Transcripts For SFGTV Police Commission 20240712

distortion . Just for point of clarification, i didnt hear you call my name so i didnt respond aye. But to respond, yes, i support the motion. [indiscernible]. I will call the vote again on item 11. [roll call] i vote aye. Theres something wrong with this computer. You have five ayes. The motion passes. Thank you, madam secretary. Next item, please. Number 12, action item, update on strategies to address climate risk in the sfers portfolio Climate Action plan. [indiscernible] on this item as well as the previous five, theres a great amount of information [indiscernible]. The tenor of the item is on page 37 [indiscernible]. Bill, sorry to interrupt you but we can barely hear you. Can you hear me now . distortion . The centrepiece of this item is on page 37, table 10, Additional Companies to [indiscernible]. I did want to also draw attention to theres just a voluminous amount of information in the report and thanks to andrew for organizing it all. There is a significant decline as far as exposure in the oil and gas industry relative t to e public equity indices. I also wanted to draw attention to the watchlist on table 12 and also to the engagement list on [indiscernible]. Andrew . Thank you, bill. As bill said, this report sort of includes a variety of information. One is a bit of an outline of our Climate Action plan and steps we are taking to address climate risk in the plan and our steps towards that ambition, to be a net zero asset owner by 2050 and then of course the specific recommendations around oil and Gas Companies. To just give an overview of the Climate Action plan that weve begun to flesh out in more detail, this is essentially our road map to work towards that ambition of net zero by 2050. The oil and gas component is one part of it, but, you know, as bill said, its an increasingly small part of our overall exposure, when we see climate risk manifesting in many other ways as an investment risk for us in other Asset Classes in other industries. So our Climate Action plan road map and what well be looking forward towards 20202021 really does fit within the three pillars of our esg platform overall, the active ownership piece, continuing to engage with companies around climate risk, proxy voting, supporting shareholder resolutions around carbon Risk Management, goal setting, governance and strategy around Climate Risk Management. Continuing on this, you know, investment and divestment approach, investing in strategies that are aligned with the transition to a low carbon economy, which many of our Investment Strategies are, divesting from companies and industries that we feel like have high unmitigated climate risk, like thermal Coal Companies and like some oil and Gas Companies. Well continue on the manager and Due Diligence monitoring piece building on that work that weve done with our public Equity Managers to engage and understand how theyre thinking about climate risk. And continue to apply metrics, analytics, so its not just the Carbon Footprint but were now trialing different tools that can measure alignment, corporate alignment with the Paris Agreement. We can understand which companies are invested within in and announce plans that are aligned with the objectives of the Paris Agreement to decarbonize by 2050, which ones arent, these different scenariobased tools. So well be working to apply those to the portfolio over the next year. And then, you know, where opportunities for policy advocacy arise, we certainly will do so when thats appropriate for us to do that, but certainly we will partner with other asset owners, many asset owners, in addition to governments, corporations, are working towards net zero, and we need to be part of that dialog and collaboration for us to be successful in this goal. So we will continue to build out those frameworks and those analytics, provide an update next year around that and try to set a suitable target for 2025 or 2030 in terms of our overall Carbon Footprint, something that is ambitious and fits with our overall ambition, but is something that is attainable and realistic. So, you know, the Climate Action plan really, as i said, looks at this range of Climate Risks across sectors, Asset Classes. But we do continue to pay close attention to the fossil fuel sector, just given its contribution overall to climate change. Its been an interesting year for the sector, right, to say the least, between the oversupply and demand disruption due to the pandemic, sending oil futures negative for a period, to rebound a bit in the second half so far this year. But its been a tough year for the sector. The industry, oil and gas, consumable fuel industry through september 30th had negative 38 return on the year versus 10 for the broader imi. I think case in point is sort of exxonmobil which has fallen out of the Dow Jones Industrial index for the first time in i think almost 100 years, there was a period over the last couple of days when chevron overtook exxon as the largest market Cap Oil Company in the u. S. For the first time, exxon is no longer the Biggest Energy company, nextera, the largest producer of renewables, is the Biggest Energy company by market cap. Just a lot of turmoil. We tried to prioritize some commentary in the report of different views on what may be next. In the near term, i think, assuming the reopening occurs, that production cuts have been effective, many people are calling for a rebound into 2021, 2022, potentially even, you know, depending on how production cuts, how drastic theyve been for even the sort of super cycle of significant price increase over the next couple years. On the other hand, b. P. Has said Peak Oil Demand within 2019, they in their energy outlook, two of the three scenarios they outlined had a 2019 peak of oil demand. So it remains to be seen. We continue to look at this closely. Like most of our peers, we continue to have some investment in the oil and gas sector. As bill said, thats small. Itits less than last year and its about a quarter of what it was five years ago. So at 108 million total in the public equity and fixed income portfolio, this is a really small absolute exposure. But something we still continue to apply the transition risk framework to. We continue to engage with these companies. And i think the last year or so has been really instructive as to why engagement with oil and Gas Companies is so important for the climate future and the global future. Given the commitments that have been secured at Companies Like shell and bp, totals, rexol, many Utility Companies these are commitments by these companies i can pretty confidently made would not have been made if we had Institutional Investors at the table working with them on these commitments and remaining invested and these companies having an Investor Base that sees a future and a pathway towards decarbonization, reimagining of a business model. So i think this just really highlights the importance of maintaining a seat at the table where there are companies that are thinking about their strategy in the future. Bill already highlighted for you table 10 on page 37, which is the full list of recommended oil and Gas Companies that we identified using our framework and applying that, similarly as weve done in 2018 and 2019. The framework identified one Additional Company this year, apache, that were recommending adding to the list of 10 current companies. Were not recommending removing any of the companies from the list. Two companies did improve according to one of our metrics in the framework but were recommending to actually see sustained improvement over time before we may think about recommending removing from the restricted list. And then theres three other companies that have actually fallen out of the universe due to either bankruptcy or being delisted, you know, having a share price below 1. But we recommended retaining them if they issue debt or if their share price does recover. The overall universe we looked at also really shrank this year by almost 25 . It went down from 153 or so companies to 114 companies, and again, this is bankruptcies and other things so the industry is certainly shrinking our exposure, but well continue to apply this framework and take action with engagement, you know, based on the criteria that we outline. Were recommending a list of 11 companies for engagement activities where we have more meaningful equity, Long Exposure to those companies. Many of those companies are ones that we are already in dialog with, are taking steps and being responsive to shareholders around Climate Risk Management plans, but weve added a few new companies to that list and we will continue to work on engaging with those