Transcripts For SFGTV Public Utilities Commission 20240713

There are no active considerations right now to reduce the indiscernible 31 , excuse me. The point is that if you thought that equity returns were not so good tactically, you could sell the futures now and buy the long treasuries without going through the option business. You could rebalance the portfolio right now. You have the discretion to do that. Just like you had the discretion to go to 6 treasuries that you didnt do for whatever reason. Well, we look at it that we are defensively positioned right now. Okay. And you dont thank we need to become more defensive tactically in the near term . No, we dont. Okay. Because in your memo you have mentioned how in the markets went down a great deal in 2007, that everybody thought it was going to bottom out and it went down greatly again. So it can happen again. I think that you mentioned how in your career and probably amongst all of us here you have the longest investment career but theres other people who said no one investing today has ever lived with the possible recession that may come. One of our managers said that at least 20 trillion has to put in the economy of the world to maybe just stop things from sliding. Umhmm. Will that occur . Will it be necessary . I believe that much, much more stimulus is going to be needed than we have spent on it so far and 20 trillion would not surprise me at all. If we look, there are right now we began this crisis with about 170 million jobs in the u. S. And comfortably 50 million to 60 million of those jobs are going away. And there was a study yesterday that indicated that 40 of the jobs that will be lost will not come back, okay . So theres going to have to be a whole lot of stimulus for quite a period for quite a period of time. At least for as long as we dont have a vaccine or a treatment is that the economy will be ailing for a while. Were not going to get back to previous base for at least several years. So tactically were going to have to find new ways of creating how we do business and how we enjoy our lives. So tactically you dont think that we need to do anything more . I mean, were always trying to do things but to reduce our exposure more, the fact that we went to 31 is the big reason why our returns by reducing the equity and bringing on the absolute return among other things, that was one of your objectives was to cut the draw down in half thats right. The question is tactically, we do not need to do more . And president driscoll, youre exactly right, we did that strategically through our Asset Allocation. You said it exactly right. We had planned for an event like this while still thinking that we could achieve 7 plus over the long term and protect us on the downside. As far as doing it tactically, something beyond what we have done strategically, which is really significant to have a 31 weight to public equity. Thats a pretty significant, strategic shift relative to our peers to protect on the downside, and to do something tactically introduces uncertainties about timing. We have thought six or seven or eight times about doing something tactically to take up treasuries more, even recommending levered treasuries and we have discussed that at least half a dozen times over the last month. Im really, really, glad that we havent done that. The stock market is up 20 in that time. Thanks for all of that. I just wanted to say consciously that were not doing anything more significantly tactically, and continuing with what were doing well now and trying to meet all of the cash calls from our private security. Let me just point out that this is not such a big issue with me, but when you and alan you do the same thing when you talk about how were doing compared to our peers, believe it or not, i think that is in one sense very irrelevant. Because when we have the problems meeting our bills were not able to ask our peers to pay. Right. This is the wrong footing. Its what i call a base bias. So i wish we would stay away from that, okay . And tactically we can do things. So whoever our really good investors, theyre different we are. And maybe we should try to find out what theyre doing and copy that. Very good, commissioner, thats a great point. And i totally agree with you that benchmarking yourself against peers is really a limited value. We have our own cash flows and our own characteristics and we have our own philosophy towards investment. And even putting aside that, to have only 49 in public plus private equity meaning, growth assets, only 49 for a pension plan, thats low. To achieve a longterm return, thats a modest number. If we had no cash flows, and we had no political sensitivities about what our shortterm returns would be, rather than that 49 to public and private equity, i recommend that it would be 100 . Yes. That is one reason why ive asked our consultant, mr. Martin, to see if he could get any kind of a breakdown of the managers and their Asset Allocations to see how theyre doing. Again, just a way of we are closer to them than we data relative to our own, but even relative to our own, 49 is light. Yeah, but again the question is relative to what can we do how much risk do we want to take. Thats why this big drop and tactically its very uncomfortable. We dont like losing i say we dont particularly like volatility and preserving capital. If we can accept it, hey, its okay. Its when it triggers a change in contributions, thats when people start asking us very pointed questions. It is with our success in being realistic about uncertainty particularly and risk that were able to then tell our sponsor this is why to please support our budget to bring on more and better talent and to compensate them accordingly. And president driscoll, youre right, we all dislike volatility. But videvolatility only matterse day of a year, june 30th. The volatility on to march 23rd is irrelevant, what is our return on june 30th is what is relevant. Thank you. One, this is a possible action item and theres no motion on the floor. If someone wants to make one. I will note. Staff has not made a recommendation. But commissioner stansbury, you asked for this to be put on the calendar and to think tactically and strategically at all times. And i will contact you if you want to continue on with this subject before we call for Public Comment. Thank you, commissioner driscoll. From my perspective, you know, i think that having purchased puts back in february before everything began to unravel and then we had sold at some point as the market kind of unraveled, it would have been very beneficial to the pension system. Trying to see those things sometimes can be very difficult. And if youre on the wrong side of it, its hard to justify 160 million loss. Of course we dont have to do the full 8 and we could do a smaller portion thereof, but im not going to make a motion for that. And it sounds like from everything that i have heard from staff today that you feel like you have the flexibility and the tools that you need to protect this portfolio. But i would say this and i want to drive this home, echoing what commissioner discoo driscoll sad what we touched on earlier is that if were only down 20 and everyone else is down 30 , thats great. But no one is going to care. Theyre only going to care that were down 20 . And 18 , 20 , 24 , it doesnt matter, the taxpayer, our sponsor, those people and, the employees and the members contributing, they are the ones that will care that were up or down 20 . Its impossible to run an Investment Fund and have down years. Its just impossible. This is a unique situation. And i again, i want to just encourage you to think defensi defensively for the portfolio. Other than that im not going to make a motion. And thank you for putting all of this together. This is probably still one of the most important conversations that we had in this fiscal year. This is helpful. I would like to note that if we bought puts 20 out of the puts on february 20th, right now markets are only down 14. 9 . And that we wouldnt have made money on that trade. But you wouldnt go 30 down and continue to sit on it. You would have closed out those positions and taken that money off the table. On june 30th we would not have touched it. I very much disagree with that. In fact, i would personally need a motion to take some of that money off the table to help to protect us. I think that indiscernible had an expiration, i think that right its not a good decision. So, anyway, thank you for putting this together. And it sounds like you have the flexibility to do other things in puts. So, again, thank you, and just please be mindful of that. I understand. Thank you. Any Board Members with a motion before we go to Public Comment which is required. Hearing no motion, madam secretary, call for Public Comment. Clerk members of the public who are currently in the queue who wish to provide Public Comment please dial 1, and 0. When it is your turn to speak, you will be prompted automatically. Those who are not in the queue, please follow the instructions shown on the screen. Moderator, do we have any callers on the line . Madam secretary, there are no callers on the line. Clerk thank you. President driscoll . Okay, there is no motion and therefore we go to item i have a question. I have a question. Its al. Yeah, to bill do you think that you need a motion . No, we would have calendared it as a recommendation if thats what we were requesting. Okay. And i am just asking based on the entire conversation that just took place. Okay, thank you. Thats it. That takes us to item 8. Board members, items 8 and 9 and 10 are almost identical, they are three terminations but they must be considered and voted on separately. Very good, Board Members, item 8 is a recommendation to terminate a. Q. R. , an International Equity strategy that weve had for about 13 or 14 years. And it has performance that has been in line with the benchmark. Almost exactly. And youre familiar with our efforts to increase the excess returns of the public equity portfolio which we have been able to do with our recent hires. Kurt . Thank you, bill. Just to reiterate, the staff is recommending and to be supportive of the termination of our Investment Management agreement with a. Q. R. Bill noted they have been managing capital for us since 2006 woo. Have written a brief memo with our rationale and if anyone would like to make comments ill simply turn back to the board for questions. Kurt, let me just this does tie together somewhat with the last discussion that we had on Asset Allocation and with the hiring of the manager that we previously hired and that is to bills point that the tools that we have to achieve the 7. 