►
Description
City of San José, California
Joint Meeting City Council & SJ Retirement Boards of October 16, 2020.
Pre-meeting citizen input on Agenda via eComment at https://sanjose.granicusideas.com/meetings.
This public meeting will be conducted via Zoom Webinar. For information on public participation via Zoom, please refer to the linked meeting agenda below.
Agenda https://sanjose.legistar.com/View.ashx?M=A&ID=809334&GUID=ED8DC3D7-E550-402F-994D-559030452995
A
A
A
A
B
B
Joint
meeting
of
the
the
two
boards,
the
two
retirement
boards
and
the
city
council,
really
appreciate
everybody
taking
their
time
away
from
their
friday
morning
to
join
us
happy
to
well.
First,
perhaps
we
should
start
with
roll
and
then
I'll
pass
it
on
to
chair
jay,
castellano
and
chair
andrew
gardner,
and
forgive
me
andrew,
I
think
I
just
mispronounced
your
name
so
yeah
perfect,
oh
good
great.
So
why
don't?
We
start
with
the
roll.
A
A
E
D
A
H
B
A
Like
to
say
good
morning
to
mayor
members
of
the
council,
chair,
gardenia
members
of
the
police
and
fire
board,
as
well
as
the
rest,
of
course,
the
federated
board.
It's
a
pleasure
to
be
able
to
spend
the
time
with
you
and
you
know,
make
the
investment
in
the
mind,
meld
and
getting.
You
know
all
of
us
on
the
same
page
about
the
status
of
the
plans
and
vis-a-vis
the
budget,
and
you
know
what
the
future
might
hold
in
terms
of
the
investment
portfolio
and
and
the
download
impacts.
All
that.
G
Just
echo
what
he
he
said,
thank
you
mayor
and
city
council
for
having
this
meeting.
I
believe
this
is
our
third
meeting
now
and
I
know
the
last
two
were
very
fruitful
in
conversation
insightful.
You
know
to
the
trustees,
and
so
I
definitely
look
for
and
we
all
look
forward
to
our
agenda
discussions
here.
So
thank
you.
A
One
additional
note
a
little
extra
thanks
to
council
member
davis.
She
is
such
a
reliable
presence
at
our
meeting
and
I
know
she
does
a
great
job,
transmitting
information
in
both
directions
between
the
board
and
the
council
council
on
the
board.
So
thank
you
very
much
councilmember
davis
for
for
doing
that
for
the
federated
board.
I
B
All
and
again,
thanks
to
all
the
members
of
the
boards,
we
know
you
don't
do
it
for
the
money.
You
do
it
because
you
you
care
about
this
community
and
we
appreciate
your
service.
I
should
also
note
in
particular
thanks
to
the
several
members
of
you
who
have
been
joining
us
for
the
well
recently
less
periodic
meetings
of
our
retirement
task
force
to
to
wrestle
with
steps
that
we
might
need
to
take
to
address
our
very
large
unfunded
liabilities
and
and
how
we
can
move
forward.
B
There
have
been
some
very
fruitful
ideas
that
emerged
and
just
as
a
simple
update,
I
just
note
that
we
have
filed
a
memorandum
to
go
to
the
rules
committee
next
week
to
ask
our
staff
to
begin
the
work
to
fully
analyze
and
prepare
legal
documents
for
pension
obligation
bonds,
so
that
we
can
all
consider
our
next
steps.
So
we
appreciate
the
work
of
that
committee
and
we'll
certainly
continue
in
november.
So
we'll
begin
now
with
the
agenda.
B
J
But
we'll
start
off
here
get
my
machine
set
up
and
everybody
can
see
my
presentation.
I
am
assuming
yes,
yes,
okay,
so
again,
so
the
cover
19
impact
to
the
city's
budget
was
immediate.
So
as
soon
as
we
had
the
the
shelter
in
place
orders
hit,
you
know
we
had
direct
revenue
impacts.
In
addition
to
the
indirect
economic
impacts
of
the
economy
at
large,
and
so
we'll
talk
about
the
different
major
revenue
categories
that
were
impacted,
but
we
had
to
resolve
the
budget
in
sort
of
a
two-step
process.
J
So
we
had
a
45
million
dollar
shortfall
for
1920
that
we
worked
with
the
city
council
to
resolve
at
the
end
of
april,
and
then
we
turned
around
a
few
weeks
later
and
resolved
the
76.7
million
shortfall
for
2021.
So
we
definitely
had
our
work
cut
out
for
us
as
an
organization
to
make
sure
that
we
were
prepared
to
meet
sort
of
whatever
budgetary
challenges
that
the
pandemic
was
going
to
throw
at
us.
J
So
some
very
significant
impacts
that
we
had
to
deal
with
on
the
revenue
side
and
which
meant
we
were
back
into
shortfall
territory.
So
this
is
just
a
slide.
A
kind
of
sobering
slide,
just
to
kind
of
you
know,
set
everybody
for
where
we
have
been
and
where
we're
at
again
now,
so
we
had
the
fallout
from
the
dot-com
bust
our
decade
of
deficits.
You
know
punctuated
by
the
great
recession,
12
13
13.
You
know
we
had
all
the
way
through
1819
a
lot
of
stability.
J
You
know
we
never
really,
you
know
got
back,
but
at
least
we
got
to
a
stable
point
and
we're
able
to
sort
of
strategically
add
back
some
resources
here
and
there.
But
even
though
1920
started
out
with
a
a
a
small
surplus,
we
actually
ended
up
in
actually
having
to
resolve
that
45
million
deficit,
and
then,
of
course,
we
had
in
2021
almost
80
million
dollars
to
solve.
J
So
here
is
a
overview
of
just
looking
at
the
general
fund,
because
that's
sort
of
the
the
the
largest
funding
source
in
the
city
that
can
be
flexibly
spent
on
any
governmental
purpose.
So
that's
a
lot
of
what
our
attention
is
often
focused
on,
and
so
here
is
our
of
our
1.5
billion
dollar
general
fund
budget
for
2021..
J
Here
it
is
broken
out
by
different
sources,
and
so
what's
good
about
san
jose
is
that
we
have
a
pretty
good
variety
of
general
fund
revenue
and
so
that
really
helps
us
out
to
improve
a
little
bit.
The
the
stability,
although
we
definitely
have
some
impacts
here
and
my
little
lightning
bolt
guys,
are
those
categories
that
we
want
to
kind
of
focus
on.