but also opportunities to engage and support engagement with a broader list of 24 companies as they arise in the future. So ill pause there. Happy to, again, answer any questions either on the Climate Action plan or the list of companies. Commissioners, are there any questions from action item are there any questions of andrew on either the Climate Action plan or the list of companies that hes recommended . If not, then i will then ask for a motion. This is an action item. I just want to recognize andrew again in his involvement in this report to include the results. So thank you distortion . Ill echo those thanks and ill make a motion to adopt staff recommendations. Thank you, commissioner casciato. Second. Commissioner driscoll with a second. Yes, i do. Madam secretary, please open the lines for Public Comment. inaudible . For those already on hold, please continue to wait. Moderator, are there any callers on the line . Madam secretary, there are two callers on the line. Thank you. Caller, please state your name and you have two minutes within which to speak caller thank you very much, madam secretary. Im from fossil free San Francisco. As i said earlier i really do appreciate all the work by andrew. And in only two minutes, i have to cut the pleasantries. The staff report says things like, quote, as of june 2020, we have less than half the amount invested in publicly traded oil and Gas Companies than it did the year prior. Unquote. It does not indicate why. That is unbelievable to me, truly, and ive been watching you guys for six years now. So far today ive seen the fiduciaries in public make Investment Decisions on items 8 through 11 without considering your own positions and exposures and counting hundreds of millions of dollars in losses in item 12 without even questioning it. The value of your fossil fuel stocks by dropped by over 400 million since i started coming here. How much of that is from your manager selling assets and how much of that is loss of value to the fund based on your inactions and youre ignoring reams of data and experts brought to you. That data is not presented and it makes me suspect that they dont want to present for the beneficiaries and the city that theyre talk has resulted in material losses that will not only affect the grotesquely excuse me, that will not affect really anyone on this board or in this room. We have done a back of the envelope that i think over 300 million of losses have occurred from your inaction, and now that the public equity are down to just over 30 seconds. Thank you. You should focus on applying the same iterative framework to your own investments that you always told us not to talk about. It shows in your Natural Resources and despite discourse at the time, staff has made significant investments in the energy sector, likely primarily oil and gas, and that needs to be included in everything that we heard today as well. Thank you. Thank you for your call. Next caller, please state your name. You have two minutes within which to speak caller hello, commissioners. Im jeremy pollock, speaking here as part of fossil free San Francisco. I first spoke to this commission about this back in 2013. I was a single man. I was an uninvested city employee. Im now married. My child had his first birthday. Im an invested city employee. My future and my sons future is in this Retirement Fund and its just really depressing to look at the charts of what has happened over the last seven years of your inaction and tiny little steps on divesting from this sector that the science is clear, the economics is clear, had no future, and the risk didnt justify holding onto these stocks. You know, i just want to ask you to please shut this barn door before these last stragglers get out. I think ill second everyones compliments to mr. Collins and his excellent work here. Hes developed a great model for evaluating carbon risk. But i dont see any analysis of how that corresponds to performance. And i think this report doesnt give you the information you need to make informed fiduciary decisions about these holdings. Commissioner stansbury in the past has asked for these reports to include analysis how these companies are we losing or making money from these divestments . In your current list, i dont see how they perform restricted to perform. If you look at exxon and chevron, these are actually candidate to divestment companies that have not committed to carbon neutral. They have lost 12 to 15 percent over the last year. You cant identify Conoco Phillips that lost more than 20 that you continue to hold. The report talks about energy is the worst performing sector, 2018, 2019, 2020. Sorry, time has passed. Thank you for your comments. Moderator, are there any other callers on the line . Madam secretary, there are no more callers on the line. Thank you. Hearing no calls, Public Comment is now closed. Thank you, madam secretary. Moved by commissioner casciato and seconded by commissioner driscoll. Madam secretary, roll call, please. [roll call] thank you. Five yeses. Motion passes. Commissioner bridges . Thank you, madam secretary. I would like to thank andrew for his comprehensive reporting on our esg investing. Its a lot of summation, a lot of details, and i know a lot of work has gone into it from your team. So we are very appreciative. So thank you very much to the Investment Team for giving us all the information and data we needed to make an informed decision. Thank you, andrew, to you and your team. Thank you. Madam secretary, next item, please. Thank you. Item number 13, discussion item. Risk review for sfers total plan. Board members, good afternoon. We do have one more large item to walk through. Its an important item. This conveys our risk exposures across the plan. Our primary active and absolute risk to our exposure in technology, health care, active management. Anna and i are going to share this item. Theres an extensive powerpoint presentation. There is also some in the word document. Anna, if you would pull up the powerpoint presentation, we will walk through it together. Certainly. I will just start with a few comments that this is a total plan review. This is hopefully you will have a view of the total exposures and concentration for total plan rather than one recommendation than the other. These are the largest key risks in the total portfolio. And we also examined whether we were compensated for those risks. I also would like to start by noting that similar to esg items, this is an item that is an overview for Risk Management as per its. So its an annual update on the Risk Management. We will talk about the overall Risk Management framework once i pull up the presentation, but this is the annual report. We also would like to highlight that Risk Management is not an exercise by just bill and myself. Every member of the Investment Team is involved and every member of Investment Team has contributed to this report, and i thank everyone in the Investment Team. Special thanks for alo martins who put together the power point and made it much more readable. I also would like to acknowledge our partnership with multiple Risk Analytics providers, including names . You will see all of the and names . All of them contributed significantly to this report. So let me see if i can share the report. Are you able to see . Good. Hopefully we can. So as i mentioned to you, the comprehensive Risk Management framework has three main pillars. Its to review Strategic Asset allocation that is coming up next week and weve actually been working on it throughout this year, and we present annual updates. Liquidity management that we covered expanse civil in the beginning of this expansively. There was dislocation due to covid, and measurement and monitoring of key risk drivers for the total fund. This is what well present in review today for the total plan and etf if we have some time. Quickly we will go through risk performance overview. We will spend the bulk of todays presentation on the exposure analysis, highlighting key geography and sectors, understanding whether we were paid for those. We will talk about two different ways to assess leverage in the total plan. And well also cover core exposure for each asset class. And we will conclude with [indiscernible]. There are dozens of different ways we will look at the portfolio and exercise scenarios in historical stress tests and Single Market factor. So lets start with the risk and performance. On slide 4, very quickly, i think what i like about this slide, less than 25 years ago we were only 5 billion. We are now over 28 billion. And as we look at the Asset Allocation, next week, i think were targeting how is the plan going to will look like when its a 40 billion plan and its the Asset Allocation and the business model, as bill mentioned. You will see that theres a similar view in the weights, not the capital allocation, and you will see, if we zoom in on the last five years on page 6, that over the last five years, a lot of innovation in the Asset Allocation, increased allocation to return, private credit and decreased significantly decreased allocation to public equity from 50 to actually at the end of march we were at 31. Id like to quickly read to you the risk allocation, not just we do plan to be compensated from taking those risks. Wed like to i would also like to highlight the treasuries are truly diversifying, the contribution to risk, and all other Asset Classes are diversifying [indiscernible] the capital allocated to it. On the bottom chart, the thick black line that says 12. 