listening mode only. when your item of interest comes up, best practices are to call from a quiet location, speak clearly and slowly and turn down your tv, radio or computer. please note that policies prohibit discriminatory or harassing conduct against city employees and others during public meetings and will not be tolerated. more over, we thank you for joining us. >> thank you. next item, please. >> item number three is general public comment. a reminder that public comment

is limited to two minutes. do we have any in-person public comment? seeing none, callers, if you have not already done so, please press star-3 to be added to the speaker line. for those on hold, please continue to wait until the system indicates that you have been unmuted. moderator, do we have any callers on the line? >> madam secretary, there are no callers on the line. >> next item, please. >> item number four is an item item, minutes of december 2024. >> move to adopt the minutes. >> second. >> great. it's been moved and seconded. public comment please. >> thank you, do we have in-person public comment on this item? seeing none, moderator, 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. >> it's been moved and seconded, all those in favor say aye. >> aye. >> those opposed? motion passes. next item, please. >> thank you, item number 5 action item consent calendar. >> move to adopt the consent calendar. >> second. >> madam secretary, public comment. >> thank you, do we have any in-person public comment on this item? seeing none, moderator, are there any callers on the line. >> madam secretary, there are no callers on the line. >> thank you, hearing no calls, public comment has been closed. >> it's been moved and second, pass the consent calendar. those in favor say aye. >> aye. >> aye. >> those opposed, nay? ? motion passes. do you want to call the next item, please.

>> thank you, item number 6 is an item item, approval of basic cola affective june 1, 2025. >> good morning, commissioners. >> this is action item of 2 percent cola. i recommend that the board approve this charter cost of living, increase of two percent for all qualified retiree who retired on or before july 1, 2025. and i'm happy to answer any questions.

>> commissioners, any questions or comments? >> i move adoption to the staff recommendation. >> second. >> public comment, please? >> thank you, do we have any in-person public comment on this item? seeing none, moderaters do we have any callers on the line. >> madam secretary, there are no callers on the line. >> thank you, hearing no calls, public comment has been closed. >> it's been moved and seconded. those in favor say aye. >> aye. >> those opposed say nay. motion passes. next item. >> item number 7 is an action item determination and approval of four percent credited for fiscal year 2025-2026. >> commissioners i ask that you accept the credit rate and approve the four percent credit interest rate for fiscal year 2025-2026.

>> i move adoption of the credit interest rate as recommended by staff. >> second. >> public comment, please. >> thank you, do we have any in-person public comment on this item? seeing none, moderator, do we have any callers? >> madam secretary, there are no callers on the line. >> thank you hearing no calls, public comment is now closed. >> it's been moved and seconded for the approval of four percent credit interest rate for fiscal year 2025-26, all those in favor say aye. >> aye. >> in a opposed nay? okay, motion passes. >> item number 8, adoption item, evaluation report. >> commissioner i'm happy to welcome bill and anne to present the results of annual actual evaluation as of july 1,

2024 and as noted in my calendar sheet, i also like to point out that the post 2010 july 1, 2010 hires are two-thirds of the active members. of the entire membership and their costs are commissionrate with that, so we really merged in with the newest planned tiers as they and, [laughter] interesting being a member of a new plant here myself i'm always looking at that every year. and bill, take it away. >> thank you, good morning. good morning. so, we're here to present the results of the 2024 actualrial

evaluation and this is not updating.

valuation al evaluation and this is not updating. >> it's just not doing the slide show. >> there we go. >> all right, thank you. apologize for that technical delay here.

so whenever do a valuation, we always that i that our assumptions will never come true, exactly true, and they don't, but this year they came very very close. the results are almost almost as exactly as we had projected last year. it's not not that they all came through its that they missed in offseting ways. so the balance is very much, very close to what we had projected. so the system is still very well funded, it's 95 percent based on the market value of assets, 97 percent based on the smooth actuarial value. the employer contribution rate before cost shaving went down from 16.9 to 16.5. investment returns were slightly better than expected. we use an assumption of 7.2

return was 7.8 based on the market value and 8.1 based on that actuarial, that resulted in a partial supplemental cola that was granted for most retirees. and then, we also had the voter approved charter amendments, hni that we'll talk about the impact of those on the valuation. here we're showing the funded status measures on the bars on the chart are the measure of the liability, split between members currently receiving benefits in dark blue, the gold is members who are no longer work ining employment that are entitled to a future benefit and then the red is the active members. the lines are the assets and

you can see it stayed stable unchanged funded ratio 95 percent and 97 percent, slight change in the unfunded actual liability with those funded levels staying the same but the liability increasing. and we do note that over 60 percent of the actual liability is attributable to members receiving benefits. as that increases the system is more sensitive to changes and volatile. it's one of the measures we track to keep a handle on that. here we are showing the contributions rate comparing last year's valuation to this year's valuation. but four profit sharing and after cost sharing. this shows member and employer

rates so you can see the charts on the left and the right total to exactly the same number, so the costs sharing does not affect the total contributions to the plan. the purple bars are the member contributions and the dark gold is the employer normal costs. so these combined are the total normal cost to the system so this is what it costs for the benefits that are earned in the current year of service. so this is the on going costs of the accruals within the system. and you can see those have declined just slightly, there is a couple of pieces to that but that's been a long term trend with prop c, is the newest tier as lower normal cost trade. so we have members retire from the other tiers and new members

are hired under prop c, we've seen a gradual decline in the normal cost rates. for the employers in addition to the normal costs, they're making that ual payment and so, let me get rid of the member rate there. so for the employers normal cost rate has gone down but so has the ual payment. --. >> sorry to interrupt you but you've gotten this from several people tune in online, they want to know if we can explain all the acronyms, all of us hear them but not the public. >> yeah, the ual payment, liability payment. so we sew the assets and

liability, the difference is unfunded actual liability that increase very slightly. but the payment on it as a percentage of payroll, we amortize those payments over a period of time and we'll get into a discussion about that specific but in aggregate, those payments went down as a percentage of payroll. and so, the, the costs before costs sharing went from 16.91 to 16.93 and after cost sharing after employers it went from 15.27 to 14.87. and so that difference was the increase in the member contributions after costs sharing. so now i'm going to turn it to anne to go through some of the specifics from this valuation and then, we'll come back to

some risk assessments. >> so one of the changes that we did not anticipate in last year's valuation, we did not know where those charter amendment that's were back in the ballot back in november and two of the charter amendments did pass. the first was charter amendment h which was for the active firefighters who are currently in that prop c tier, those are the ones that were hired after 2012 or january 1, 2012. and the increases is their benefits were, isolated to the benefit multipliers in the benefit formula. your formula is a percentage of pay that final average pay service. so all of those benefit multiplier at those age members increased and now at the level of the non prove c members. there were no changes to the prop c member contributions

currently prop c for firefighters and police officers is nine percent. the non legacy or the non prop c is 7 and a half percent but those prop c still stayed high for the members, higher and there were no changes to the maximum compensation either for the prop members. the next charter amendment was charter amendment i, and that had two different provisions in there for different increases. one for the current nurses frs. and that they were offered to purchase when they were a per diem nurse.

examine that changed from a miscellaneous plan to safety miscellaneous plan which is like a police officer plan. it increased only for their service after january 2025. so any of their service related to prior to that, their benefits will be calculated based on the miscellaneous plan and any service after that date, their payment will be based on this safety plan. this light here shows the cost impact of the charter amendment and member of members affected. the increases of the member rates applicable and the normal cost rates and the accrued liability. so for the fire fighter there

were about 1130 members affected by this valuation. there will be more going forward every time a prop c hired they'll go into this benefit tier. and the impact of employer normal cost rate, and i will not use acronym, it's the actuarial term meaning the amount of benefit that's are accruing for the active members for that year of service. so it's like purchasing on a credit card that you make every year. you're making the purchases and paying them off. it's, it's just the active accrual of those benefits for those members. so for the firefighters prop c, those they're normal cost rates as a percentage of pay went up by 1.13 percent over that fire fighter payroll. now as first contribute to aggregate contribution rate so the impact when you do that calculate overall of sfers

payroll. also a very very small impact on the actual liability the past service costs of about 14.7 million dollars. so for the per diem nurse credit there were about 1900 nurse that's fell into this category, however only about 700 have serviced available for purchases. when we did our calculation we assumed that they would purchase the amount of service that they did have available to them and that averaged one year per 1 over their payroll, no change to the member rate and overall, a four basis point increase to the normal cost rate for this group. and only point nine million dollars increase to the

actuarial unfunded. so the for the dispatcher, the about 700 affected and the member rate did change. they were previously in a miscellaneous group which they can contribute seven and a half percent. the public safety, the miscellaneous their that's one and a half increase for these members in this group. the normal cost rate for the employer increases about ten quarter percentage based on that group's payroll but when you spread all over sfers payroll. so over the charter amendment increases normal cost rate by 15 basis points and it increased the actual liability by about 15.6 million dollars. now, to put that into relative terms all of sfers actuarial

liability is 37 billion. so in affect, these charter amendments though they were impactful for the small groups that were affected did not have a significant impact on the plan as a whole. so for the contribution increases that would be affect for fiscal year, you would see a one percent or point one percent increase in the member rates which is about half a million dollars thed employer normal cost like i said 15 basis increase, which total 7.2 million and that 16.2 million dollars in your actualial liability. and that payment would be 1.5 million.

