Transcripts For SFGTV BOS Special Budget And Finance Committee 20240712

Participating in a meeting remotely. This precaution is taken pursuant to the local, state and federal orders and declarations and directives. The meeting is through video conversation and participate in the meeting as if physically present. Public comment is available on each item on this agenda. And sfgovtv. Org are streaming the number across the screen. Each speaker is allowed two minutes to speak. Comments are opportunities to speak during the Public Comment period and available by calling 1 415 6550001. Again, 1 415 6550001. Meeting i. D. , 1460595898. Again, 1460595898. Then press pound twice. When connected you will hear the meeting discussions but you will be in mute and in this mode only. When your item of interest comes up dial star, 3, to be added to the speaker line. And best practices are to call from a quiet location and speak slowly and clearly and turn down your television ore radio. You can submit Public Comment by emailing to the budget and finance committee clerk, and if you submit Public Comment via email it is forwarded to the supervisors and it will be included as part of the official file. Finally items acted upon today are expected to appear on the board of supervisors agenda of october 20th unless otherwise stated. Chair fewer thank you very much, madam clerk. Call item number 1. Clerk yes, item 1, a resolution approving the sheriff offices home detention and Electronic Monitoring Program rules and regulations and approving the evidence of financial responsibility demonstrated by the program administrator, season 10iel Offender Services l. L. C. For fiscal years 20202021. For those to provide Public Comment call 1 415 6550001. Meeting i. D. , 1460595898. Then press pound twice. If you have not already done so, please dial star, 3, to line up to speak. A system prompt will indicate that you have raised your hand. Wait until the system indicates that you have been unmuted and you may begin your comments. Chair fewer thank you very much, madam clerk. Colleagues, you may remember that we continued this item from last week. There were some technical difficulties and then we sort of ran out of time for this item. And so i want to thank mr. Holland from the Service Office for returning to present on item 1. We have a guest expert on electronic monitoring, mr. James kilgor. We hear from mr. Holland and i believe that today we have our technical issues resolved. Mr. Holland, the floor is yours. Thank you, supervisors. Thank you, chair fewer. Iis my screen showing . Chair fewer yes, it is, sir. Terrific, okay. Thanks, supervisors, thank you, chair fewer. I am the chief Financial Officer for the Sheriffs Office here in San Francisco. And before i start, i want to just say thank you for your vote a few weeks back to fund our Data Management system that the Sheriffs Office is pursuing as recommended by the reenvisioning the jail working group. In developing this presentation i was given another opportunity to experience the challenges of mining criminal justice data, so i really appreciate your support of this reenvisioning recommendation. So the purpose of todays presentation we come before this body every year because the california appeal code requires that, quote the rules and regulations and administrative policy of the program to be written and reviewed on an annual basis by the county board of supervisors. So thats why were here. And now im going to address a number of the questions that came up when we were here a few weeks ago. So starting with this first slide, which illustrates the general process by which an individual is put on electronic monitoring in San Francisco, and its a process that involves multiple agencies and the multiple agencies who make up the criminal justice system. And the flow chart is to show that most points in the process, particularly the Decision Point be that results in an individual being assigned to electronic monitoring is made by the courts. In making this decision, the court has information regarding the defendant, including information from a Public Safety assessment or p. S. A. Thats highlighted in blue in this process map and the p. S. A. Is described further on the next slide. So, my next slide this shows the Public Safety assessment decisions that have been made from may 2016 to june 2020. Within the Public Safety assessment, there is a decisionmaking framework or d. M. F. , that uses a risk to determine the risk of a person reoffending or not appearing in court. As that table shows weve had about 30,000 p. S. A. S scored over the last 40 years. And then as you can see in the data in the chart in the lower half of the slide, a higher risk score correlates with higher risk of not appearing in court and the higher risk of reoffending during the pretrial period. And the courts use electronic monitoring as a tool to mitigate these risks. And that is further illustrated in the next slide. Now i presented a version of this slide to the board in september 2019 when the board approved the current electronic monitoring contracts. It shows three boxes. Each of which shows for a given date the total justice involved population and how many of those people were in custody on subject dates. So you can see that between september 2016 and 2019, that the incustody population decreased 5 , even though the total justice involved population grew by 27 . I cant speak for why the total population increased, but the decrease in the incustody population correlates with an increase in courtordered electronic monitoring or e. M. As noted in last weeks Public Comment, the e. M. Population during this time grew threefold and today the courts have placed approximately 25 of the outofcustody justice involved population on e. M. E. M. Has played a Critical Role in reducing the population we believe, including the closure of c. J. 4. Now the next slide addresses the questions about who is on e. M. Today. So i looked at it in two ways. So to determine who is on e. M. , we looked at a data set of all persons booked into the San Francisco jail system from january 1 to june 30, 2020. Who are ultimately put on electronic monitoring. We then looked at who is on e. M. As defined by a persons top charge, splitting the data into two buckets as defined by federal guidelines, and part two for nonviolent charges and part one for violent charges. Many jurisdictions in this country restrict electronic monitoring for individuals with part two charges only. However, in San Francisco, being a leader in criminal justice reforms, San Francisco has expanded the use of e. M. For persons with part one charges to keep them out of custody and to reduce the jail population. Its this part one population that accounts for the threefold increase by the courts of people assigned to e. M. , rather than custody, and which in turn has played a Critical Role in reducing the jail population. Now the next slide shows who is on e. M. By demographics. Now this slide has a lot of pie charts and i have broken them down into two groups. The pie chart on the top says race and ethnicity demographics of who is on e. M. And these percentages are reflective of who is arrested in San Francisco. The three pie charts on the bottom show by race and ethnicity the risks from the decisionmaking framework or the d. M. F. To reduce bias, the d. M. F. Process excludes Demographic Data, but for the purposes of todays presentation, Demographic Data was added after the fact using data from other data since linked by a common booking number. Now i show the d. M. F. Score by race and ethnicity, and the bottom three charts highlight that the Court Assigns e. M. Primarily for individuals whose d. M. F. Score results in a release not recommendation. E. M. Allows for a noncustodial sentence, i. E. , release, for individuals who might otherwise be held in custody. And the final slide shows some additional Demographic Data, specifically on age, gender, housing status, for those who are on e. M. And im about to conclude, but before i conclude i want to add that there is a larger question of the effectiveness of electronic monitoring that this department is interested in looking at. And quoting from the report, monitor the release from the safety and justice report on the c. J. 4 closure, quote the city should review the Forthcoming Research on the effectiveness of electronic monitoring and its impacts on the jail population. , again, this office is very interested in doing that research and we have partnered with the california arm from u. C. Berkeley to look at this, and its a strong relationship with the California Department of justice which can provide real data on recidivism across the state. We have been at this a while and the California Policy Lab just received their ethics approval for this study and we invite anyone who is interested to participate in this with us. And with that, i am thats all i have. And im happy to take any questions. Thank you. Chair fewer thank you, mr. Hollands. First lets ask my colleagues, any comments or questions for mr. Hollywoo hollands at this p . Seeing none oh, sorry, chair fewer. Chair fewer supervisor walton. Supervisor walton i did have a few questions for mr. Hollands. Chair fewer would you like to ask them now, or after our expert on electronic monitoring . Supervisor walton in whatever way is easier for you. Chair fewer okay. Why dont we have the other presentation first because some questions may be answered in his presentation and then you can ask then we can ask all of the questions. And also we had, actually, mr. James kilgor here last time and he waited such a long time. So lets have him first. So mr. James kilgor, if you dont mind joining us now and giving us i think that you have a presentation to present to us, is that correct, mr. Kilgor . Yes, yes. Chair fewer you may present it now. Okay, and ill speak probably about five minutes if that is okay. Chair fewer that is perfect. Thank you. So i just want to begin by thanking you all for waiting so long to hear this presentation. And i appreciate you taking an interest in this and taking the policy measure seriously. I want to just talk a little bit about my own experience of electronic monitoring. When i was paroled from prison in 2009 and i came home, the day after my parole agent came and told me that i was going to be on electronic monitor and they would only be allowed out of the house from 6 00 a. M. To 10 00 a. M. , monday through friday. And that sparked a lot of responses from me about what the notion of freedom meant with electronic monitor, but also what was happening with these devices. So thats 2009. Since that time i have been doing a lot of research on electronic monitoring. I gained an open Society Fellowship to develop a campaign on electronic monitoring. And i have been interviewing people, collecting data, doing research, and advising people on policy around electronic monitoring since that time. So i want to talk a little bit about about what the conclusions that i have made about electronic monitoring. The first thing is that i think that we have to stop talking about it as an alternative to incarceration. Its an alternative form of incarceration. The definition of incarceration is depriving people of their liberty. The standard conditions of electronic monitoring is house arrest, and in most instances you have to apply for permission to get movement out of the house and those restrictions place huge burdens on people in terms of accessing employment, in terms of participating in family activities, in terms of participating in religious events. A whole range of freedoms that are seriously restricted by electronic monitoring. Secondly, and i think that this is absolutely crucial as i listened to the presentation before me, there is no body of research that has established that electronic monitoring has a positive impact. Theres no body of research that shows that it has an impact on recidivism, and people showing up for Court Appearances, on people on contributing to Public Safety, there is no body of research that shows any of that. And what is remarkable is that this technology has been implemented for years and years and years, and were doing the research after we implement the Technology Rather than looking back on over 20 years of using electronic monitors and we still havent established that its effective. It reminds me a little bit about with electronic monitoring, it reminds me a little bit about a rush to get a vaccine for covid before we actually properly test it. But we have been doing something similar to that with electronic monitoring ever since the 1980s with these devices. Thirdly, we need to recognize that electronic monitoring disproportionately impacts the same people that it mass incarceration disproportionately impacts. Black people in particular, people of color more broadly, disabled people and people with disabilities and so forth. All of those people are disproportionately impacted by electronic monitoring. Now the problem is that and this is one of the things that im happy that our city is trying to address most jurisdictions dont keep data on this. So we dont really have data that shows that electronic monitoring is racially discriminatory, but we know that it is from the experience of talking to people who have been on electronic monitors, and we also know that every single aspect of the system of mass incarceration diz pr disproporty affects black people and people of color. Why somehow should electronic monitoring be the exception to that . So i think before you embark on this technology you might want to also think about who are the companies that are driving this technology. The companies that are driving this technology are primarily companies that have already benefitted from mass incarceration. The biggest electronic Monitoring Company in the country is b. I. Incorporated and were a subis said area of the Worlds Largest private prison operator. Securest technologies which runs prison phone programs and video visitation programs, runs a large electronic Monitoring Company. And sentinel, the company that you want to that you want to contract with is notorious for charging people for all kinds of things on on pay to be on probation. They have even been taken to court for charging people for probation fees when their probation has already expired. So the last thing i want to say is that electronic monitoring makes life very difficult for people. Somehow people think that its not a bracelet. We refer to it as a shackle. Its a device of incarceration and its a device to control people, and to limit their ability to reintegrate into the community. And we were quite convinced from all of the research that weve done that any jurisdiction can do far better with the funds that they have and the technology that they have, they can do far better than investing in these punitive devices, but, rather, to look for programs and look for opportunities that are going to address the fundamental underlying structural problems that land people in jail in first place. Those are rooted in poverty. Theyre rooted in racism. Theyre rooted in the criminalization of the poor. So take the resources that are going into electronic monitoring and put them into ways to keep people out of jail and ways to build healthy communities, not ways to incarcerate people in their homes with their family members. Thank you. Chair fewer thank you very much. Thank you. Now let me open it up to my colleagues. Supervisor walton. Supervisor walton thank you so much, chair fewer. I appreciate you, and thank you mr. Kilgor and mr. Hollands. My questions are really for the Sheriffs Department at this time. Mr. Kilgor actually answered a lot of the questions that i had for him within his presentation. A couple of things that i just wanted to note, mr. Hollands typically how many people are on electronic monitoring over a course of a month . Today we have approximately 300 people on electronic monitoring and thats been pretty consistent for the last year or so. Supervisor walton and so from yearly data, what would you say, 300 times 12 or what do you think in terms of the year. Last year how many people did we have on electronic monitoring, for instance . You know, i hadnt thought about it necessarily in that way. But that data set that i was presenting in my slideshow where we looked at people who were who were charged between for six months, that had a thousand people in it. So, you know, possibly there are 2,000. And the reason is that it doesnt necessarily add up is that someone may be on electronic monitoring for a very brief period of time, so you could have different names. But that data set that i presented today has 976 individuals who are put on e. M. Over a period of six months. Supervisor walton what is the typical duration of somebody on electronic monitoring . You know, i would need to get back to you on that, but just working out the math in my head i would, you know, less than 30 days would be my guess. Supervisor walton so thats the mean thats the mean but theres a lot of variation in that. Supervisor walton what is the budget cost for electronic monitoring . The budget is the budget that this board authorizes is about a Million Dollars annuall. It used to be a much smaller budget, but the city determined that we would no longer charge any fees for electronic monitoring and so then the budget went from roughly 200,000 to about a million. That was also related to the large increase just ordered by the courts. Supervisor walton from a technological aspect, have there been any malfunctions or drawbacks of electronic monitoring . How has that affected safety as well as erroneous complications for someone on the electronic monitoring devices . You know, im sure that its not a perfect system. I know that back in february of this year, we upgraded the monitors such that they would only need to be charged every 24 hours, which is still a burden, but, nonetheless, i improvement over the devices that we had before that. But thats one issue, one technical issue that i can think of off the top of my head. Supervisor walton thank you. Thank you. Chair fewer thank you. I have a question. Im wondering so, mr. Hollands, can you please put up that first screen that shows the first slide or it could be the second slide that actually shows sort of what happens when somebody yes. So im looking at this and im thinking that this is