In
terms
of
covid
for
sure
sales
tax
takes
an
immediate
hit.
J
So
the
real
question
mark
for
us
in
2122
is
going
to
be
how
the
rest
of
this
calendar
year
in
2020
turns
out.
So
you
know
so
far.
It's
looking.
You
know
decent
on
the
on
the
real
estate
side
in
terms
of
properties
holding
values.
Although
transactions
are
down-
and
I
think
you
know-
the
commercial
side
is
still
a
little
bit
of
a
question.
J
J
It's
quite
it's
quite
small,
but
it
took
a
massive
hit
because
you
know
folks
aren't
their
folks
are
not
traveling
and
there's
very
little
business
travel,
but
because
we're
not
a
sort
of
a
tourist
destination
that
category
in
itself
wasn't
as
large
as
say
it
would
have
been
for,
like
a
san,
diego
or
a
san
francisco,
although
we
do
have
a
lot
of
special
fund
activities
for
our
convention
center
and
our
cultural
facilities
and
our
arts
programs
that
are
funded
by
that
tot
tax.
That
are
definitely
feeling
that
pinch.
J
So
that's
a
little
bit
of
snapshot
of
our
general
fund
sources.
Here
and
again,
the
property
tax
is
one.
We
really
want
to
keep
an
eye
on
for
2021
to
see
how
that
may
change,
and
so
we
had
a
76.7
million
dollar
shortfall
in
the
general
fund,
and
we
we
really
wanted
to
be
careful
about
how
we
addressed
that
shortfall.
We
had
a
limited
amount
of
time
to
really
get
at
it,
and
always
our
preference
and
our
our
policy
in
san
jose
is
to
match
our
ongoing
revenues
with
our
ongoing
expenditures.
J
To
make
sure
we
have
a
structurally
balanced
budget,
because
this
hit
us
so
late
in
the
budget
cycle.
We
couldn't
get
all
the
way
there,
but
wanted
to
do
as
good
a
job
as
we
could
to
do
that
because
we
we
know
that
we're
actually
in
you
know,
we
don't
expect
to
snap
our
the
fingers
to
be
snapped
as
soon
as
the
vaccine's
here
and
we're
back
to
where
we
were
at
the
beginning
of
2019.
It's
going
to
be
a
climb
out
of
here,
so
we
have
an
ongoing.
J
You
know,
structural
shortfall
that
we
need
to
address.
But
what
we
were
able
to
do
is
look
at
all
the
tools
we
had
available
and
we
were
able
to
address
40
million
dollars
of
that
of
that
shortfall
with
with
no
service
impacts
to
the
community.
So
one
of
them,
we
were
very
fortunate,
was
recognizing
the
proceeds
of
the
revenue
capture
agreement
with
ebay,
which
generated
additional
sales
tax
revenue
to
the
city
that
we
wouldn't
have
otherwise
had.
J
We're
also
very
strategic
in
the
leveraging
of
bond
refunding
savings
to
pay
down
other
debt.
So
finance
just
recently
closed
on
a
refunding
of
the
outstanding
debt
for
city
city
hall,
which
released,
which
generated
both
some
one-time
savings
and
ongoing
savings
for
future
debt
service
payments
to
the
general
fund.
We
repurposed
that
one-time
savings
to
buy
down
other
other
debt
that
was
related
to
our
golf
golf
courses
and
to
a
streetlight
led
conversion.
J
So
by
able
to
to
use
those
try
to
pull
all
the
leverage
that
we
could
without
impacting
city
city
services,
you
know
we
were
able
to
shave
off
a
lot
for
that
shortfall.
We
had
about
11
million
dollars
of
very
targeted
reductions
that
did
impact
some
city
services,
but
we
also
used
one-time
funding
and
savings
of
about
25.7
million
dollars
and
so
about
a
third
of
the
shortfall
or
so
what
ended
up
being
solved
with
with
one-time
funds
which
is
appropriate
kind
of
given
where
we
were.
J
J
So
not
only
are
we
sort
of
directly
impacted
by
the
public
health
orders,
but
there's
also
the
perception
of
folks
in
how
safe
they
feel
in
doing
their
purchasing
activities
and
then
we're
also
we
have
job
losses
and
so
we're
actually
operating
in
a
recession,
and
so
you
know
that
impact
is
certainly
going
to
continue
throughout
this
fiscal
year
and
we're
going
to
keep
an
eye
on
that.
But
we
also
expect
that
impact
to
linger
into
future
years
and
again
so
because
we
used
about
25.7
million
dollars
of
one-time
funding
to
balance
2021.
J
That
was,
you
know
if
nothing
else
changed.
That
would
be
our
starting
deficit
for
21
20
22,
but
we
know
things
are
going
to
change.
You
know
we're
going
to
update
all
of
our
revenue
assumptions.
We
have
labor
costs
which
will
go
up.
We
have
other
costs
which
will
go
up.
We
have
retirement
contributions
that
will
likely
be
higher
too.
J
J
A
little
bit
here
is
the
adopted
budget
by
our
general
fund
uses
by
csa,
and
so
it's
not
surprising
that
as
a
city,
we
spend
a
lot
of
our
money
on
public
safety.
So
this
is
policing
and
fire
is
our.
Is
our
largest
swath?
We've
got
money
in
in
reserves.
We
have
money
for
strategic
support,
which
is
a
broad
array
of
different
support.
J
So
this
is
how
we
look
at
our
budget
from
a
sort
of
a
city
service
area.
But
if
we
drill
into
a
little
bit
to
see
the
different
types
of
expenses,
we
can
see
that
by
and
large
we
are
a
service
organization.
So
we
are
spending
most
of
our
money
on
personal
services.
So
this
is
all
of
our
salaries
and
our
retirement
contributions
makes
up
the
bulk
of
what
we
spend
our
money
on
in
the
general
fund.
J
J
And
so
we
can
see
here
that
you
know
that
there's
been,
you
know,
consistent
pressure
that
accelerated
at
the
end
of
of
the
odds
and
into
the
11
12
fiscal
years
has
moderated
out
since
some
of
the
reforms
and
the
different
actions
that
the
city
and
the
town
boards
have
taken,
and
so
we've
kind
of
at
this
level
still,
you
know,
flatter,
but
still
a
quite
high
level
of
20
of
the
general
fund
at
320
million
million
dollars.
So
this
is
obviously
one
of
the
important
drivers.