so in total, it will increase the plans actuarial or the i'm sorry, the plan employers contributions by about 9.2 million dollars. and again for relative terms, all of sfers contributions for fiscal year in 2026 are estimated to be around 1.16 billion. so again, a very small impact but meaningful for the members who receive this increase and it's nice to see that they're getting improvement. okay, so now we're looking at the ual, unfunded actual liability, the chart on the right hand side is the change in the employer contribution rate before the cost sharing adjustments. so focusing on the left hand

side, the unfunded liability increased in total about 61 million dollars from last year to this year's valuation. one of the sources of a decrease are your contributions coming into the plan. so all of the member and employer contribution right side coming into the plan and they come in and they payoff that normal cost or that active accrual amount, they're able to pay for all the interest on unfunded liability and last year they were able to pay for the 170 million to take down the principal on your unfunded accrued liability. the investment returns that bill spoke about earlier was a slight gain if you will, favorable experience on the asset side and we, the plan earned around 8 percent and our boge is 7.2 so that was an actuarial gain of 311 million

dollars. on the liability side, that's the the, how's retirement, determination, salary increases all the member behavior how that compares to what our assumptions look like and there was a loss this year of 425 million dollars and we'll go into that in the next couple of slides to give you a de tail on what happened on the liability side. the sue mrementd --supplemental cola was did 111 million. and that was over and above what we had anticipated. but not enough to grant a full supplemental cola. it was about half a percent on most employees benefits along with two percent increase in their basic cola.

a full one and a half for a total of 3 and a half so they got half percent increase. and then the propositions as i said in the previous slide increased the liability by 15.6 million dollars. so then turning over to the employee contribution rate which decreased about 40 basis points from last year. as bill said earlier, there is a lot of things happening here but they tended to offset each other and at the end what we didn't anticipate happening the charter propositions are what increased the contribution a little bit more than we were anticipating the 18 basis points at the end. but what did change that contribution rate there was a supplemental cola in 201 19 and that was fully paid for this year paid over a 5-year period

and last year was the last year of that appointment, so we saw a decrease in the rate because we no longer have to make that rate. so that's a decrease of 70 basis points to the rate. your payroll grew from last year to this year, by about 8 and a half percent which is well above what we anticipated. so when you're wage grows when your payroll grows by that much, that's the amount that we calculate the ual payment rate. so the ual are around 1224 million dollars and if your payroll increases by more than three percent that's what we expect them to increase. and then that way the whole ual payment is consistent and stable but when your payroll increases by 8 percent, you're going to see a downward trend because the payments are spread over a much larger payroll base. now looking at the investment,s

it decrease the contribution rate by about 50 basis points, a half a percent. and coincidently the cola gain because of the gain in the assets, also changed your contribution but it increased your contribution rate by half a percent. so it's a coincidence that they ended up at the exact same level because your gains and loss right side spread over a twenty years period which is, amortized. so, that's not, that's just a coincidence but it was nice and offseting with each other. so the liability was about 40 point increase. so again offseting, features, contribution rate is where we expected it to be. are there any questions so far

before i move on? okay. so here we're showing the historical changes in the way out, unfunded actual liability or the last ten years. in 2024, that's what i just went over the source of change in the unfunded actual liability and then, here are the next the previous nine years and the bars are representing all of those sources of change, the line represents the net aul payment. so i'm going to show you a little bit of inter activity with our model. and just focus first on the investment return. so, in this chart negative means good, right. so that you are decreases, so you can see that your asset experience was fantastic in the last ten years. and over the course of this ten-year period your return on

the assets was just above 9 percent. so you're seeing some offseting losses but mostly gains due to your assets during the last ten-year period. then if you turn to the assumption changes which are in purple, there were experience studies done in 2015 and 2020, now an experience studies we look at all of our assumptions, we look at economic and all demographic assumptions so you're bound to see the changes. the other years, in 2018, and then in 2021, those were years where you had discount rate changes. we reduced it, which means you're lowering your assumed rate of return which increases your liability and increases your contributions. so in 2018 it went to 7.4 percent from 7.5 and then in 2021 it went from 7.4 to 7.2

percent. in 2015, there was no discount rate change at that point in time. what was going on there, was when we revised the mortality assumption, those here to remember that it was a very big impact to a lot of pension plans across the country and specifically in california where that improved mortality did cause significant increases in the ual and contributions. >> i would like to mind the board that the meeting and discount rate in state of california is 6.75 percent. >> 6.5. >> but that includes all plans even if they're not remotely comparable to ours, correct? >> yes, over a billion dollars. >> okay, now moving on to this,

to the green bars, we're showing that they're supplemental colas. most are supplemental with the exception of 2002 that was a prechange for the retirees those are the members who, who in the charter the plans, it said that they needed the planning to be fully funded for those members to receive a supplemental cola but a charter amendment changed that and now those members are, permitted or allowed to have a supplemental cola even if the plan is not fully funded, they have to have those assets to get that supplemental. so in 2016, that was the biggest impact that was due to retro active for the, for the post 96 retirees, because back, back when prop c was passed, it wasn't the intention that those

members were not allowed a supplemental cola. so basically the only group that is does not receive a supplemental do ko* la to the state, are the prop c members. and then in 2024, we had a partial supplemental cola and charter amendment that's are included in that during bucket there. lastly the one source that has been consistently decreasing are the contributions coming into your plan. your information policy is strong enough for ever single year you're getting, more and more closer to paying off that entire unfunded actuarial liability. so in summary, when you look at

plan in total, for those ten years. over the last ten yae,z the unfunded has decreases by 11.8 billion dollars. the biggest sources that are your assets, a negative 4.4 billion dollars increase followed bit contributions, negative 2.1, and then the things that increased your unfunded again were your liability, a loss of 11.8, your assumption of 5.5 billion and supplemental cola of 1.4 billion so. if you wanted to look at your asset returns net of the supplemental cola, because when you do have asset returns you don't get to keep them all you have to pay for the supplemental cola. that is still a three billion dollars reduction in your

unfunded liability. in 2024, we said that the liability loss was about 525 million dollars. most of that liability, is due to the salary increases for your members. and you have seen that as well in the last four years. has come to the salary increases to the active members. and when you increase the salaries of your active members, you're uncreasing the benefits by increases the liability of the plan.

so here we're just accelerating the salary losses, they're about 60 percent of your entire liability loss. and when you look at all sources, when you combine the losses that's about 37 percent of your liability losses. so in the coming year, there will be another actuarial experience study done looking at these specific assumptions and we will, whoever the actuarial is at the time, there is an rfp, i don't want to jump to conclusions but they will be reviewing these assumptions in the coming year. >> very diplomatic.

so let me ask you a question. have you experiences a hiring freeze and constraints in the last, i'm bad at guessing but i say over a year? and no? >> in the last month? >> formerly, yes. >> so we can look forward to relosing that number. >> yes, the salary increases we think of being driven by the inflation that we experienced and there is a delayed affect on salary increases. that doesn't mean that we necessarily expect you to continue salary increases at the same level in the future. >> yeah. >> so when you, when it's reviewed in the experience study, we'll not only look at what the history is but what do we anticipate going forward. >> right and the current m.o.

us that your members have, we have incorporated all of those into this valuation. and i think they go out to like fiscal year 2027, so all of those increases have been incorporated in this valuation and small part of those salary increases because there are increases in the mou for future salaries. >> so proficiency has been made in your pro jexz of possible kicking the can down a little into the future benefits being raised? over that period? >> it's the opposite of kicking the can, i would say, right because we know about these increases, we know about the increases, most of them were higher than the three quarter percent inflation that we were using. not a lot but a little bit higher because of inflation in the last two to three years. so we do have those increases

already embedded into the liabilities, knowing they're going to happen. and we do that every year, every time or every time a new mou is made we're made aware of one. so. >> thank you. >> so it seems like there is at least two serve possible unforeseen one of ballot measures that changed and formalized hiring freeze that may limit, new hires were paying into the system. and it seems from your report, neither one of those factors were enough. >> but in the hiring freeze we have not incorporated that into this valuation. for any members hired after june 30, 2024, that's our cut off point for our valuation date. and the hiring freeze came.

>> just in the last month. january. >> that will impact the next valuation. and really what that that will impact the most, is the payroll. new actives, they have no actuarial, you're going to pay the payroll that you're paying normal cost on and for the unfunded liability. we see a slight tick up in the contribution rate. because you still need to pay that dollar amount and if you're payroll goes down or stays flat, it will slightly tick off but not a lot just because unfunded is a small portion of your total contribution, i think it's only a third, where two-thirds of your contribution is bayeds on the members actively, accruing

those benefits. >> i appreciate that. i didn't see one here, it would be good to see impact if there is a flat implement or further freeze or reduction or how that might impact contribution rates, if there is it's neglectable or something that may be increased to go. >> right, so if i go back to this slide, just right here, right, this okay, we'll do this. so this slide, this payroll growth, your contribution went on a about a quarter of a percent, because of the payroll. 8 and a half compared to three and a quarter percent. so if it's flat, i mean, it's probably what 10, 15 basis

points that you're looking at so not substantial. >> so here, the first two bars, they adjust naturally with payroll. and the underlying cost adjusts with payroll. so if payroll does not grow, they stay pretty much a constant percentage of payroll. what is going to change is the light yellow bar at the top. so that's why, we're saying you know for the most part, it's not affecting your rates, because it's only going to affect the rate for that small piece at the top. and that gets affected because those payment right side fix dollar amounts. so it's a higher rate, if we divide by higher payroll.