2 , thats the estimate of the total volatility, annual volatility for our portfolios based on the policy weights. And i think thats a good gauge. We will present other estimates next week from both wiltshire and an analysis, but i think its a good gauge of where we are and its a good way to think about the risk appetite, 12 . And as you see in the analysis later on, 12 annual expected annual volatility is approximately in line with a 70 30 portfolio. So a little more equities than the 60 40. Here we outlined what i just said, that if you review growth assets of public and private equity, we see that 33 on the top right chart, 73 of risk distribution comes from growth assets. Similar analysis for the current Asset Allocation, id like to highlight that we do while we do have a bit more in public and private equity, we also have a 3 allocated to cash, to compensate for the volatility, expected volatility, and be prepared for escalation of the capital [indiscernible]. Quickly here, whether diversification actually works, and you will see from this chart annual returns, thats what youre using, the annual return from each asset class, the red diamond is the total for that year. Its calendar year, not fiscal year returns. But the core thing is you will see the dark blue indicating public equity drives the performance. As we said in expected volatility, we see that the actual realized volatility mostly came from public equity. Its also worth noting that even though we expect quite a lot of volatility for private equity, that has not been the case. We havent seen much of the volatility or certainly not to the extent of the public equity in the last 20 years. Similar results im going to speak to those. So the next pages examine one, three, five, tenyear and the performance and risk. And i highlighted here the annual volatility. Its interesting. Even with covid and one of the largest market dislocations, oneyear volatility is only 8. 2 . If we compare it to what i said of the risk appetite, 70 30, its about its almost twice that 15. 2 . And we also put mean public db over one billion, its one of the peer analysis, and they have much higher volatility as well as 12 . So that estimate that we looked at typically was an at typically was an here what this indicates is that our these are rolling 20year periods since once it goes back to 1989. And so what id like to point out here is that our rolling 20year period, so long period of time, 20 years is a long time, is that our 20year returns really for the first time in recent years have fallen below 7 . Theyve fallen below 7. 4, which is our current required rate of return and its been below 7. 4 for the last couple of years. 20year return right now is 6. 3 or 6. 4 . So quite a change. I would also like to note that in 20 years ago, in 1999, the assumed rate of return per the actuary, it may have been name , i dont recall who it was, 20 years ago the assumed rate of return for the next 20 years, from 2019, or say fiscal year 20192020, the assumed rate of return was 8. 5 annualized. Well, our actual return over that same period has been about 6. 3 or 6. 4. So its [indiscernible] when you compound that difference over a 20year period. And with that, we can turn to the next unless there are questions, we can turn it other to the next section, which is the exposure analysis of the plans risk exposures. Thank you, bill. I will start with the country exposure and highlight that the largest country concentration is in china. We are 7. 1 overweight on china, which is a large overweight, largest country overweight. We are also before i move on, id like to make sure that this overweight is calculated versus the benchmark that we use for cash overlay, which is 68 msci equity and 32 u. S. Bonds. So its again, its very close to that kind of risk profile for the total fund. But we are a little underweight united states. We are substantially underweight japan. And across europe, we are underweight germany, and i dont see [indiscernible] and the u. K. Next, page 21 is a very important page because thats where we, both on the sector and country exposure, these exposures are intentional and we will examine whether we were compensated for this key risk drivers. Here we could see were very large overweight on the information technology. We have 23 of total plan assets are invested in i. T. So almost a quarter were getting close to a quarter of plan assets being invested in technology. And thats mostly in public and private equity, but we do have sector exposures through debt as well. The next largest concentration is in real estate. Again, more than half of it, 10 , comes from our direct Real Estate Equity allocation, and the rest comes from real estate debt, either from liquid credits through mds and cmds or absolute returns where its mostly structures, credit, and we also have some of it in private debt. The next largest overweight is health care. Its very intentional. You will see that it is highly profiled, specifically in public and private equity but also have some of it in debt, royalties, specifically private credit [indiscernible]. The underweights are in financial and utilities and materials and industrials. So a lot of color on page 22, but id like to highlight, just look at the bottom of the chart and look at the evolution of our concentration in technology. Five years ago, sfers invested 12 of total assets in i. T. Now its 23. So almost double over the five years. Now, bill as bill outlined in the staff memo, the Technology Sector is broad and its massive. It includes software and hardware and semiconductors and securities and data and Data Analysis and fintec, its brought and growing. As you will see in the presentation next week, the we are big deliverers in technology and innovation, and again, this is an Intentional Growth and Intentional Growth in the overweight of the i. T. Now, this slide, let me walk you through it because its important to understand how we approach the answer to the question were we compensated for our [indiscernible] in health care and technology. Before i let me just flip to page 33. This is public equity sector exposure, and you can see 7. 6 overweight in technology. Very big overweight in technology. And health care overweight 5. 2 versus the benchmark. So this was very intentional, large in i. T. And health care in our public equity portfolio. Lets see if we were compensated for this type of tilt. Back to page 23. Page 23. So this is whats called [indiscernible] Sector Performance distribution. Our colleagues helped us over the time horizons. I will tell you that i have seen in my life a number of performance attributions. Ive never seen positive numbers across the board. Its amazing. Now, what is it that we are looking at . We are looking at cumulative active return. So this is the return over msci global benchmark. Cumulatively over the years. So lets focus on five years. Over the five years that i said that we increased our allocation significantly to i. T. And health care, were we compensated for that . So if you look at the bottom row, overfive years, the cumulative active return, the outperformance over the benchmark for first public equity portfolio is 11. 36 , the numbers are here in percentages. Thats quite substantial. More than half of that comes from two Sectors Health care and information technology. Now, lets open up say health care. The active returns, or cumulative return over five years for health care is 2. 43 . And its interesting that if we were to invest just in health care index, so we were in this sector and we put all the money there, the sector outperformed msci equity. So we would have it would have made us 87 cumulative over five years. But the managers that we selected added to their stock pick, through their stock, specific stock investors, another 1. 