J
J
We
kind
of
break
it
down
here
for
the
tier
1
and
tier
2
costs
for
our
normal
distributions
between
police
and
fire
systems
and
the
federated
system,
and
the
biggest
component
of
that,
as
folks
know,
is
the
unfunded
actuarial
liability,
our
ual,
and
so
it's
136.7
million
dollars
in
police
and
fire
67.5
million
dollars.
And
again
this
is
our
annual
contribution.
This
is
not
the
total
uil.
This
is
just
what
the
city
is
in
the
city's
budget
in
the
general
fund
for
2021
for
an
overall
amount
of
200
million
dollars.
J
So
definitely
the
biggest
component
of
the
retirement
contributions
is
the
uil
and
something
that
quite
rightly,
the
mayor
had
had
engaged
the
retirement
stakeholders
working
group
to
figure
out.
Is
there
a
better
way
for
the
city
or
for
the
boards
to
think
about
how
we
can
lower
the
overall
city's
general
obligation
for
those
costs,
because
it
does
constrain
a
lot
of
what
we're
able
to
spend
money
on
and
address?
J
You
know
what
the
deficit
could
be
in
2122,
and
here
it
shows
a
little
bit
about
where-
and
this
is
just
a
snip.
I
just
took
from
the
valuation
report
for
2019,
so
I
apologize
for
the
sort
of
poor
graphics
here,
but
what
this
shows
for,
for
both
of
us,
both
police
and
fire
and
for
federated,
is
what
the
actuarial
projections
are
for
the
ual
itself
and
we're
in
right.
J
D
Julia,
okay,
thanks
jim,
so
if
you
go
to
slide
14,
just
to
kind
of
give
a
high
overview
of
what
we're
going
to
chat
about-
and
this
is
an
abbreviated
version
of
the
presentation
that
we
made
to
the
stakeholder
group
earlier
in
the
week.
So
the
links
there
to
the
full
presentations
that
were
made
and
also
chiron
made
a
presentation
as
well,
so
I
provided
that
link
so
on
the
next
slide,
just
as
a
background,
this
isn't
new
territory
for
the
city
with
respect
to
having
a
conversation
about
pension
obligation
bonds.
D
Back
around
13
years
ago,
former
mayor
reed
formed
a
budget's
task
force.
The
city
manager
released
a
report
on
general
fund
structural
elimination
plan
that
was
looking
at
strategies
that
we
could
look
to
balance
the
budget
and
deal
with
our
pension
costs
at
that
time.
So
on
the
next
slide,
you
know
prior
kind
of
just
as
a
background
in
terms
of
prior
kind
of
looking
at
pension
obligation.
Bonds
is
the
direction
we
got
was
to
explore
them
as
a
strategy.
D
D
That
report
came
forward
and
concluded
that
it
wasn't
a
viable
tool.
The
stock
market
conditions
weren't
right
and
even
if
the
council
was
willing
to
assume
the
risk,
there's
a
pretty
long,
lead
time
with
respect
to
a
court
validation
process.
And
the
report
also
pointed
out.
The
significant
caution
was
necessary
related
to
the
market
volatility
risks
and
the
potential
financial
losses
to
the
city
over
the
long
term.
D
Obviously,
things
haven't
gotten
any
better,
so
the
funded
ratio
for
federated
is
now
at
53
percent
and
police
and
fire
is
at
74
percent.
What's
also
interesting
to
note
is
a
significant
change
in
the
ual
is
a
percentage
of
covered
payroll
for
federated
over
that
10-year
period
it
increased
from
226
percent
to
629
percent
and
for
police
and
fire
it
increased
from
154
to
544..
D
I
Good
morning,
mayor
council
members,
members
of
the
board-
hopefully
you
can
hear
me
well
on
page
21
julie
and
I
are
going
to
be
discussing
what
pobs
are,
how
they
save
money,
who's
issuing
povs.
What
are
the
benefits?
What
are
the
risks
and
what
are
the
strategies
we
can
use
for?
Mitigating
those
risks
like
turn
to
22.?
I
The
unique
dynamic
of
the
municipal
bond
market
is
that
a
investors
are
willing
to
invest
funds
for
many
years.
As
I
said
up
to
30
years,
unlike
the
corporate
market,
municipal
bonds
are
are
typically
serialized.
So
for
a
30-year
bond
conceptually,
we
could
be
issuing
30
different
majorities
of
bonds,
each
with
their
own
rate,
unlike
the
corporate
market,
where
bonds
mature
in
a
bullet.
I
In
fact,
just
yesterday
we
closed
an
approximately
146
million
taxable
municipal
bond
for
the
ice
center
expansion
and
those
bonds
matured
further
out
in
2051,
but
had
an
average
life
of
just
under
19
years
and
the
rate
for
those
was
3.31
so
based
on
those
rates.
It's
easy
to
see
why
taxable
bonds
are
being
issued
more
and
more
to
fund
pension
obligations
with
assumed
discount
rates
that
are
two
times
or
more
those
levels.
I
Local
government,
california,
is
subject
to
constitutional
debt
limitations
and
that
that
requires
a
vote
unless
it
falls
into
certain
exceptions
and
the
courts
have
determined
their
exceptions
for
lease
obligations
like
the
bonds.
We
we
just
completed
and
exceptions
for
revenue
bonds
like
the
revenue
bonds.
We
do
for
the
airport
or
waste
water.
I
Subsequent
legislation
was
passed
to
reduce
that
appeal
period
to
30
days
and
that
validation
doesn't
obligate
us
to
issue
the
bonds
and
but
it
does
require
us
to
go
through
the
process
of
putting
together
the
fond
documents
so
that
they
can
be
reviewed
by
the
court.
But
the
validation
merely
protects
us
and
protects
the
validity
of
the
bonds.
So
if
I
can
turn
to
page,
24.
I
prbs
are
being
issued
all
across
the
country.
More
than
half
of
them
have
been
issued
here
in
california,
over
the
last
10
years,
6.3
billion
here
in
california,
and
according
to
a
book
on
povs
published
by
one
of
the
city's
bond
attorney
firms.
The
counties
have
done
it:
alameda,
contra
costa,
imperial
los
angeles,
mendocino,
merced
orange
sacramento,
sonoma
san,
diego
cities
of
fresno,
long
beach,
oakland,
pasadena
and
richmond,
as
well
as
the
state
of
california.