>> and those are cal cue dated to increase at 2.3 percent each year. so if they're both growing in tandem. okay, so this is a news slide that we have not shown before, we're talking about the ual, the total ual, the ual payments, the layers, the timing and all that, this is showing as of the 2024

valuation, what all the different ual payments schedules look like and their stacked on top of each other. tells you the outstanding balance, how many years remaining and the payment. so we've seen what it looks like thoer those payments going until the end the 2046. so your, amorization schedules are very different from most of our system's. partially, because back in 2021, when you were more than fully funded at a market value basis, we looked at and reconsidered your funding policy and we shortened all of the current, at the time, assumption changes layers and all of the experience gains and

loss layers as of 2021 to amortize them over a five year period. and you can see in 2024 and 2025, on top you have all the ual payment that's are positive, meaning you need to payoff set ual at the bottom, the negative are the. you have about 220 million dollars in the net ual payment 2024, but it's not differing very much when you get to 2026, you still see that blue line which is your net ual payment projected over the course of the next 20 years. and again, we have it by source, we have the 2013ual,

that entire ual was condensed into one base when we also did some mod if you canations to the funding policy. then you have your experience losses in light yellow, assumptions are in purple and dark green are supplemental cola. what we have also included here and reason to show you these payments, we have deferred assets. what that means are, we always talk about deferred asset gains and losses, for example, back in 2021, there was a very favorably year in asset returns over 30 percent in assets. you don't recognize that all in one year. we smooth it into asset over a five-year period tha. was the only actual gain you had, you would see every year after that

you would see a 20 percent, you would see gains, and recognize 20 percent of that gain over the last five areas. so these differed assets are from previous year returns and amortized over 20 years and really what is causing the fluctuation that we're expecting. years after that. and i will show you, we've taken away the 2025 because the scale, we could not see the detail of the layers going forward. and these are all the layers going forward after 2026. and you can see here the contributions from the ual payment go from 236 million and they dip down a little to 200 million and the reason is that 2021 actuarial loss, it's the final year where we're going to

recognize 20 percent of the gain in the 2021 and it comes down, this is the layer that starts really in 2025 but that's the reason for this decrease here is that, that layer that is being added here. and then that was a really unfavorable year and so, we're going to recognize differed those differed loss sxz this is the final year where we recognized those differed losses, meaning we recognize them it hits as a new layer in 2026, and you pay for it over 20 years. but it increases this contribution and that u a l payment to 2025 and last year, differed losses assets, that we're seeing and then when we get to 2028, you have another more significant drop in your contributions and that is because of this proposition

here and that was the proposition back in 2008, that improved miscellaneous benefits and changed the structure of your cola from going to a simple 2 percent to a compound two percent cola. so this is the last two years that those payments for that proposition back in 2008 will be fully paid for in this contribution. anyway, are there any questions? we just really wanted to show the dynamic, i don't know if it was helpful or not, to show you the increases or decreasing of those rates and why that should helping. >> very helpful. >> two things, i want to understand, is this presentation, looks a little different than what you've done in prior years.

>> used in a prior slide, what is the new issue? >> so when the new entrance come into the plan, they they are bringing, they're not bringing them an accrued liability by he end of the year they have accrued a liability where we have not taken that into account. >> so when we do the valuation on july 1, 2024, we're taking into account everybody who is working as of that date? when we get to the next year, there is a bunch of new hires who have come in and earned a little bit of benefit? >> right. >> and that's the, that's the issue is, we give them new entrance loss. >> people are going to retire at some point on how many credits they've earned. so that's that number. on this chart now, the assumption number, we have a

multiple assumption so. when you have that assumption number, what is that suppose to reflect? >> so this assumption is a layer that was started back in 20 and 15, >> that's the remaining schedule of paying that assumption change off. >> and how accurate the

assumption assumption, we have to pay for when the assumption was high or low that's when the payment number was important? when i say last fiscal's year payroll. >> there is no payroll involved because it's all dollars. >> not yet. >> this is all dollars that you're seeing. these are like, like, if you're paying your mortgage, you're paying dollar amounts. >> but when you say contribution rates, had you to have used a payroll somewhere. >> when we get to the contribution rate, we divide by payroll. i was just explaining the amorization payments are set up as a dollar amendment and then we divide by payroll. this is showing the dollar amounts of those payments. >> thank you. as unusual when you explain t i get it.

>> when you look at 2026 going forward, that pattern is the pattern on the ual payment. because, because your normal cost stays pretty static, in way of payment that's are changing. so we're taking by dividing the payoff and each year we assume payroll is going to grow 3.25 percent. so we assume that those payments are going to stay constant as a percentage of pay.

you can see that the contribution rate is 19 percent in 2016 and slowly crept up to about 23.4 and now that's gradually in the last five years, has come down each and every year to the current year that you're seeing at 14.9 percent after that cost sharing. we finally recognize it in the rate and that's what is causing the ups and downs in those years and then we have a small dough crease in 2030 and that's proposition that we have in 2008 and then it stays relatively stable over the next

8 or nine years in the projection. >> and the line is 2023 projection? it's the 2023 projections so you can see how different the projections were last year to this year. >> he thought it was wrong when he was reviewing it.

we want to wrap up. if all of our assumptions are met for the investment and

because we amortize the cost of that supplemental cola over only five years where the affects of the return are spread out over a much longer period, you start seeing a rise in the contribution rate within the very narrow range. we went years without any returns falling within that range. but we've had several the last few years that have fallen the last range. and you get a partial up to a full supplemental cola at and then the rate goes down again and we reach 1100 percent funded so that changes our funding rules and further drops the contribution rate.

to test the sensitivity over longer period, we followed a standard procedure where we look at the capitol market assumptions provided by your investment consultant, and look at the range of returns over a one nf year and five-year period and use the ranges to create these theoretical scenarios. using the 5th and percentile, very good and very bad returns for one year. and five-year significant are using the range of the five-year returns for the

different percentiles. so the moderate is from 25th to 75th so that range is about the middle about 50 percent of the returns. so we expect the middle half to come in. the intent is to show you the tense tiffity. so amend ix here has all the individual scenarios this chart just summarizes them all in one chart. you can see the range of potential returns, base line showing the projections that anne was showing and discussing with that bump.

there is a required contribution that goes into the retiree healthcare trust. but it could increase contribution rates by about 40 percent by the end of the projection period. the gray area is our 5th to 95 percentile projection, so just basics. so, so the contributions rates are looking good, they've been steady for several years but there is still significant variation based on returns. and we wanted to just point to one metric that we look at in terms of the sensitivity to

those returns. and that's the asset the measure, it's simply the assets divided by the payroll and it indicates the sensitive returns. the way that works, well your ratio is about 8 and so if you had a ten percent investment loss compared to our assumption, so we're assuming 7.2, so it would be a minus 2 approximately 8 return, we give you that 2 percent. that's equivalent to about 80 percent of payroll. so we would set up an amorization to pay back 80 percent of payroll over a period of time. if that ratio is like the public plan, that is only about

6. that would be 56 percent of payroll. so when we're setting tup, it would be a smaller percent of payroll that we would have to charge. because yours is higher, you will see greater fluctuation in your contribution rate than the afternoon plan. 75 percent of other plans out there. so it works both drexz, positive, you get more benefit, negative you'd have a higher increase in contributions. it's not really a measure that you can change, it's like a characteristic of the plan. it's just something to be aware

of how you risk and monitor the risk and understand that your contribution rate will be more volatile based on investment returns than most plans. >> and better funded plans are much more sensitive to the risk and your plan is 95-97 percent depending on what ratio you look at. you're better funded. so some of your. it looks like it's not a characteristic that we can avoid it's just part of the lifecycle of where we're at. however, it seems like we've made conscious efforts to derisk the portfolio and to

prepare for that shift. are there other components, and other this shift to a mature plan requiring other adjustments as well or things that mature plans normally do that we need to consider and have not necessarily considered yet? to help manage that additional volatility. but there are, offseting trade offs in doing that. you have to balance those trade offs. we are using a five-year asset smoothing, which is pretty normal period. we're using a 20-year amorization period which is as

long as we can use. >> per charter. >> per charter, your charter restricts that and we would not want to go any longer than that anyway. so that's really controlling the volatility as much as we can on that front. then you do go to the investment policy and how you manage the risk on that side. but also understanding the capacity of the employers to handle that risk. and part of that can be communicating that risk so they, have some plans in place. >> thank you. >> just for the for the record, i can pickup a one point, we have not derisked portfolio we're risk aware and new allocation of the board approved has a somewhat lower

but risk profile but with exposure to the markets, we continue to have risks. >> thank you for the clarification. >> so let me just wrap up, your system is very well funded when we look in compared to other systems, you are very well funded. the projected contributions are very stable at this point. there is a little bit of a short-term volatility that anne was going through as we recognize the 2021 and 2022 investment gains and losses, kind of offset by your by going forward, it is that, you know, the range of potential investment returns can produce quite a different range in contributions in our standard projection.