65 . So that tells us that not only did we pick the right sectors to overweight, we also benefitted from active management within those sectors. We selected managers that added through stock through their Stock Selection acumen. Similar for information technology, and that is interesting that its consistent through all time, the forward time horizon. As i mentioned, the health care and technology overweights are mainly in public and private equity. Lets see similar analysis for private equity. I apologize, the format is different because the data comes from a different system. This is thanks to our partners at askia, formerly name . Again, lets pick five years. Here session the internal rate of returns, the i, rrr over five years. Versus cambridges health care backbench, 14. 6. So again we benefitted from selecting managers in health care. Similar in information technology, our Team Managers and here this is not just the managers, this is from bottomup investments in technology delivered 16. 3 versus cambridges benchmark of 16. 1. And the last point that id like to make on this page, if you look on the bottom row, pe total portfolio, the irr is 14. 2 , which is lower for both it and health care. Again, that tells us that the tilts toward i. T. And health care benefitted that portfolio. Next we move to our geographical tilt. As we mentioned, the largest geographical tilt was in china. Here we define china even broader. Well define it as Greater China, including hong kong exposures as well as taiwan and macao. So if we include Greater China exposures, then 11. 2 of funds, of total fund, is invested in Greater China. This is a bottomup analysis, so we do include global managers that Like Companies in china. Or its close to 2. 9 billion of the fund is invested in Greater China. Now, were we compensated for those . Again, most of the china exposure, as bill covered previously, came from public equity and private equity. So here we highlight that our china managers yeartodate delivered 17. 6 . By a wide margin beating any indices. So we were paid for our china tilt within public equity. Now, private equity china now, its very new exposure for us. Its about 5 years, i think closer to 4year average exposure, duration on our portfolios. Even then, the yeartodate irr of china managers is 20 , well over total which is 16 and cambridges china benchmark is 19. So we have covered three largest key exposures and concentrations within total fund i. T. , health care, and china. The last one that id like to highlight is the exposure to active management. Ill present two measures of active management, and as weve seen that weve benefitted from active management increasing active management, the measures that ill present are looking at our public equity portfolio. So receipt now wha right now whg at is a tracking error, thats expected volatility of active returns, returns over msci benchmark, msci equity benchmark. And we measure that volatility here using an analytics kit. Five years ago that estimate was so the standard deviation of active returns was about 57 bips five years ago. Now it is 300 bips. So more than five times. So over the last five years, we increased active risk by this measure, by the measure of [indiscernible] in our public Equity Portfolios by more than five times. We look at another measure of active risk. Its called active share. That is measuring how our portfolios from this benchmark. Or the other way you could say is, what is the overlap with the benchmark . Five years ago, active share was 32 . That means that 32 of positions of position weights weigh different from the benchmark and 68 were the same as benchmark. So we were quite and 32 for a portfolio of two dozen managers is not a bad measure. But over the last five years, we increased active share of our public equity portfolio to 52 . That means that more than half of our positions are truly active and different from the benchmark. And as i mentioned in the brinson attribution on page 23, we were paid for that for taking that active risk. Unless there are any questions, i will move on to two measures of leverage. Could i just make a quick couple of comments beginning on page 23 . Ill just be real brief. So Board Members here, lets look at the fiveyear column. So on highlighted there, our current weight in public equity to health care is like 17 . But the weighted average over the last five years has been closer to like 13 or 14 . But look on the total column, the 2. 43 as a percentage of 11. 36. That Means Health Care has been 13 or 14 of our exposure, but its been about 22 of our excess returns. Thats really, really good. In addition to that, technology on a highlighted its current weight is 27. Its about doubled over that time, over the last five years. The weighted average of about five years is maybe 20 or 21, Something Like that. But you can see here it constitutes just under 34 of our excess returns. So even though we have a large weight to both sectors, weve outperformed by even more than those large weights, by a material amount. And then one thing id like to point out on page 24 is looking at the Cambridge Technology benchmark. The Technology Benchmark for cambridge includes a whole roster of Venture Capital managers that we dont have access to. Really, any public plan doesnt have access to. And those managers are elite. I dont know exactly what their returns are, but from word of mouth and conversations with peers that are in the e f and family office, their returns have been really, really good. So i think if you look at this on an adjusted ill ask cambridge if they might be able to put a composite of whats investable for us, is i think in technology we have outperformed by more than this line item appears. And just as anna highlighted, here we have 51 of our private equity portfolio in technology, another about 16 or something is in health care. But look how much those two sectors have outperformed the rest of our portfolio . The rest of our portfolios are in 12, are investments in technology have earned more than 16 and in health care theyve earned 22. Our sector weight and our decisions, manager decisions in both sectors have added a ton of value over the benchmark and then the same would be about china which [indiscernible]. Thank you, anna. Back to you. Okay, bill. Now well cover two estimates of leverage. I really dont like saying leverage from growth and net exposures. These are really an assessment of gross and net exposures. Gross exposures cover every bit of exposures. Theyre not volatility adjusted but they cover currency [indiscernible] and any derivatives that we have and any of the shortterm positions that we have, all of it is here. And the reason were doing it is to make sure that to see if we count everything, what is exactly we are putting to work and you will see that in public equity weve increased so our gross exposure is 48 of the total plan while the net is 38. 49 versus 38. Private equity, we have a little bit more, and i expect that comes from fx hedging on the growth exposure. Real assets, not net and gross, are the same. Absolute return is the largest, because thats where we have loans derivatives. By the way, these gross exposure calculations by and large do not include netting. And so when we look at it on the total fund, i think its an interesting way to look at it and saying that the net exposure is a little higher than 100 , so 106 , and the gross exposure is less than that. So this is one way to measure risk, is how much money is put to work in different instrument. Its not apples to apples, but its one good measure. And then we tried to assess a different leverage of the fund in a different way, calling it an economic leverage. And here the public equity is 100 because every dollar is added invested in public equity is actually invested in a company. Private equity here Venture Capital do not use that much leverage, or not at all, but the buyouts do. So most of the leverage comes from the buyout allocation. Real assets, again, the Natural Resources we didnt assume much leverage but the real estate, which is about 60 of the fund, 60 ltd, loan to value. Absolute return, again many thanks to our partners, Asset Managers who tracked this diligently, polling every manager for their estimates not estimates but the actual leverage numbers, Balance Sheet leverage, so the estimate is 418, and similar, private credit is a conservative 30 leverage. Leading to the total Fund Leverage estimate here on less than 1. 5 x. Next i will quickly cover the its key exposures for each asset class. Again, here i mention that for public equity or exposure geographically is china, 11. 4 versus 3. 