4 , joe, i couldnt agree more thats what were trying to do. It involves not only the Asset Allocation and the diversification, but the selection of managers that add value. And managers that hug the index arent going to add enough value over time. And you previously hired a number of managers that are more differentiated, higher active share in industries that have Better Future growth potentials. And so when you do that, you need to get the money from somewhere or youre going to change the overall allocations. So all three of the managers that are being recommended for termination are not bad managers and theyre not on being terminated because they havent delivered but they really dont fit the strategic portfolio which is to add more active shares. And id say the same about all three of them that were fully supportive of this because it is consistent with the longterm strategic intent for the portfolio. Board members i would add that this is in line with our reduce allocation to public equity in the last two months. So, again, its not something that is reflective of the managers, its reflective of the needs to reach an end of the staff desire to have public equity disclosure. Thank you. You both said it very well. Unfortunately, or perhaps someday the reporters who like to write up what we do only indiscernible and with that in the newspapers as opposed to the full explanation why were trying to pursue greater active share with other managers. Anyway, well said, alan. Thank you, ana. Anymore Board Members, if not, a motion is in order. I move to terminate. A second . Ill second it. Madam secretary, call for Public Comment. Clerk president driscoll, im sorry. Members of the public who are currently in the queue who wish to provide Public Comment, please dial 1, 0, when it is your turn to speak and the system will prompt you automatically. Those of you who are not in the queue, please follow the instructions shown on the screen. Moderator, do we have any callers on the line . Madam secretary, there are no callers on the line. Madam second, roll call. Clerk president driscoll . Aye. Commissioner bridges. Aye. Commissioner casciato. Aye. Commissioner chu. She had to go to another meeting. Clerk absent. Commissioner heldfond. Aye. Commissioner safai. Aye. And im sorry, i have to leave the meeting now. Clerk thank you. Commissioner stansbury. Commissioner stansbury. Hes not available. We have 52. Motion passes. I dont know that you can call it 52. You have abstention or absence. Clerk the motion passes. Next item. Clerk next is causeway and this is a recommendation to terminate a manager in the portfolio for 17 years. They have slightly outperformance and were seeking higher active share in this higher access returns. Kurt . Thank you, bill. For reasons and circumstances that weve just discussed, were recommending the termination of our Investment Management agreement with causeway. Again, we have written a brief memo that describes our rationale that we just discussed. And id like at this point to have any further input from anyone, ill turn it back to the board for questions. Ill make a motion to adopt staff recommendation. Is there a second . I move a second. Commissioner heldfond did you second . Ill second, thank you. Board members any questions . Hearing no questions, madam secretary, call for Public Comment. Clerk members of the public who you are currently in the queue who wish to provide Public Comment, please dial 1, 0, when it is your turn to speak and the system will prompt you automatically. Those of you not in the queue follow the instructions shown on the screen. Moderator, do we have any callers . Madam secretary, there are no callers on the line. Clerk thank you. President driscoll. Madam secretary, roll call vote. Clerk president driscoll. Aye. Commissioner bridges. Aye. Commissioner casciato. Aye. Commissioner chu. Not attending. Commissioner heldfond. Aye. Commissioner safai. Not attending. Commissioner stansbury. Aye. Motion passes. Be advised that its getting late and commissioner chu had to leave at 3 00. So, thank you. Next item. Very good, Board Members. Next is q. And a. And this is a core strategy that has underperformed in the 12 plus years for which we have been invested and they have increased amount of competition for Data Analytics for engineering talent like google and facebook. There are some firms that we still think highly of but its become a much more competitive space for engineering talent. So we recommend termination and were looking for more Company Specific risks than this company can provide us and higher shares as well. Kurt . Thank you, bill. Again, staff is recommending that we terminate our Investment Management agreement with 2ma. And before i turn over to the board i want to acknowledge and to thank each of the three firms for their partnership and contribution over many, many years. We have valued them. So with that, again, we have written a brief memo further describing our rationale and ill turn back to the board for recommendations. Ill make a motion to adopt staff recommendation. Leona, and i second. Calling for Public Comment. Clerk members of the public who are currently in the queue and who wish to provide Public Comment, please dial 1, 0, when it is your turn to speak. And the system will prompt you automatically. Those of you who are not in the queue, please follow the instructions shown on the screen. Moderator, do we have any callers on the line . Madam secretary, there are no callers on the line. Thank you. President driscoll . Aye. Commissioner bridges. Aye. Commissioner casciato. Aye. Commissioner chu, absent. Commissioner heldfond. Aye. Commissioner safai. Absent. Commissioner stansbury. Aye. Thank you, five ayes. Motion passes. Next item number 12. Very good. Board members this is an annual update to the indiscernible portfolios and ill just leave it for comment before turning it over to david. Oh. Can everybody hear me . Yes. Very good. Board members in a moment ill turn it over to david, with the portfolio update. Through the end of february this portfolio was doing exactly as it was intended, it was outperforming bonds at very, very low volatility in the range of about 2 annualized. And had only captured 11 of the market return, market equity return in months that the markets declined. It also had more up months than the equity market and many more up months and fewer down months than the bond market. That all changed in the month of march for reasons related that we think that are related to markettomarket pricing that do not resemble the underlying Credit Investments that we experienced large losses. We think that by Holding Tight well be money good meaning that well earn money and return of principle on these investments. And ill ask david to take it from here. Thank you, bill, thank you, commissioners. And can everyone hear me okay . Okay. Very good. We went into march of this year with about a third of our portfolio invested in credit oriented strategies and within that the meaningful allocation of about 12 to Residential Mortgage credit. This was based on solid fundamentals in an area of the credit market that has gone through a notable strengthening since the Global Financial crisis. In the weeks that followed after april 29th, after february 29th, the world changed significantly. The majority of the developed world found itself under the government stayathome orders in the vibrant liberal economy and experienced an abrupt shu shutdown without clear dates of reopening. Our portfolio suffered as a result and was down just over 10 during the month of march. In the interest of time today im going to skip through the slide deck and skip around various slides but highlight several key messages and then open up for the boards questions. I will provide detail on what happened inside of our portfolio during the month of march with some information showing how we were allocated coming into the month and the data supports why we were allocated that way, details showing the Market Dynamics that drove our losses and the information on why our thesis for these investments remains intact. There were two presentations that were sent out for this meeting today and ill be sharing the relevant slides virtually. Ill be starting with the first absolute return Program Update slide 6 that is titled spurs absolutely return, return attribution by substrategy as of 3312020. Hopefully everyone can see this slide which is page 6 and shows the performance over time during the month of march up to six different absolute return substrategies that were allocated to. The most important takeaway on this page is the credit line item and its performance during the month of march. We started the month with slightly more than 28 of our programs capital to peer Credit Strategies. Our multistrategy and special situations managers also have some exposure to credit, so the total credit exposure was around 35 . Pure Credit Strategies accounted for 54 of the loss during the month of march and when we include the credit portion of the loss for multistrategy and special situations, the total losses attributable to credit exposure exceed 60 of our loss for the month. Perhaps most important, is that our overweighttoresidential Market Strategies which had been additive for the last couple years quickly