>> thank you for the presentation and the good news. a new administration for a public entity like we have right now we like to see from their retirement system and i would congratulate everybody for having this type of report. the results that give this a report and janet, thank you for pushing all this. you're the star today. [laughter] and charts, presentation. >> okay, any further questions

or comments? >> here's an object servation. this is one reason, or example of why peer group comparisons, i'm not going to say they're not not important but sometimes they can be useless. this asset leverage, looks like more sensitive than our peers. are we doing something stupid or risk? no we're not, our whole investment process are mindful, of the lever risk the liquidity issue, we do that very deliberate. so we're not being crazy about taking on more risk but how we're doing it, you may say that there is some benefit to the player to keep funding ratio is so high. nice little perks like the cola is something that members benefit but always risk that go with everything in terms of the numbers that we eventually

adopt, that the employees are costs sharing as well as all the citizens of san francisco and citizens that contribute to pay the taxes. so it's all mindfully done all the time. so good luck to our peers. [laughter] if we didn't have such packed jend, i would have asked more questions. thank you for the thorough presentation. >> thank you. >> okay. is there a motion for adoption? >> move to review and adopt, move to adopt the july first, actual funding valuation report. >> second. >> public comment, please? >> thank you. do we have any in-person public comment on this item?

seeing none, moderator, do we have any callers on the line. >> madam secretary there are no callers on the line. >> thank you, hearing no calls public comment has been closed. >> it's been moved and seconded all those in favor say aye. >> aye. >> aye. >> those opposed say nay. motion carries. looking at the schedule. >> one more, right. after your next item. >> absolutely. >> is that fair enough? >> okay, you want to call item number 9. >> item number 9 is an action item adoption of employer rate of 16.53 percent for fiscal year 2025-26. >> commissioners you've had the

presentation, and now we ask you to adopt the recommended employer contribution rate. >> move to adopt staff recommendation. >> second. >> public comment, please? >> thank you, do we have any in-person public comment on this item? seeing none, moderator, do we have any callers on the line? >> madam secretary, there are no callers on the line. >> thank you, hearing no calls, public comment is now closed. >> it's been moved and seconded, all those in favor say aye. >> aye. >> those opposed say nay, motion passes. >> thank you. >> i know we were talking about taking a break if it was possible to cover the financial

statements and break after that since we have financial here. >> no problem. great. >> so do you want to call item number 10? >> thank you, item number 10, discussion item review of audited financial statements and supplemental schedules for june ending june 30, 2024 and year-ended june 30, 2024. >> commissioners today we credit craig harner from ngo to walk you through the financial statements for fiscal year 2024. >> thank you, allison. thank you members of the board retirement for letting us come and present the results of our audit. i'm a partner with ngo

responsible for overall service sxz signing of audit report. with me ying yang is my supervisor, working day-to-day with staff and management. we want to thank everybody here for all of their help during the audit. we ask a lot of questions. with that, we p.m.ed a audit for june 30, 2024. the financial statement are prepared by management and accordance with the county principals and management is responsible for completeness and accuracy and presentation of those financial statements. we performed our audits and government audit standards and we issued our, our report on november 20th, 2024 and we're happy to say that we offered a

unqualified opinion modified it's at the highest level of insurance that we can provide our organization regarding their financial statements. the required communications, the required communications is a summary that we're required to go over certain items, based on our professional standards that we communicate. so i'll start with we didn't have any difficulties and disagreement wz management. as far as we know, no management consultation with other auditors so no looking for a second opinion on complex treatment of an area or anything like that.

and as far as what we call call qualitative, there is two areas that are significant one is the count eye and policies, and then the county estimates and i'll go over each of these. management is responsible for policies and for following the policies that they choose. as they see and note, there were no new policies adopted during the year and no new standards or accounting standards for them to adopt. so president' similar year to the prior year. more importantly, none of the accounting policies used by management lack a thougher authorize tive.

the two most significant ones affecting sfers, relates to fair value of investment and then also the actuarial calculations of the total pension liability and net pension liability of the plan sponsored which is not, it's not a balance in your financial at statement but it's in the notes. and what is significant is all the plan sponsored have to take that number and they take their proportionate share it's one of the larger balances. for example, the city and county has to take about 95 percent of the liability disclosed and financial statements record that as a balance sheet liability on their financial statement. in relates to valuation, we look at, we get an

understanding on the investment policy. we look at how the portfolio structure and then we plan our procedures based on the risk profile of the underlying investments of the securities. so we perform over year, equity and debt securities, we select a sample and recalculate the pricing based on price thating we can go out and look at in the marketplace. and for your alternative investment, prior equity and credit and real assets and absolute return strategies, we do a little more procedures here because of the risk profile tends to be a little bit greater, because there is no information about them out there in the marketplace so. what we'll do is against what samples and confirm balance with the general partners and funds. we'll look at the audit financial statements of those underline investment funds, make sure that they've been audited by a reputable auditor

and then we look at their valuation policies as well and make sure they're following the county standards that they should be following and then we'll reconcile the audited balances per the financial statement to sfers at 630 records and make sure that we can come within a reasonable estimate a reasonable amount there. we didn't have any issues auditing the investments this year. what we do is two things, we audit the census data so that the data that we received from sfers, and we'll select samples from retired members and members and active members so make sure that they're complete and accurate.

and then we also contract with to review all the calculation and the significant assumption that's are being used specifically no discount rate, and payroll growth and inflation assumption sxz making sure that those are all within the practice and within the gaspe guidelines. our consultant found everything to be reasonable and didn't have any concerns. asked a couple of questions but thank for response sxz able to alleviate that and we spr no concerns or issues there. >> thank you post what those were? >> just just informational, just clarification, a treatment of, i would have to go back, a

treatment of. what we can do is go to our papers and through allison and karen we can get that information for you. something very minimum it didn't impact the results. >> thank you. >> and then lastly, we didn't have no material misstatement or the financial statement no material audit adjustments and no uncorrected statements out there as well so. with that, if there is any questions? >> any questions? comments? >> thank you. >> i would like to thank staff and having a clean audit delivered. always a pleasure as a board member to have a clean audit. and thank you for your continued, you've been a partner with us for a long time. thank you.

>> thank you. >> some informational item only. public comment, please. >> thank you, do we have any in-person public comment on this item? seeing none, moderator, do we have any callers? >> madam secretary, there are no callers on the line. >> thank you, hearing no calls, public comment is now closed. >> okay, so let's take we'll, if you'll again, we'll eat while we're doing our business, and let's do 20 minutes? >> sure. >> to come back, is that good for you? allison. >> 20 minutes. >> back in session.

>> commissioners, follow the financial statements because the key input to the annual report. which we're pleased to provide you in february, part of the reason the meeting today is so full is because we had all the actuarial items and we're ahead of schedu the past. so attached is the report for your approval. it reflects on the staff. you can see we've done a lot over the few highlights. 1700 retirement appointments, 1.9 billion in benefits paid. as you know, navigating uncertain financial markets and even on the dc side, we continue to see growth and assets in participant over

8,000 counseling sessions over the course of the year. there is a lot in here. and it really does reflect a lot of hard work. i want to thank janet and allison just something that goes behind the scenes that ties into the budget as we continually think of how we can do the business better. and have a new software package that we use to work on the budget and it's making us more affective and efficient and they sphere head. just an indication the importance of technology and how we want to use it and the output obviously is a reflection of the broader work of the organization. if you have any questions, i'm happy to address them.

this is an interesting meeting, not only is it spring training, we're starting on the cycle of new board meetings and that makes larger agenda items. for the meeting to have today. we can only thank your staff, you and your staff and all of your partners in how we can put our business and how well we come port our business. are we going to hand deliver these? >> once you approve we'll get a printed version and we'll distribute.

we also have an abbreviated version which may be appreciated more. >> abbreviated? >> yes, once this is approved, what we do it just highlights essential what we consider essential facts. >> you'll send the board a copy? >> absolutely. >> and you want to make a little pocket copy? >> again, thank you. we're going to accept this please, can we have a motion? >> i move to approve annual report. >> i second. >> moved and seconded. public comment please. >> thank you, do we have any in-person public comment sdm seeing none, moderator are there any callers on the line? >> madam secretary, there are no callers on the line. >> thank you, hearing no calls, public comment is now closed.

>> so it's been moved and second to approve the annual report. all those in favor say aye. >> aye. >> those opposed nay, motion passes. thank you. >> we met four weeks ago as the committee and great work the team has put together. we, we had to thank you for all the work you delivered. >> this is a discussion item only, so public comment. >> do we have any in-person public comment on this item? seeing none, moderator, do we

have any callers >> madam secretary, we have no callers on the line. >> hearing no calls, public comment is now closed. >> next item. >> item number 13 action item approval for fiscal year 2025-26 and fiscal year 26-27. >> the commissioners, commissioner gandhi mentioned rereviewed the budget in the oversight committee and now we're bringing it to you for approval. i'll share some of the comments that i did with the oversight committee given the impact. so what you see before you is a budget that we prepared that will help us execute on our extra strategic plan and also mindful of costs. we really do genuinely appreciate the support and we're already seeing the positive impact that that has had on this organization. so if you recall, this board supported the addition of

retirement services staff and the budget starting two years ago. and with that, additional head count, we are improving response time. our offices are open to members and as a result, not only our members have here, but our team, is happier and in doing some great work. so we thank you for that. last year, the big initiative which will be a multi-year initiative was on the it front and there too was supportive in providing in the budget an a allowance. we're still working on filling some of those positions and the projects are already under way. again it's a long term it improvement process but we have made progress in areas of resiliency and risk mitigation. so now looking forward what we're presenting to you, there are no new major hugely

impactful initiatives this year. this is a normal course of business year for the most part. building on what we had in the previous years and still prioritizing it and the need to modernize there. so overall, the changes in the budget are very minimal to last year and summarized really in this, in the materials themselves. keep in mind, we put into budgets, the numbers that we have. with respect to personnel cost and other areas. so not all that is in there so when i say that the budget is relatively flat, it does not necessarily account for all of those numbers. we did get the number from the city, on the it side, we did make estimates, we expect to from some of the services from

the department of technology and wanted for you the board to know that we expect that there be a small increase in those services. the one that you all know about. i do not have numbers today that i can put forward in the budget. so at some point, we can come back to the board on that. the objective there is that we will pay less per square foot than we are paying now. so what is in the budget is a continuation of in terms of costs per price per square foot and we will add jaouft accordingly.