the electronic monitoring process. And so are you saying that once theyre in custody, and the individual is booked into county jail and then within eight hours there is a Public Safety assessment, is that correct . Thats what i have represented on the chart here, but actually to be explicit about that, that eighthour timeline is for people who are going to have prearraignment hearing. Chair fewer okay. But those individuals have a prearraignment hearing and also do a Public Safety assessment, is that correct . Yes, to determine whether or not they could be released on prearrangement and if not, they would go to arraignment. Chair fewer okay. And then are the dependence on electronic monitoring has increased . I think thats what your presentation said, is that right . Well, what im saying just to be really explicit about it, is that the courts the courts used to put about a hundred people on to electronic monitoring or assign people to electronic monitoring such that we had about a hundred people on a given day on electronic monitoring. After the humphrey decision when bail was curtailed, the courts increased their reliance on electronic monitoring and increased the number of people they put on to electronic monitoring such that we have about 300 people a day today. Chair fewer sure. Why do you think that is that the court actually is putting more people on electronic monitoring . Is it about the competence, actually . That these individua individualo sorry im coming from a laypersons perspective, but that when the courts have a decision on whether to release somebody, these the electronic monitoring is mainly used to ensure that people people its mainly people who are awaiting trial, is that correct . Correct, yes. Chair fewer okay. So its sort of an insurance that we can keep track of these folks and that they will return for their court date, is that correct . Yes, thats my understanding of it. But in order to mitigate the risk of not appearing or not reoffending, this is one of the tools that the courts have. They dont always use it, but for about 20 of the people who are awaiting trial, about 20 are on electronic monitoring as ordered by the court. Chair fewer okay. And if the court should choose to not do electronic monitoring, so tell me the relationship between electronic monitoring and pretrial release. Well, electronic monitoring is a subset of pretrial release. So when we do the Public Safety assessment and we go through the decisionmaking framework, someone might lets see i put this on my people people could be put on and i have this on this slide here the decisionmaking framework recommendation. There is a recommendation it could be a recommendation for no active supervision and for minimal supervision and a lot of interaction between the individual who has been charged and this is all done by San Francisco pretrial. Chair fewer sure. They would then be working fairly intensively with people with with the staff from pretrial. And then finally the d. M. F. Could result in a release not recommended recommendation. Chair fewer so are you telling me that people that are in yellow and orange category are those are the people that are really on electronic monitoring . Because green would mean no active supervision which im assuming then we wouldnt have people on electronic monitoring if theres no if they qualify for no active supervision, is that correct . Or do we have those people in green on electronic monitoring . Well, i would actually, i would have thought similarly, but if i go to this chart here, you can see in the three pie charts on the bottom of that slide all of these people, whether they were recommended for no active, minimum, assertive Case Management or release not recommended, all of these people were ultimately put on electronic monitoring by the court. You can see that really for the most part its people whose score results in a release not recommended recommendation. Who go on to electronic monitoring. Although there are some people with no active supervision who are assigned to electronic monitoring. Chair fewer yeah. So this is my question about electronic monitoring, is that it seems as though i mean, the people it depends it seems as though on the judge a little bit and the courts on the confidence of the courts to actually that since the majority of people on electronic monitoring, it is because we want them to come back to trial for their court date. And so it seems as though that it has a lot to do with the confidence of the courts on releasing folks and not having them incarcerated. Would you concur with that . Well, unofficially, and speaking for myself, yes, i would concur with that. Just looking at the data on this chart here, as i have mentioned in my presentation, a higher risk score correlates with a nonappearance and also reoffense. So i you know, it makes sense to me that the courts use e. M. As a Risk Mitigation tool to make sure that someone appears in court or that someone does not reoffend. Chair fewer sure. So it would seem that people though in the green, yellow and maybe even individuals in the orange range wouldnt need to be electronically monitored because we could actually do that in other ways, except, i mean, besides having an electronic monitor on them. Would you agree . Well, i cant speak for any of the judges, but i can think of a situation where the courts might see someone who has a lowrisk score but they want to make sure they stay in compliance with the stay away order from a victim of Domestic Violence, for instance. And so by having a g. P. S. Tracking device on that person then the courts can feel that they have taken some action to make sure that the person does comply with the stay away order. Chair fewer sure. I think that in that instance i can understand. But im thinking on some of the other offenses because i also wanted to know is there any sort of data on ethicity of electronic monitoring versus, you know, just supervision checking in, Constant Contact with case managers, those type of things. Is there any sort of data that we have on the ethicity of electronic monitoring versus alternatives to electronic monitoring . I think thats an excellent question, and this is a question that we are also asking and this is why we are really keen to work with the California Policy Lab to take a look at the effectiveness of electronic monitoring. Chair fewer sure. Because it seems as though that we dont have that data, that it is really hard for us to justify renewal of a contract in 2022 if we dont actually have the data on really what works and what works best. And so what works best for not only the person who is being monitored but also what works best for general society. It seems as though we dont have this data that we are sort of dealing sort of in the dark area of because for every instance that youre telling me, yes, you know, we should monitor them so theyre not near indiscernible . Chair fewer i get that. But then also we also hear the other stories of electronic monitoring that is that it is very inconvenient for folks, that you have to plug them in and they have to be charged. Just, you know, like charging a cellphone, i dont know how many times a day i have to charge my cellphone to make sure that it works. And so and also we hear about, you know, electronic monitors being cut off or them just not working. So would you so what is the sheriff, i guess, sort of plan . Are you looking to actually to amend the contract that expires on july 31st, 2022, using the data that you gain from this organization and the California Policy Lab and the contract with them, that to quite possibly to amend the contract that expires in 2022 . You know, i think that actually its not so much you know, the Sheriffs Office amending the contracts. And, again, im probably speaking more for myself than for this office. But in my mind it makes sense to have this data on ethicity so that we can present that ethicity to the courts who are the ones who are assigning people to electronic monitoring. We run the program as, you know, as we get individuals assigned to us by the courts. But, you know, for me as a resident of San Francisco, i think that this is it would be a great bit of information to give to the courts. Chair fewer right. I think we the general public, is under sort of the impression that electronic monitoring is the best way to do it. And it keeps Public Safety in check in San Francisco, assisting Public Safety. But im wondering today what were discussing are the programs and the rules and the regulations. And i wanted to know how much say do you have the Sheriff Department has on the program, the electronic monitoring rules and regulations . Or is that mandated, actually, to you . Or do you have or can you actually adjust rules and regulations . Do you have that within your authority . We have some leeway on some of the rules i mean, ultimately the rules and regulations are the scope of services in the contract. And this is what the board approved in 2019. We probably have some leeway on some of those rules and regulations or some the scope of services, but i suspect that some of the scope of services are beyond our control. But, again, i think that the bigger question is the ethicity of the courts choosing to put people on to electronic monitoring. Chair fewer sure. You know, what i would suggest to supervisors who are going to be here after the report is published is that theres actually a hearing on this. I think that considering that the contract is expires in 2022, to have a real hearing on this to really understand the ethicity of it, and to also look at where the sheriff has authority to change some of the programs, rules and regulations. Even though the authority scope might not be broad but the things that we can change could we change them to be more effective . And also allow folks, you know, knowing that most people who are awaiting trial i think that theres a large percentage of people who are awaiting for trial actually serve time. So i think that i mean, serve time. So knowing that the vast number of people that are on electronic monitoring, you know, awaiting trial, like, i actually just think that there are i mean, people have to get on with their lives. When i see that 88 of them are men, and in our society, you know, men are probably the men are the main bread winners for the family and support the families. If theyre unable to do this while being electronically monitored that say hindrance, actually, to not only the person being electronically monitored but also their whole family. So we are talking about i think not only the livelihood of this individual but also the livelihood of their families. So i think that im remiss if we didnt dig deeper into this. Im glad that we are having this conversation today just so the general public can have a deeper understanding of what electronic monitoring really is. And i wanted to say mr. Kilgor, thank you for sharing his personal experience and actually seeing and seeing what electronic monitoring does. And i think that when he gives this sort of example of it being a shackle, in a way i think it is a shackle, and if theyre not able to actually to continue with, you know, with working and raising a family, and being you know, able to provide for themselves i think that we are also doing a great disservice to them and also to their families. Having said that, i see supervisor walton oh yes, i see mr. Kilgor is in the queue and would like to add something. Would you like to Say Something . I would like to Say Something about the Risk Assessment tool that is being used. I think that theres been a lot of research on that particular tool, and basically the Research Shows that tool is biased, that it uses nine criteria to judge risk and almost all of them relate to someones historical involvement with the criminal legal system. Whether theyre from a prior violent conviction or prior failure to appear or prior misdemeanor convictions that we know that all of these things now are going to be biased in terms of who is in the criminal legal system. So if were going to judge risk on the basis of if you have a criminal background, its going to disproportionately affect black people in particular, people of color in general. And theres been a lot of i mean, i can give you a couple of studies. I have one that ill put in the chat where you can see where the investigations that have been done on this particular Risk Assessment tool showing the bias. And although it doesnt ask specifically about the individuals race, there are historical things that are brought in there that clearly have an element of racial bias. So i was surprised to see a liberal jurisdiction like San Francisco having chosen this particular tool when its really been under critique for three or four years amongst policymakers. Chair fewer thank you, mr. Kilgor. Supervisor walton, i see you in the queue. Supervisor walton thank you, chair fewer. I want to know is this something that we have to approve today . Because i would love to see a list of the rules that we could possibly change. Like, i know that some things are deemed by the court and theres some things that we cant do about those, but i would love to see a list of things that we could possibly change before we approve this resolution. To see what that looks like and to see what conversations we could have to possibly institute some of them. Chair fewer okay, lets ask mr. Hollands. Mr. Hollands, are we on a time constraint on this and i know that it would be the third budget meeting for you to come back to. So i think that the question that supervisor walton has is, could we look at some of those rules that you that the Sheriffs Department does have authority over . Would you is there a time constraint here . Theres not necessarily a time constraint. The penal code requires that the board review the rules and regulations. It doesnt require that the board approve the rules and regulations. That was done this time last year. It requires that the board review them. That said, were certainly open to taking a look at the scope of services that we put into the contracts. However, they are contractual. So any changes would probably need to go to the contracting process. But wed be happy to do that. But i also want to add a clarification on electronic monitoring versus home detention. This is an item that came up at the dinner table with my husband who thought that all electronic monitoring was home detention. But i explained to him that is actually not the case. And here in San Francisco, home detention makes up about 20 of the full of all electronic monitoring. Chair fewer that is very good to note. Thank you very much, mr. Hollands. I see supervisor mandelman in the queue. Supervisor . Supervisor mandelman yes, thank you, chair fewer. And i guess i mean, if were going to keep talking about this item, i wonder if it makes sense to invite the court to also to explain how, you know, how theyre using this and how they think about this, but the sheriff is really feels like an intermediary here for a service that courts want or are demanding. So if were going to keep the conversation going i think that we need to invite more people to participate in it. And the other i also do and i take, you know, and i am not an expert in this field and i appreciate that, but i take mr. Kilgors point and i have heard some of the concerns about Public Safety assessments. It seems that in San Francisco our judges pretty routinely dont take the recommendation coming out of the Public Safety assessment. And it also seems that i think that the last time that we had this conversation with mr. Hollands, i asked for the information, you know, about the are they are the judges getting it right . And are people actually showing up when, you know, for trial when theyre being when theyre being released, even if the pretrial assessment has suggested they shouldnt be. And, you know, as you would expect they arent showing up in the same numbers and in the same percentages as folks where the recommendation is that they be released. We havent really delved too much further into that, but i think that its an interesting question. Because as we as we in the courts work hard to get more and more folks not spending time in jail, we do want to make sure that the public is safe and that people are showing up for their Court Appearances. So this is an area that i am interested in and we can continue the conversation but i think that we need to get more people involved. Chair fewer yes, i agree, because it seems that the courte confidence of the courts is an important factor here as mr. Hollands mentioned. So, mr. Hollands, i think that also it seems as though supervisor walton would like to make a motion to continue this item and to continue this discussion for next week. And when you come back next week i would like to also have the data point of how many people violate the electronic monitoring rules. And what are the violations that they how does one violate the rules and when you violate the rules how many of them are sent back to jail or incarceration. And are there different measures when somebody violates the rules . So i think that all of those types of those data points that we would really appreciate. Supervisor walton, before you make the motion, i would like to open this up for Public Comment. So, madam clerk, can you plawz are please call Public Comment on item number one. Clerk checking to see if theres callers in the queue. Operations, let us know if there are callers that are ready. If you have not done so, press star, 3, to be added to the queue. For those already on hold, wait until the system indicates that you are unmuted. Let us know if there are callers that wish to comment on item number one. Yes, there are currently eight callers in the queue. I will unmute the first caller. Chair fewer thank you very much. Caller supervisors, i am frank hoto with stop crime s. F. We urge you to support this Sheriff Departments Electronic Monitoring Program and home detention. I also urge you to fund the study to get data on ethicity, and those with ankle bracelets, and this year the number of robberies indiscernible im being interrupted, hello . Chair fewer we can hear you. Caller okay, thank you. The number of burglaries and robberies are up 20 over the same period last year. Public safety is to release those suspects does most likely to again commit a crime or just not appear