turned during the month and was responsible for approximately a quarter of our program losses during the month. A logical question would be why did we have such a large allocation to Residential Mortgage credit . I would now like to direct your attention to slide 16. And in this its the spurs Residential Mortgage credit for those not following virtually. And here you can see two columns comparing the Residential Mortgage credit from 2008 to the metrics that one of our managers invest in today. And anyone who has applied for a mortgage in the last 10 years knows that underwriting for individual loans today is done to very strict standards. Compare this to the pregmpletd g. S. T. When there was little supporting documentation and the no income and no assets or ninja loan term came into prominence. A few other points to note most of the loans that compromise our mortgage exposure are comprised of loans with 10 plus years of payment history and have l. T. V. S around 75 . Whereas in 2008, the loans were far less seasoned and many l. T. V. S were over 100 . Lastly, household Balance Sheets came into the current covid19 crisis in very strong shape. The aggregate of lending criteria attractive l. V. T. S and strong payment history and borrower financial help provided an attractive set of tailwinds for Residential Mortgage credit investment. On the next page, slide 17, and theres further support of the thesis as it highlights that the undersupply of housing is greater today than it has been in almost 50 years. Additionally, the next wave of household formation from the age 20 to age 39 demographic cohort is just beginning and its actually larger than that of the baby boomers. Ill now skip a slide and skip ahead to page 19. Where you can see a pie chart that has the u. S. Fixed income market and that the mortgage related assets compromise more than onefourth of it. As part of ourunde underwritinge had exposure to mortgage credit and concluded that our exposure was very small and disproportional given the size of this market. Additionally, having the exposure be a hedge funds structure is advantageous in that these managers are given the flexibility to be long and short and can hedge out Interest Rate risk. In summary, theres a strong set of fundamentals and Interest Rate approaches that substantiated having 12 of the absolute return Program Capital invested in Residential Mortgage credit. What happened during the month of march . And slide 21 21, march 2020 cret dislocation provided an idea of how bad the credit markets got by showing spreads at different points of time across various instruments. In all cases spreads at the end of march exceeded the 90 percentile of the range they experienced since 2012 for these instruments. Third from the bottom is legacy nonagency, a residential back securities and it spread as of the end of march, and blew out to four times the level of where it was at the end of 2019. Slide 22, shows the series of events that resulted in a perfect storm for credit. Concerns about residential and commercial mortgage borrowers ability to pay resulting from covid19driven economic weakness and concerns about a perceived refinance wave related to the Interest Rate movements in early march, led to a rapid price decline among residential and commercial mortgagebacked securities. Mortgages, which operate with leverage from four to 10 times, came under selling pressure when spreads widened and the prices declined. Adding to the pressure on liquidity and pricing were high levels of redemptions experienced by mortgage and structured credit mutual funds with daily liquidity. Further, typical buyers like Insurance Companies took a more defensive stance and were temporarily out of the market. Lastly, there was a limited willingness of counter parties to provide financing and the market for Residential Market assets went into a severely dislocated state. Bondbonds and loans that tradedt or near par at the end of february traded at levels as low as 50 during the month of march. A logical question here is how are our funds different from Mortgage Rates or mutual funds . Or funds will hold many of the same securities as Mortgage Rates, but they hold them in structures that utilize much lower levels of leverage, typically a quarter to one turn of leverage, and maintain much higher levels of cash. This helped our funds to avoid forced selling to meet margin calls, but there was nowhere to hide from the pricing pressure and our funds were forced to market their portfolios to market at month end. Theres also a presentation that was sent out for this meeting from blackstone and there are several slides in here, for those following along and ill refer to pages 4 through 6 of the blackstone presentation. But you should see on screen for those on the call a slide titled forced selling and structured credit. With this slide, it talks through that Residential Mortgagebacked and commercialbacked assets declined in value by 30 to 50 , which is comparable to the price declines in 2008 and 2009. On the next page, we see the time period over this that this occurred in march relative to what happened during the Global Financial crisis. What we just experienced took almost six months to occur during the Global Financial crisis and comparatively only took 15 days in march 2020. So the speed of this decline was absolutely unprecedented. And so what happens now . Fortunately, the low leverage utilization and the strong cash positions of our mortgage and structured credit managers helped to mitigate and leverage the Liquidity Risk and presented the crist salizatio crystalliza. We estimate that of the 6 loss in march that it is attribute to our credit managers, that less than 10 of that related to asset sales and a permanent loss of capital. As the stimulus packages have become better understood we have seen some recovery and credit spreads and the price of mortgagerelated securities. We have seen positive performance from our credit managers in the range of 2 to 6 for the month of april. Also mitigating the effect of our march loss is about 200 million of unfunded commitments that we have with Residential Mortgage credit managers who will be deploying capital into dislocated markets and the opportunity to earn stressed level returns on our behalf. The thesis is definitely impactedded bed by covid19. First, the underlying loans were originated and or modified to very high credit standards. As a result of these standards and home price appreciation, l. V. T. Ratios provide Downside Protection from borrower weakness and home price declines. The housing shortage is an additional dynamic that is expected to help the asset class. Lastly, the trillions of dollars of the government stimulus is targeted primarily at median incomelevel households that compromise the majority of borrowing that make up the loans in our portfolio. Underlying loans in our portfolio average 150,000 to 200,000 and relate to Household Income levels below 120,000 annually, for which the cares act will provide income replacement near purpos 100 fo. And its likely that the government stimulus will accelerate around the novemberlication if the economic weakness looks like it persists into 2021. No doubt from here that there is an element to the Residential Mortgage credit thesis that is aligning ones self with the governments stimulus actions. But given that were under a mandatory matter to stay in our homes as a matter of Public Health and our homes are not only where we sleep and also our restaurants and gyms and movie theatres and our places of work, we expect that the government will exhaust all possible resources to prevent another housing crisis. So weve gone through a lot of material here supporting our thesis and supporting why we still believe in these investments. We have a lot more materials for you today than we have time. But im going to stop here and both myself and the representatives of blackstone will be happy to take your questions on what weve discussed as well as any other topic that is related to the absolute return program. Unmute. Thank you. Lets turn the floor over to the rep from brakeston blackstone ft before we start the q. And a. Do you have a specific question . No, just going to give them a chance, though you touched on their powerpoint, i thought they might want to add. Okay, alberto, would you like to make a few comments . Yes, good afternoon, david, bill and commissioners. Can everyone hear me . Yes. Yes. Great. Yeah, i just want to confirm what david just said and in terms of some of the reasonings of why the portfolio had a meaningful exposure to the Residential Mortgages and, you know, going into this we thought that the fundamentals were very good and better than the previous crisis. David highlighted and walked through some of the slides. And especially the point that is most important is that this is really mark to market and we expect this to recover. I will pause here. Do we have any questions . Board members, time to ask questions. Okay, ill ask one sort of a loaded observation. But this is a Performance Review of this. And march had a tremendous effect on returns. Dave, you basically decide with blackstones help, you do twothirds of the Asset Allocation with the categories and the manager selections to execute inside any category. I assume we dont make any major changes in the next 30, 60 days . We dont plan on making any major changes, but consistent with what youve heard from other members of the investment team, we are focused on slightly modifying the profile of the absolute return program to become more liquid. And this is just part of our Risk Management efforts in order to make sure that we are in a position where we can absolutely fulfill the commitments that weve made to fund any of our unfunded commitments. And for absolute return, that extends even beyond some of those commitments that we have within our portfolio, but potentially to be a source of liquidity for other parts of the plan. So, you know, with the