and how the deal terms are negotiated. the permit today is for you to ask me questions as it relates to the budget. once you approve the budget, it goes through the mayor's office and then to the board of supervisors for approval in late spring early summer. with that, i turn it over to you for questions. >> when do we normally present our draft to the mayor's office? the way the system works, we enter the budget into the system february 21 and then mayor's office starts to look

at that and then talk to us about the budget. their budget analyst. >> and it's, based on the same drill? that it was last year? or the year before? when you or are there new requirements. >> the process is generally the same, the budget instructions given the challenge of the budget year. >> are the people the same? >> some. >> okay. >> commissioners any questions on this budget or the process or alike? comments? okay. >> i have one request, slash question, which i'll bring up last. i know in the investment, part

in the foot notes, it says how, refers to staff and the board about an efficiently and affective decision, okay, those are interesting words to use very important. this budget is proposed is this what is then leads to administrative costs that we use in our total, that's what we capture when we get to contribution rates. used to be point 5 now it's point 6. this is enough justification why it's going up since we're now a bigger firm, a bigger fund. they look at cost a as a percentage payroll. so it's a little different than

relative to the aum *. >> so i'm just guessing, is this budget is proposed, one huge number has not been provided by the control number. does it look like we will be above or below point six? >> we'll have to get back to you on that. >> okay. >> i see the members are thrilled about that. the item if it's cut by the mayor's office, or by the board of supervisors when you go to that round, the item that was increased here about 300,000 for hearing officers, if that is cut or reduced please tell me because i will not be able to, not that i will not be able to go back to the budget but like we're told if that cut gets made. why that addition was put in

there trying to improve a service issue but if it's cut, we're going to have the same on going case of resolving disability cases. thank you. that's the type that would not get cut. >> approve the budget for 2025, and 26-27. >> second. >> public comment? >> thank you, do we have any

in-person public comment on this item? seeing none, moderator, do we have any callers on the line? >> madam secretary, there are no callers on the line. >> thank you, hearing no calls, public comment is now closed. >> thank you, it's been moved and seconded. all those in favor say aye. >> aye. >> aye. >> those opposed nay, motion passes, next item. >> item number 14 discussion item governance committee report. >> i'm making this up with the last short meeting on scheduling. so i didn't bring my notes on that november meeting. >> you approved the minutes from november. >> the same board meeting

schedule. >> this is our first meeting under the board? >> no, the next item is to take forward what the operations, sorry the governance committee wanted to put forward to effectuate that change. >> so it's a discussion item only? public comment? >> thank you, do we have any in-person public comment on this item? seeing none, moderator, do we have any callers on the line? >> madam secretary, there are no callers on the line. thank you, hearing no calls, public comment is now closed. >> next item. >> item 15 an action item proved revision to see operations policy? >> this item is to essentially approve the move from 12 meetings a month to 7. the operations oversight

committee did review the change to the policy. i do want to note and when we make the motion, we'll have to note it, i changed so we have 7 meetings a year and i did not catch if we had a 1:00 p.m. start time, we moved the meetings to 11. i meant to have 11:00. i was working on the assumes that everyone wanted to continue to start at 11:00. so the so reflect 7 meetings a month. >> i just want to reiterate that when we first embarked on this discussion about shrinking the meetings by that much i was very skeptical and i had a lot of questions. and i want to thank staff for taking the time to answer those and do a really are busta nal sis on how to optimize our work

and making sure that we're affective in our committees. this is the product of a lot of work that has been put in over the last you know, year or two. is really appreciate that if there is no other comments. >> there is a trickle down and damage which is secondary but it is useful to staff i think in terms of their time. and that is the efficiency in terms of how the presentations of these issues to the board will g.like today we had a fairly large presentation nz terms of volume in terms of time.

important stuff but, efficient keeping our eye on efficiency in terms, i'm sounding like, elon musk. it's going to have benefits and concerns it's time that will be agreed by the staff i think. so with that said. we'll. >> i think the time budget for an hour and a half. for some investment topics, we're not going to be able to cover them in that amount of time. the fact that we never discussed risk poll lance by this board, and it's the duty of the board to have risk toll ans. it's subjects like that time is necessary.

for such tra daoej i can consultant that may help the board at meeting. we approved certain funds but then we don't use them because we don't meet. there is always an issue about efficiency, what we're trying to accomplish? >> and if i may, with respect to having time at meetings, initially, we schedule, i see meetings the same day as board meetings to encourage attendance. i can always, i can work with committee chair to discuss what topics are covered and ensure that we have appropriate time to address those.

>> thank you this came up with investment committee in the event that there is a special need, we have the ability and flexibility to adopt it, that was one of the concerns i raised as well. buzz i share the concern about preserving quorum as well for the time that we have a shorter topic. >> okay, any further comments on this item? >> i would like to make a motion to adopt staff recommendation with the amendment of having the meeting started at 11:00 am as oppose today 1:00 p.m. >> i second it. >> okay. public comment, please. >> thank you. do we have any in-person public comment on this item? seeing none, moderator, do we have any callers on the line? >> madam secretary we have no callers on the line. >> thank you, hearing no calls, public comment is now closed. >> it's been moved and seconded to approve the revisions to the

board operation policy as discussed and all those in favor say aye. >> aye. >> those opposed, nay? motion passes. >> next item. >> item number 16 discussion item, personnel committee report. >> tim wasn't around. held its meeting as scheduled in our meetings, we reviewed the performance evaluation for our and the ceo, cio position.

i just says that focus remains key member and keep leaders for sfers and i think. part of this, either of you would like to say anything or whatever about the process, please, chime in but, the all the reviews were reflected.

and the success of sfers. >> good? okay. any questions? >> moderator, are there any callers on the line. >> madam secretary, there are no callers on the line. >> hearing no calls, public comment is now closed. >> item 16. >> i want to remind you that the form 700 statement of economic interest is due by april first which maybe seemsed far away but probably will

sneak up on all of us faster than we would like. >> can i ask you a question on that one item. >> yes. >> what is his name that was in the mayor's office, that last year, i don't know whether any of my fellow commissioners, other fellow commissioners i was in their site line, and it became sort of, discussion point that kept going on for weeks about, the way we file the 700 and especially in terms of investments. do you see any? >> i don't even remember the guy's name. >> you went through that also? right. >> maybe just to speak in general terms as you go through the process, if you have an issue or we can help you navigate with the appropriate

folks reach out. >> okay, again. same question as i asked before, you have not been notified of my changes that are suppose, or suggestions that are suppose to come back to us in on this subject? >> no, okay. great. >> all right, any other questions on the economic interest? okay. secondly, we have in here, the training programs that are option for you to consider. the board, the whole needs to approve that but please do work with darlene, work with me, do not book anything on your own. we want to make sure that anything booked is consistent with policy and we're here to help you to make sure that that

happens. also with respect to upcoming conferences, as you mention the prior board meeting wilshire confidence is in april. and i believe it's in palm springs, yes. thank you soer so if you're interesting in attending, you can reach out to me or ali. we have some of our team that will be there as well. the retirement board forward calendar that is in the materials will now be adjusted based on your approval to moving to seven meetings a year. we will get that adjusted accordingly for you to review next month. and finally as i believe you're all aware, joel engardio it was great to have him on the

board this past year and good representative on the board, is no longer going to be the board of supervisors representative going forward. we're waiting to hear who is the next board member will be. i do not have more information at this time and once that is official, we will communicate it. that's what i had on the ceo report, i'm happy to address any questions. >> any questions or comments? is there a deadline or timeline for the board of supervisors or just until the president of the board remains somebody, it remains vacant? >> until they appoint somebody. >> thank you. >> i imagine it's going to take a while. >> okay. >> okay, this is a discussion item only. public comment. >> thank you, do we have any

in-person public comment on the item? seeing none, moderator do we have any callers on the line. >> madam secretary, there are no callers on the line. >> seeing no calls, public comment is closed. item 17 proxy voting report. >> commissioners comprehensive update on the program, you recall the way andrew depicted it they're depicted right to left, one element is communication and collaboration where we work with peer institution sxz other asset owners and other working

groups, for example, we highlighted andrew's work with i willpa and csg investment management where they manage csp risk and opportunities for every investment that we add to the portfolio and on going monitor esg matters with existing relationships. and the third pillar is active ownership where we seek to influence performance for public market portfolio. active management executive officers. comment letters which is often about regulatory or policy matters. and then finally proxy voting and proxy voting as you know is our right and opportunity to vote on a variety of items including directions, compensation packages or

compensation structure i should say, mergers in a variety of other matters. to today as we do every year, we have two proxy items for the board. the first is review for proxy voting activities in 2024 along with observations about the season and then some recommended changes to sfers recommended guidelines. with that, i'll hand it over to andrew. >> thank you, curt. so we'll start with a present awesing on our proxy voting activities in calendar year 2024 and that will include the way sfers voted on our proxy vote as well as commentary on the broader market and then we'll continue with an update. my colleagues is going to walk us through the first report. i want to highlight that we continue to apply our approach

to proxy voting matters and we apply a custom voting policy that was developed by sfers, unilaterally and informed by our proxy advisor lewis and other market sources as we consider our votes. so with that i'll pass it over to boik. >> thank you, i'll start with our proxy voting and what we saw across the voting season. just a reminder kurt mentions some of that, we voted on two types of proposal management proposals which are brought by management company and these include topic, directions, mergers, and reorganizations

and second we also vote on share proposals and other interest groups and these can cover corporate governance as well. this past year we record which was on par with what we supported in the last two years. what we didn't xor is concentrated and compensation. our support for pay proposals increased over the last year but still voted against about 35 percent of them. moving on to shareholder proposal as andrew mentioned we continue to take the approach here and we tend to favor those focused on topic and increased transparency. last year we voted in favor for

about 47 which was on par with what we supported the previous year. i want to give a brief overview on key observation that's we saw over the 2024 proxy season. in this past year, we saw a continuation of many of the same trends that we saw in 2023 which the an die dei proposals and also lower average support for environmental and social proposals. in 2024 average support decreased to 22 from 23 percent. decrease to 16 from 18 percent from the previous year. and a few main drivers of this decreasing over the past few years. first, it's just kind of important to note that anti esg proposals are lumped with this the proposed statistics and they have very low average

support where they received about 3 percent average support over the past year with most institutional investors voting against them so that draws down on the aggregate there. it's also worth noting that this past year, proposals were withdrawn. and this is essentially indicates that many companies agreed to implement these practices prior to vote, which means that we might have seen less material environmental and proposals that could have gotten higher rate. and moving on to some broader investment sentiment here, many investors believe that public companies have significantly improved their disclose oozeder on environmental and associate initiatives their targets, progress towards those targets and some of the board oversight. and so many institutionals investors have felt that

proposals have become redundant and some of the investors feel that some of the proposal advocate for strategic or operational changes that they feel that are best left to management discretion. and and then on those points were the enhancing disclosure and the least dis descriptive. and moving on to the proxy season, we saw ai risk become a topic and also topic that would probably grow in 2025 with some of the growth and developments in that market the proposal on this past focused on ai, mostly disclosure of ai safety practices and some of the risk on misinformation on some of these plat forms and government structure to oversee ai related risk. and another is 76 percent

increase in the scc granting no action request which is no action request is when they agree that they should be removed from their ballot. and lastly we saw an increase in activist proxy contest just due to some legislative changes that made it easier and cheaper. i'll stop there andrew, i'm not sure if you there is anything that you want to add if not welcome open it up to questions. >> thank you for the presentation, colleagues any questions? comments? >> do we have any in-person public comment on this item? seeing none, moderator, do we have any callers on the line? >> madam secretary, there are no callers on the line. >> thank you, hearing no calls, public comment is now closed. >> thank you.