for court. And its not the robbery suspects, but suspects with rape and trafficking and Domestic Violence and child molestation and arson are subject to electronic monitoring every year. What will the victims think . That electronic monitoring is not an option. And even murder suspects are ordered to wear an ankle bracelet. And the sheriff does not make that decision, nor does city hall. Only suspects indiscernible that disappear from court or commit crimes again are given monitoring. What happens if monitoring can eliminated . They can choose to release the suspects or put them in jail pending trial. So in many cases eliminating monitoring will send the suspects back to jail and that may be unnecessary expenses and even inhumane. Banning monitoring would be wasteful and inhumane in some cases and in others it puts Public Safety at risk for those who commit rape, Domestic Violence, assault, sex trafficking. Clerk thank you for your comments, sir. Next speaker, please. [no audio] chair fewer here we go, okay. Chair fewer madam clerk, it seems that we had a technical difficulty, is that correct . Clerk that is correct. Chair fewer is everything okay now . Were trying to see if the Public Comment line is up or not. Chair fewer okay. We have speakers in the queue . Yes, theyre still there. Lets see if we can get the line reestablished. Chair fewer while were trying to connect them i want to make a statement for the public speaker. Which is that, you know, i think that what we heard from mr. Holland says that the state requires us to actually to review the Program Rules and regulations and that is what were doing now. And we are actually taking a deeper dive than we have ever done before at this committee. So were reviewing the rules and regulations and were to contract to july 31, 2022, with sentinel. Were trying to just understand this method. And so this is for our listening public to understand this is not eliminating, this is actually what the state requires us to do. Mr. Hollands, is that correct . Im sorry, i was kicked out of the meeting. Chair fewer i was just reiterating that this is a requirement that we actually review this. So thats what were doing today, that we are not having a discussion today about eliminating electronic monitoring, we are having a discussion today that is required by the state that we review the Program Rules and regulations. Okay. Do we have our speakers back on . Were currently trying to rebridge right now. Chair fewer okay. Could i make a request . Chair fewer yes, mr. Hollands. When you continue this item, could you continue it not for next week but two or three weeks out . Theres a fair amount of budget work that needs to be done between now and whenever we continue it to. Thank you. Chair fewer thank you. Supervisor walton, if you would take notice the request from mrt to this week but maybe in about two or three weeks. We could call it back to the call of the chair if you prefer. So we have conversation with the Sheriffs Office when they are ready to prepare the data. Supervisor walton thank you, chair fewer. I think that the call of the chair makes the most sense so that way we can arrange for the appropriate time for them to come back. Chair fewer that would be great. So thank you, mr. Hollands. Doe we have folks on line . Are we able to get them back . I thought i was just kicked off. I didnt realize that everybody was. Clerk we have a confirmation that the bridge line is reestablished . Im waiting on operations right now. Chair fewer madam clerk, i think we had a discussion and i think that we know the direction that we are going with this conversation. Do you think that it would be appropriate for us to move on to item number 2 first and then to come back to see and hopefully the Public Comment line would be connected for item number 1. We wouldnt vote on it yet and wait to hear Public Comment first. Is that appropriate at this time . Clerk i believe that it would be appropriate if that is your preference. Chair fewer okay, colleagues, is that okay . Because i know that we have a rather lengthy agenda item coming up. So if we can i think that we know the direction here and i think that our speakers dont have to stay on any longer if they dont want to. I think that supervisor walton is going to make a motion after this. And so lets move on to item number 2. Could you please call item 2, madam clerk. Clerk yes, madam chair. Item 2, resolution approving and authorizing the director of property, on behalf of the office of economic and Workforce Development and w. C. P. I. At 1449 webster street at a base rent of 139,170 per year based on the extended term with approval of this resolution and expiring on august 31, 2023, plus one threeyear option to extend. Members of the public who wish to provide Public Comment on this item should call 1 415 6550001. And meeting i. D. 1460595898. And then press pound twice. If you have not already done so, press star 3, to be added to the queue. A system prompt will indicate that you have raised your hand, wait until you are unmuted and you may begin your comments. Chair fewer thank you very much, madam clerk. We have mr. Pinick. I havent seen you in a while. Youre probably happy about that. And our director of Workforce Development, mr. Josh arsae, and good to see you again. Mr. Pinick, the floor is yours. Thank you, supervisors and chair fewer. I too was kicked off and in that momentary Technical Glitch and now it seems that i cant share my screen. The clerk does have my presentation, and im hoping that she can share her screen and i can walk through it oh, actually my shared screen has just come back on. Chair fewer the clerk is sharing the screen, okay. Can you make it the full screen, please . Thank you very much. Thank you, madam clerk. Im here before you and seeking your positive recommendation on a resolution authorizing an office lease amendment at 1449 webster street. This is on behalf of the office of economic and Workforce Development, oewd. And it is to continue the operations of the Western Addition neighborhood access point. Next screen, please. By way of background, oewd has been operating the Western Addition at this point for the Community Since 2008. This lease amendment allows these services to continue which consists of employment and job search services, job readiness and skills training, resume assistance, coaching for interviews, and Supportive Services such as child care and transportation. Next slide, please. The details of the lease amendment, this will continue the occupancy much oewd at 3900squarefeet of office space. There is no changing in the current staffing and no tenant improvements are required. The lease term will extend for slightly less than three years. And ill explain that in a second. The annual base rent is 139,000, which equates to 35. 68persquarefoot and as the clerk mentioned earlier with annual c. P. I. Increases bracketed between 2 and 5 . And the proposed base rent is 15 less than the previous base rent under the original lease. In addition, there is one threeyear option to extend this lease at 95 of fair market rent. The reason the term is slightly less than three years is that the data of august 31, 2023, represents the threeyear anniversary of the lease expiration. We spent the last two months at hold over. The hold over rate is at the lower rate so were getting the benefit of the 15 discount for the entire three years. Next slide, please. That concludes my presentation and i have oewd, and he and i are available to answer any questions that you may have. Chair fewer thank you very much. Colleagues, any questions or comments for mr. Pinick or mr. Arsay . Seeing none, yeah, this is a really valuable resource for the community. I just think they do great work. And oewd i think has a very good working relationship with this particular site and so i just want to just give a shoutout for it. Since i am going to check now to see whether or not we can actually connect with Public Comment. Madam clerk, do we have an update on Public Comment lines . Clerk madam chair, i believe that operations is still trying to connect to the bridge line. Chair fewer were going to take Public Comment on item one and item 2. And im reluctant to go on to item 3 and four. And were going to lose track of who our Public Comment is, so we should take a recess right now and my apologies to everyone about this Technical Glitch. Its now 11 30. Madam clerk, could we reconvene at 11 45 to check in . Clerk yes, i believe that would be a sufficient time for the lines to get reestablished. Chair fewer yes. Apologies to all of our listeners i just wanted to say and to our presenters today that because of this Technical Glitch well take an approximately 14minute recess and we will reconvene at chair fewer good afternoon, we are reconvening the budget and finance Committee Meeting and i have apologies for that technological glitch. I would like to now to call for public item on item 2, theres no b. L. A. Report on item number 2 and we heard the presentations and colleagues have no comments or questions. So, madam clerk, please call for Public Comment. Clerk yes, operations, checking to see if theres callers in the queue. Let us know if there are callers that are ready. If you have not already done so, please press star, 3, to be added to the queue. For those on hold continue to wait until the system indicates that you have been unmuted. Please let us know if there are callers who wish to comment on item number 2. Yes, i have five callers in the queue. Caller good afternoon, supervisors. Im actually my line was unmuted but i am actually calling for item number one regarding the electronic monitoring. Chair fewer we will take Public Comment for item number 1 in a moment and were just calling for item number 2 now for a Lease Agreement for 1449 webster street. Madam clerk, instruct folks on how to stay in the queue to give Public Comment for item number 1. Clerk yes, madam chair. Those who are interested in commenting on item number one, we will take Public Comment on that momentarily. If you have already raised your hand, press star, 3, to lower your hand at this time. Thank you. Next speaker, please. Caller im waiting for item number 1 still. Clerk please press star, 3, to lower your hand. When Public Comment is open for item number 1, you can press star, 3, to raise your hand. Thank you. Madam chair, no more callers in the queue. Chair fewer thank you very much. Public comment for item number 2 is now closed. I would like to make a motion to move item number 2 with a positive recommendation to the full board. A roll call vote, please. Clerk on the motion [roll call] three ayes. Chair fewer thank you very much, madam clerk. Lets go back to item number one and we have about five callers in the queue. And if you can please call again, Public Comment for item number 1, madam clerk. Clerk yes, madam chair. Operation is checking to see if theres any callers in the queue. Operations, please let us know if there are callers that are ready. If you have not already done so, press star, 3, to be added to the queue. For those already on hold, wait until the system indicates that you have been unmuted. Let us know if there are callers to comment on item number 1. Yes, there are currently six callers in the queue. I will queue the first caller. Caller good afternoon, supervisors. My name is alice xavier and i am a San Francisco native. I urge you to approve the sheriffs plan for home detention and electronic monitoring of criminal suspects to be released from prison pending trial. Public crime is up and our Public Safety is at stake. Some of the suspects are charged with rape, child molestation and even murder are released pending court hearings. If your wife or mother or child were a victim of these types of crimes would you want the suspects on electronic monitoring . Why should the victims have to live in fear . Electronic monitoring is not inhumane inconvenient and they are robbing our elders is inconvenient and rape is inconvenient. And torture is inconvenient. And murder is inhumane and inconvenient. If you support Public Safety you would support the sheriffs plan for electronic monitoring of a suspects release. Please help the sheriff to maintain the means of safety for victims and suspects in our community. Do not forsake the victims for they are the ones who live in fear and shackled to their homes. Victims are the ones impacted most. Victims matter. Thank you. Clerk thank you for your comments. Next speaker, please. Caller good afternoon. I am Mohammed Shaq and im with indiscernible the Jail Coalition. indiscernible for the last seven years. I want to thank all of you, particularly supervisor walton and fewer for really wanting to take a critical look at electronic monitoring or e. M. In the city. In the spirit of the leadership envision you have demonstrated what the legislation and i encourage you to take similar steps to end the practice of ankle shackling. I want to address a few things from the supervisors presentation. First, the numbers and claims that has led to reductions in the jail population. He showed data points with regards to the jail population over the last couple years. Last september, that the actual jail population was 1277 and that today its much lower around 785. Now what that completely ignores are the significant releases as a result of covid19 as well as some reductions from shifts in prosecutions from the new d. A. And the jail population at the beginning of the year was 1162, not much different from last year. And electronic monitoring trickled all the way back to 2015 as a result of the humphrey case. So its no way a result of e. M. If anything, from 2018 when we tripled to the beginning of this year before covid releases there was a general overall increase in the jail population. I also want to address the question of ethicize, theres nothing to suggest that e. M. Is effective to get people to show up for the court date as james kilgor also pointed out. What we have data on is that costeffective and less punitive and simple measures do actually work. Data collected, for instance, in jefferson county, found that sending people Text Messages or phone call reminders of having direct contact, increased the Court Appearances from 79 all the way up to 92 in 20 your time has expired. Clerk thank you for your comments. Next speaker, please. Caller good morning, madam chair and very fares. I am a policy manager for glide on behalf of the organization i urge you to reject the resolution concerning the home detention and Electronic Monitoring Program. I really want to thank the chair and supervisors for your thorough line of questioning of the sheriff as well because its a very productive conversation. Our reenter programs at glide work closely with people who are formally incarcerated within families and its a prohibitive and a harmful extension of incarceration that impacts not only individuals but their families and the community as well. When our clients are reentering the Community Everything is difficult all at once am people need to be connected with primary care, and dentistry and Mental Health services and attend recovery circles and meetings in the city and to reconnect with loved ones and secure housing and employment and obtain food and resources necessary to survive. Movement is essential to engaging in all of these activities. Electronic monitoring devices set restrictions on movement which impacts every aspect of a persons life. The program greatly has a potential success for those and threatened with reincarceration. Its daily evidence of the counterproductive barriers and the vulnerabilities that result. And job interviews and changes in Work Schedules or unplanned overtime are difficult to accommodate. And work with travel and changing location says not allowed and in warehouses, it can interfere with the g. P. S. Signal. All of this is compounded by Many Employers reluctant to hire someone who is wearing an ankle monitor, especially dealing with customers. And movement for family or parenting or Community Activities are refused and delayed responses to requests for appointments. In an emergency a person may risk returning to jail to get a sick person to the hospital. We strongly oppose electronic monitoring as an extension of incars raitionz. Our city is reliant on the program and its harmful and wasteful and counterproductive. And you can set people up for success and not throw up barriers that undermine reentry. Thank you. Clerk thank you for your comments. Next speaker, please. Caller hello. Hi, my name is riahana louis. And my mother who is a smallframed asian woman was victimized three times. She was beat and mugged three times in San Francisco bayview. I myself was also a victim. On august 7, 2020, i was doing graffiti removal with a few of my friends and a really tall white man came up to me and started calling me chinese virus and told me to go take my ass back to fucking china where all of the virus came from. He proceeded to get close to me and my two friends told him to leave me alone and he started running away. We didnt know why he was running so i called 911 and we caught up to him and police came and arrested him. They found an ankle bracelet on him. Now at first they told me they couldnt do nothing until we found out that he had ankle bracelet and they arrested him and said that he had a warrant for his arrest. And had i not been a victim of that, if he had not had an ankle bracelet and they not further investigated that he had a warrant for his arrest, he might still be free creating more victims out there. Now without that, i am worried for the people out there. Im worried about people like my mother who was victimized and beat three times. Im worried about other women like myself who are out there who can be victimized. I am sorry, this is all of this talk about their inconvenience is ridiculous. How about us . How about the people who suffer from this . How about the victims of the crime . Think about us. What we have to go through. And, again, my mother got beat to pulp on september 22nd. How about her, and how about the families, what do you tell them . These advocates are wonderful people, im sure they have bleeding hearts for them, but, im sorry, think about the victims, please. Think about the victims. I support the electronic monitoring. Please, do not take that away. People need to feel safe. Your time is expired. Clerk