exception of some of those changes, we really dont anticipate making any other material changes. Since inception, the strategy has been positive, though again march was a very bad month. And i tend to not focus on singular month returns but its the first time that we had a chance to look at the total portfolio with this level this level of returns and how it breaks down. I know that theres another level underneath it but this is perhaps very good for the board meetings. That concludes my questions and observations. Other board member questions . This say nonaction item. Hello, its scott. If i could make one comment. To thank david and bill and everybody involved in how they presented this today. But more importantly how they sort of walked me i dont know whether they walked other commissioners, but i appreciate all of the time that you gave to explaining. I want to echo scotts comments and to really express my appreciation to the staff for your great work. And, david, its leona. Thank you for walking through the entire comprehensive review, because i did have some questions but you answered them all through the analysis and the research that you presented today. So thank you to you and your staff. Thank you. This is a nonaction item but i still have to call for Public Comment. Madam secretary. Clerk members of the public who are currently in the queue who wish to provide Public Comment, please dial 1, 0. When it is your turn to speak, the system will prompt you automatically. Those of you who are not in the queue, please follow the instructions shown on the screen. Moderator, do we have any callers on the line . Madam secretary, there are no callers on the line. Clerk thank you. President driscoll. That takes us to the last investment calendar item on the 13th. Clerk item 13, discussion item, chief Investment Officer report. Board members, we had a great month in april. We were up 4. 29 . The just a great month. Public equity was up, you know, double digits. And now on a fiscal yeartodate basis, im pleased to convey that were up 1. 37 on 10 months recorded in the books. And thats even as the s p 500 is about flat and the broader equity market is still down decidedly. We do have one closing to report that i believe that im obligated to mention verbally and that canin closed. We asked the board for 40 million in march. We were allocated 30 million. This is a strategy. And i wanted to mention about just the Human Health Crisis to put some metrics to it which i have highlighted is that is 33 million, 36 million jobs lost in a period of six weeks and upemployment spiked from 3. 5 to north of 20 in just six weeks. And 2q2020g. D. P. Is expected to be down 30 to almost 40 . The worst on record is negative 10. And its becoming clearer and clearer indiscernible . Its becoming clearer and clearer that the recovery will be a slower one than consensus expects. In terms of asset class update, public equity has solidly outperformed with the weight of technology and to health care, private equity. And absolute return, we just gave an update there, private equity has performed spectacularly well. Its up 11 on a fiscal yeartodate basis, again, overweight to tech and health care have helped considerably. And real assets is that real estate portfolio is holding up holding up reasonably well. And in the energy market, theres been a complete collapse of the demand following from 100 million to 70 million and the production initially rising. So a plunge in demand and the production has eased off some but theres still a significant imbalance. Its going to take quite further time and production and a rise in demand. I think that the last in particular is going to be slow going. Our private credit performance performed well, indiscernible and i did indiscernible and speak about one thing prior to Going Forward. [broken audio] the recovery would be vshaped, and ushaped. I think that is very likely barring indiscernible and lshaped indiscernible it takes a very long time to begin a recovery. And a ushaped is a recovery and then indiscernible or how long lasting the indiscernible and it takes quite a long time. indiscernible and the industries are going to be slow to recover really for as long as social gatherings are dangerous, thats going to put a lid on an economic recovery. So were going to be living with this risk for a while until we have a vaccine or a treatment and were going to have to really discover new ways of enjoying our lives and new ways of doing business. Meanwhile ill point out on page 6 as i have before is that we have a material overweight throughout our portfolio to technology to software to biotech, to the digital economy, and to innovation. And all of those things have worked really well for us. And we believe that Going Forward that those things that have been pulled us closer indiscernible with that i will stop and ask the board if they have any questions. Board members, questions . Ill just make one observation then. I note that alan martin indiscernible with forecasting and the prediction one of the instructors who i had the benefit of listening to has also offered to educate us. Those who dont know forecast and those who forecast dont know. Again, we will try to do our best Going Forward with all of the anticipated possibilities and allocate. I will call for Public Comment please. Clerk indiscernible members of the public who are currently in the queue who wish to provide Public Comment, please dial 1, 0. When it is your turn to speak, the system will prompt you automatically. Those of you who are not in the queue, please follow the instructions shown on the scre screen. Moderator, do we have any callers on the line . Madam secretary, there are no callers on the line. Clerk thank you. President driscoll. Okay, that moves us to the administrative calendar, items 14 and 15 can be taken together. It is the same subject matter. Clerk item number 14 and 15. Review and approval of the action adjustments for thomas a. Abrahamsem and daniel dunnigan. I move to adopt those. Is there a recommendation that we individually have to vote on this because of this change . Commissioners, these are folks who have qualified for additional disability and that the Workers Compensation and appeals board has come back with a final determination of the perseasopercentage of disabilit. So for mr. Abrahamsen, to approve to adjusting his retirement allowment to 63 . And for mr. Dunfigan to 58 . And so we do need a roll call vote to approve both of these adjustments. We used to have to sign a paper. Okay. Missioner, what is the motion ill make a motion to adopt the staff recommendations on both of these individuals. And i second. Any Public Comment . Hearing no Public Comment sorry, go ahead. Clerk members of the public who are currently in the queue who wish to provide Public Comment please dial 1, 0. When it is your turn to speak the system will prompt you automatically. Those who are not in the queue, follow the instructions shown on the screen. Moderator, do we have any callers on the line . Madam secretary, there are no callers on the line. Clerk thank you, president driscoll. Okay, before we go to the executive directors report, we need to go back and catch up oh, we need the roll call vote. Roll call vote. President driscoll, aye. Commissioner bridges, aye. Misser casciato. Commission. Commissioner chu. Absent. Commissioner heldfond, aye. Commissioner safai. Absent. Commissioner stansbury. Five ayes, motion passes. Before we go to the executive directors report, we have items 5, 6 and 7 to catch up. 5 and 6 are basically identical. Call them separate. Clerk item number 5 is action item approval of the minutes of the march 11, 2020 meeting. indiscernible . Does anybody have any corrections or deletions on the minutes of march 11 . Any questions . Chair, i move that we adopt the minutes from march 11th. Leona. I will second. Any Public Comment . Clerk members of the public who are currently in the queue who wish to provide Public Comment please dial 1, 0. When it is your turn to speak the system will prompt you automatically. Those who are not in the queue, please follow the instructions on the screen. Moderator, do we have any callers . Madam secretary, there are no callers on the line. Roll call vote. Clerk thank you. President driscoll. Aye. Commissioner bridges. Aye. Commissioner casciato. Aye. Commissioner chu. Absent. Commissioner heldfond. Aye. Commissioner safai. Absent. Accommodationer stansbury. Aye. Five ayes. Motion passes. Item number 6, action item approval of the minutes of the april 22,2020, special meeting. Ill make a motion to appro approve. Ill second. Any board questions . Public comment . Clerk members of the public who are currently in the queue who wish to provide Public Comment, please dial 1, 0. When it is your turn to speak the system will prompt you automatically. Those who are not in the queue, please follow the instructions shown on the screen. Moderator, are there any callers on the line . Madam secretary, there are no callers on the line. Clerk thank you. President driscoll. Aye. Commissioner bridges. Aye. Commissioner casciato. Aye. Commissioner chu. Absent. Commissioner heldfond. Aye. Commissioner safai. Absent. Commissioner stansbury. Aye. Five ayes. Motion passes. Item number 7, consent calendar. Any members want any items set aside for a separate consideration . If not, a motion to adopt is in order. So moved. Casciato. Leona. Second. Thank you. Board members with any questions . Any Public Comment . Clerk members of the public who are currently in the queue who wish to provide Public Comment, please dial 1, 0. When it is your turn to speak, the system will prompt you automatically. Those of you who are not in the queue, follow the instructions on the screen. Moderator, do we have any callers on the line . Madam secretary, there are no callers on the line. Roll call vote. Clerk thank you. President driscoll. Aye. Commissioner bridges. Aye. Commissioner casciato. Aye. Commissioner