and seeing this is a discussion item, we can move to the next item. >> item number 19 is an action item proxy voting policies. >> hello commissioners, we now present sfers revised proxy guidelines for your review and approval. as we do each year, we review our proxy voting guidelines, and consider any updates or changes that we might need to make to reflect prevailing governance standards and market norms et cetera. these guidelines are developed by sfers, but informed by our research with our proxy voting provider list and other sources. for this year, we're proposing three relative updates. i would recognize none as material but important nonetheless. the first one is we're waiting

to expectations around board responsiveness to shareholder proposals that receive significant shareholder support. the second is related to board oversight risk associated with the use of artificial intelligence technology and services. and the third is related to the boards of unvested equity during the change control. so in our memo, we've outlined, what those changes r as well as provide a more detail rational for why we're recommending those changes. and then the companying red line version shows in detail or explicitly what those suggested changes are. and they would be implemented upon the board's approval of those edits. so we'll pause there, happy to answer any questions if you have any.

>> any questions? comments? public comment, please. we need a motion, i'm sorry. >> move to adopt >> staff:'s recommendation. >> second. >> i'm going to make a comment but that's okay. >> i have a question but i'll wait until it's not going to affect the motion. >> not mine either. >> okay. multiple companies are now, what we're seeing on the news are changing the ai policy. where when you do something, you look at their at their policy for the number of people working there and whether they have any kind of a dei policy or maybe just it's a subject and not really part of our policy?

i'm just, if companies are going to delete that policy is it going to go back where we're going to change our opinion or any other current investments? >> so we don't have an explicit voting guidelines around corporate dei, we can anticipate shareholders this year related. >> will that affect our voting. >> topic there have been already this year and the in the past. >> okay, that's a way to look at it, thank you andrew. >> okay, that's going to be interesting. >> i was going to ask about glass, are you heard from our consultants and providers and how they're approaching that subject matter, that's what i want to know about? >> there have been no changes to the glass fluids policy. >> they're still the largest ones in the process guide? >> they split it. >> kind of equal? >> effectively.

>> yes. >> it's been for a long time. >> market share. >> so i'm curious to track what they're both doing. yeah. >> couple of lawsuits on that may are going to cause a bigger waive. >> yes, i'll be focusing on that this year. >> any other comments? questions? motion? is there public comment. >> motion has been made. >> no? >> a motion was made? >> yes. or, sorry. public comment. >> public comment. >> do we have any in-person public comment on this item? seeing none, moderator do we have any callers on the line. >> madam secretary, there are no callers on the line.

>> thank you, hearing no calls, public comment is now closed. >> okay, it's been moved and seconded to on the revised proxy voting guidelines. all those in favor say aye. >> aye. >> those opposed, nay? motion passes. next item, please. >> item number 20 discussion item chief investment officers report. >> commissioners i'll make some brief comments on performance and then go through our closed investments. our estimated assets under management as of end of january is 37.7 billion dollars, i want today make a few comments on the three-year annualized performance, it's on page three no need to flip there besinger but our three-year performance is 3.5 percent which is obviously below the long term 7.2 percent rate of return. if you think about what happened in the period that is

january, or, february one of 2022 through 2025, so a lot happened in the market. and as i've discussed in prior board meetings, the our number reflects now about a bounce back in he quit market and the lag in private market which one would expect when you have a big drawn out on them and a big recovery. the good news is, that our 3.5 percent return continues to be in excess of standard 60-40 or 60-30 portfolio. and i would also note that our exposure return over that period and private credit, even though those are less liquid and private credit is a private market asset have really helped returns and add today performance. next turning to closed investments and there are quite a few, so bear with me as i read through.

under delegated authority, sfers invested 24.4 million in ventures, at t closed on december 12, 2024 and it will be classified as venture capital within our pe portfolio. next under our delegated authority additioned 50 million in real estate fund five which closed on december 23, 2024, this brings our investment and the fund to 100 million. that is in a real estate investment within our real assets portfolio. next, aries under our delegated authority on december 24, 2024, sfers approved a increase for credit strategies fund this is income focus senior debt categoryization under our sfers private credit portfolio. also, under our delegated authority on december 27, 2024,

sfers approved the roll over of an existle 50 million commitment from new mountain lease partners to trust, this is classified an as opportunistic for fund portfolio. in addition, january 22, 2025, sfers approved a 75 million dollars increase in a commitment to poursidio loan fund income focus in your debt fund within the sfers private credit portfolio. and finally under delegated authoritile 5 million to overment royalty and credit opportunities and we invested the 85 million in that fund and it closed on january 31, 2025 this is classified as a real lending investment within the sfers portfolio and it's our fourth investment with them within that asset class.

typically, the end of the year, a lot of time managers are trying to get funds close asked deals done so i think the number of strategies that you see here is higher than we had in the past in part because of that and then just going forward, we do expect a deal fundraising to increase in our team is it geared up and ready to go in line with our pacing targets so i would anticipate over the coming year we will continue to put our money to work and there will be investment funds in closed investment. >> can i ask you, are you seeing an optimistic deal flow? being presented to us? >> depends on what you mean by optimistic. but i think--. >> well we're seeing, having the good ones coming to us. >> so, our team is doing a fantastic job getting access to

good funds and they laid the groundwork and i anticipate that we'll continue to get access to good funds. there is an expectation generally in the market that fundraising will pickup. we're seeing hint and some of is tied when you see hints of distributions improving and it gives an opportunity and commitments, sorry and money being put thin the fundraising follows. so we're seeing, i would say, maybe grass shoots for all of those and we have goent a de sent amount back in distributions we'll talk about that in future meeting but we'll remain positive. all subject to broader market conditions and there is a lot of uncertainty there. >> in regards to our staff, actually going out and building relationships and keeping them

the communications going. are, is it a predominantly long distance or, is it? >> well so, we have fund managers come to us. >> that's what i meant. >> we also go and see those managers onsite or attend conferences where we can meet with awe lot of managers at once. there is significant value and when we're looking to fund the strategy to do an site visit and get to know the organization more broadly than typically somebody comes here it may be a sub set of the team. >> it's a loaded question because it's one of the pillars of our promise why we need to look at real estate alternates. is visits from, i mean, it's a beauty contest. sometimes. all right, and my last question is, how the deal flow from

aisha? >> we can gt into more detail with the team. i would say, my sense is that there continues to be a lot of caution specifically around china that pan asia are leaning towards india and for china focus funds, fundraising has been challenging. >> great. >> i have a follow-up question on that, you mentioned india becoming a larger area of focus, when we had discussions or presentations to the board in the past, we have a lot of expertise with specifically china and pan asia investments. i don't remember a whole lot of established expertise that we have in the indian market, do we have a lot of resource in that area or in the process where we're developing those

resources now? >> i would say, some of the build up with china was before my time. so generally i think there was a thee seize that the team tested and as they were testing their thesis, they were building their knowledge because you have that exposure, with respect to india, we do see opportunity there and we're across the number of asset class sxz the team has been spending a lot of time over this year to travel there. directly, to get that on the ground knowledge with the funds that are there. we've been work withing consultant, with fak ro to understand their perspective, there is a education process under way to understand both the risks and the opportunity. there is a lot of optimism so it's important when there is consensus with optimism to make

sure that we untds the risk but that is being built. >> and we have a resource. mong others and even in we're not in an india funds have resources. to get ak set to their knowledge. >> and, any restrictions with regard to travel or anything like that have not been so far in this effort or is that something that is been a challenge. >> well done. >> let me ask the same question

a different way. we had many unfunded capitol calls in asia, particularly with funds to funds operations. are there capitol calls going up or not? how active are they in that area in terms of allocating, focus on the first part, our private equity allocations to asia. >> i would have to follow-up with numbers. >> maybe on your next update, you can give us an update. gives us an indicator of how things are going. we've been patient the last couple of years. thank you. >> okay, any other questions or comments? >> thank you do we have any in-person public comment on this item? do we have any public comment

on this item? moderator do we have any public comment on the lines. >> no public comment on the lines. >> seeing no calls, this item is public comment is closed. next item, committee. >> the committee did meet.