thank you for your comments. If theres any callers in the queue, next speaker, please. Hello, caller . Caller hello. Clerk please begin. Caller hi, i am owen sanug, and i support the electronic bracelet, because ive had trouble with Law Enforcement in the past and i think that you have to have it to monitor them. Also trying to monitoring and its also about basically theyre still in jail and theyre just free but they still have to be monitored. So it is not a freedom to run around all you want. So, i mean, if we dont keep a track on them they might be out doing other things. So electronic monitoring is a good thing so i support it. Thank you. Clerk thank you for your comments. Next speaker, please. Caller hi, i am diana block and a San Francisco resident of patruro hill. And im with the coalition for women prisoners and also the no new jails coalition. I really want to thank the board for taking this time to look into the question of electronic monitoring more deeply and also for allowing james kilgor who is really a National Expert in this field to speak. That is really very important. You know, last time i had a few minutes to speak at the last hearing and i talked about the impacts on mothers in particular whom we have worked with when they are released on electronic monitoring and the ways in which it hampers their ability to care for their children, to get employment, and to do all of the things that are so important for their families. I also now wanted to say that the line of questioning that you are all taking is extremely important and that is really what i want to support. That you need to look into what this is really doing, how it is affecting the communities in this city in a racial manner and in a gender manner. I want to also remind you and the speakers about the presumption of innocence, which i feel that is really going to a lot of the points. People who are pretrial, they should not be presumed risky or dangerous. They have not been tried. Those algorithms on the Risk Assessment tools, they are just measuring past behavior. They are not measuring what is happening, and what the Current Situation is. And they have been proven to be extremely racist in their orientation. So for all of those reasons i applaud the fact that you are moving forward. Speakers time is expired. Clerk thank you for your comments. Next speaker, please. Caller indiscernible im the president of the Jail Coalition and were strongly opposed to electronic monitoring. And we would like to remind that you our citys reliant on e. M. Is harmful and we shouldnt invest in services that support indiscernible than incarceration. indiscernible several of my clients have been on ankle monitors. I have seen the harm they cause. They have to be charged constantly that restricts movement, and those without access to outlets can lead to compliance violations. Similar, my client was wrongfully accused of removing it and had legal consequences. So i know the sustained harm that its caused to the conviction process. And indiscernible in fact its merely another form of incarceration as mr. Kilgor explain. We demand the release of data on electronic monitoring and for what . We have seen ankle monitoring triple over the last couple of years and this led to a ballooning of the sheriffs budget, particularly for overtime pay. We want that to go to support programs that support pretrial measures and make it indiscernible more successful. And Offender Services with Companies Seeking a contract with has seen dozens of lawsuits and indiscernible in georgia and florida and california, for human right abuses. And so in addition to electronic monitoring being a fundamentally Harmful Technology it would be shameful for San Francisco to continue to do business with a company that is notorious for human right abuses. I urge you all to recommend that the contract is not renewed and to continue to fight against surveillance and control of our communities. Thank you so much. Clerk thank you for your comments. Next speaker, please. Caller hi, i am Melissa Hernandez and im a member of the coalition and i live and work in San Francisco. I am calling in to voice my opposition to electronic monitoring and especially voice my opposition given our citys inability to provide really basic data, policies, or any coherent explanation as to why so many people are being placed on e. M. Our citys reliance on alternative monitoring is harmful and we should be investing our time and resources to find services and programs that support more opportunities for actual release. And building up our communities and in ways that keep us all safe. Instead of spending on more forms of incarceration. We want to say that our city system of e. M. Is fragmented and ineffective. We know what works and its not e. M. But its supportive programs. We have no doita showing that e. M. Is necessary or effective to get people back to court. And what the system is doing is expanding the system of mass surveillance that falls on the shoulders of San Franciscos black community. The same disparity that we saw when we look at the people locked up before theyre even convicted of their alleged crime. Its a product of the deep systemic racism within our city. And we should want to address this issue. Instead of electronic monitoring, we need to explore all possibilities of release, expand the eligibility of own cognizant release and invest in the Community Support programs that support pretrial diversion and make o. R. More accessible. And we look forward to continuing this conversation next week and i just want to thank the board of supervisors for really taking a deeper dive on this. Thank you. Clerk thank you for your comments. Next speaker, please. Caller yes, good morning. My name is brigette indiscernible and im calling in support of electronic monitoring. We can all agree or disagree, im fine with that. I have attended through the court system the use of electronic monitoring on those charged for recurring and horrendous crimes. I have witnessed the judges only to place electronic monitoring when and where needed and on recurring crimes such as human trafficking, rape, child abuse, child molestation, Domestic Violence, and, yes, i believe that the judges are getting it right. Were these offenders, they need to be tracked. We are victims in our home, told by supervisors to their constituents to buy security cameras and sensor lights, spending good money after bad money . Thats not what i chose to live in San Francisco for. We ask you to support the Public Health and safety and to uphold the electronic monitoring contract. Thank you for having Public Comment on this most important issue. Clerk thank you for your comments. Next speaker, please. Caller hi. My name is nini clausner and i have lived in San Francisco for over 35 years. I used to think that electronic monitoring was a good way to decrease the number of people sent to prison and jail. But in learning more about this issue, i see that electronic monitoring is merely an al an alternative form of incarceration. It places it on black and other people of color, and assumes that a person is guilty and a menace to society. That people who need no supervision is placed on e. M. Is reason enough to stop this technology, stop using this technology. As mr. Kilgor and the Sheriffs Department representative said, theres no data on whether it increases the proportion of the people showing up for court. Nor apparently the data about whether it prevents people from committing more crimes before their court date. My heartbreaks for the woman who spoke earlier, but the way to decrease the Domestic Violence is better education, more funding for shelters and Restorative Justice programs, not electronic monitoring. And i cannot believe that youre thinking about extending sentinels contract. If you knew that a plumber had three lawsuits against them, would you hire them . Come on, folks. Please, do the right thing here. Clerk thank you for your comments. Next speaker, please. Caller hi, good afternoon, supervisors. I am carolyn, and im the San Francisco policy director for the Public Defenders Office and i wanted to just thank you so much for delving into this critical and underrepresented issue. The Public Defenders Office had a front row seat to our local court system and how the Sheriffs Office has use the e. M. Over the past 21 years. And we request respectfully that we also be able to present at the next Committee Meeting that examines this issue. As well as to be a part of the ongoing conversations around potential changes and how we use e. M. We also believe that it would be helpful to adult probation e. M. System as we have two systems in the city that run electronic monitoring. That would enable us to understand the full snapshot of how many people in total are under electronic monitoring in our city. We have seen a large increase in our reliance on electronic monitoring over the last few years. And i have heard from multiple colleagues and the Public Defenders Office whose clients on electronic monitoring are violated for very small kind of technical issues that arent their fault and placed back in jail by the Sheriffs Office. And the Contracting Company for e. M. , because their monitor had a Technical Glitch. So theres a lot of ways in which we could improve our policy locally as well as to work with the courts to lower the number of people who are placed by the courts on electronic monitoring. I also wanted to just say again that the ideas that people on electronic monitoring now would be in jail if there were no e. M. , that this is not supported by the data. And so im very glad again that well delve more into that data through this policy project. We also wanted to point out that the sheriffs characterization of who is on e. M. That is implied is inaccurate. Felony burglary, that is the Largest Group for the crime on e. M. But it also includes auto burglary, and entry into vacant dwellings, which are definitely crimes but not violent crimes. So i wanted to point that out and it would be helpful. Speakers time is expired. Clerk thank you for your comments, next speaker, please. Caller hi, board members, i work in San Francisco. Thank you so much for visiting this item. And to look more deeply on how we can keep our communities safe. I also appreciate the time given to james kilgor as well. Our citys reliance on electronic monitoring is harmful and i hope that we can invest in services that keep our communities safe and instead of thinking of additional forms of incarceration. And, furthermore, thinking about increased opportunities for release. So during covid, as folks have mentioned, we were able to reduce the jail count significantly and to let people out. And so this kind of Public Health crisis with the pandemic has shown us that there are different ways to, like, think about how we respond to violence and how we respond to harm in different ways that we can act in order to make the most of what we have. And electronic monitoring is definitely not that future. So relying on ankle monitors and putting more money into the hands of corporations like sentinel is not the way that we want to go because instead we could use these funds and these resources to create social help in our communities. Like mohammed mentioned, its less punitive for controlling our communities. And going with an approach like this would allow for more resources to be available to keep our communities safe. So i urge you all to not recommend that the contract with electronic monitoring and against the surveillance and control of our communities. Clerk thank you for your comments, next speaker, please. Madam chair, that completes the queue. Chair fewer thank you. And item one is closed. I would like to remind everyone and all of our public speakers, and i mean, Public Commenters that today is not about renewing a contract for electronic monitoring. Today we are doing a state mandated review of home detention electronic monitoring rules and regulations. We have a contract for electronic monitoring that does not expire until july 31, 2022. This is a deeper conversation about electronic monitoring. So i just wanted to remind everyone on both sides of the argument that this is not about the contract. It is not a contract renewal discussion today. With that, supervisor walton, i believe that you have a motion that you would like to make. Supervisor walton yes, thank you so much, chair fewer. I would like to move item 1 to a future meeting at the call of the chair. Chair fewer thank you very much. Could i have a roll call vote, please. Clerk yes, on the motion to continue item number 1 to the call of the chair [roll call] you have three ayes. Chair fewer thank you very much. Madam clerk, call item 3 and 4 together. Clerk item 3, ordinance appropriating 149 million of certificates of participation proceeds for the department of Public Health to Fund Improvements facilities for the 101 grove exit project, and the San Francisco General Hospital chiller and cooling tower replacement project in fiscal year 20202021 and placing these funds on controllers serve pending the sale of the certificates of participation. And item number 4, the ordinance thirding the execution and delivery of certificates of participation in one or more series on a taxexempt and or taxable basis and from time to time evidencing and representing an aggreat principle amount to not to exceed 157 million, to finance and refinance certain Capital Improvement projects, including but not limited to certain projects generally known as the Homeless Services center, and laguna honda hospital wings, k and mreuse project, and aitc immunization and travel chinnic relocation. The public should call 1 415 6550001 to comment, and meeting i. D. , 1460595898. And then press pound twice. If you have not already done so, please dial star, 3, to line up to speak. A system prompt will indicate that you have raised your hand. Wait until the system indicates that you have been unmuted and you may begin your comment. Chair fewer thank you, madam clerk. We have today with us rick brewer, mr. Brewer, good to see you again. And the Controllers Office, and kathy young and Terry Schultz, and the City Attorneys office. Mr. Brewer, the floor is yours. Thank you. Let me get a slide up. All right. Good afternoon, and thank you. Im rick withdrewer from the Controllers Office of Public Finance. And before you today we have the department of Public Health facilities c. O. P. S, items 3 and 4, which is an ordinance authorizing the c. O. P. S not to exceed 157 million for these projects and the accompanying appropriations. So the approved capital plan includes c. O. P. S to fund the proposed 126. 2 million of the project costs that are being considered here. The funds would come from an issuance of two different capital plans, c. O. P. S, that is the one 108 million of the project costs and the other with a 60 million project cost. While we plan on using 18. 2 million of the critical repairs to get to the full 126 million. And with the costs with issuing c. O. P. S the full amount is 157 million, not to exceed. And here before you we have the sources and uses of the capital plan funds so you can see that we have a number of projects that are being considered here. The majority of which are part of the 101 grove exit strategy, which the department will get into in a minute. But these three projects and to note the Homeless Services center was actually the supplemental appropriation and direction to utilize the commercial paper to fund that project. In the interim it was provided last fall by the board. And so that amount is the difference between the supplemental appropriation and the c. O. P. And as you can see so were just using that data, 18. 2 million for critical repairs and the cooling tower and the replacement project which is the balance of the project is utilizing the part of the 108 that was planned on 101 grove. I hand it over to kathy with the department of Public Health. Kathy, youre on mute. So sorry. Let me start over. Good afternoon, chair fewer and supervisors. My name is kathy young and im the director of facilities and Capital Planning for the department of Public Health. With me today is Terry Schultz with Facility Services and Capital Planning jukerburg San Francisco general. And its comprised of three distinct projects. Services are retrofits and renovation of two former patient care wings in the honda hospital. And the second is the relocation of the immunization and travel clinic. And third is the relocation of the urgent care clinic. And the laguna honda project will create office space for 400 staff that are also located in Civic Center Area leased spaces. The need to vacate 101 grove is driven by the poor seismic condition. It has a four rating. Next slide, please. And the scope of work at laguna honda has abatement, significant interior demolition, voluntary seismic upgrades, replacement of the aging utility systems and accessibility upgrades for restrooms, building entrances, and elevators. And during an earlier phase we were asked to analyze whether it would be possible to be able to convert the two wings to all electrical power. We did make the decision to replace the existing hot water boilers with electric boilers for possible conversion projects. The project scope also includes replacement of the sewer lines serving the old campus administrative buildings. These are the original clay ones back to the 1930s. Laguna honda facility staff is determining that these peoples are set for complete failure. The combination of age and backfilling of the old wings over the past decade which have indiscernible have placed greater pressures on the sewer lines, making this a very Critical Infrastructure project. Next slide, please. And they will finish the design documents early next year with the start of construction scheduled for the Third Quarter, 2021, and with completion targeted for First Quarter of 2023. Next slide, please. The adult immunization and travel clinic is a pretravel preventative medicine provider for individuals, groups and families that offers all u. S. Licensed vaccines for families. And for International Travelers of any age. The clinic is located on the first floor of 101 grove and would move to the cityowned 25 van ness building. The scope of the project includes interior demolition and improvements that has administrative spaces. D. P. W. Will start on this project next year and we hope to have it completed in 2022. Next slide, please. The third project is the relocation of the urgent care clinic currently located within the 101 grove complex. The medical, dental, behavioral health, and Shelter Health programs would be colocated at the new site at 1064 mission street, along with the Homeless Outreach team from h. S. H. This is funded by multiple sources, including 5 million from the 101 grove exit c. O. P. As we have mentioned the c. P. C. And the board approved this last year. Next slide, please. And the critical repairs and recession allowance c. O. P. Will fund the chiller and cooling water replacement project. The existing centralized chilled water system at dfsg has cooling water to the hospitals ambulatory care buildings at the acute care hospital, building 3, that includes the Pathology Clinical Services and research labs. And building 2, which houses the central utility services, including emergency generators, which serve many of our nonacute care buildings on the campus. Next slide, please. Thank you. These buildings are depicted in the purple on this map. The existing chilled water system consists of two steam driven chillers, one that is 46 years old and that is no longer operational. And one that is 15 years old that is highly unreliable. With only one chiller in service, the chilled Water Capacity has been reduced by 50 . On extreme heat days the hospital is unable to maintain the required building air temperatures. This project would replace the two steamdriven chillers with electric chillers to reduce the demand for natural gas, and supports the citys electricification goals. And the new system would be able to supply cooling to other buildings, like the complex that is depicted here in gold on the slide, as they are rest i dont fitted and to extend the electricification benefits for the future. And the original plans ha has ts in the upcoming years. And d. P. H. Has worked with the Controllers Office and Public Finance and c. P. C. Staff to fund the project using c. O. P. S. 16. 