chu. Absent. Commissioner heldfond. Aye. Commissioner safai. Absent. Commissioner stansbury. Aye. Five ayes. Motion passes. Next item. Clerk item 16, the executive directors report. You missed one. The im sorry. The one for training. The agenda item for training. That was in the consent calendar. Oh, okay, i forgot to amend. Okay, forget it. We can reconsider and open it back up if you want to amend it. Yeah, i just wanted to i was trying to see if i could attend that and if i could be amended to attend, i would like to see if i can put those modules in. We can certainly handle that with the vote to approve and well just add any other Board Members who want to attend, we can go ahead and set them up. indiscernible . It probably doesnt even require an amendment. Because its just indiscernible . The board approved it as an appropriate conference for one board member but certainly more Board Members could also want to attend. indiscernible . Clerk im sorry . Ill start, the executive directors report. I had sent out an email on the 5th of last week that the cares act provisions have been implemented, effective may 5th for the sfdcp program. I can report that during the first week that weve had some activities. Weve had 13 participants who have applied for and received the coronarelated distribution, the new distribution that allows them to take out up to 100 of their sfdcp account balance or 100,000. And we had 13 folks who have accessed that provision. Theres also opportunity for them to repay that at a later date. Weve also had three folks who have requested loan suspension. They currently have loans and they want to suspend the repayments and so weve had three folks in the first week who have done that. And weve had one participant who has actually requested and received a covid loan, again, with a higher level limit up to 100,000 or 100 of the account balance. So the participants certainly, certain of them were very happy that the board approved this and there is i will call restraint access to it at this point, but, certainly, we have folks who are interested. And the other thing that i would stress is that the deadlines for filing form 700 were extended, but theyre coming up. The deadline, the final deadline now is june 1, 2020. And then there was also the mandatory harassment prevention training and that deadline was extended to may 15th, but we believe that it will be extended beyond may 15th. But darlene will remind you oh, im sorry darlene will remind those of you who have not completed the form 700 filing. And then were waiting we believe that there will be an announcement today extending the harassment prevention training and once we have that deadline well send that out to you. With that, i will answer any questions of note on the 5th, the California Supreme Court have heard arguments in the alavita Deputy Sheriff Association Case related to restriction of components of pay and pension and its one of the three that will be being heard hopefully over the next few months by the Supreme Court. Certainly, i believe that its 90 days from the date of the oral arguments that we would anticipate a decision by the Supreme Court. But this is one of the california rule cases, and so i just wanted to let you know. Im sure that you have probably seen summaries of folks interpretations of the arguments, but we anticipate that there will be at least an initial ruling on this case in particular before august. And with that ill answer any questions. Board members, questions . I have a question then about the cares act. I have seen a lot of different agencies try to explain it. Its loaded. But focusing on the defined contribution area where people can borrow or seek hardship withdrawals, i know that its underway and you have sent stuff to it. Have you tested to see whether our members understand the act . Its great that its going on and im sure when theyre coming down here theyre getting good service, but did you actually test to see if participants understood what was mailed out to them or on the website not even mailed to them . Right. I will clarify theyre not coming here and our offices are still closed to the public. So the folks who have accessed it have either done it through member counselors or through the website. And certainly the fact sheet that i added on to my email when i notified you that it had been implemented, that has been distributed through the departments, the team and Resource Department and posted so that the folks will know that its available. But right now its either done via telephone or online. But i believe that most of the applications that you are required to go to the sfdcp website. And i believe that the turnaround on the loans and the distributions is 24 hours. So thats always been extraordinarily fast. And if you complete the application today, it might be too late today, but you would expect it turned around within 24 hours. That is very quick. Hopefully theyll understand the repayment issues. Secondly, to let you know that the harassment training deadline is extended in my department to july 3rd. So maybe theyll indiscernible and the Supreme Court case which is a triple case that may or may not affect us directly. On the service side, since it comes out of your reports, to let you know that a member walked up to me yesterday morning who i had seen a million times and said, i want to retire. And within 30 minutes and the administrative side were starting to deliver fixed services to this gentleman. And it was Super Service very quick. Well done. Thank you. Thank you. Thank you, members. Thank you. Any other Board Members have questions or comments . This indiscernible . I want to say that i want to thank and the staff and everybody for all of the help, you know, all of the calls that weve gotten and all of the people that are similar to joe, with what joe experienced yesterday. I want to say thank you, thank you all across the board. Thank you for your recognition. Okay. In how things went today, about 45 minutes were spent simply by the madam secretary going back and forth. Its necessary to meet the meeting rules so i know that Everyone Wants to spend more time on the important part of listening to the presentations by staff and our subject experts but with that a motion to adjourn is in i order. Public comment on my Supreme Court. Thank you, robert. Public comment on the executive directors report . Clerk members of the public who are wishing to provide Public Comment dial 1, 0. Members of the public who are currently in the queue who wish to provide Public Comment, please dial 1, 0. When it is your turn to speak the system will prompt you automatically. Those of you who are not in the queue, please follow the instructions shown on the screen. Moderator, do we have any callers on the line . Madam secretary, there are no callers on the line. Clerk thank you. President driscoll. Motion to adjourn is in order. Does that require a roll call vote . So moved. Thank you. So moved. Meeting is adjourned. Time to hang up. Mayor london breed we are on day way too many of this covid19 shutdown. I want to just start by thanking sf gov tv and those who are participating in this Virtual Press conference today. I am joined by the department of Public Health, dr. Grant colfax, as well as the police chief, bill scott. The director of the Human Services agency, trent rohrer, the director of housing and homelessness, Abigail Stewart khan, and im San Francisco mayor, london breed, here to provide you with an update on what is happening with covid19 in our city. As of today we have 1,994 casis of those san franciscans who have been diagnosed with covid19, and sadly weve lost 35 people and about 70 people have been hospitalized, and as a reminder, we want to ask folks to visit datasf. Org covid19 for more information. I have a number of announcements today, and i am excited to announce some good news for a change. I know that last friday we made an announcement that on may 18 there would be a number of businesses, including florists and bookstores and cosmetic stores and other places that will be allowed to reopen for pickup and Delivery Services. And the good news is that is still happening. The even better news is that we are able to extend this to all retail in San Francisco with a business that is actually directly connected to the street. And so what this means now for our city is incredible because were talking about many of those Small Businesses in various neighborhoods where you see many of those shops that are closed. They will be able to open for pickup and for Curbside Pickup and delivery, which is going to be incredible. This does not include malls, for example, but it does include all retail in San Francisco, and were talking about close to 95 of businesses that have unfortunately been closed, to provide this opportunity to our Small Business community is going to be incredible, but i want to be clear that there, of course, will be limitations. There, of course, will be certain requirements around Wearing Masks, around maintaining social distancing and also ultimately we want to make sure that these businesses understand and are prepared for these guidelines and are able to provide this level of service to the community. And im really excited about this because this is gonna not only support the jobs that hopefully many will return as a result of this, this will support the communities and the people who love these businesses and want to see them continue. Its a continued step, of course, in the right direction. We also, i want to mention, will be allowing manufacturing and warehouses to open as well. Again, under certain guidelines, and well be able to provide that information as well just so that we can continue to gradually reopen our city as we see changes in very specific indicators. Now you know from the very beginning what weve said was our guiding principle is the data, the facts, our Public Health officials, and we do appreciate what they have done to get us to this point where even though