>> in the next segment that will be prebted you'll be voting. additionally we had a full overview is update on 2.0 legislation implementation. but again the most important segment is really, the gal yard sfdcp state value recommendation and that's it. thank you. >> great. any questions, comments? public comment? >> thank you, do we have any in-person public comment on this item? seeing none, moderator, do we have any callers on the line. >> madam secretary, there are no callers on the line. >> thank you, hearing no calls, public comment is now closed. >> next item please. >> thank you, item number 22 is an action item.

stable value manager recommendation. >> thank you so much. thank you so much for taking the time today i'll just start off by giving you brief context on stable value and then i'll move to our greg to carry forward the recommendation. as a brief reminder, stable value is our most conservative investment in our line up. the goal of stable value is capital preservation. our plan assets have also grown three times. so we have seen the allocation of stable value overtime. you want to make sure that you have good diversification across the different age groups considering the fact that most of our employees are active, it's important that we have the

right investment that's can lead them. so while it's very important, it's less important to those who are much younger and therefore, we still include it as a core vehicle, and it does pay out a very competitive crediting rate every quarter. and we did an analysis and a gried that stable value still has a place in our line up. in 2011 and they had taken over when we unbundled. so the fast volume it's often offered to our record keeper for transparency and to help make sure that we're choosing the right propoederers, we unbundble stable value so they're working on that and record keepers can focus on record keeping. and so with that, we hire galyard and to date they were able to hue the portfolio and we have been increasing our

credited rate ever since. we report on that every quarter and i'll share with you the update with q1. now that you have the context, i would like to share what steven has been working on for the last six months to support this recommendation to the board today. >> thanks diane, and i was going to talk about the search process that we did over the last few months, we're going to go back to the back of the present aintion, the third to the last slide, cal manager search process. like louie just mentioned, since the stable value represents the most conservative option within the scpp and has a large asset base, the search was comprehensive and thorough. so we collaborated a multi step process with extensive research. the actual search process began last year in 2024, started with

20 candidates. the screening process narrowed the initial list down to nine firms, cal and staff then evaluated stable value dedicated resource sxz experience. the tenure of the staff, particularly the senior leadership, their philosophies, contract and of course fees. the valuation process culminated with the joint call on semi finalist, also initialed their standard process in which distribute the search process up until this point. their peer review process concluded with a search committee call which was attended business cp staff where three firms were confirmed, investco. calan and staff then conducted interviews with the

semifinalist. each firm was also required to a create a customize portfolio which gave inside on their philosophy. upon conclusion of these manager interviews, they identified galyard as a top two candidates for further consideration and these two firms provided, at the committee meeting. both firms brought their stable value leaders to speak. and mike norman the president and senior managing principal along with their key staff members. and the committee members, for additional due diligence, also conducted onsite visits to

galyard in louieville during the week of october. we're able to speak with employees from portfolio management and wrap contract management. staff also performed reference checks during the first two weeks of november by reaching out to three exiting clients from each of the finalist, government with stable greater than 500 million were compared. so after analyzing both these firms extensively, staffing concluded that retaining galyard would be in the best interest of sep. so today we have greg to discuss two finalist firms and the reason behind the choice to retain as a an investment manager. we can then answer any questions afterwards but for now, let me turn it over to greg. >> good afternoon, i'll make this. there is a lot of written materials, we show all sorts of charts and graphs and as

already mentioned galyard really was the top candidate. we had a wonderful experience since they were brought on. they have been been on watch always ranked as a high percentile. they continue to be a solid organization, based up in minneapolis owned by own spring and that's the one thing that we continue to keep on our radar, they are owned by two private equity funds. they still have a long runway for anything to happen. stable value is their core business, and they are the second largest in the stable value universe. on slide four, just kind of give the bullets for smft key factors. when we meet with the external fixed manager as well as the wrap providers, they have nothing but glowing things to say. we've got a great experience, we've got a lot of client

exposure and we know them very well and every time it comes back to a solid organization that executes on behalf of their mandate. i'll stop there and again they offer a fee concession through this process going from 6. and six and three quarters down to six and a quarter basis points is one of the additional factors that certainly help the cause. i'll stop there and see if there is any questions on process or the conclusions? >> questions? >> even earlier, we did bring this to the dcc who listened and also interviewed and they unanimously voted for this to the full board for approval. so we're here today asking for your approval so we can, extend our contract with galyard.

>> okay. any questions? >> i'll take a motion. >> i have a statement to make. >> okay. >> this particular product manager recommendation, i support the recommendation the committee as well as the fund today. i think i referred this several months ago as searching for the best vanilla ice cream and i said those words specifically. we have benefited when vendors are competing. in this case, investment is a very solid firm even though they got their hand slapped recently for a totally different issue. they're a good firm, they use today work for us. if you look at the fees, their fees member pay, but the other part of the coin is the performance meaning managing the money for the members. you need to look at that performance number. and the debt of those two numbers is what stays in the pardon me ant's pocket.

okay, so on the fee basis, investment one basin points lower, point 001. okay. that million dollars spread over 36,000 people how significant is that? it all counts? but when you look at the performance numbers in the different areas, the short duration, you're on, you will see that rate of return is more than one basis points better performance by galyard so they're both good firms on a pure rate of return for the participant galleyard is better and that's why i support the recommendation and voted for them. >> thank you. >> thank you. >> that's the kind of work a company has to do. >> so mr. president, oh. i was ready to make a motion. i was getting ready to make a motion. >> ready for a motion. >> are you ready? >> mr. president, i move that

we approve staff's recommendation for galard as the stable value manager and really again thank the team for six months of hard work and research. >> second. >> that was a motion. >> seconded. >> public comment? >> thank you. do we have any in-person public comment on this item? seeing none, moderator, do we have any callers on the line? >> madam secretary, we don't have any callers on the line. >> thank you, hearing no calls, public comment is now closed. >> it's been moved and seconded all those in favor say aye. >> aye. >> those opposed say nay. motion passes. thank you for your great work. >> >> item number 23 discussion item, san francisco deferred compensation plan quarterly q4-24. >> thank you, i know this is your second to last item i'll keep this as brief as possible. quarterrly update.

>> you're my favorite. >> thank you. as you know, this quarterly update covers four main pillars of the plan, including investments, marketing and operation and record kieper. to kickoff this brief update, i would like our investment kalt ant to cover which includes new investment and some watch list investments. >> i'll start with the hard part. i did want to mention that my colleague then taylor will be leaving caland i think his tentative date is july first. he's been moving to maui and looking to do some other things. cutting back on the travel, so he is not going to compete just a change of lifestyle, i'm sure you'll pop up at one point or another. >> i want today wish him aloha.

that's the first thing, we have two updates and we'll be meeting with the dcc but there is a portfolio management change, for your growth manager, joe has bnt pm and t role runs with a single role manager and he will be leaving the fund, he's staying at trow but private market group. that's affective september 30th. still wagon has been a t.rowe a number of years. he's been managing communications and strategy, there is roughly 32 stocks out of the 70 stock portfolio that are the same, roughly 70 percent in terms of market value, we're going to be doing a lot more analysis. we jut wanted to make sure that you were aware and we recommend putting on that, that will be on watch list. the second is bare core plus is your income manager, this one

is less sensitive, perhaps it's a watch list item but they're changing some of the deck chairs in the role, mary alan is presented to you before, she is being elevated later this year and she'll be on the mutual fund board and they're back filling her role as cocio. so again it's a bit of, you know, progression as all organizations but do but nonetheless it's a significant change at the top so we wanted to highlight that and put that on watch list and we'll be reporting in more details to the dc cin march. in terms of performance, if you go to the next slide, really it was a top quarter for the fix income, you should go to the, oh we don't have it in here. oh okay. nonetheless, it was very strong year and we're going to touch on that. we have next board meeting, we

have our semi annual reviews of the board as an upcoming item. the new investment is the state real asset strategy that will be happening i believe february 28th and participation has gone out so that will replace the u.s. reap fund. that's all in the works and looking to go affective february 28th. >> right, and as a reminder to the commissioners, we're mapping the assets from the sfdcp real estate fund which was 66 bids and we're moving that to the diversity fund. we conducted a search through state streets that is 32 bids and also includes more diversification. so we are very excited to announce this fund, it will be a core fund and we'll let the

committee know once it has been funded. so that's the update on the investment front. just to wrap it up on the mashlgting front, i'm happy to report the higher limits applicable to those age of 60 to 63 have been available since january as promised. we've already seen some enthusiastic adoption of these higher limits. as a reminder we communicated the changes last year via direct veil and about 3000 participants who fall into this category and result inside stellar open rates and conversion rates. we also continue to leverage our departmental communication with hss and i'm proud to share that both publication did highlight the for their readers. these distributions are all distribute asked fortunate enough to partner with gate keepers at the independent

department that can distribute flyers. you can find a sample on this on page 6 of the memo. we also launched a new webinar called investment 101 in response to participate interest and we're working on investment 201 to be offered on future date. wrapping up on the operations front, we continue to work on k provision. so as a reminder, secure 2.0 suggests that beginning of january of last year, anybody who makes more than 145,000 dollars a year, in fico wages will no longer be able to make catch up contributions pretax. that means that any employee who he nrekts a pretax contribution but has made over 145,000 k in the prior year will not be able to make a pretax catch up contribution. the plan will automatically and

has been allowed through legislation convert that pretax into roth. this means it will be after tax contribution. so it is pretty elaborate, the industry has pushed back a lot, i don't think it's working because capitol hill wants their money. so it is happening, regardless of whether or not we want it. for plans that don't offer roth, those participants will not be able to make any catch up contributions. so they're saying, if you offer roth, you must oblige, and if you don't offer roth, your participants will suffer. we're working very very closely with it, the controller's office because we'll have to work to change our payroll systems including potentially changes to the emerge system to account for these flags and conversion. so i will continue to keep the board updated on this process, it is going to be a process, but i promise you that you have

the best people working on it and that we will be able report a completion of it by the end of the year. and the last thing that i had in the memo was our record keeper where as you know, we work with voya and they had put out a calendar for our participants to access for their own education that, i would be happy to answer any questions at this time. >> i do have a question, you mentioned--i'm wondering if passing on the retirement of abby, you're still in how, how involved are you, you didn't know that? >> i did know. : i did not know who is stepping in yet. they have not hired. >> they have a request out. >> yes. >> and yeah. but i'm wondering, that's not going to have any affect?

you're dealing with staff that is in place, right? we work very hard to maintain good relations across the department. abby department has been very very helpful. that has not changed to my knowledge. so we do not plan on not being highlighted in the future but we'll make sure to reach out to the new director with our ceo and cio introduction. >> i understand that, as i understand it, the c.f.o. and her team met the key team are going to stay in place. so we'll see. >> thank you. >> any questions? no? yeah? >> regarding this 2.0 issue, are you planning a targeted communication? to that group? >> the roth 145?