All
those
who
have
issued
povs
and,
as
I
said
earlier,
all
rates
are
near
historic
lows.
I
Right
now
and
povs
have
tended
to
come
in
waves,
both
based
on
the
legal
issues
that
have
been
resolved
along
the
way,
but,
more
importantly,
based
on
where
interest
rates
are
relative
to
the
discount
rates
assumed
on
the
pension
obligations
themselves.
So
some
of
the
cities
have
added
pobs
in
just
the
past.
Two
years
have
been
pasadena
ontario,
riverside,
pomona,
san
bernardino
and
larkspur
among
others.
The
most
recent
one
was
the
city
of
azuza.
I
Our
our
pension
systems
are
assuming
in
most
systems
assume-
and
that's
probably
best
seen
in
a
graph
on
the
next
page,
if
we
assume
a
p
or
b
rate
for
30
years
of
3.11
and
remember
that
rate
will
be
determined
by
the
mark,
it'll
be
based
on
supply
and
demand
and
other
factors.
In
fact,
right
now,
there's
quite
a
bit
of
volatility
in
the
market,
but
those
savings
come
from
replacing
a
portion
of
the
unfunded
liability
with
an
asset
with
our
investments
and
investing
those
at
earnings.
I
I
So
we
assume
we
borrow
a
250
million
dollar
pov
at
the
same
3.11
percent,
with
the
6.5
6.7
earnings
rate,
we're
going
to
achieve
6.6
million
dollars
a
year
annual
savings
or
present
value
savings
of
118
million
dollars.
And
then
this
chart
gives
you
a
sense
of
what
an
increase
in
borrowing
costs
would
do
to
those
savings
and
what
a
change
in
our
discount
or
earnings
rate
would
do
and
that'll
turn
it
back
to
you.
Julia.
D
When
we
looked
at
this
back
in
2009-10,
that
spread
was
very
was
nominal,
and
so
one
of
the
reasons
why
it
wasn't
economical
and
then
also
the
time
value
of
money,
pobs
help
accelerate
the
investment
in
the
funds
which
could
theoretically
compound
the
earnings
and
reduce
the
unfunded
liability
over
time.
On
the
next
slide,
we
list
out
some
of
the
risks,
because
there's
always
a
flip
side
of
the
coin,
so
there's
obviously
investment
risk.
D
So
as
again,
we
put
a
lump
sum
into
the
plan
and
then
that's
being
invested
by
the
pension
systems
over
time,
there's
always
a
risk
of
over
funding
and
what
that
would
mean
with
respect
to
being
significantly
overfunded.
That
doesn't
happen
very
often,
but
it
obviously
is
a
risk
and
what
that
would
mean
for
pressures
in
the
pr
in
the
plan
and
then
there's
credit
risk.
S
p,
generally
views
pobs,
issuance
and
environment
of
fiscal
distress
as
a
mechanism
to
provide
short-term
budgetary
relief.
D
D
When
the
time
is
right.
As
we
mentioned,
we
have
to
go
through
a
validation
process
for
this
and
there's
a
time
involved
with
that.
And
so,
as
the
mayor
indicated,
he
has
is
going
to
be
releasing
a
memo
to
direct
staff
to
start
to
work
on
this.
So
we
can
essentially
bring
the
documents
to
council
proceed
with
the
validation
process
and
essentially
kind
of
have
this
tool
in
the
tool
box
and
when
the
council
is
ready
to
proceed
with
issuing
pension
obligation
bonds.
So,
on
the
on
the
next
slide.
D
Kind
of
the
conclusion
is:
is
that
we
really
don't
know
the
full
effect
of
issuing
pension
obligation
bonds
until
we
get
to
the
financiality
tally,
where
we
can
look
at
the
maturity
of
the
bonds
and
to
see
and
compare
against
the
actual
investment
performance
and
our
cost
of
borrowing
and
can
do
that
measurement.
So,
as
I
mentioned
at
the
end
of
the
presentation,
is
a
copy
of
the
report
from
may
2010,
and
then
I
also
included
the
same
slides
from
the
presentation
earlier
this
week.
D
That
has
some
literature,
review
and
links
to
reports
and
things
if
the
council
and
the
retirement
boards
wanted
some
more
information.
So
with
that.
That
concludes
our
part
of
the
presentation
and
we're
available
for
for
questions,
and
I
I
will
have
to
step
out
I'm
at
10
o'clock,
because
I
have
a
prior
commitment,
but
nikolai
will
be
on
to
help
answer
any
finance
related
questions.
After
that.
B
A
A
Roberto
you
want
to
respond
without
her.
Yes,
mr
mayor,
thank
you.
No
trustee,
santos,
the
our
actual
firm,
is
just
actually
attending
the
meeting
this
morning
and
they
had
a
chance
to
see
a
presentation
last
tuesday
at
the
working
solutions
group
on
pobs,
and
this
is
the
second
time
so
other
than
than
the
receiving
the
presentation
they
have
not
had
a
chance
to
to
review
it
and
make
comments
to
your
boards.
Well,
thank
you.
It
sounds
fascinating.
A
L
L
L
I
could
tell
you
this
that
this.
This
is
a
time
in
the
market
where
I
actually
have
purchased
just
yesterday
puts
on
the
market,
because
I
feel
that
the
market
has
reached
a
very,
very
high
level.
It
said
almost
twenty
nine
thousand,
as
if
I
I'm
as
of
yesterday,
I
was
that's
when
I
was
looking
at
it.
L
L
So
I
just
want
to
caution
caution
that
I
know
it's
a
really
good
interest,
rated
environment
and
I
and
I
I
agree
with
all
the
efforts
that
the
staff
has
been
making
to
refinance
our
bonds
and
and
do
the
the
absolutely
necessary
things
that
we
have
been
doing.
I
might
my
hat's
off
to
to
staff
for
and
the
finance
team
for
refinancing
our
debts,
and
we
should
continue
to
do
so
because
interest
rates
are
still
dropping,
but
I
really
caution
this.
L
I
mean
I,
I
think
it
is
a
you
know
if
you,
if
you,
if
you
will
going
to
go
into
vegas
using
a
credit
card
and
and
that's
the
way
I
feel
about
it,
and
I
I
would
not
support
this
strategy.
Quite
frankly,
it
doesn't
matter.
You
know
I
I
just.
I
just
think
the
market
can
really
move
against
us
and
if
it
moves
against
us
in
a
significant
way,
we
will
be.