5 million of the total 34. 7 million in costs would be funded by the remaining portion of the 101 grove exit c. O. P. And the other 18. 2 million is funded by the critical response. Critical repair c. O. P. Next slide, please. So this project is already well underway. The insulation of the temporary chiller was completed last quarter. D. P. W. Is scheduled to complete their drawings for the project by 2021, First Quarter, and to submit out for approval. D. P. W. Then will the intent is then to put the project out to bid about Third Quarter 2021, and anticipating that they will approve the project by the fourth quarter. And this will allow construction to start in early 2022, with the projected completion of quarter 2023. And that concludes my presentation and i want to turn this back over to summarize the funding. Thank you very much for your time this afternoon. Thank you. So as you mentioned, theres a number of projects that are all sort of utilizing the citys c. O. P. S and just to note that the slide for the homeless service, which is 5 million cost with 7. 25 million total and thats making up the difference between the supplemental of 147. 5 million and to not exceed 157 million. So the majority of the additional costs here reserves is interest, and well be funding this project using the commercial paper on the interim basis and issuing longterm c. O. P. S until we have reached closer to the project completion. And so there will be some period of capitalizing of the interest at that time and as well as refunds the oneyear debt refund indiscernible . So the timeline we introduced back in september, we have been through Capital Planning and were before you today and were looking at the board of supervisors for final approval, for a second hearing and then theres also one amendment that we are requesting that be made and to provide to the staff, and we are wanting to remove the specific letters k and m from the laguna honda wing. The project is still being in a design phase and it was originally planned for k and m, but d. P. W. Has since changed their plan to be for wings o. E. M. , based on the lower cost as the o and m wings were the last of the administrative wings to be built at la geunda honda and they have a better seismic situation. If you have any further questions on that, you can ask kathy and us on that. I will turn it over for questions. Chair fewer thank you very much. Any comments or questions from my colleagues at all . I have one question for you, mr. So are all of these projects being funded wholly by c. O. P. S. So i guess partially so theres geobond funding as well as additional funding through the management of the project. Laguna honda project has a bit of Grant Funding provided for the initial phases of design but that money has run out and does not have another source at this time. Chair fewer so the majority of funding is funded these projects, c. O. P. S are funding them, is that correct . Correct. Chair fewer and theres so many other big projects in San Francisco funded by c. O. P. S is also are hope s. F. Projects is that correct . Thats correct. Chair fewer okay, got it. All right, any comments or questions from colleagues . Seeing none, can we please hear from the b. L. A. Yes, good afternoon, chair fewer and the members of the committee. The budget and legislative analyst office. Item number 4 before you is an ordinance that would provide for the issuance of 157 million in certificates of participation and the issuance that we sort of detail on pages of 2 and 3 of our report. Item number 3 is an ordinance appropriating 129. 75 million to be funded by the certificate of participation. And those projects have been described to you in the presentation and we describe those on page 4 of our report. The sources and uses of the proceeds are shown in the table on page 5 of our report. I will echo what mr. Brewer said, which is that the homeless the appropriation is for the three Public Health projects and the Homeless Services center, those funds for Previous Year appropriated by the board of supervisors and the certificates of participation are now paying back commercial paper that was previously approved and issued. The debt service on the certificates of participation is in the policy of no more than 3 the total general Fund Debt Service no more than 3. 25 of the discretionary revenue. And we recommend approval. Chair fewer thank you very much. Madam City Attorney, that there was an amendment that is proposed, is that substantive . No, madam chair, its not. Chair fewer thank you very much for your advice. Seeing no comments or questions from my colleagues, i do have one last question, mr. Brewer. Do you know how much so we are reaching our cap, i mean, working towards this cap of our own cap of c. O. P. Debt, is that correct . Yes. Chair fewer okay. Do you know how much we have left of our c. O. P. Cap and how much more money is left in there . So when the 10year capital plan was adopted we were sort of already at the cap with existing projects. And we could speak more to where we are today as the budget has obviously taken and they have lowered our total ability to issue c. O. P. S. The Controllers Office will be coming out with a report in november updating discretionary revenue projections. So based on that, we will be meeting with the Capital Planning folks and updating our c. O. P. Curve capacity. But, yes, i agree with the downward trajectory in those revenues. It will be less capacity in the future. And this was planned a while ago. Only potential benefit that we have is that we have a c. O. P. Funding that were looking forward to by the end of the month and well know be issuing c. O. P. S and hoping that the debt Service Estimates and savings will come in lower and better than projected will ultimately assist the city in this. Chair fewer okay. And my final question is so has the rest of the c. O. P. Funding already been accounted for through other projects . So there will be some updates and a process for those updates. There was i believe for 1850 bryant that may that hasnt been issued and may not have been updated. There are some hall of justice projects that are fathe farthere future. So i think that for, you know, the ones that we mentioned today, the ones that have been planned, but i dont know we in the past year have authorized a number of the c. O. P. S that were in the nearer term. But longer term c. O. P. S which really fall in the sort of 20242030 timeframe, including the hall of justice demo and rebuild for the full amount and then also the public works yard and projects of that nature, we have not brought any legislation to you for those specifically. And so as you reopen the capital plan, there will be more conversations had on that. Chair fewer the only reason i ask is because i have looked at some Capital Projects that i would like to have funded and they have told me that there isnt c. O. P. Funds available. But i am hearing that maybe something a little different now. So having heard that, could we open this up for Public Comment, please. Madam clerk, items 3 and 4, please. Clerk yes, madam chair. Operation is checking to see if there are any callers in the queue. Operations, let us know if there are any callers that are ready. If you have not done so, press star, 3, to be added to the queue. For those already on hold, wait until the system indicates that you have been unmuted. Please let us know if there are any callers to wish to comments on items 3 and 4. Yes, i have one caller in the queue. Chair fewer thank you. Caller so presenters, my name is francisco louisiana costlacosta and iwish a person k menard shaw had listened to your presentation. We need people like that to review your b. S. I repeat b. S. We have the hospital, and we have laguna honda. If you do a needs assessment, whatever b. S. You are talking about stems from the deferred maintenance. The deferred maintenance stems from out of ignorance. So let me give you some history. Way back in the 1960s, the bayview has built the building, that hospital, that portion of the hospital, before zuckerberg was built. And how did zuckerberg get its name on the building . Because yall couldnt build the building within the finance that was available. So he gave you a hundred million or 18 million, whatever that is, and got his name, right . The laguna honda was built by the citizens of San Francisco, they were rich but built it for the poor. How has the patients from laguna honda been treated all of these years . On a scale of one to 10, minus 24. Figure that out, presenters. So i am one of the few who participated in this deliberation because i have written umteenth articles about hospitals over the last 40 years. And what do i see . Abject disregard time is up. Madam chair, that completes the queue. Chair fewer thank you very much. Public comment is now closed. Thank you, mr. Decosta for reminding us of our inadequacies. And then i believe that we have a motion now to accept the amendment brought forth by the Controllers Office. And so id like to make a motion to accept those amendments. Roll call vote, please. Clerk yes, on the motion to amend item number 4 [roll call] there are three ayes. Chair fewer i would like to make a motion move item 3 and 4 as amended to the full board with a positive recommendation. Clerk yes, on the motion [roll call] you have three ayes. Chair fewer thank you very much. Madam clerk, please call item number 5. Clerk yes, item number 5, hearing to review the findings of the Municipal Bank task force and recommend implementation strategies to improve transparency, Economic Investment and local control in San Francisco finances, and requesting the office of the treasurer and the Tax Collector to report. The members of the public who wish to provide Public Comment on this item should call 1 415 6550001. And meeting i. D. , 1460595898. And then press pound twice. If you have not already done so, please dial star 3 to line up to speak. A system prompt will indicate that you have raised your hand. Wait until the system indicates that you have been unmuted and you may begin your comments. Chair fewer thank you very much, madam clerk. Colleagues, i am really looking forward to this hearing as this has been a long time coming. Thanks in particular to the Treasurers Office for their patience. I have been working this issue since joining the board of supervisors in 2017 and prior to the current pandemic i had introduced the legislation calling for the development of a city Business Plan for the creation of a public Municipal Bank or at least a nondepository resolution as a first step. This was building on the countless hearings and studies that we have done on this issue. While the legislation is currently on hold, i do want to delay, to hold this long overdue hearing on the march 2019 task report from the Treasurers Office. I also would ask the budget and the legislative analysts to produce a report looking further into key aspects of the original report, including costs, and opportunities as well as the modeling for Affordable Housing financing. I have never been more convinced that the creation of a public bank is the direction that we should continue to move towards. We know that there are major problems with the administration of the federal p. P. P. Funds and the extent to which large commercial private banks fail to prioritize for Small Businesses or for people of color and womenowned businesses. And we know that the only public bank in the country, the state bank of north dakota, leveraged an incredible amount of resources for businesses in their state. The entire state of north dakota, both their population and their budgets, is comparable to San Francisco. Imagine what we could do if we had an institution that allowed us to leverage more resources in this way. To benefit our local communities and local enterprises. I appreciate everyones patience with the Technical Glitches today and for the long delay in scheduling this hearing to begin with. I am looking forward to the discussion about how to continue to move this issue forward in the name of financial equity. Reinvestment of the local priorities and the public accountability for taxpayer funds. We do have a few presenters today. Amanda fried from the Treasurers Office is joined by molly cullen and fred besoe and fred cardell, and the participant from the treasurers Municipal Bank Feasibility Task force. I want to also give a special recognition and appreciation to our legislative aide who has been the force behind this in my office. Pregnant, also taking her baby to many, many public bank hearings and meetings and meeting with the group, i just want to really thank her for taking us to this point. It has been a labor of love for her. But something that my whole office has fully believed in, and i want to really thank her for her personal commitment and dedication to creating the first public Municipal Bank in San Francisco. And with that, i would like to have the speakers and to give the opportunity to my cosponsors, supervisor walton, and also supervisor prestons office. So supervisor walton, do you have any comments at all about this . Supervisor walton thank you so much, chair fewer. I will wait until after the presentation for my comments. Chair fewer thank you, supervisor. Do we have anyone from supervisor prestons office that would like to make any comments . Jen is here, yeah, from supervisor peskins office. Chair fewer then please bring forth miss knighter who is a legislative aide from supervisor prestons office. Miss snyder, the floor is yours. Thank you, chair fewer and committee members. I just want to add supervisor preston and our offices voice to the call of support for public banking. Our office has been a longtime advocate for establishing a public bank in San Francisco, and we really appreciate your great efforts thus far. And especially as a democratic socialist office we acknowledge the creation of a public bank as a power tool in creating a city that prioritizes Affordable Housing, racial justice, and our Climate Emergency too. The Global Pandemic that were facing has really only intensified the need right now. And so, you know, billionaires have grown their wealth by over 800 billion during the pandemic, but Small Businesses are struggling and workers are facing mass unemployment and displacement. And everything points to communities of color in San Francisco suffering the most. So, yeah, were really proud of the work that the Public Coalition and chair fewers office has done to make public bank a reality in our city. And we look forward to continuing that fight for a public bank in San Francisco. So, yeah, thank you for your time. Chair fewer thank you very much, and, yes, many thanks to the Public Bank Coalition who has worked tirelessly on this. Lets start our presentations now. First amanda fried from the treasurer and Tax Collectors office. The floor is yours. Hi, amanda. You are on mute. Of course i am. Good afternoon, chair fewer and supervisors. Im glad to be here today. I want to echo what you said, chair fewer, about working with chelsea. It has really been a privilege over these many years, and we will miss you and chelsea quite a bit as we know that we will continue this work Going Forward. As you noted this report was issued in march 2019. Which, given covid19 and the state of our world, just feels like another lifetime ago and yet as i think that you have already mentioned, the underlying concerns about the Financial System have only intensified. So i want to be clear that the treasurer is in solid agreement with public bank advocates that the current Banking System is deeply racist and unfair. During his 16 years in office, our office of Financial Empowerment has led the country on reforms to make it easier for lowincome consumers to get access to safe Financial Products and to build wealth. We have advocated to level the playing field. And hes been first in line to criticize banks like wells fargo whose abuses are deeply destructive. That said, the role of the treasurer is first and foremost to keep the taxpayer money safe. As i share the findings of the Task Force Report today, i will also spend time explaining why portions of the budget and the legislative analyst proposal are deeply flawed. And i apologize, i think that sometimes in this in the transition to the new team, i lost the ability to share. It