>> yes, it will be targeted to that individual will get the letter not the usually blast out to everybody? >> people as you know, people's salaries can change, sometimes they don't know how much overtime. so we plan on communicating to those who we identified already. >> okay, got that part. excuse me. not because it's salary would be that high because i have to take the salary but the previous mayor took over. make sure that he has the opportunity and which group he may decide to fall into if he wishes to save money. but 3, the most important, when you see t.rowe price, i get the names mixed up, the gentleman that had you refer to is on the growth portfolio not the target

date management. >> correct. >> they also got their hands slapped on the target funds. no connection, thank you. >> any other questions? okay, discussion item, you want to call for public comment. >> thank you, do we have any in-person public comment on this item? seeing none, moderator, do we have any callers on the line? >> madam secretary there are no callers on the line. >> hearing no calls, public comment is now closed. >> thank you very much for the usual precise report. next item please. >> 24 is a discussion retirement board member due to the order. >> i would say, that i do not there is a conflict of interest for us since one of the equity owner of galyard is a fund that we're in an investor in. >> i would not think.

>> i don't know if you knew that or not. >> maybe if you have a question, the city attorney. >> we can discuss it off line. >> okay, i'll brief you on it later. >> on the good of the order, i just want to say that the, it's all of our intent that actual results that we've all looked at, the way we conduct our business and the results of business are good and i want that to be message to our constituentcy and that's in another report so everybody can see it but almost most importantly is the board of supervisors new group coming in, understand what we do and is what we're doing and that

applies to the mayor's office. in that regard, with allison, i've had the pleasure of going into those constituentcis and discussing issues that we're working on and whatever. and going into this new administration, allison is definitely in my opinion, and it's my desire, that she take the lead and be the face of the retirement system when we're dealing with those people. and you know, i, i just fall back to tell you the truth. i have every confidence in the world that she will do, well in that position, hopefully we have to go into, you know, at the middle of the year we're going to have an election for a new board president, hopefully,

it--but he will have somebody in city hall and in those important areas with the board that will continue what we're doing. we have, and the retirement system. that's the only, the good of the order is that's the good of the order. >> with high diligence and transparency. >> well said. >> i want today thank staff for the preparation today, when i got the agenda packet it was on super bowl weekend, it was a treat to prepare and i was wondering how we would get through it quickly and efficiently and i'm happy to see how well we got through

while paying attention to each item. thank you for the work. >> well done. i will have to say that i didn't read it on the super bowl weekend. >> it goes to what we're talking about, when we cut down on meetings and efficiency. elon would be proud. i'll take a motion to adjourn. >> we don't need a motion. >> we need public comment. do we have any public n person public comment in this item? seeing none, moderator, are there any callers. >> madam secretary, there are no callers on the line. >> thank you hearing no calls, public comment is now closed. item number 25 adjournment. >> well done. >> thank you. >> well done. >> i thought i was suppose to leave early. >> good to have you back.

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[music] welcome to this over vow of san francisco ethic's commission. we are excited introduce to you our work and serve as a resource for city employees and officials. the ethicky commission created by san francisco voters in 1993. to impartial low over see rowel and guidelines for i cleaner government. we help those work nothing or with local gentleman follow the rules through education, support and enforcement the commission shapes the rules to make them strong, practical and enforceable. the public expects and deserves the government this serves them. this means serving the public without improper influence or seeking personal gain. the government's decisions made fairly and open low.

however, this is not always the case. for this reason, rules and guide lines exist to steer people away from violating the law or engage nothing unethical behavior. the ethicky commission provides education and assistness for people working with local government includes city employees, officers, candidates, lobbyists and others engaged in or with government. here are examples of our work. we create new ethic's policies. help officials avoid conflicts of interest. manage public disclosures, over see campaign finances and including recordkeeping and the administration of campaign financing and aid the registration and reporting of

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welcome to san francisco's new revitalized qatar valline this is not just an upgrade is a community transformation. taraval street under a complete make over from 10 feet below the street to 30 feet above. >> it is part of the taraval improve am project to impprove transit performance and make the streets safer for all who use them. completed on time and on budget, this multiagency construction project is a once in a generation investment to bring safer, more reliable train service, increased accessibility. beautiful corridor, refresh roadway and reliable water and

sewer systems for decades to come. >> safety is at the forefront of this transformation. new train boarding platforms are a game changer for safety am before the project 5 people per year were hit by vehicles gettinga or off trains we add 22 new or extended boarding plat forms on the route. riders no long are exit on the street along side traffic. when my kids were young it was heard they want to plunge off the train straight in the street. up on the h stop now we have the platform that is broader when they are excited get off the trin and get home i feel better about them jumping off the train. >> having island where hay step on to is a giant improvement. >> these disability crosswalks look good and improve safety by making it noticeable to drivers.

>> sidewalk extensions at intersection corners shorten the distance needed to cross the street and slow downturning vehicles. these and other safety treatments are proven tools to reduce the risk of collisions make the taraval corridor safer and inviting for people walking and driving. another key part was replace being two miles of train track for thes first time in almost 50 years. the old tie and balist track was built for muni oldt cc streetcars and old are light trail trains not today's modern vehicles and it was noise and he prone to vibration. >> these new rails will make for a smoother, quieter ride and require less maintenance. it is much quieter with the new

impresumes i livid here the entire time and plays earthquake or municipal when he it came by now we don't have to play anymore >> before when the streetcar went by i would stop talk the street cars would rumble past now i share that confirmation. i like the fact well is not a 3.4 quake every time they go by now. it is quiet temperature feels like sliding on glass. >> this project is more than rails and concrete it is people earngaging with their community. >> local residents and merchants have told us when their community need and had than i want in their neighborhood. a quieter reliable train roadway and safer streets for people walk. gi think it is essential. i'm excited and wonderful to have a safe way it get to work i work on embarcadero i take it to the end of the line every day

>> through open house, public meetings and surveys members helped shape where the stops should go to the curb plan and selecting trees and art work for the corridor. >> we relied on community feedback during construction of the project. with voting held to choose where to stow construction materials and how to sekwenls the construction. >> as a result the project was split in two segments to reduce impacts to the community. access ability is at the forefront of the design. new features ensure people all abilities enjoy seamless travel on the taraval. these platforms and key locations have a raised boarding area level with the train to help people with walking aids or strollers board more easily. >> warning lights are flashing. >> pedestrian signal announcements assist with visual

impairment its cross the street. new curb ramps are essential in providing accessible path of travel on to and off of sidewalks. the sunset district has long been shaped by transand i the qatar valcontinues linking past to present. on the heels of a new tunnelful muni tear van line opened as a shuttle from westportal to 33rd avenue in 1919. it was not until a few years later the trains used the tunnel sparking a population boom. previously, riders transfer to the circumstance line to go east of what is today known the westportal neighborhood. by 1923, passengers could catch a one seat read on the taraval between downtown and 48th avenue. for the first time, san

franciscans had a connection from the bay to the ocean tide. the taraval street cars brought development people could access the south western neighborhoods. homes and buildings sprung up from the once empty dunes. this vielth east/west corridor is the spine the neighborhood carrying over 30,000 daily riders when service last ran the route in 2019. today, it is a bustling local business that give this area its flavor fr. cafes to quirky but teaks the taraval connects tout best of san francisco's small business scene. >> i lost fact it is not a money on cultural it is multicult rar.

korean, chinese. vietnamese. french. italian. we got irish. we got a lot of good mix on this street of restaurants and businesses in those cultural veins and good ole american. helping local line help our small businesses because this is again a small community. and the traffic here is not if you have to generate big revenue. with the l train from other parts of the city to this area has help us the small merchants as well to generate more business. >> taraval street is a reflection of the outer sunset's unique character. >> this two mile stretch of transit is not just getting from a to b it is reimagining how we move through our city to shop, dine and experience more in the places we live. >> i live in the suburbs i have to take a car or a bus that was

an experience i never did again as a teen. now my kids can visit their friends cross the establishment it is a huge increase in their freedom and independent. one of the reasons we chose to raise a family in san francisco. >> it is wonderful to have a safe, clean reliable way to get to work for the neighborhood i'm excite body what it means to bring others back to our neighborhood. we have, let of interesting shops and restaurants and i'm excited to see how things become when it is easier to get here. >> a lot know each actively it is a close knit community. in my shop i know customers by name i know what they'll order and i have it ready for them. >> what i'm most excite body the street is now unified, we have new paved roads and new rails. and new lighting. new boarding island.

>> today, your new street features newrism upgrade water and sewer pipes. 5 new priority signals that hold green lights when trains approach. sidewalk extensions to make pedestrian crossing safer. high visibility crosswalks and ramps. safe boarding islands and platforms. new trees, landscaping and art. is it time you responsiblesed this corridor to the end of the line? with great food, walks on the beach and san francisco's new add upon ventures a ride away now the sunset district is more accessible than ever. [♪music♪] ♪♪ ♪♪

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