B
Country
campus,
I
appreciate
your
word
of
caution.
Let
me
just
point
out
we.
This
is
not
a
decision
that
anyone
on
the
council
needs
to
consider
for
another
9
to
12
months.
I
believe,
based
on
the
amount
of
time
it
would
take
to
get
this
legal
documentation
together,
and
I
think
I
would
join
you
in
saying.
There's
no
way
I'd
want
to
do
it
in
a
time
of
you
know
essentially
market
highs,
which
is
what
we're
looking
at
right
now.
I
know
we
don't
try
time
markets,
but
I
would
agree
with
you.
B
Is
that
a
moment
when
we
would
still
have
low
interest
rates
and
be
in
a
very
different
position,
but
I
agree
with
you:
this
wouldn't
be
the
the
time
I
believe
to
try
this,
but
obviously
I'm
not
the
expert,
and
we
have
a
lot
of
time
and
to
get
more
information
before
we
have
to
make
any
decisions.
The
real
question
is,
you
know,
right
now,
for
us
is
just
getting
the
legal
process
underway
so
that
we
can
even
get
to
that
point.
I'm
sorry
staff
did
you
want
to
respond
anyway,.
B
L
Well,
I
I
don't
disagree
with
you
mayor
that
about
your
assertion.
I
I'm
definitely
not
going
to
be
around
to
make
that
decision
quite
frankly,
but
it
does
affect
taxpayers
in
the
end.
We
may
end
up
being
on
the
hook
for
this
poor
decisions,
and
I
could
tell
you
that
I
have.
I
don't
want
to
take
offense
to
anybody,
but
but
this
this
this
the
investment
boards
move
like
boards.
L
You
know
they
don't
move
at
the
speed
of
of
mark
of
the
market,
so
decisions
that
are
you
know
we
could
miss
the
entire
market.
You
know
when
I
first
came
on
to
the
board.
When
I
first
came
onto
the
board,
I
don't
know
I
still
maybe
my
first
year
in
office,
I
remember
we
were
trying
to
dump
oil
stocks
because
we
had
a
lot
of
oil
in
our
portfolio.
L
At
that
time
I
told
everybody
that
the
oil
was
oil
markets
were
at
their
high.
I
mean
at
their
low
at
their
absolute
low.
I
mean
we
were
getting
creamed,
but
we
ended
up
selling
the
oil
portfolios
and
and
it
just
in
time,
for
the
oil
portfol
just
in
time
for
oil
to
go
up.
And
so
I
want
to
caution
that,
because
it's
it's.
L
It's
it's
a
slo
decisions
made
by
boards
move
very
slowly,
and
I
want
to
continue
to
say
that,
because
we
cannot
react
to
the
market
as
as
as
an
individual
investor,
could
you
know
selling
their
stock
on
on
a
day
or
taking
one
or
two
days
to
make
up
their
mind?
It
will
take
us
months
to
make
up
our
minds
on
any
decisions
made
by
the
boards,
so
we
may
have
me
we
we
anyway,
I
I
anyway.
I
just
want
to
throw
that
word
of
caution
out
there.
L
Because
I
don't
think
we
could
move
fast
enough
and
I
don't
and
I
don't
like
to
take
extra
risk
with
the
money.
I
would
like
us
to
entertain
other
ideas.
If
there's
did
anybody
bring
up
any
other
ideas
on
ways
that
we
can
close?
The
unfunded
liability
I
mean?
Is
there?
Is
there
any
other
ideas
being
floated.
B
L
Yeah,
okay,
I
and
I
just
wanted
to
say
my
piece
again.
I
appreciate
the
efforts
to
look
at
ways
to
close
the
unfunded
ability,
because
it's
it's
like
an
anchor
on
our
city,
and
I
and
I
appreciate
all
the
efforts
I
also
appreciate
again,
staff
is-
has
always
looked
at
ways
to
refinance
our
bonds
to
bring
down
the
interest
rates.
L
F
Thank
you
mayor
a
couple
questions.
First
of
all,
I
agree
with
council
member
canvas
that
we
should
be
cautious.
We
should
take
our
time
to
evaluate
this.
There
are
some
risks,
but
initially
when
I
first
heard
about
pension
obligation
bonds,
I
was
actually
not
supportive,
but,
as
time
has
gone
by
and
looking
at
how
it
can
be
used,
how
it
can
be
structured.
F
I
actually
see
some
of
the
benefits
of
that
strategy,
but
we
also
had
a
conversation
that
actually
was
at
the
last
joint
meeting
about
the
use
of
pension
obligation
bonds
to
make
the
short-term
payments
to
the
pension
fund.
That's
prohibiting
us
from
being
more
aggressive
in
terms
of
our
investment
strategy.
The
conversation
was
around.
Why
can't
we
achieve
at
least
market
averages
of
around
seven
percent,
which
is
the
historical
average
for
the
market
and
the
reason?
F
Why
was
because
we
had
to
be
more
conservative
because
we
had
these
large
pension
payments
that
we
had
to
make,
and
so
that's,
where
the
conversation
came
up
around
using
pension
obligation,
bonds
to
allow
us
to
make
those
payments
and
have
a
more
aggressive
investment
strategy
to
at
least
equal
the
market
rate
of
returns?
Historically,
so
I
guess
this
question
is
directed
to
staff
or
it
was
actually
brought
up
by
one
of
the
board
members.
F
It
was
it
was.
The
conversation
was
around
funding.
The
current
obligation
and
the
reason
why
we
didn't
have
a
more
aggressive
investment
strategy
is
because
we
had
these
obligations
that
we
had
to
make
and
we
had
to
have
the
funds
available
to
make
those
payloads
obligations,
and
so
therefore,
pension
obligation,
bonds
came
up
as
a
potential
strategy
to
to
address
that
and
mitigate
our
obligations
and
allow
us
to
have
more
aggressive
investment
strategies
to
at
least
meet
historical
market
returns.
D
D
A
F
Well,
like,
like
I
said,
I
was
very
when
I
heard
that
proposal
was
very
intrigued,
because
I
thought
it
would
be
a
an
opportunity
for
us
to
again
be
more
aggressive
in
our
investment
strategies
at
least
try
to
achieve.
You
know
the
market
rate
of
return,
historical
rate
of
return,
and
I
agree
with
council
member
canvas
that
the
market
is,
is
high
and
there's
a
high
possibility
or
probability
that
the
market
is
going
to
have
a
decline
in
the
short
term.