7. Were also overweight united states, underweight united kingdom, japan [indiscernible] germany. Sector, recovered that previously. Largest overweight in i. T. In health care and underweights in energy, materials, real estate, and industrials. Im not going to cover treasuries. I joke with vicki that this is where i expect absolutely no surprises, retract treasury index to the bit. You could see that. Liquid credit, however, is where we take quite a bit of credit risk, intentionally. And ill just draw your attention to, first, the duration is lower than the benchmark. The bench is u. S. Bloomberg averages bond index. So 5. 1 years for sfers liquid credit portfolio versus 6. 3 years for the ags. But look at the yield to maturity. 6 expected yield to maturity for liquid credit versus 1. 3 for the ag. And that comes from a strong tilt to credit quality. If you look at the average credit quality s p equivalent is doubleb plus versus doublea minus. This is only 6 notches down. So we took quite a bit of credit risk, but we feel that we are compensated for that with a 6 yield to maturity. A lot more information the private sector i cover quickly because theres been a detailed overview during the july presentation by both our private equity and real assets as well as cambridge. So here i just will highlight that our private equity exposure is 51 in i. T. So more than half of our private equity exposure is in technology. And also ill mention that we have more than a quarter in asia pacific versus 15 for the benchmark. Private credit, id like to highlight how diversified we are in Different Industries on the direct lending as well as others where we find different ways of either Real Estate Investments or other private credit opportunities. Real assets, real estate, again, very diversified. A bit of underweight in office and apartments and retail. Thanks to blackstone, you could see that and here were comparing to [indiscernible] index which is different. Were not able to get the data from fund to fund. We could not look through the benchmark. But here one thing that i will highlight is that we take more risk and we have larger allocation in Credit Strategies within our absolute return portfolio. Again, this is intentional. And we have strong underweight in equities to make sure that we bring a diversified return from absolute from the absolute return allocation. That concludes the exposure analysis, and im cognizant of time. Ill briefly just highlight the stress test and Scenario Analysis that we do, and i invite you to ask bill and i if you have any questions. Page 45, we actually run hundreds of stress tests. Here we highlight core factors where we stress msci equity, which is the Global Equity index, and bill will go through that. please stand by . Se stand by not as quite as large of variability over the last one, three, and five years, but it has been positive, so we have been compensated for taking that additional risk. Yes, we have. The question is, is it efficient enough . This is the issue of the Asset Allocation and the Security Market line. We keep talking about more efficiency. I think we all could throw in more mixes. Like, one of our managers trades in, i think, 160 different markets as he pursues the perfect, most efficient portfolio. Im not suggesting that we should do that, im just trying to show that if we keep pursuing efficiency, if were taking our eye off total return, i think were going to miss something. And im going to try to point this out two different ways. One, the way it is phrased on i forget which page it is, but the statement is staff objectivists who have greater returns than our peers. Its a great objective, but i dont offense, i dont agree with that as our objective. I think our objective has to be what is the rate of return we can achieve with the amount of risk we want to accept with all of the constraints and restraints that we have on us. Commissioner, i think youre absolutely right. I think thats a great idea. So by the way, under the word summary at the top of page 9 is where that sentence is. You said today, youre looking for some direction from the board on what to do or not do. I think the longterm volatility was 8 or 8. 2. Yes. That was the result. Okay. Going back to the last assess allocation mix we adopted, after many months of study and work by you, our Investment Teams, and the cmac, the allocation mix we adopted, you want to guess the mix we adopted . Im going to guess 13. Good guess. Bill, we adopted 13. 5. Were trying to show our stakeholders and members that were willing to reach out to accept the best risk. Im not trying to dismiss our peers, but what can we achieve, and then, weve got to convince the Mayors Office or budget to let us have them. I think theyre all great points. Fantastic. Thank you. That concludes my comments, commissioner bridges. Thank you, commissioner driscoll. Are there any other comments from other commissioners at this time on staff plan recommendations . Were happy, and i see you next week, so maybe at that time we can try to poll the board on their risk constitution . I was going to ask you, is it possible, i havent seen the total agenda, so we would roll this into that . I think so. I think we should. We should find a way to do that. Okay. We can talk about it offline. You can talk with us offline about that. Yeah. This was a discussion item only, so are there any questions from other commissioners about sfers and the terms to the plan . And bill, we can follow up before next week, as well. Okay. Any other questions or concerns . If not, well open it up. This was a discussion item only, but we can open it up, the lines, to Public Comment. Clerk thank you. Callers, if you havent already done so, press star, three to be added to the queue. Those of you who have already done so, please wait until the system indicates you have been unmuted. Operator, are there any callers on the line . Operator madam secretary, there are no callers. Clerk thank you. Hearing no callers, Public Comment is now closed. President bridges . [inaudible] and well do the follow up and talk to you afterwards to see what we can do for presenting this at next weeks meeting, as well. I know you put a lot of time and effort into this, so thank you very much. Thank you, commissioner, and thank you, Board Members, for hearing this item. Madam secretary, next item, please. Clerk thank you. Item number 14, discussion item. Chief Investment Officer report. Thank you. Commissioners, ill be real salient. Our report lost 77 investment points. It resisted the decline last month, as it has done pretty well in every month except one. Except for march, the downside capture was that. Provide equity up, you know, 12 private equity up 12 . Its been backed by a very strong i. P. O. Market. Public equity has also posted a very strong rebound, record setting rebound, actually, and is now up about 9 for the year. Where we have major tilts in technology and china, theyre up about 15 this year. You heard me comment about Natural Resources there. I coudo have some comments the at the bottom of page 20. Asia alts recommended an allocation. Blue torch, which is a new relationship for us, credit strategy, the board approved 15 million last month, and it did close at 15 million. In june, the board approved an allocation of 75 million to their Flagship Fund as well as [inaudible] fund. Good news today is we just did receive an allocation for the 50 million in the Flagship Funds. [inaudible] one of our Flagship Investments in the life science phase, very difficult capacity here. We did request 75 million. We received 50 million. That was primarily because of our going back and forth earlier in the spring excuse me, yeah, early spring, march, april period about just where we stood with regards to liquidity concerns and our capacity, and so, you know, that may have been a fallout or a little bit of a casualty, so less an learned for us, for me, for our staff. All of us on the board, as well, for planning, pacing schedule, and a commitment, and being able to honor that across all foreseeable forecast conditions. Real quick, managers under review, please note the additions to the item. If the board would like to learn more, please contact myself, pert, or hahn. Were right about at the center of where we thought we would be. 1. 6, and median allocation was 1. 