looks like you just gave me back that again. So i will share now. First, three backgrounds, the public or Municipal Bank is run and owned by the city, state, or a country. At the request of the board, the Treasurers Office put together a task force to look at the feasibility of a public bank. The task force included experts from various fields. Some of whom you will hear from today. Community advocates from the green institute, and the attorneys who specialize in Bank Formation and Community Development, bankers in the Public Interest from selfhelp federal credit union and Beneficial State Bank and, of course, our government partners. The goal of the Task Force Report that i present to you today was to provide thoughtful analysis of the financial costs and benefits of creating a Municipal Bank. And to outline the policy and the operational considerations should the city choose to proceed. The backbone of the report is the financial modeling that we did. There have been many excellent reports that outline the benefits of a Municipal Bank or the legal risks, but most have concluded that it was expensive and difficult and left it at that. Given the expertise of the task force, we wanted to do a rigorous quantitative analysis with the costs, timing and product mix. Aside from the models, the report also outlines the policy considerations associated with starting a Municipal Bank. Such as potential sources of funds for capitalization, startup costs and deposits. The report also includes other interim or alternative options that could achieve the similar aims of a Municipal Bank. And concludes with next steps that the city could take should it choose to move forward with creating a Municipal Bank. This report does not opine whether a Municipal Bank or a particular Municipal Bank model is the right decision for the city. But, rather, seeks to provide enough specifics to guide your future policy decisions. One of the critical tensions that arose during the Municipal Bank task force process was whether the primary goal for a Municipal Bank is to reinvest in our communities through lending, or to divest from wall street banks by building a Municipal Bank that could manage our citys banking needs. Our models contemplates three scenarios. The first is a reinvestment model which offers Affordable Housing and Small Business loans. The second is a divestment model which operates the citys banking, holds the citys cash, and would also purchase Business Loans from local banks to allow them to offer more loans in our community. Number three is a combination model that combines the social impact lending of model one with the investment and paradigm of model two. What im showing now is a breakdown of these three models and their size at breakeven and years to breakeven and the relative investment that needs to be put in. I first want to recognize that there are a ton of assumptions that go into building each of these models. And the assumptions are stated in both the report itself and the technical appendix. The length of time that a model projects to breakeven depends on a variety of factors such as expenses, revenue and growth rates. Adjusting any of these levers can shorten or lengthen the time for the bank model to breakeven. Again, were the first that we know of to attempt to model public bank scenarios with such rigor. Were very open to working with any member of the board who wishes to see how changing these assumptions would impact the model. And i also recommend diving into the technical appendis on our website appendix on our website. Now lets go back to the models. Modal one would provide a billion dollars in Affordable Housing and Small Business loans. The model provides 170 Affordable Housing loans, 60 wholesale Small Business loans which will result in numerous additional direct loans and 700 direct Small Business loans. The startup and operational costs for model one are lower than those for models two and three. Because model one does not need to maintain infrastructure to service the citys banker and not need to follow the regulator toy and compliance requirements of a bank. It will have a higher cost of funds because it must take on debt rather than deposits. Model one has the quickest path to breakeven of the three models. For the first 10 years, model one will need 13 million in operational subsidies to offset losses. However, after 10 years and their 165 million in capital investments, model one will begin to break even. And now ill turn to model two, the divestment model. This is the bank that could manage the citys banking needs such as depositing more than a million checks and processing more than 300,000 credit Card Transactions annually. Model two has higher startup and operational costs. To counter the high startup costs it includes participation lending which is basically purchasing lowrisk loans from other Financial Institutions. It could offer 200 participation loans at 5 million each. To achieve financial sustainability, model two must be 3. 1 billion in size with 460 million in bank capital. The model projects that it would take around 31 years to break even operationally for the year. In the first 30 years, the model estimates that the bank will need 990 million to maintain subsidies until it can break even. The goal of model three, the combination model, is a public bank that both divests, performing the citys banking and reinvests in the community by having Affordable Housing and Small Business lending. It has the widest spectrum but is also the costliest and the hardest to break even because the combined high startup costs and the ongoing operational costs with revenue from social impact lending. Model three must 10. 4 billion in size with 1. 6 billion in bank capital to break even which we approximate that will take 26 years. During the 26 years of losses the bank requires 2. 2 billion in subsidies. So how big is a 10 billion bank . Its big, but its not out of the realm of realistic big. The bank of north dakota is 7 billion in assets after a hundred years of operation. 10. 4 billion bank would be the 143rd largest bank in the u. S. However, as im sure that you are aware, the slowness of model threes path to profitability increases the operational, political and regulatory risks. So thats the very brief overview of the three models and, again, i really do encourage anyone interested to read the full report and dig into the technical appendix at sftreasurer. Org. And i want to caution while the models themselves require a lot of deliberation, even assuming that there was consensus on model, there are still important Unanswered Questions before a Municipal Bank could be formed. First, the task force didnt research how the bank should be governed and issues such as the number of directors, where the director should come from and who should appoint them. And a Municipal Bank needs to avoid political interference from impacting loans and bank governance. Second, the task force identified potential sources for bank capital and deposits and operational subsidies, but given the magnitude of the funds required and finding ample funds remains a huge challenge. So what can you do today or next year as you can consider how best to proceed . A few suggestions, again, all in the report. The first is to convene the city agencies that are already performing lending and Community Development work to evaluate which programs can and should be expanded and discuss opportunities for a phased approach. Start to draft the banks Business Plan. A new banks Business Plan is a primary part of an application for a bank charter or fcid insurance. Theres several Consulting Companies who focus primarily on advising the banks and creating Business Plans for banks. And, lastly, continue to use the citys purchasing power and bully pulpit to push for changes in the Banking Industry. One of the main rationals for a National Bank is to have an alternative for the traditional Banking Industry that is harmful to citizens. While being created the city could continue to use alternative means to push for changes in the Banking Industry. The city can use its purchasing power to promote Better Banking practices and to continue to implement the innovative programs such as bank on and smart money coaching which help the underserved citizens to get access to the Banking System. And i believe that you will hear from the budget and legislative analysts next and in advance of their proposal i will take some time now to reinforce that the money in the treasurers pool Investment Fund has already been appropriated by all on the board for a specific purpose. There is no money in the pool that is available at the treasurers discretion to invest in a Municipal Bank or any other worthy cause. The law is designed to ensure that the treasurer must not use the funds outside of the appropriation process. You can think of the pool as the citys checking account. Lets say that your rent is 3,000 per month. And you deposit 36,000 in your checking ash count t account toa years rent. And april rolls around and your bank says that your funds were just sitting there so we decided to invest them in a new car loan for you. Youd be frantic and livid. The pool works the same way. When you appropriate money through the budget pressure, the treasurer takes custody of the funds that you need to execute those appropriations. Our income one priority is to keep those funds safe. And so we invest them in the safest investment vehicles that exist. Mainly those backed by the federal government. Our second priority is to make sure that the city has the funds that it needs when it needs them. And in response speak thats liquidity. We cant tie up money for 20 years if you tell us that you need it in six months. Only once we have satisfied safety and liquidity do we konlt contemplate yields. The safest investments dont offer the highest rates of return but we have a reasonable rate of return to support the citys budget growth. Now these priorities arent just good management, they are actually prescribed in california law. These rules were significantly strengthened after the 1994 bankruptcy of orange county, which was caused by risks taken by the county treasurer, including investing in highrisk bonds leading to 1. 5 billion in losses. The subsequent tightening of the law by adding constraints on county treasurers and municipal investments is specifically intended to avoid similar calamities. Given these laws, it is at best dubious and unethical to use the funds in the pool to fund a public bank and that worse its on its face illegal. So thank you for your time. I look forward to your questions. And to assist me with the more technical banking questions, i will be joined by molly cohen who led our offices work on the Municipal Bank Feasibility Task force. Chair fewer thank you. Colleagues, any comments or questions . I know that it was a lot of information and actually when we first got the report it was a little sobering. But i think so is molly presenting did you say or she is here for questions . She is here for questions. Chair fewer lets hear first, seeing no questions from my colleagues or comments. Lets hear from the b. L. A. Please. So we have them joining us about their reports. So mr. Basoe you have the floor. Thank you. Thank you, chair fewer. Is the slide appearing now . Chair fewer it is. Could you make it full screen, please. Yes, i will. Chair fewer for those of us over 50. Thank you. Good afternoon chair fewer and the members of the committee. I am fred basoe from the budget and legislative analyst office. Im going to provide a summary today on the policy analysis report that we have prepared for supervisor fewer on the issues and options for consideration and analyzing of a Municipal Bank for San Francisco. The scope and objectives of the report we were asked to review the as results of the tk force report, which you just heard a summary of. And then to outline alternative models that could achieve profitability in a shorter time period with the ability to extend loans at market rate. Important we were to consider the Risk Management to address the california government code principles that miss fried outlined and to meet the liquidity means and to achieve a return on funds. So all of those were important in our analysis. Just a quick comment. We did provide a draft version of our report to the treasurer and Tax Collectors office. We also provided it to the City Attorneys office. And received feedback from both. So in terms of any of our recommendations being illegal, we were not advised by the City Attorney that there was anything illegal in our report. And one of the earlier drafts they made some recommendations that caused us to make some changes in some of the model that we have presented. But beyond that, we did not get an opinion from that office that there was anything illegal. Ill talk more about the safeguarding of the principle of liquidity and achieving yield as i go forward. I think that they covered the public bank definition so i will not go through all of these points, other than to specify that the mission of the public bank is from maximizing shareholder value. So unlike private banks, it can be intended to fulfill certain economic and social policy objectives. And as she said, it would be a separate entity, with its own board of directors, own bylaws, etc. The board of supervisors could present general direction and policy objectives, but the bank would operate independently. And state law, by the way, was amended in 2018 to allow the local Government Entities to create public banks and to invest surplus funds in public bank obligations. So theres a specific provision in the state law allowing that. A quick definitions, which are important i think as we go through this. Capitalization and funding so this is where does the money come from to support a public bank. And we refer to it as the municipal Financial Corporation in our report because we have different variances and this is a more generic term than public bank. So ill use that term now, but its the same idea. For capitalization, that is the funding that a Financial Institution receives from investors as it starts its operations. So the startup money, that also retains funds to serve as a buffer to absorb the potential losses. Every bank has to be capitalized and theres different regulations about that from the federal Deposit Insurance Corporation for commercial banks. The same would apply to a public bank. And funding is what supports the institutions lending operation. So in the simplest sense, those could be deposits received by a bank, but they are also funds borrowed through Debt Securities or i. O. U. S. So the institution issues Debt Securities, receives funding, and then turns that into loans. Well talk about both as we go through our models. And then why we refer to this as municipal Financial Corporation because of these two variants, the depository bank which is more of a traditional bank, somewhat familiar to most people i think as commercial banks are, and they create money or deposits through new lending activity. They provide full range of Bank Services such as checking and time and savings deposits. They disburse funds. They have cash and Treasury Management services. Depository banks have access to the Federal Reserve bank to clear and settle checks between the institutions and payments between the institutions. They have higher operating costs than nondepository because theyre providing a higher level of service and need more staff, more systems and so forth to do so. And theyre regulated by the federal Deposit Insurance Company and the California Department of business oversight. They have to be approved to operate. And their operations are regularly checked upon by these federal and state agencies for california banks. A nondepository institution, on the other hand, can also provide loans, but its funded through the issuance of Debt Securities as opposed to receiving deposits and providing, you know, full banking services. The payments and transactions that are cleared not through the institution itself, but through a correspondence depository bank. So it would have a relationship with perhaps one or more Credit Unions or local banks for those services. It has more limited Funding Sources compared to the depository because its not taking in the deposits from all types of customers. Generally it would have lower operating costs than a depository. Which is good news for providing loans at lower Interest Rates. And its not regulated by the federal Deposit Insurance Corporation. Back to the Municipal Bank task force, there are three options that miss freed presented and so i wont go through those again. Both the depository and the nondepository models have 5 through real estate loans, their assumption, and 2. 5 and 15 for Small Businesses. Some of the issues that we wanted to identify with the Task Force Model and then sort of use that as a launching pad for the models that we developed, and in the treasurers presentation, miss freed said that the depository models do not achieve profitability for approximately 30 years from the point of commencing operations. For the nondepository its 10 years. So its a long time span before theyre operating profitable. And theres operations when we compare the assumed operating costs to those of fic regulated banks you found that it was about double in the assumption. So all of that would mean that fewer funds are available for loaning out and loaning out at lower Interest Rates. And the passage of ab857 last year which allows for creation of public banks and made some other changes if banking regulations, it also places limits on the public banks ability to accept deposits from nonpublic entities. The task force did not assume use of the investment pool, and i think that miss freeds presentation got into their viewpoint on why that fund couldnt be used. And we disagree, and we recommend use of it in a limited way, and ill talk about that in a minute. But i think that is key to providing lowcost lowinterest loans, lowcost operations for the bank, and longterm loans for Affordable Housing and Small Businesses and other purposes. Theres a limit on Housing Loans in the Task Force Model, particularly the model 1. 