F
But
again,
if
you
look
at
historical
averages
going
back
a
hundred
years,
it's
around
seven
percent
and
if
we're
going
to
dig
ourselves
out
of
this
hole,
we're
going
to
have
to
at
least
meet
our
assumed
earnings
rate
and
we're
not
structured
or
designed
to
do
that
now,
and
so
we
need
a
strategy
and
whether
it's
pension
obligation,
bonds
or
some
other
strategy.
We
need
to
come
up
with
a
strategy
of
how
we
can
at
least
meet
the
average
market
returns.
F
D
Yeah
I
mean
if
the
council
does
give
you
know
formal
direction
for
the
staff
to
explore
pension
obligation,
bonds,
there's
a
whole
lot
of
work.
We
need
to
do
to
bring
back
a
very
comprehensive
sensitivity,
analysis
stress,
testing
working
with
the
retirement
plans
in
terms
of
looking
at
what
happens
over
time.
D
But,
as
we
mentioned,
there's
a
long
validation
process
that
takes,
and
so
I
think
the
mayor's
recommendation
is
for
us
to
start
that
process
so
that
we
can
have
the
tool
in
the
toolbox
if
the.
If
the
market
and
the
in
you
know
the
reinvestment
market
for
the
retirement
plans
and
the
borrowing
market
for
the
city
are
at
a
time
that
we're
willing
to
take
the
risks
associated
with
that
and
put
some
mitigating
factors
in
place.
D
G
All
right,
thank
you
mayor.
This
question
is
probably
more
directed
to
jim
regards
to
the
budget.
I'm
just
trying
to
get
an
idea.
I
know
when
you
guys
created
the
budget
back
in
you
know
you
guys
started
early
on,
but
you
start
in
the
heart
of
covid.
When
the
economy
was
completely
shut
down,
you
guys
had
a
heart,
a
difficult
task
of
trying
to
project
what
revenue
would
be
like
based
off
of
what
you,
the
information
you
guys
had
back
then,
and
now,
where
we
are
in
the
recovery
process.
G
You
know
several
months
later.
How
close
are
we
in
those
projections?
Are
we
still
are
we
better
off
than
we
thought
we
worse
off
than
when
we
thought?
I
was
just
wondering
if
you
could
speak
to
something
like
that
jerry's
trying
to
think
in
in
looking
forward
when
the
two
boards
have
to
start
talking
about
actuarial
numbers
and
and
budgets,
and
you
know,
bills
that
got
to
be
paid.
It'll
just
be
nice
to
have
that
in
mind
of
what
the
city
is
forecasting.
J
Yeah
I'll
take
a
shot
at
that
I
mean,
I
think
the
short
answer
is
it's
too
soon
to
know
yet
for
2021,
you
know
for
1920.
You
know
we
had.
We
were
very
close
on
almost
all
of
those
revenue
estimates
for
how
we
closed
out
1920.
I
think
sales
tax
came
in
a
little
bit
better
than
than
we
thought
1920,
which
was
good
by
about
eight
eight
million
dollars.
So
that
was
good
news,
but
I
think
you
know
it's
it's
too
soon
to
know
how
sales
tax
we
actually
don't
know.
J
So
we
get
sales
tax
data
almost
two
months
after
the
quarter
closes.
So
we
don't
really
know
how
we
did
for
july
august
and
september
until
november,
and
so
so
that's
really
going
to
tell
us
how
close
we're
doing
sales
tax
I
mean.
If
I
I
had
to
guess
right
right
now.
I
still
feel
good
about
those
estimates.
I
think
that
may
be
still
a
little
bit
defensive.
So
hopefully
we
are
okay
there
in
sales
sales
tax.
J
J
We
are
taking
down
some
revenue,
estimates
more
of
a
one-time
nature
related
to
business
taxes,
so
our
card
rooms,
taxes
we're
taking
that
down
by
almost
50,
because
the
card
rooms
just
haven't
been
able
to
really
open
up,
and
so
that's
a
general
fund
revenue
hit
of
about
eight
and
a
half
million
dollars
offset
a
little
bit
by
some
of
our
just
disposal.
Tax
that
went
up.
J
We
also
are
seeing
a
lot
lower
parking
citation
revenue
which
is
because
you
know
folks
aren't
in
the
down
down
downtown
area.
We've
redeployed,
some
of
our
parking
traffic
control
officers
to
other
other
duties,
so
there's
some
impacts
there.
But
if
I
look
at
you
know
sort
of
the
bigger
broader
you
know
revenue
categories,
I
I
I
feel
that
we
are
okay,
where
we
currently
are
with
with
those
projections
for
sales,
tax
and
business
taxes,
the
longer
term
general
business
tax,
transit,
occupancy
tax.
J
J
That's
going
to
be,
you
know,
there's
going
to
be
some
information
related
to
commercial
properties
that
we
don't
quite
have
yet
so
we're
going
to
get
our
first
sneak,
peek
of
property
tax,
also
in
november
for
21
20,
20
22,
but
there's
other
things
going
on
the
property
tax
side
kind
of
unrelated
to
covid
that
are
out
there.
You
know,
there's
a
state
has
will
probably
change
a
little
bit
of
the
calculation
for
a
portion
of
the
property
tax
related
to
iraf.
J
The
education
revenue
augmentation
fund,
which
is
going
to
be
we've
taken
account
most
of
that
into
our
2021
budget,
but
it
could
be
a
few
million
dollars
down
down
there.
There's
also
a
recent
court
ruling
that
will
likely
change
the
allocation
of
the
property
tax
related
to
the
successor
agency
areas
will
likely
result
in
a
substantial
reduction
for
what
the
city
will
receive
on
an
ongoing
on
both
kind
of
looking
back
for
the
past
few
years
and
on
an
on
ongoing
basis,
and
so
you
know
we're
still
looking
at
that.
J
I
M
I
I
take
council
member
canvas's
caution
and
his
many
years
of
experience
as
an
advisor,
and
I
think
that
has
value,
but
I
also
think
that
right
now
we're
in
this
unprecedented
era
that
I
don't
know
the
rules
apply
anymore.
There
is
huge
stratification
happening
in
our
economy,
haves
and
have-nots,
and
and
typically
that
that
means
that
you
know
we're
going
to
see
a
lot
of
closures
and
and
a
lot
of
economic
downturn,
and
I
think
we
still
will.