95. Strategy updates on page 6, this completes the cycle that youre hearing this year. He just heard the e. S. G. And Risk Assessment items. And finally, we have some important meetings coming up. We have an investment meeting coming up next month. I do want to take a moment to thank the board you heard about orby med. Its one of our very largest relationship in the life science spaces, both private as well as health care royaltys. And matrix, performing something around 20 or 30 so far the first eight months with our relationship with them. The Board Meeting, quick note, on page 7, its not november 11. November 11 is actually a holiday, veterans day, and so the Board Meeting has been moved to tuesday, november 10. Last item, i am thrilled to announce the hiring of bob doe. Bob is our inaugural manager of investment operations. Youll read his profile. Bob brings experience. He managed investment operations for a very large Investment Platform and also managed investment operations on behalf of on state street for calstrs, and calstrs raved about bob. Bob, welcome to sfers, and youre well come to say a few words. Obviously, im very excited to join this family and very excited to be a part of my first Board Meeting. Ive been a part of management operations for the better part of 19, 20 years, both the custodial and assess management side. Im proud to bring my experience and knowledge here. Mainly, related to what i think kind of the three things ill be focusing on really is what i kind of call proper location, control, and processes, so looking with the team to make sure that everything is square our processes belong where they are, we have controls in place. And then, what i call is looking for places that we can have efficiencies rgs right . Where we can look at our systems and auto mamation where can be better where we are, get better at data and technology and definitely want to work to identify those. And then really, just working with ourselves, our vendors, and our peers to identify industry best practices, to make sure were really at the forefront of building out policy, programs, and practices. Were looking to be very up front in the way we invest and managing a list of the markets that we go into. And i want to shuck sure, on the investment make sure, on the Investment Opportunity side, that we do that and we dont fall under. Definitely looking to really build out a team and be very cognizant about how we build it out. Like myself, it is going to be the inaugural person, but i am going to be looking to build out the team and how we move into the future. We have 20someodd investment professionals who have been waiting anxiously for your arrival. No pressure. To wrap this up, we do have two recruitments pending. We do have an analyst to support justin and an analyst to support ana. Justin and ana have been here alone for six months. And special thank you to their work. Theyre all very important items. We look forward to seeing you next week at neex weaks meeting. Science and tech and Asset Allocation are important items. We look forward to seeing you next week. Board members . Members, are there any questions on the c. I. O. Report . This is a discussion item only. If not, thank you, and we would like to welcome bob, as well, to sfers, and look forward to working with him. So welcome. Madam secretary, at this time, if there are no questions or comments on the report, well open up the lines for Public Comment. Clerk thank you. Callers, a reminder to press star, three to be added to the queue. Operations, do we have any callers on the line . Operator madam secretary, there are no callers on the line. Clerk thank you. Hearing no public callers, Public Comment is now closed. President bridges . Thank you, madam secretary. Next item, please. Clerk item 15, discussion item. Deferred Compensation Committee report. President bridges, i would suggest that you accept this report as submitted. These are for the last three deferred Comp Committee meetings that date back to march, august, and the most recent one in september. You were chair of that committee for one of those meetings, and commissioner casciato was chair for the other two, unless youd like to walkthrough what took place, but this is the minutes for the three Different Committee meetings. Thank you, mr. Peters. Commissioner casciato, is that okay with you . Do you have any comments or anything to add to that . Do you have any comments . I have nothing to add to his comments. Commissioner casciato . Commissioner casciato . Hello . Hes not on . Hes not he cant hear us . You can hear us, but we cant hear him, so maybe we can take the report as submitted. We can take the report as submitted. Hes nodding his head. Okay. This is discussion item, and commission, we will take the report as submitted. Are there any questions from commissioners on the report as submitted . Again, this is a discussion item for the deferred Compensation Committee report. If there is no discussion, we will take the report as submitted. Madam secretary, at this time, if you could open up the lines for Public Comment. Clerk callers, a reminder to press star, three to be added to the queue. Moderator, are there any callers on the line . Operator madam secretary, there are no callers on the line. Clerk thank you. Hearing no further callers, Public Comment is now closed. President bridges . Thank you, madam secretary. Next item, please. Clerk item number 16, discussion item. Deferred compensation manager report. Good evening, everyone. Thanks for your time today. Im here to present the deferred compensation management report. In the interest of time, i can just briefly go over some of the highlights of the attached report. Attached is the sfucp deferred compensation report. I wanted to provide you with some more updated numbers as of the end of last month. So as of the end of september 2020, weve had an aggregate total of 55 coronavirus related loans issue for a little over a total of 15. 1 million. Weve had a total of 542 coronavirus related distributions, for a total of a little over 18 million. Next, i did want to speak on a participant issue that arose recently. We were made aware of an issue that a participant had when they were setting up a withdrawal. I wanted to let you know of the situation and the steps that we have taken in response to this. In case you werent aware, there was a participant that encountered some obstacles when trying to withdraw some money from his account. He subsequently sent a letter documenting his experience. After receiving his letter, we researched the circumstances surrounding his withdrawal request. His calls were reviewed, and we also looked over the webpages he visited and the correspondence that was sent to me. After conducting this review, while we concluded this wasnt a systematic issue, changes could be made to prevent this from happening in the future. Voya has agreed to address training with their call center reps, specifically regarding the timing of installments and when those installments would be available to the participant. They will update their website and forms, and we are planning to update our wording in our sfgp guide. As a full follow up, we also sent another letter of correspondence to his address of record last week. Ill keep you updated if anything else arises, but i dont anticipate there should be any further issue with the situation. Also wanted to mention, on the topic of communications, currently, were in the middle of National Retirement security month. This month is a National Campaign held by congress to emphasize the benefits of saving for retirement. If you visited our sfgcp website this month, you probably have seen our special section dedicated to National Security retirement month on the top of our webpage. If you havent, we highly encourage you to do so. And if you do that, youll see the links that we have to the daily webinars. Additionally, on top of that, we are also holding live daily webinars throughout the month, and these presentation topics rotate weekly. There are topics from voya on the topics of Financial Wellness and links to the biography fliers for our retirement counselors to encourage members to reach out and contact our reps, and the sfgcp has been sending out communications to participants at various points throughout the month. Were trying to tie in the weekly themes for the presentations and the communications. So as an example, next week, the webinar will focus on Online Access and tools available, and we will be encouraging members to register one or both of their accounts online. Those are the topics that i wanted to cover. If you have any questions, im happy to answer them, and if not, i thank you for your time. Thank you, steve, for the record on deferred compensation. This is a discussion item only. Commissioners, do you have any questions for steve at this time . If there are no questions on the deferred compensation managers report, madam secretary, can you open the phone lines for Public Comment, please . Clerk thank you, callers. Please press star, three to be added to the queue. Moderator, are there any callers on the line . Operator madam secretary, there are no callers on the line. Clerk thank you. Hearing