0 of the nondepository, which would put a damper on the Funds Available for Housing Loans. And that impacts the availability of Affordable Housing. So what we did is we take modelh the nondepository and the depository variant. I want to say they are illus trif and obviously, they dont have to be done the way that we present them, but we present them to show what could happen, given the certain set of assumptions and the certain funding and capitalization models and what could be produced with the creation of one of these institutions. But the city could choose to put in more, less, do it in different ways, but here is a model for consideration. As i said we do assume the use of city resources. We do address Risk Management to ensure the safety, liquidity and yield points. So ill get into the details of that later. But i want you to know that were aware of those requirements and believe that the models that we are presenting address all three of those concerns. Our depository variance is recommended to be limited, but its not to be a full Service Retail type of bank, so that this would minimize the overhead costs and allow for more funds to be available at low Interest Rates for loans to achieve the social policy objectives of the bank. Our model does achieve profitability immediately, versus the long time span for the Task Force Models. And that is because they would have funding from the investment pool. Theyre able to originate loans at lower Interest Rates than the Task Force Models so we believe that would be beneficial, of course, for the purposes of the bank. So our conclusion is that both variants are feasible and they could operate profitably but we recommend a nondepository m. S. C. , because it has the advantages of lower operating costs compared to a depository bank and it doesnt require fdic approval. So its simpler to start and it would not have to go through all of the regulatory hurdles at the outset. Over time, it may make sense to convert to a depository fullservice bank, or even a limited service depository and have fdic approval and regulations. But we think that initially it makes more sense to start as a nondepository. We have pro forma analysis in our report on both models, just to briefly talk about the our preferred model which is the nondepository. It would be capitalized by earnings on the investment pool and not investment pool funds itself, but interest earnings that would be diverted, and along with general fund appropriations. These would take place in the first three years of operations, combined with our interest earnings and this would produce about 136. 2 million in Capital Funds to be used for the institution. The earnings would be on a billion dollars out of the investment pool, which at the time that we were doing our analysis had a full balance of about 12 billion and the loans under 5 for just the general fund. Again, the capitalization is the funds then that the institution would keep. It serves as buffers against loan defaults over time. Funding is a different story. Funding is as i said earlier either obtained through selling Debt Securities, in the case of a nondes tokes nondr through investments in the case of a depository. The preferred model with nondepositories, we recommend here that a billion dollars from the investment pool to be used for the initial funding for the m. S. C. This would be combined with some general fund appropriations. And over the first five to six years of operation, these commitments could, if necessary, be rapidly scaled down. We are recommending a slow rampup of this institution, with a lot of this funding initially transferred and used by the m. S. C. , but largely to buy Municipal Bonds and u. S. Treasury notes, so that it is building up its assets but this is putting a lot of that into loans in the first couple years. With demonstration projects it would make some loans but it would not be operating at full tilt for the first couple of years so that it could establish itself, have some successful projects and be building up its assets. So this also means that from the investment pool side that the funds could be returned if needed. And the 10 of funds that we are recommending, by the way, is consistent with the current state legislation as you probably know, ab310, which is proposed now at the state level to turn the California Economic Development and Infrastructure Bank into a public bank. Recommends use of the state investment pool, the pmia, that 10 of that be used for funding for the state bank. So this is at a similar level in terms what were recommending here from the City Investment pool. By year 10, by the pro forma shows that the m. S. C. Assets would be approximately 2 bill one and the Loan Portfolio, 1. 25 billion. And 750 million in u. S. Treasury notes and municipal securities. That means that theyre liquid and they could be returned if the city needed it for the investment pool. But, remember, this is a small piece of the total investment pool of approximately 12 billion. And by year 10, it would have Significant Impact on the local housing provisions and Small Business credits and infrastructure financing, whatever objectives that the bank or m. S. C. Has. The loans at that point would be more extensive and be accomplishing the objectives of the institution. This graphic is just to show how this money would be used. It shows for both the depository and the nondepository. The depository is a use that is now allowed i mentioned ab857 and it amended the state law in terms of what instruments investment pool funds can be invested in and a public bank is one of those options. A depository public bank. Unfortunately, the law does not explicitly state that a nondepository could be invested in with the investment pool. So for that reason we have recommended a the circle here shown in the middle on the bottom of the slide as a public conduit entity. So this is an entity that would sell bonds which is something that the investment pool can be invested in by state law. And then the bonds would be used to invest in securities issued by the nondepository m. S. C. So this is how this would be worked around. Ideally the state law could be amended and its something that the board of supervisors could consider is having it amended so that both the depository and the nondepository variants of an m. F. C. Could be invested in by the investment pool. But, meantime, this is the approach that we recommend to do that. Key points on how our model would work for the nondepository m. F. C. , i mentioned the phased in approach and the demonstration loanss etc. , for the first five years of operation. Its highly liquid for the first five years and after that the funds are, but not all, are used for loan purposes to achieve the objectives of the bank. It does not offer Traditional Banking Services as i already mentioned. And importantly it has a network of affiliated institutions. These could be local and regional Credit Unions, banks and loan funds and Financial Institutions. So they would provide the actual direct banking services, issue loans, this would be a good thing for these institutions as well. And it would keep the m. F. C. Out of the Retail Banking business. Which keeps its costs lower and it takes advantage of the existing institutions that already have the infrastructure to originate and to manage loans. All profits retained and reinvested would be reinvested in the m. F. C. So it builds up robust buffers to protect the citys financial commitment. This graphic shows 10year horizon for the m. F. C. Nondepository. And the assets consist of Municipal Bonds shown in the darker blue. U. S. Treasury notes in the lighter blue. And then the loan assets are shown in red. And thats what i think that you can see that after year five that block grows, so that is showing that more of the assets of the m. F. C. Are tied up in longterm loans and wouldnt be liquid, couldnt be immediately returned if needed to the investment pool. But about 750 million is what is represented by year 10 is still in very liquid form and could be returned if needed. We dont think that would be a need, but i just want to make that clear that there would still be liquid assets available. Some of the key measures for the nondepository, the earnings on its u. S. Treasury notes and Municipal Bonds that i just showed or 2. 5 , thats our assumption going into it. Interest rates on loans that the m. F. C. Is issuing would be 2. 65 . So that is a lower Interest Rate than at the time with we did this analysis and it would be available from commercial lenders. And there would be interest paid to the investment pool. So yield was one of the tenets that the treasury Tax Collectors office mentioned as being necessary in managing the investment pool. There would be yield provided to the fund lower than its current average but there would be yield provided. And then in terms of the m. F. C. S Performance with the funding levels we have put in, the loan rates that we have put in, and the return on equity would be slightly lower than the Industry Standard. The Industry Standard here of 11. 4 is based on fdic regulated banks. What we are projecting by year 10 for the m. F. C. Would be 9. 3 , so its decent. But slightly lower than the Industry Standard. In terms of return on asset and both of these measures, by the way, are measures of the profitability of the organization. So they are achieving profitability is what these measures show. In terms of return on assets, what we have projected is 1. 4 or slightly above the Industry Standard of 1. 3 . In terms of this, a Capital Assets ratio regulation that is promulgated by the fdic and we went beyond what is required. There you can see the requirement of 6 to 8 . The fdic characterizes the ratio of 8 to 10 as being well capitalized. The bank is considered well capitalized if it has that. We have a asset ratio of 14. 5 . What this means when i mentioned the capitalization of the bank and being about 136 million by year three, and going up after that because of its interest earnings, that amount relative to the total assets of the bank is the measure here. So it is the buffer against loan default or financial problems that the institution might incur. And if 10 is considered well capitalized by the fdic, we believe that the additional 4. 5 that we are recommending and have built into the model provides an even greater assurance that the bank would be safe. And we talk a lot about in the report about addressing risk and i wont go into all of the detail about, this but the risks that should be considered are the credit risks. And i just mentioned that, the high rate of loan defaults and how we address that with a high rate of capitaltoassets higher than the level that is recommended by the fdic for a well capitalized bank. We also addressed interest risks or the maturity mismatch, and you can have longterm loans, but shortterm funding. So if your creditors need their funding back immediately, and the funds are tied up in longterm loans that creates a problem for the institution. But that could be addressed. And some other approaches that i will get to in a minute. Theres also excuse me a rollover or refunding risk if the contractors demanded their full cash and didnt roll over their investments at one time, that could be a problem. Liquidity risks which are runoffs where theres a sudden urgent need to remove all of the assets from an institution, that is a risk also that the m. F. C. Would need to address. So in terms of remedies theres high Capital Asset ratio and the underwriting standards of the institution to be rigorous and consistent. And longterm lowcost funding because the investment pool can provide longterm funding that would be available at a low cost. And that allows for longterm loans to go out at a low Interest Rate. And then importantly the 750 million of funding committed from the investment pool can be withdrawn on a threeday notice. And that gets to the distribution of the banks assets that i mentioned. Credit risks first of all, its impossible to completely eliminate all credit risks. Any institution would have some loans that will default. But, again, we have designed this to stand up against a long period of losses and we put in a very high capital ratio assumption. So depending on the structure of the m. F. C. , what we have projected is that it could absorb complete writeoff of 24 to 40 of its Loan Portfolio before any losses are incurred by the investment pool. Further, its unlikely that the m. F. C. Would be exposed to default at a level that high. That would be extremely unusual. And since it will be run as a professional Financial Institution, the bankers and the rigorous underwriting standards, that would be a highly unlikely outcome. This just shows graphically what i was talking about with the different risks that are associated with different types of loans made by a Financial Institution. But, again, heres where the risk weighted capital ratios would be in our model versus what the fdic recommends for a well capitalized bank. So up to the 14. 5 level or above 20 , depending on the particular assets or the loans. The liquidity risks points on that and the m. F. C. That we have models have 62. 5 of its total assets in the form of longterm loans. This is at year 10. The surplus held in the investment pool are generally invested in shortterm liquid instruments. Though those securities can be sold and proceeds transferred to the city bank to account for any expenditures needed. Thats the current state. Using money from the investment pool, however, to purchase longer term m. F. C. Liabilities means 750 million or 50 of the i. E. P. Funding commitment and, again, we were talking about 10 at the outside of the investment pool, slightly higher by year 10. But 50 of that would be in liquid over the near term. Not available for immediately recovered. It could be recovered over time but some would be tied up in longterm loans. But on the other hand our model allows for another 750 million, the other half, to be recovered on shortterm notice. And this shows the investments and withdrawals and what it shows and if you go back in history, this is generally true for the years that we have looked at it that there is never a need for the entire investment pool to be withdrawn at any one time. So were starting with, again, with we did our analysis, a slightly 12 billion in the investment pool. And throughout the year you can see the highest withdrawal was slightly under 600 million at any one time. So again, not having the full access to a shortterm basis to all 12 million does not appear to oppose an undue risk. Based on the history of the investment pool. And what is available and not available over the 10year period from the funds that would be used to fund the activity of the nondepository m. F. C. And you can see, again, for the first five years, which is largely blue, most of the funds are available for immediate withdraw. That amount gets to be less as time goes on, but relative to the general fund portion of the investment pool, it is largely available to be immediately used if the city needed that much money, which in this case is by year 10 would be 4. About 4. 2 billion if that were needed at one time. Finally, we do have policy options for the board to consider. Briefly, to establish the funds and staff and the working group. So the development of the Business Plan for the city and municipal Financial Corporation. And the working group we believe should consider funding in three areas. Property acquisition for Affordable Housing. And we say that because the more we looked into it the cost of developing Affordable Housing is so high in San Francisco, and a way to get more bang for the buck with a public municipal Financial Corporation, we believe, could be through acquisition of housing for Affordable Housing purposes as opposed to funding new. But also to consider liability for Small Business lending and infrastructure financing. Third, we believe that the Implementation Working Group should assess the viability of developing a wholesale Distribution Network and i mentioned that before where the m. F. C. Would have relationships with local Credit Unions and banks who would do a lot of the underwriting and the loan origination work too so that the municipal Financial Corporation doesnt have to create that entire and costly infrastructure. And then finally, if the city should decide after an initial period of Successful Operation and demonstration lending projects, the sale of funding commitments, then maybe to consider conversion to a depository bank which would have some advantages, certainly. Initially as i had stated, you know, it has disadvantages for getting this institution up and running. But down the road it may make more sense to get approval from the fdic and to be subject to regulation of that institution. So that is a summary of the report. Were here to answer questions. The analyst from the project is at this meeting also. And were happy to answer any questions. Chair fewer thank you very much. Oh, my god, that was a wealth of information. I think that, colleagues, any comments or questions . Yes, supervisor walton. Supervisor walton sorry about that, chair fewer. I did want to first of all to start off by saying that i can remember years ago when chair fewer and i were serving on the board of education that we talked about the possibility of a public bank here in San Francisco and how important it was. And so i was excited upon making it over to the board of supervisors and seeing all of the work that chair fewer put into making sure that we push this space to allow us to charter a public bank across the state of california and so i want to thank her for her leadership on that as well as Assembly Member chiu for being a champion at the state level. It is i still think very exciting, even though we know that, obviously, there are some fiscal and financial implications for us as a city to achieve success with a Municipal Bank. But i am excited that we have made it this far and we will get this past the finish line for our residents here in San Francisco. So i wanted to say that. Im not sure that are we doing questions right now, supervisor fewer . Chair fewer we have one more presenter. So, colleagues, i know that you have other engagements starting at 2 00. We are on a loose quorum. So we have a couple of options here. We cheryl jacob is our next presenter. We could continue this item and have it back to answer more questions and to have a time to actually look over in detail the two reports sidebyside after theyve been presented to us. We could