M
But
on
the
other
hand,
you
know
you
know-
and
I
think
in
asia
and
in
europe
government
interest
rates
are
in
the
negative
territory
in
the
united
states,
they're
really
deep.
So
you
have
nowhere
else
to
put
your
money,
except
in
equities
and
and
stocks
to
try
to
beat
inflation.
So
even
as
we
see
some
like
manufacturing
industries
go
down
or,
as
expected,
other
you
know.
Tech
firms,
for
instance
zoom
and
whatnot,
will
continue
for
better
or
worse
to
to
grow.
M
So
if
we
can
choose
the
market
segment
to
really
where
we're
investing,
I
I
I
think,
there's
still
room
to
invest
and,
and
the
that's
good.
I
think,
because
this
discussion
that
we've
been
having,
at
least
for
the
time
that
I've
been
on
council,
is
that
why
are
we
not
as
a
city
with
our
pension
boards
getting
the
rate
of
return
in
the
market?
And
of
course
the
answer
has
always
been.
We
have
a
mature
fund
and
we
need
the
dollars
right
away.
We
can't
be
risky
with
it.
M
So
I
see
this
strategy
as
kind
of
opening
up
a
second
pot,
so
we
can
bear
some
risk
with
dollars
that
don't
need
to
be
paid
out
right
away
to
to
our
pension
recipients.
So
I
think
that
is
a
plus
and
I
understand
the
risk
involved
in
it.
But
the
alternative
to
just
continuing
on
is
we
have
a
mature
fund
and
and
our
pensioners
need
that
money
and
we
can't
really
do
anything
to
dig
ourselves
out
of
the
hole.
So
those
are
my
thoughts.
B
E
Great,
so
actually
it
was.
It
was
really
enlightening
conversation
at
the
retirement
contributions
working
group
that
we
had
this
week
to
kind
of
hear
some
of
the
the
strategy,
but
also
some
of
the
history
behind
pension
obligation,
bonds,
and
I
think,
there's
a
couple
points
that
I
took
away
that
were
really
important.
One
of
them
was
the
majority
of
pension
obligation.
Bonds
have
actually
succeeded
in
achieving
their
goals
over
the
years
has
only
been
just
a
small
percentage,
and
this
is
obviously
it
is
due
to
timing.
E
But
that
was
one
of
the
points
that
that
I
wanted
to
make
and
the
other
was
just
the
strategy,
and
I
do
think
this
strategy
is
important
to
have
us
prepared
to
be
able
to
use
this
as
a
tool.
And
so
I
think
there
was
there's
kind
of
agreement
there
from
the
working
group
that
that's
a
good
strategy
to
to
take.
E
I
don't,
I
don't
recall
the
the
grouping
of
it,
but
it's
cash
like
dollars
where
we
can
actually
move
them
rather
quickly,
and-
and
we
did
so
both
boards
and-
and
so
I
think
there
are.
There-
are
ways
that,
as
a
even
as
a
municipality
as
pension
boards,
that
we
can
move
more
swiftly
and-
and
I
think
that
you
know
this
is
certainly
something
that
we've
seen
apologize
for
the
noise.
E
I
B
Thank
you,
I'm
sorry.
Your
voice
appears
to
be
a
little
bit
faint,
but
I
think
we
got
most
of
it.
I
would
just
emphasize.
We
got
a
long
way
to
go
before
we
pull
the
trigger
on
this.
So
we're
gonna
have
many
more
meetings
to
come
on
pension
obligation,
bonds,
I'm
sure.
So
we
have
a
lot
more
opportunity
for
for
all
of
us
to
get
educated,
because
I
know
I
certainly
need
to
learn
much
more
trustee
horowitz.
H
H
There
are
two
markets
that
we
need
to
time.
One
is
the
market
and
interest
rates.
We
want
to
issue
the
bonds
when
interest
rates
are
quite
low,
but
we
don't
necessarily
have
to
invest
all
of
that
money.
At
that
same
moment,
we
can
step
into
the
market.
We
can
dollar
cost
average
into
the
market
over
some
time
in
order
to
make
the
spread
that
we
need-
and
I
will
just
point
out
that
currently
the
dividend
yield
on-
let's
say
the
s
p
500
is
about
1.7
percent.
H
H
A
Thank
you
mayor.
This
is
a
trustee
sum.
I
noticed
in
the
budget
director
the
presentation
our
fy
2021
is
the
governed
budget
used
to
use
25
just
over
25
percent
of
the
funding
source
as
a
farm
balance?
I
just
wonder
with
that
application.
What
is
the
expected
funding
fund
balance?
Will
we
have
at
the
end
of
the
fiscal
year
2021.?
A
B
J
I
think
that's
for
you,
jim,
I
think
so.
Thank
you.
Thank
you
mayor.
So
I
think
the
so
of
the
the
the
beginning
fund
balance
is
sort
of
the
you
know
the
funding
that's
carried
over
from
the
previous
year.
That
was
either
you
know,
excess
revenues
or
additional
expenditure
savings
that
was
not
and
and
anticipated
or
or
was
not.
You
know,
yeah
excess
revenue
or
excess
expenditures,
as
well
as
any
unspent
reserve
funding,
so
that
gets
rolled
over
into
the
following
fiscal
year
and
then
that
gets
out
allocated
out
in
the
budget.
J
J
What
we
do
estimate
on
an
ongoing
basis
is,
you
know,
we
know
in
any
given
year
we're
going
to
have
some
level
of
excess
revenue,
a
combination
of
excess
revenues
and
or
expenditure
savings
that
will
generate
fund
balance
at
the
end
of
the
year,
and
so,
as
part
of
our
budget
balancing
strategy.
We
assume
on
an
ongoing
basis.
J
A
Yes,
that's
what
I
don't
know,
so
it
sounds
like
we're
constantly
estimating
about
23
million
on
some
balance
available
for
the
next
fiscal
year,
so
my
understanding
that
23
million
it's
not
really
that
much
to
comparing
with
the
required
retirement
contribution.
I
just
I
just
want
to
get
a
cons
understanding
of
how
much
volatility
the
city
can
tolerate
in
terms
of
pension
returns
and
pension
contribution.
B
Yep
jim,
could
we
go
back
to
that
that
slide?
That
contained
the
I
think
was
the
general
fund
uses
pie
chart?