no callers, Public Comment is now closed. President bridges . Thank you, madam secretary. Next item, please. Clerk item number 17, action item. Approval to issue request for proposals for sfdcf Investment Consulting services. Members of the board, as youre aware, your board policy requires that consultants who are hired and report to the retirement board, that the services for Investment Consulting would go out every five years. Coan has been providing Consulting Services for the sfdcp since june or july of 2016, so the contract would expire in june. So what were proposing, weve presented this to the deferred Comp Committee at the september Board Meeting, and they forwarded a recommendation that we revise the attached r. F. P. To solicit bids from qualified providers. I will note that the r. F. P. Will be updated on page 9, section h. It will be updated to reflect the new language on the San Francisco campaign and governmental code. That was outdated long. The key dates on this r. F. P. Is if the board approves it today, we intend to issue it on friday. We intend to give them until december 14 to submit proposals, and that we would be on time to present recommendations from the Evaluation Team to the february deferred Comp Committee meeting with hopefully a recommendation from the deferred Comp Committee meeting and coming to the retirement board no later than april of 2021, so that if, in fact, we time these contract negotiations, well have sufficient time. So with that, ill be happy to answer any questions. Thank you, executive director. Board members, this is an action item. Are there any questions for our executive director on the proposal for the r. F. P. . Again, this is the request for proposals to the sfdcp Investment Consulting services. Yeah, this is [inaudible] the question i asked at the Committee Meeting that i didnt have an answer to yet. Who will be the scoring committee that will pick the finalists for the presentations in february . [inaudible] will be diane with justin. She will be returning from her leave right after the first of the year. Steve moyes, acting director. I will also be part of the Evaluation Team, and were hoping that we can solicit the participation of someone from the Public Markets Investment Team or the Investment Team to help us evaluate the proposal. [please stand by] clerk we have four yeses. Motion passes. President bridges . Thank you, madam secretary. Next item, please. Clerk item number 18, discussion item. Presentation of sfers audited Financial Statement and required communications for years ended june 30, 2019 and june 30, 2018. Commissioners, this is an item that has been continued for a number of months. It is to present the finding of the audit for 2019 june 30, 2019. Like i said, it s been continued since early this year. Each year, the department hires a consultant to come in and do an audit. N. G. O. Has done the audit the last few years, as well as recommendations. Its strange for us because they are just finishing up the final touches of the 2020 audit, which the city, i believe, will be issuing in november, no later than december, and hopefully, craig will be back early next year to present the 2020 results to the board, but we just needed to get this presented to the board, and so i will turn it over to craig at this point. All right. Thank you. Thank you, jay, and thank you, everyone, members of the committee and the board. Ill keep this kind of brief because as jay mentioned, there wasnt really anything in the audit. We did an audit for the years ended june 30, 2019 and june 30, 2018. We issued our independent auditors important on june 30, 2019, and its the highest level that an independent auditor can give a department. With the required communications, a few things that our professional standards require us to communicate to the state board of retirement. Ill go over those briefly. As i said, there wasnt anything we didnt have any disagreements with management during the course of the audit. Management didnt look for second opinions with other accountants. We didnt have any difficulties in emergency roperforming our we didnt have any corrected statements or material misstatements, as well. Couple more things that are kind of significant to the audit that were required to communicate is that theres certain areas of the Financial Statements where management has to make estimates about the balances or the numbers in disclosures, and the two most significant ones are the fair values of investment and the actuarial information which are based on actuarial estimations and actuarial statements. We found all the estimates and assumptions are key assumptions, and all the estimates and assumptions to be reasonable. And with that said, we didnt have any other audit findings, we didnt have any, you know, internal control deficiencies [inaudible] or material weaknesses in internal controls, and we also doesnt have note any noncompliance with laws, regulations, or contracts. So everything was in pretty good shape, and thats kind of a testament to the finance the finance and the Financial Reporting team that sfers has with the boards oversight. I would join frank again in congratulating and thanking the accounting team. This is my 20th Straight Year where weve had what ive considered to abe aad great au. There are no material discrepancies, so i think we have a great team, and again, thank you to n. G. O. We are finalizing our latest audit, but well see him back early next week. Yes. And with that, were happy to take any questions the Board Members may have. This is not an action item, its just a presentation of a report to the board. Thank you, mr. Hughes, and craig, for this presentation. Commission, do you have any questions for either of them [inaudible] . If not, we cthis is a discussi item. So madam secretary, you can open up the Public Comment lines. Clerk just a reminder, callers, president star, three to be added to the queue. Moderator, are there any callers on the line . Operator madam secretary, there are no callers on the linum. Clerk thank you. Hearing no further calls, Public Comment is now closed. President bridges . Thank you, madam secretary, and thank you [inaudible] for presenting these communications to the board, so thank you very much. Madam secretary, next item, please. Clerk item number 19, auction item. Approve request to adjustment industrial disability retirement allowance from 50 to 90 . Members, this is a standard request that we asked of you. In this case, james perry was awarded a disability retirement and set at an initial allowance of 50 . His Workers Compensation case was completed, and he was provided with a 90 rating. Under the charter, we are permitted to ask you to allow his increase to 90 until hes provided with a service retirement, and im happy to answer any questions. This is an action item, and ill ask the board if there are any questions on this item. If there are no questions, i would also entertain a motion. Sorry. Im waiting for commissioner casciato. I want to make a motion to [inaudible] i said i make a motion to adopt this item. Thank you, commissioner casciato. Is there a second . This is brian. I will second. Thank you, commissioner stansbury. It has been moved by commissioner casciato and seconded by commissioner stansbury that we move the retirement percentage from 50 to 90 for james perry, iii. Madam secretary, if you can open the phone lines. Clerk thank you. Press star, three to enter the queue. Ma moderator, are there any callers on the line . Operator madam secretary, there are no callers on the line. Clerk hearing no callers on the line, Public Comment is closed. President bridges . Yes. Lets have a roll call vote on the item. [roll call] clerk thank you. We have four yeses. Motion passes. Thank you, madam secretary. Please call next item, please. Clerk next item, number 20, discussion item, executive directors report. I will keep mine very short, however, i do want to point out that weve been extremely lucky since the shelter in place order. Weve been able to hire two of our t members of our Leadership Team into permanent positions. Ba do is on the reporting side, and were more than happy that bill and his team have adopted him and have assured us that they will be always available to help him be successful in his job. A second key hire that we have brought on board last month and a project that ive been working on for 15 years, and that is to get a Quality Assurance Operational Risk office started in the department, and i have been working with mr. Derwin brown for nearly two years, i think over two years, frankly. Tried to convince him that he needed to leave the l. A. County plan and come up and join us in San Francisco. He agreed to do that. He started work at the end of last month. He has over 20 years of experience working with lucera. 