we continue to see in some cases the numbers increase, we do see the numbers flattening. They have not declined, but the fact is we are in a better place. Not where we want to be but were in a better place. And when making decisions around what opens in our city, we look at six particular indicators, and dr. Colfax has talked about these indicators in the past, but i just want to remind people so that we are all clearly understand what those things are as we begin to allow businesses to open. What are we looking at, how are we making those determinations . Well, its whether or not the number of cases are flat or decreasing, and we see that they are at least remaining flat. We look at whether or not our hospitalizations are flat or decreasing, and as you can see, they are still flat. And our Hospital Capacity is stable because we know that in the event of an outbreak or a surge we have to be prepared, and the good news is we are in a good place. And we want to be able to at least get to a place where we could at least test over 1600 people a day in our city. And the good news is we are almost there. In fact, im really optimistic that based on all of the work thats being done, especially with our department of Public Health and community partners, we will actually get there hopefully next week. We have a comprehensive tracking Program Contact tracing program, and we want to make sure that that program is at a capacity where we can act immediately once we identify a case. And finally, a steady supply of p. P. E. And yes, sadly p. P. E. Is still a conversation that we are having. We have been very creative and very fortunate that we have had generous people who have contributed, our partnerships with usf and their contributions and the support that they provided and other private hospitals. We have been fortunate, but we want to make sure that we have sufficient p. P. E. So those six indicators are exactly whats important to ensure that we as a city are able to open, and throughout the duration as we gradually allow things to happen, we want to make sure that we are always looking at these indicators in order to determine what is best. So i want to thank the department of Public Health, and i want to also caution everybody, because even though this is exciting, we still need to be very careful. Its because you all have been following the social distancing order and Wearing Masks and doing your part that were even here in the first place. And the last thing we want to do is get too excited and then start flooding our streets with too many people where we see that its a problem and then the numbers start to go up, and then we have to dial it back and close some of these businesses. So the goal is to gradually move in a way where we start to get used to opening businesses, because the fact is we have to get used to the fact that the coronavirus is going to be with us for a while, so lets make sure that we are all prepared for what we need to do now and in the future to keep everyone safe. The more that you do your part, the more opportunities that we are able to provide to so many of our businesses who desperately need to open. I want to touch bases on that, just our budget impacts, and i know that youve heard about the fact that sadly the city is experiencing a possible deficit of anywhere between 1. 1 and 1. 5 billion, and i just want to put that into context because what is going to happen in the next year or two with our city, its going to be even more challenging than its already been. And even though we have had challenges and we still enjoy decent economic times, there has always still been a need for more muni service, for more housing, for more resources in general. So now imagine all of our efforts and everything weve done to get to this point. We are basically going to be in a situation where we have to make really hard financial decisions. And just to give you a perspective, i signed this fiscal years budget last year. And sadly even before the fiscal year closes, we anticipate in our current fiscal year a 250 million budget deficit that we have to close. We also for the next fiscal year are looking at possibly a 1. 5 billion budget deficit, and we know that the city has put away about 800 million in reserve, but theres also limitations as to how that money can be allocated. And we also have to be very cautious. So what that is going to mean is hard decisions, hard cuts, impacts on services. And so i just wanted to put that perspective out there because this doesnt even take into account the 375 million that we have already spent to help in the efforts around the coronavirus pandemic. That includes the hotels and the shelters and the testing and all of the things that you know were doing. Now we are hopeful and we expect most of it to be reimbursed by our state and federal government, but think about it, that may be now, but what happens in the future . We still need to do testing. We still need to do Contact Tracing. We still need to help our vulnerable populations, so whether or not those federal and state resources continue to come in is unknown. Especially now that we know even the state is facing a 54 billion budget deficit. So the economy here locally, the economy in our state, in our country, and globally, its going to be very challenging. And its gonna require a lot of sacrifices. In San Francisco alone over 100,000 people have applied for unemployment insurance. So as i said, its going to be critical that we start thinking about economic recovery in a way to not only get businesses open but get people back to work. And get our economy moving again so that we can continue to develop the Financial Support needed to address the many challenges that we continue to face. Now in that effort, i want to talk a little bit about the recovery the economic recovery bonds that we announced yesterday, and this bond is a work in progress. I introduced it at the board of supervisors yesterday. The goal is to support our city infrastructure, like parks and roads and expanding our facility for our most vulnerable populations, including those suffering with Mental Health and addiction. And i want to be clear that when were talking about what happens with bonds in San Francisco, oftentimes we are taking other bonds that we have been supported by voters in the past. You have been very generous in supporting parks bonds, housing bonds, the last earthquake and safety bonds, and what happens is we live within our means. So as we retire debt, we are able to assume additional debt, and we do so without raising property taxes, and that has been our consistent commitment, which is why every time weve come with a bond of this nature to the voters, they have been supportive and generous in providing the support. And i also want to be clear that this bond money is not were not able to use it for operations. We are only able to use it for infrastructure, so thats why the ability to expand our Mental Health system and our programs and to bring those places up to standard, to expand our parks, which we are finding are even more important now than they have ever been, especially as we shelter in place, our ability to look at our roads and our infrastructure and our bike lanes and to not only focus on those things but to also really get our economy going, to get people back to work right away, and to do so in a financially responsible way without raising property taxes. Its gonna be critical to our economic recovery, and so i wanted to just touch bases on that because i know there were a lot of questions that members of the public had about, well, how are we able to do a bond and we have this budget deficit, and thats exactly how. So im excited about what that could do, so we have to, again, start thinking about our recovery and jobs and getting people back to work is going to be a critical part of that. I want to just talk a little bit about give to sf, and i really want to say to those who have contributed to give to sf, whether you were able to give a Million Dollars or one dollar, it does make a difference. We have had large contributors, weve had small contributors. And yesterday i announced a contribution from jack dorsey, the ceo of twitter, of 15 million to give to sf. The ability for the city to address, again, many of these challenges has everything to do with state, federal support, but it also relies on philanthropy. And there have been, you know, so many people who consistently step up when we ask, whether its salesforce obamayang the helman foundation or ann and gordon gede or trillioand google and some of the other folks, they have rose to the occasion. We know that there is much more thats needed, so well be continuing to do outreach, but i want to really appreciate even the small contributors who have really made give to sf work in a way that has gotten money directly in the hands of people. And whats so amazing about what this program does is we have provided Grocery Store gift cards to families, people who are undocumented, or families who may not qualify for cal fresh or other subsidy programs. People who are maybe hairdressers and they have kids and were maybe not getting any government subsidy. People who were traditionally working, barely making ends meet, but never qualified for subsidies. I wanted to make sure that those families were not forgotten, and this is a part of providing assistance with food, providing assistance with rent payments and providing assistance to our Small Business community, which mostly employs a lot of these individuals, and so this program has been absolutely incredible, and i want to take this opportunity to appreciate some of the folks who have been on the front lines delivering these services. Theres a Community Center in the western edition that have been preparing meals and serving food to families and people on a regular basis. Mother brown, who serves homeless populations in the bayview Hunters Point community. In the mission, the carnivale committee, they have been