take Public Comment first. Madam clerk, can you tell me how many people are in the queue . Clerk madam chair, i would have to defer that to our operation staff. Are there any speakers in the queue . Madam chair, there are currently three callers in the queue. Chair fewer okay, i see that supervisor mandelman may be able to stay a little longer and i know that supervisor walton may have to leave at two, so well still have quorum. So supervisor walton, id like to have miss cheryl jacob speak first and then if you would like to ask questions so we could have Public Comment after since i know that you have to leave. Could i have hello. Good to see you, long time no see. So i just wanted to say, please, the floor is yours and thank you so much for your participation and also part of the Public Bank Task force. So, yes, the floor is yours. Thank you so much, chair fewer and the supervisors walton and mandelman for having me. My name is teshille jacob, and im a participant in the San Francisco treasurers municipal Feasibility Task force. And involved with ab857 through the California Public Banking Alliance and im a member of the San Francisco public bank. Today id like to comment on both of the reports. And as a preface in march 2019, i submitted a letter along with Task Force Members john avalos, and others which i submit for the record here. I believe that chelsea could probably the clerk has distributed that. The letter was included as a supplement to the treasurers report. In it we raised our concern with the treasurers framing and conclusion. Many of those concerns have been analyzed and confirmed by the b. L. A. Report. In my testimony today ill provide a brief comparison of the two reports that you just heard, explain why they differ so significantly, detail the problems with how the treasurers task force was structured and commissioned, and provide a recommendation for how the board should move forward with the Business Plan. The next two years are a critical opportunity to rebuild our citys budget and local economy, particularly our Small Businesses. Embarking on a public bank Business Plan now will give the city a critical tool and a measure of financial sovereignty that has greatly benefited other jurisdictions such as north dakota. So a brief comparison of the two reports. The treasurers report as you just heard described three models. One of which is a nondepository. That would cost 184 million in budget appropriations and require 10 years to break even. By contrast, the b. L. A. Report is also a nondepository. It would require a total of 80 million in general fund and surplus amount appropriations and it would be immediately profitable. In essence, the b. L. A. Model provides a vehicle for investing one billion of the general fund that is held in the investment pool that is currently invested largely in federal government securities. And provide a vehicle for investing that into the local economy. You may be wondering what explains these dramatic differences between the treasurers report and the b. L. A. Report. I mean, are we talking about the same economy and the same bank system . Well, first the model developed by the treasurer with startup and operational costs, this is partly due to the time and the lack of payment operations. So it was difficult for the treasurer staff to identify the existing and pore costeffective options. The b. L. A. Report demonstrates where the treasurers report has overestimated costs and how they are out of line with the Industry Standards. And the second reason why the costs are higher in the treasurers model is that the treasurer is relying on higher cost private debt, rather than on investments from the citys own investment pool. The reliance on higher cost private debt would severely undermine the goal of a public bank, which is to serve as a vehicle for reinvestment of the municipal funds, not to go to the private market. Next is the Task Force Report did not model a phased approach. We in our letter we recommended modeling a phased approach that would build towards taking on the citys banking needs over time. We emphasize that performing the citys Cash Management right now is not the central need. Right now what we need is Community Reinvestment. In this moment especially its Small Business recovery lending and Affordable Housing preservations. A phased approach would look more similar to what the b. L. A. Had proposed by starting with a nondepository Municipal Finance Corporation that evolves into a depository bank. And, finally, the most important reason why these two reports differ is as you know and as you have heard today is the use of the citys pools Investment Fund. As a treasurers report stated, theres a tension between the treasurers role and the Municipal Bank. It stated that the county treasurer has one overriding priority to ensure the funds in her or custody is secured and protected. Unfortunately, that affects the report analysis because it was unable to meaningfully to discuss one of the largest sources of capital available. And the problem with the way that the treasurer had framed the issue is that it makes like it sound like the pooled funds could not be invested when, in fact, we know they can, and the investor is investing 80 million through the safe, sound and local program that goes into our local banks. What the treasurers report and the b. L. A. Report made clear is that investment of funds can only be done according to the code 53601. Those funds could be take away here is that the treasurer could invest funds as long as it confirms with that code section. They recommend a conduit program to comply with that. And it could be an Agency Within the City Government to avoid a conduit relationship and to directly issue securities for purchase by the investment pool. In either case, i believe that further analysis of how the Government Code Section 53601a or e could be used to fund the m. F. C. And should be included in the work of the Business Plan working group in consultation with the City Attorney. Its worth repeating that at 11 billion, the citys pooled Investment Fund is a major source of potential funding which could be used for both initial bank capital as well as loan funding. We are talking about directing redirecting less than 10 of the pool directly into the types of activities that will jumpstart the citys economic recovery. I would like to talk now about a problem with the way that the task force was commissioned. The initial delegation from the board of supervisors was to advise the mayor and the treasurer and the board and relevant departments regarding the creation of a bank. But this left too many policy questions undecided. As a result, we spent several meetings in the task force considering the questions such as, is the primary purpose of the bank divestment from wall street or investment in community . Should it be considered a Consumer Bank serving the underbanked or an Economic Development bank. Should it deal with candidates and serve undocumented City Residents . I think that Going Forward these policy issues should be addressed at the board level prior to delegating to a new task force. The recommendations that i have and this is where i agree with the treasurer and the b. L. A. Is that the board should create a working group and hire a consultant with experience in banking. At this point the board should move forward with the Business Plan, not another feasibility study. The creation of a Business Plan group could be based on legislation introduced by chair fewer in fall 2019 and it could address should address the broad policy questions so that the work of the task force could be narrowly focused on a specific Business Plan. For instance, based on the reports that you have heard today, the initial public bank should be a nondepository model that evolves into a depository. And it should be focused on Community Reinvestment and not Cash Management for the city. And have a targeted Balance Sheet size of 1 billion and serve as an Economic Development bank that works with local Financial Institutions. And not a direct to Consumer Bank. After a time it should evolve into an a. B. A. 57 bank. With these parameters in place, the work can be much more productive and deliver to the board a final product that would allow them to move this. And the pool fund is a policy decision, that must be made by the board based on reasonable projections from a professional and rigorous Business Plan. In closing i want to share an example of the type of financial sovereignty and the ability to shape our citys destiny that a public bank could offer in this time. As we know that covid is wreaking havoc on our Small Businesses. A large percentage of which may close permanently. If we had the additional source of financing available, some of them may have been able to survive. And the bank of north dakota has often been cited as the single public bank in the country, but whats less discussed in our context is the similarities in the population size and government budget of north dakota and San Francisco. I dont need to tell you that San Francisco has a state population of about 8 sorry, a population of 870,000 people across 47 square miles with a budget of 11 billion. But did you know that north dakotas population is 755,000 people, and it is spread out over 71,000 square miles and has a budget of 13 billion. With that in mind, its use to feel look at what our city was able to do to respond to covid versus what north dakota did. In San Francisco, oewd and other city programs have provided 18 million in direct relief to Small Businesses. indiscernible and while this is a strong response, if we had our own public bank we would have been able to do more. North dakota, the fact they had their own bank allowed them to coordinate all of their local banks with the s. B. A. And as a result north dakota is number one in the country with regards to these funds for workforce. And in addition to the p. P. P. Loans they received federal funding and the bank received 200 million which was used as supplementary loans for Small Businesses. The loans were critical to keeping north dakota Small Businesses open. The point that im trying to make sure is that we dont know what the future holds for the city, but a public bank cannot only help us to create new opportunities, but to provide critical assistance in times of disaster. If we had our own bank, we have the ability to set our financial destiny in a much larger way. This is one of the promises and potential of a city bank. I agree with the treasurer and the b. L. A. s recommendation that we move forward with the Business Plan. Thank you. Chair fewer thank you very much. Supervisor walton, i know that you have to leave. So, please, ask your questions and if you dont get your questions answered im happy to continue also the conversation. Supervisor walton thank you so much, chair fewer. That was going to be my question in terms of the continuance or completing the entire hearing today. Chair fewer i think that we should make a motion to continue this to the call of the chair. Having seen two reports i think that theres a little conflicting i think opinions about the use of the investment pool also, and that it might require a hearing, a larger hearing perhaps, than we can capture right now. And so i think that, you know, i really want to appreciate all of the speakers that came too and so i want to give actually full respect and due to everything that they had to say and all of their findings. I think we are running out of time. So what would you prefer, supervisor . Supervisor walton i think that i agree, i would love to have some conversations with the folks who presented this morning and also to be able to do my own comparison and analysis with my team. And most of my questions were going to be about the differences and, obviously, everyone spoke on those differences but i would love to just more time for a complete understanding, particularly if were going to continue. Chair fewer okay, thank you very much. Supervisor mandelman, i think that supervisor walton would like to continue this conversation to the call of the chair. I will make that motion. I just want to feel you out and see if youre amenable to that. Is that okay . Supervisor mandelman say it again. Chair fewer supervisor walton is must leave us now but i think that this presentation has given us a lot to think about and a lot to discuss. I think that to give full due to all of the reports that have been presented before us and also what mr. Jacobs has also brought forth to us today to give its full due and respect, i was going to continue this item to the call of the chair. And perhaps a lot more time for more discussion and really i think that we have some recommendations on the table for the board to really digest. I will not be here in office to continue this, so i actually will be doing it for the benefit of my colleagues who are remaining and who will also take up the charge, but also for the Public Bank Coalition who has been working so hard on this. So what would you have to say about that, supervisor . Supervisor mandelman i am happy to stick around as long as you like or happy to continue it, whatever works. Chair fewer having said that, i think that what id like to do now is to people have been waiting a very long time at this committee. So lets call for Public Comment on this item on item number 5, please, madam clerk. Clerk yes, madam chair. Operation is checking to see if theres any callers in the queue. Let us know if there are callers that are ready. If you have not already done so, please press star, 3, to be added to the queue. For those already on hold, please continue to wait until the system indicates that you have been unmuted. Please let us know if there are callers who wish to comment on item number 5. Yes, i have three callers in the queue. I will queue the first caller. Caller hi, folks. I just wanted to call and to express support for all of the hard work that youre doing. I really appreciate the time that folks have put into all of this. I dont want to embarrass myself on making specific comments on the details because im not as informed as most of the folks here. But, you know, given the benefits, i think that this is a great conversation and i really appreciate your time and attention to it. Thank you. Chair fewer thank you. Clerk thank you for your comments. Next speaker, please. Caller good afternoon, supervisors. I am calling the members of the coalition. And im urging the supervisors to move forward with the b. L. A. Recommendations. And to establish a public bank. The b. L. A. Knows that san franciscans are in crisis. And the local institutions flood a public bank need a public bank that could be accountable to our community. And i ca can direct money to resources that are needed right now. Small businesses, people without jobs, and immigrants, and the health care. In a time of crisis we need action to address these local needs. A public bank is a good solution in that direction. In closing, i want to thank you, chair fewer, and chelsea for your leadership on this issue. And i greatly appreciate the supervisors support. Thank you. Clerk thank you for your comments. Next speaker, please. Caller hi, my name is kea and i grew up here and i would like to say that i recommend that and to look forward for the b. L. A. Recommendation and to start investing in our communities and i think that this is a time to start a public bank, it is really now. And we have seen how volatile wall street banks wall street can be. Theres mistrust in wall street from the public. And i just think that its what the people want. And its also a great step forward. I really believe even if there are upfront costs that in the long run youre investing in our future. And as a young person i think that is incredibly important. So thank you for your leadership and considering this proposal. Please go forward with the b. L. A. Recommendation. Clerk thank you for your comments. Next speaker, please. Caller hello, good morning, supervisors. Or afternoon. Clerks and chair fewer. This is s. F. Public Bank Coalition and important to have these hearings, a long time coming. I want to start with general frustration, just the fact that this task force idea was introduced in 2017 and didnt start for another year later and a year to complete to get to this hearing. Im not saying it to cast blame, but to emphasize that the public has been waiting and were hungry for real first steps. I want to remind everyone that the conversation really should be about how we get to a public bank, not if we need a public bank. I think that, unfortunately, a lot of the stuff in the treasurers report shows that maybe in the Treasurers Office mind its about this conversation. I urge the committee to move forward with the recommendations provided in the b. L. A. Report and we as a Coalition Support the phasedin approach, with the creation of a depository bank we can invest in marginalized communities now. And about the issues of cost, i remind people that costs we never talk about the cost of the current system, and the lost opportunities and not of having a public bank. Its not a cost, its an investment. Two very different things. I wanted to also suggest this idea floated before about purchasing an existing bank, this solves a lot the initial issues discussed. I want to say that although this has been delayed its still very far ahead than every other major city that is trying to do this. So we have a real opportunity to be a leader and to show the rest of the country how to break up with wall street. If San Francisco cant do it, i dont think that any other city can. So we can lead this effort and show the rest of the country. And i will finish by saying this isnt just about divestment, this isnt even about investment. This is about fundamentally changing the relationship local governments have with large Corporate Private Financial Institutions. If we make this fundamental change, our emergence from that will be a Financial Institution that acountable and where money is equitable and one that safeguards and protecting our taxpayer money. So, please, thank you for all of the work and thank you supervisor fewer and chelsea, you guys, were going to miss you. Theres so much work that you have done on this and really hope that we get more momentum too in 2021 as well, so thank you for hearing this. I appreciate the time. please stand by