15 years of that were working towards building they started 15 years ago was spent working towards a Quality Assurance program at lucera. I believe the last five years of his job at lucera, he was the chief of the Quality Control department there. Just wanted to let ba and bill know, this wasnt an extremely long meeting no, im kidding. This was an extremely long meeting. I will offer derwin an opportunity to speak to the board, hopefully, hes still here. Thank you, jay. Hello and good evening, president , and fellow commissioners. As jay mentioned, i have 20 years in los angeles county. In 200 1, our c. E. O. Split the retirement operations into three separate divisions, which was member services, benefits, and Quality Assurance. The manager who hired me went to Quality Assurance, and i went with him. And he started building the actual Quality Assurance in 2001 and 2002 from the ground. We started with procedures, documenting procedures for our business processes, developing criteria, adding measurements, doing analysis, doing regular audits. From then, i moved up to supervisor within Quality Assurance, where i was fortunate enough to be the project manager for several data cleanup project that [inaudible] on our radar to take care of because one of the things that we had and im sorry if im taking up too much time but we had a Data Conversion Program that i was involved in. Im very happy to be here with you guys, improving the processes, contributing as much as i can, and being a part of this great team. It has been a pretty short meeting, and my patience is still here, so i appreciate the time of day, and thank you, karen, and thank you, all. Pleasure to be here. Thank you. The other thing i would like to point out thats not on the agenda is we had presented to you [inaudible] the board has declared a vacancy, and commissioner driscolls appointment will be ending in february. So back in june, we sent a proposed schedule. You adopted it, and you declared a vacancy. Weve worked with the department of elections i should say darlene worked with the department of elections. They have agreed to reschedule. Just wanted you to know that we will be sending out notice of that vacancy tomorrow, and that we are going to have the period for nominations start on october 19 through, i believe, september 14, which is September December 14, which is a friday. We will vote in january, and just wanted to give the board the heads up that we will be opening up the nomination period effective monday, october 19, and well be sending notices out to labor organizations, to the city, the department heads, and to employees and retired employees. With that, ill be happy to answer any questions that any board member has. Thank you, executive director huish, for your report. Wed like to welcome you to the family. And yes, this is a long meeting, but we ask you for your patience as we go through this report. Commissioners, are there any questions for the director . If not, madam secretary, well open up the publhone lines for Public Comment on the directors report. Clerk thank you, madam president. Members of the public, press star, three to be entered into the queue. Moderator, are there any public callers on the line . Madam secretary, there are no callers on the line. Clerk thank you, moderator. Seeing no further callers, Public Comment is closed. President bridges . Thank you, madam secretary. This is [inaudible]. Thank you. Thank you. Commissioners, at this time, we have the floor open if you have any comments, suggestions, or anything youd like to state for the good of the order, you can do that now. So it is open for any suggestions. Commissioner driscoll again. To my fellow colleagues on the Governance Committee, ill be asking darlene [inaudible] help in terms of getting out guidance to the Governance Committee in the next several weeks. Thank you. Thank you, commissioner driscoll. Anyone else . If not, well open the phone lines for general Public Comment. Clerk thank you. Any callers on the line, please press star, three to be added to the queue. Moderator, are there any callers on the line . Operator madam secretary, there are no callers on the line. Clerk thank you. Hearing no further calls, Public Comment is now closed. President bridges . Madam secretary, i think that was our last item, and thats the end of the meeting, so the meeting is adjourned at 7 15 p. M. Thank you everyone for your patience. Thank you very much, and have a wonderful evening. San francisco is surrounded on three sides by water, the fire boat station is intergal to maritime rescue and preparedness, not only for San Francisco, but for all of the bay area. [sirens] fire station 35 was built in 1915. So it is over 100 years old. And helped it, were going to build fire boat station 35. So the finished Capital Planning committee, i think about three years ago, issued a guidance that all city facilities must exist on Sea Level Rise. The station 35, Construction Cost is approximately 30 million. And the schedule was complicated because of what you call a float. It is being fabricated in china, and will be brought to treasure island, where the building site efficient will be constructed on top of it, and then brought to pier 22 and a half for installation. Were looking at late 2020 for final completion of the fire boat float. The historic firehouse will remain on the embarcadero, and we will still respond out of the historic firehouse with our fire engine, and respond to medical calls and other incidences in the district. This totally has to incorporate between three to six feet of Sea Level Rise over the next 100 years. Thats what the citys guidance is requiring. It is built on the float, that can move up and down as the water level rises, and sits on four fixed guide piles. So if the seas go up, it can move up and down with that. It does have a full range of travel, from low tide to high tide of about 16 feet. So that allows for current tidal movements and sea lisle rises in the coming decades. The fire boat station float will also incorporate a ramp for ambulance deployment and access. The access ramp is rigidly connected to the land side, with more of a pivot or hinge connection, and then it is sliding over the top of the float. In that way the ramp can flex up and down like a hinge, and also allow for a slight few inches of lateral motion of the float. Both the access ramps, which there is two, and the utilitys only flexible connection connecting from the float to the back of the building. So electrical power, water, sewage, it all has flexible connection to the boat. High boat station number 35 will provide mooring for three fire boats and one rescue boat. Currently were staffed with Seven Members per day, but the Fire Department would like to establish a new dedicated marine unit that would be able to respond to multiple incidences. Looking into the future, we have not only at t park, where we have a lot of kayakers, but we have a lot of developments in the southeast side, including the stadium, and we want to have the ability to respond to any marine or maritime incident along these new developments. There are very few designs for people sleeping on the water. Were looking at cruiseships, which are larger structures, several times the size of harbor station 35, but theyre the only good reference point. We look to the cruiseship industry who has kind of an index for how much acceleration they were accommodate. It is very unique. I dont know that any other fire station built on the water is in the united states. The fire boat is a regionalesset tharegional assete used for water rescue, but we also do environmental cleanup. We have special rigging that we carry that will contain oil spills until an environmental unit can come out. This is a job for us, but it is also a way of life and a lifestyle. Were proud to serve our community. And were willing to help people in any way we can. Hi, were live. Chair sesay good morning. I call the board of directors special meeting of september 10, 2020 to order. I am the board chair. The Board Meeting is being conducted pursuant to provisions of the brown act and recent executive orders by the governor to facilitate teleconferencing to reduce the risk of covid19 transmission. Ordinarily, the brown act sets strict rules for teleconferencing. The executive order has suspended those rules. As noted on the agenda, members of the public may observe this meeting by sfgovtv and they may offer Public Comment by calling the published Public Comment phone number. Id like to welcome members of the public and staff who are watching us