doing an incredible job with getting food on a regular basis to the people in the mission, and we have been working with a number of nonprofit organizations to get resources in the hands of people because we know that sometimes these are people who may not qualify for unemployment or they cant wait to get an unemployment cheque to feed their families, and so give to sf, the resources its provided directly to san franciscans, has been invaluable, and again i want to thank jack dorsey for his commitment to this program. And if anyone is interested, please go to givetosf. Org. You can make contributions or you can find out more information in terms of how you get support from this amazing program. So i want to just lastly touch on another program that i think is absolutely incredible and is being proposed through our Human Services agency through the state. This Program Provides an opportunity under the Cal Fresh Program for people who, for example, if you get cal fresh or medi cal or foster care families, youll automatically receive in your ebt card 365 additional per child. But if you dont necessarily qualify for any of these but you also have children, you can still sign up for this program through the city. So we know that the school district, and we want to appreciate their work in providing meals at the sites for those families who need those meals during this time, but this is just an extra step, an Additional Program that has been absolutely needed to continue to support families. So if you have any questions and you want to sign up, please visit sfhsa. Org or call 311 if you are a family and you have children and you are in need, please reach out to us so that we can provide you with the support and the assistance that you need. For those, again, who fit into the categories of cal fresh, medi cal or the foster care system, its going to be a lot faster and easier for you to get those resources because youre already getting those resources. Theyre going to be automatically added. But for those who dont qualify, we want to get you on you know, get your information and get in touch with you so that we can make sure that we get you signed up and get you your resources as soon as possible. And last but not least, i want to just say thank you to our Disaster Service workers. These are a lot of City Employees who are working in so many capacities, whether they are here at the Emergency Operations center or they are out in the streets, out in the communities, distributing food, distributing masks. I mean, ive seen people at muni bus stops just handing out masks for people who wanted to get on the bus but they didnt have a mask to get on the bus. The kindness of so many of you and the fact that you are putting your lives on the line every single day, City Employees whose responsibilities are things other than what they are probably doing right now, they have been the reasons why were able to deliver as much as were able to deliver in the city. I really want to appreciate your work and what youre doing. And in partnerships with the food bank and the salvation army, glide and other programs, we have been able to deliver and also hand out hundreds of thousands of meals. So i want to be clear, we are not doing this alone. There have been programs, like i mentioned, st. Anthonys and glide, they were doing it already, but the work that we have been doing together to expand the support to reach to unhoused people, to reach out to our immigrant communities and others, its been incredible. So i just want to thank and appreciate everyone whos out there on the front line doing your very best to take care of others, because thats exactly what is going to get us through this. It has been a very challenging time, and as i said in the beginning, were on day i dont know how long. Its been a long time. But i do think that this weekend is effective monday, its a great time to think about, you know, some of your Favorite Places that you may want to support to arrange for Delivery Services or pickup services. So for example, flower shops were only available for delivery, and now the pickup from a flower shop is an option. The pickup from a cosmetic store is an option. Pickups from a lot of these Retail Businesses, especially in your neighborhood, is not only an option but will be valuable if you can help to support them. This is how were going to keep them in business, and im sure that since your kids are probably at home driving you crazy now the toy stores are going to be available for pickup, here is an Incredible Opportunity to get a distraction for them. So i just want to say again thank you all for continuing to comply with this order and your patience. We are in this for the long run, but if we continue to do our part, wearing our mask, socially distance, the more opportunities will be available for us to enjoy. Thank you all again, and with that id like to take this opportunity to introduce dr. Grant colfax with an update from the department of Public Health. Dr. Grant colfax good afternoon. Im dr. Grant colfax, director of health for the city and county of San Francisco, and thank you, mayor breed. As of today, there are 1,994 San Francisco residents who have confirmed cases of covid19, and sadly a total of 35 san franciscans have died of the disease. While even one death is too many, i want to also stress to san franciscans that by flattening the curve over these past two months, these past two long months, you have indeed saved lives. San franciscos mortality rate due to covid19 is four times less than that of los angeles and a remarkable 35 times less than new york citys. Thank you, San Francisco, for doing everything you can to slow the spread of the coronavirus here in San Francisco and in the bay area as a whole. You have truly protected each other and you have protected populations who are most vulnerable during the pandemic. And today i would like to talk about our path, our shared path, our shared journey to recovery. We are anticipating, as the mayor mentioned, another step in that direction this monday when many Retail Businesses can begin to offer Curbside Pickup and takeout services. This is, indeed, good news. Not only for businesses, employees and customers who have been waiting patiently, but also because it means that our city is doing better. The number of people hospitalized with covid19 is staying flat. Since april 6, our hospitalization numbers have ranged from 70 to 94 patients. Today there are 70 covid19 patients hospitalized across our nine hospitals in San Francisco. As i said on monday, this is the metric we would need to study before moving forward to open up more retail, and if all goes well over the next five days, we will be able to make that move. Here is a brief summary of the plan. The new policy will allow many Retail Businesses to begin Curbside Pickup, along with related warehouse and manufacturing businesses in their supply chain. The citys vision is to balance that very important and hopeful step with a continuing need to vigilantly protect community health. For example, the retailers that can do Curbside Pickup must have no more than 10 employees onsite at any time, or fewer if the store is very small. Related manufacturing and warehouse work with resume if there are no more than 50 employees onsite at one time. They will also need to abide by state guidelines for safety during this pandemic. All participating businesses must adopt a social distancing protocol and a health and safety plan. We are working in partnership with the Mayors Office of economic and Workforce Development and the Economic Recovery Task force on the safest way to reopen our economy. Full instructions for businesses will be released tomorrow to allow them to prepare, and the formal health order will come out on monday if the indicators are still good. Once that order is issued, businesses that are ready and able to satisfy the requirements can begin the next phase of reopening. This is a meaningful step on the gradual path to the new normal. As we take these steps, we will continue to keep a close eye on the data so that we can move forward or pause or even increase restrictions depending on the spread of the virus in their community. As well as we have done here, the challenges before us are tremendous. As we begin to carefully transition to a new phase, this new phase, we must balance a continued Emergency Response alongside embarking on our path to recovery. But remember, the virus doesnt have a timeline. In fact, if we move too quickly, it will get much longer. But the good news is is that the way we live with the virus is largely under our control. There are three things that you can do to help, and i ask for your help. Please continue to social distance. Please cover your face with a face covering. And please get tested if you are working. These will keep us moving in the right direction, and we, i, as the city Health Leaders pledge to do three things as well. Continue to expand testing access. Build our Contact Tracing system so it is among if not the best in the country. And improve our surveillance symptoms to detect outbreaks and respond as quickly as possible, supporting individuals who have been diagnosed with covid19, supporting their families. Together, with those actions, we will accomplish three important things. We will see a reduction in infections and deaths. We will experience and feel more safety and confidence as we continue to reopen. And we will ultimately recover and enjoy more activities, even in a world where the virus remains a fact of life. That, that is the task before us. San francisco and the bay area is in uncharted territory. We are working hard at all levels and with our community and Business Partners to develop our local road map. And we are following key indicators in San Francisco and across the bay area to ensure that the virus remains under control. These indicators include Hospital Capacity, watching our hospitalizations to ensure that our Health System is prepared to serve patients with covid19 and other conditions. Personal protective equipment, or p. P. E. , ensuring that there are supplies for Health Care Workers and First Responders for at least 30 days into the future on any given day. Testing. We are continuing to expand testing in the city and are very close to meeting our goal of conducting about 1800 tests a day. Contact tracing and supporting people to isolate in quarantine, and again, supporting them and their families and their neighborhoods with support. And continuing to develop a robust Surveillance System for outbreak detection and response. Over the next weeks, and many months, we will continue to monitor these indicators. We will Work Together with community businesses, region and the state to accomplish as much restoration as we can. The coronavirus is still here and we are going to find a way to protect each other and enter a new era for San Francisco. Question will continue to rise to the occasion we will continue to rise to the occasion and i am proud to be part of this effort. San francisco, i cant thank you enough for your steadfast courage, sacrifice and dedication to the health of the entire community. The way we have come together to flatten the curve proves that we can continue and will continue to build a new way of doing things. Thank you. The first questions will be for dr. Grant colfax. First question is from alex berrey, San Francisco business times. Do you anticipate making any modifications to the restaurant and dining restrictions before may 31, or releasing guidelines on how restaurants will be allowed to operate in San Francisco when they do reopen . Dr. Grant colfax so i think its important to emphasize that this will be a gradual process to a new normal as we learn to manage our work and our efforts and our activities in a setting of covid19. So there will be a gradual reopening with looking at the indicators that i talked about and monitoring that carefully. So there will be a gradual restoration assuming those indicators give us the confidence to continue to move forward. Monday, the 18th, is a big step in that direction. With regard to specific guidelines for restaurants, those would of course be issued in advance of any modifications required, but i do not have a specific timeline to share with you at this point. The next question is from kerry fisto, hoodline. What is the status of the site at 180 jones street . The site is currently an empty lot guarded 24 7 by a city contracted security service. Dr. Grant colfax so as we know, the Behavioural Health issues in San Francisco continue, and certainly we are committed to ensuring and we have ensured as much as possible that people who have Behavioural Health issues, including meth addiction and dependence, are provided with care and treatments. We have continued those efforts, both on the street, in the hotels where people are sheltering in place, and also for people who are living with covid19. I think that with regard to the actual center, my team is looking at that effort Going Forward. I cant speculate on the specific sites at this time given that we have been in the middle of a pandemic since march, but certainly we recognize the need for continued Behavioural Health care, especially for people who are living with and using meth, and a sobering type model is supported by the science, and we look forward to figuring out how do we build a sustainable behavioural Health System that reflects the new reality in which we are living in. How do Behavioural Health Services Continue to be delivered and strengthened and intersect with the real needs of people who are living with Behavioural Health issues, as well as at risk for covid19. As a followup, could that empty site at 180 jones street, which is on a block with multiple encampments, provide another safe sleeping space since it is unused during this time . Dr. Grant colfax i cant speculate on the specific site at this time, but certainly safe sleeping sites are being considered in a number of areas in the city, but i cant speculate on that right now. Next question is from melanie woodrow, abc 7. Once those businesses reopen, will the six indicators will monitored daily, and by whom . Dr. Grant colfax so those indicators are monitored by the Health Department. You can go to our covid19 data tracker and follow most of them with regards to hospitalization curve, the testing data and other indicators, so we will be monitoring those at the Health Department on a daily basis. In conjunction, i should say, with other Health Departments across the region. If the numbers begin to slide in the opposite direction, would businesses be immediately closed again . Would you move back to phase one . Dr. Grant colfax so i think, again, weve always followed the data, science and facts, and we have had we would look at the specific issues that would be cause for concern and make a decision on whether certain businesses, certain practices, certain areas or certain neighborhoods would need a more robust Public Health investment. I cant speculate on whether an entire system would be changed as a result of those indicators. But i do think we need to be clear, we are gradually phasing in. We are watching those indicators. We certainly all hope with the collaboration and support of san franciscans across the city that the Public Health measures that we will continue to maintain will continue to flatten that curve or have that curve go down. If in fact the indicators go in the opposite direction, we will investigate in as quickly as possible and make decisions based on the data about where and when we may need to scale back. Next question is from liz cruits, abc 7 news bay area. Is the bay area planning to extend for the next three months or longer similar to Los Angeles County . Dr. Grant colfax i think that we are continuing to monitor the data looking at this gradual stepbystep reopening and ensuring that we take a reasonable approach that balances the fact that the real, the really good news is that compared to other places in the state, including l. A. , we are in a stage where we feel comfortable moving to this next phase. And again, we will iterate depending on what the data show over the next few weeks and months in terms of the next phases to reopening. The next question is from time magazine. The city said in late april that it had the capacity to test 4300 people per day. Mayor breed said the city hopes to be running 1600 tests per day by next week. Why is there still a sizable gap between capacity and how many tests the city is still running . Dr. Grant colfax yes, i think thats a i appreciate the question. Its an important point. So when we talk about that level of capacity, its basically the machines that are at the Health Department and other parts and ucsf and other parts of the city, the machines that can actually run those tests. But in order to actually get those tests into those machines, a lot of things need to happen. We need to have enough supplied to to do the testing. That continues to be a challenge. Its getting better, but its been a challenge ever since this pandemic began. We need the people on the ground, the staff who are collecting the samples, and thats something that is very challenging in this dynamic. They have to wear the personal protective equipment. The tests take time to actually do, and then we actually need to have people come in for the testing. And weve seen an increase in our tests over the past few weeks, a dramatic increase, but we need both the people to come in for testing, the supplies to do the testing, the staff to do the testing, the sites, scaling up the sites in different neighborhoods. We know that not everybody can access a specific site that might have capacity, if its across the city, if they need transportation, and so forth. So we need to develop this broader culture of testing where people get tested on a regular basis and have universal access to testing. We are moving in that direction. We have the machines ready, but now we have to create the structure and the culture to meet that goal of at least 1600 tests today Going Forward. Next question is from kcbs. As certain counties in california move into stage 2 of the states road map, are you concerned about san franciscans traveling more between counties that have different restrictions . Well, again, i think that as we as ive said, key to this is ensuring ongoing social distancing, that people wear face coverings and that people get tested. So i think that with across the state, as testing efforts scale up and as communities adapt, the social norm of wearing facial coverings, im hoping that san franciscans will take appropriate precautions if and when they do travel. Thank you, dr. Colfax. The next questions are for mayor london breed. Madam mayor, your first question is from the l. A. Times. What is your reaction to the county going to phase two while the rest of the bay area moves more slowly . Why do you think san mateo is doing this . Mayor london breed well, i cant speak to what san mateo is doing, but i think in the announcement today that we are able to open retail for dropoff and pickup has been incredible. So i think we are taking probably a great step forward, and i think i want to be clear that every county is different and every countys numbers are different. And so their county Health Officer and how they make decisions, you know, i cant speak to, but i know that we are looking at the data. And as i talked about in the six indicators, were making decisions on what can open and when based on those six indicators. And thats why were able to move forward on may 18. Last week we made an announcement that it would only be a certain limited number of stores and locations, and now weve expanded that to not only include all retail in San Francisco that had curbside businesses, but also manufacturing and warehouses. So i think that is very significant. The next question is from heather knight, San Francisco chronicle. The closures ofve