If
I'm
not
mistaken,
I
think
that's
what
trustee
someone's
referring
to
right,
yeah
yeah,
I
think
it'd
just
be
helpful
to
clarify,
because
I
know
that
different
organizations
use
different
terminology
at
times
and
it
may
not
be
bad
just
to
clarify
it.
J
Yeah,
so
what
we
mean,
so
I
think
the
in
the
on
the
on
the
revenue
side
here,
so
this
25.3
million
dollars.
That's
the
fund
balance,
that's
that
excess
revenue
or
uns
or
spencer
savings
and
or
rolled
over
reserves
that
becomes
a
funding
source
from
for
2021
and
then
that
fund
balance
is
part
of
our
overall
that's
lumped
into
our
overall
revenue
revenue
pie
that
then
gets
split
out
and
out
allocated
in
the
budget
process
to
the
various
departments
and
csas
and
individual
uses
that
are
shown
in
these.
J
These
two
charts
here.
So
if
we
look
at
this
use
chart,
so
this
earmark
and
contingency
reserve,
so
these
are
monies
that
are
set
aside
generally
for
specific
purposes
with
the
with,
with
the
exception
of
maybe
the
the
contingency
and
the
budget,
stabilization
reserve,
which
are
sort
of
our
our
rainy
day.
Slash
emergency
funds
yeah,
but
there's.
J
True,
yes,
and
what
also
I
I
really
need
to
mention
too,
and
thank
you
for
the
the
reminder
is.
This
is
also
a
lot
of
money
that
is
multi-year
funding.
So
it
is
funds
that
are
rebudging
from
year
to
year
to
continue
projects
and
programs
that
are
already
in
process,
and
so
that
is
a
significant
portion
so
which
shows
up
technically
as
unspent
in
1920,
but
is
to
continue
projects
in
2021.
B
Right
so
unspent
does
not
mean
unencumbered.
It's
money,
that's
dedicated
to
something
so
we'd
have
to
cut
something
to
use
that
money
and
that
fund
balance
to
go
pay
off.
For
example,
a
pension
payment
is
that
right,
correct,
correct,
okay,
yeah!
I
just
wanted
that
to
be
clear
to
everybody,
because
I
know
it
can
be
a
little
unclear
from
that.
I
and.
B
Point
out
this
is
our
general
fund,
one
and
a
half
billion,
or
so
we
also
have
two
billion
dollars
in
other
funds
that
are
restricted
for
particular
purposes.
That
is,
for
example,
the
airport,
our
energy
utility,
our
water
treatment,
plant,
etc,
and
those
do
pay
pension
and
oped
obligations
for
those
workers.
But
obviously
the
general
fund
carries
the
the
great
weight
of
this.
So
I
just
want
to
make
sure
everyone's
sort
of
clear
about
what
we're
looking
at
and
why?
Okay,
any
final
questions
before
we
move
on
trustee.
A
Jennings,
yes,
sorry,
I
just
yeah,
I
I
want
to
make
sure
that
when
trustee's
son
was
asking
her
question,
I
don't
know
if
it
was
specifically
towards
the
unfunded
liability
or
towards
just
the
budget
for
retirement,
and
so
I
was
a
little
confused
on
that.
However,
I
just
wanted
to
reiterate
that
of
the
general
fund.
58
of
the
general
fund
is
personal
services
and
included
in
that
personal
services.
Budget
is
money
for
retirement
and
that
is
allocated
for
the
retirement
costs
of
the
employees
that
sit
in
the
general
fund.
A
B
C
And
good
morning
to
city
council
members,
I
believe
sheryl
is
driving
this
presentation.
Thank
you
cheryl,
and
there
was
a
fascinating
discussion
on
pension
obligation
bonds
for
my
colleagues
on
the
retirement
task
force.
Please
bear
with
me
because
this
is
the
identical
presentation
that
I
made
on
tuesday.
C
And
I'm
going
to
start
with
slide
3..
We
spoke
a
lot
about
our
pension
plans,
taking
a
defensive
stance,
so
I've
been
asked
to
speak
about
the
impact
of
kovid
on
our
investment
portfolio
and
the
outlook
for
the
portfolio,
and
I'm
happy
to
do
so
on
behalf
of
the
boards,
and
we
all
know
that
we've
been
very
defensive
compared
to
some
of
our
peers,
and
why
is
that
and
how
does
that
translate
into
strategic
asset
allocation?
C
Now
julia
pointed
out
that
you
know
our
obligations
are
about
400
million
dollars
a
year
north
of
400
million
dollars
a
year
now
in
exactly
20
years
by
the
year
2040
they
are
estimated
to
be
close
to
a
billion
dollars.
So
these
liabilities
are
very
real
and
so
there's
this
trade-off
and
bill
hall
market
chiron
has
often
pointed
out
that
we
are
a
very
mature
plan
and
what
that
means
is
that
we
are
going
to
face
significant
outflows
from
the
plan
in
the
coming
years.
C
C
Now
we
also
know
that
we
can
only
take
on
so
much
volatility,
and
so
we
balance
that
by
investing
in
low
beta
assets
and
in
that
low
beta
bucket,
you
will
see
that
there's
five
percent
that's
allocated
to
cash
equivalence
or
immunized
cash
flow,
and
so,
over
and
above
the
city's
contribution
that
we
are
a
negative
cash
plan
in
and
what
that
means
is.
We
have
to
actually
pay
benefits
over
and
above
the
city's
contribution
out
of
earnings
from
the
plan,
and
that
runs
at
about
a
percent
of
the
plan.
C
So
this
was
our
asset
allocation
pre-pandemic.
Now,
of
course,
none
of
us
expected
a
pandemic
to
happen,
but
we
were
cognizant
of
the
fact
that
assets
were
not
cheap,
that
the
markets
were
somewhat
pricey.
It
was
not
at
2000
levels,
but
they
were
not
cheap
either
and
they
were
getting
more
and
more
expensive.
You
know,
as
from
between
the
years
2016
and
2020..
C
So
in
in
the
last
hundred
years
we
have
we've
had
12
instances
where
the
markets
dropped
20.
But,
interestingly,
this
particular
stock
market
drop
was
the
swiftest
in
history.
It
only
took
12
days
for
the
market
between
from
it
started
on
february
19
and
in
12
trading
days
we
actually
hit
a
bear
market
and
the
market
kept
sliding
all
the
way
till
march
23rd.
C
C
C
We
took
valuations
into
account
and
we
did
realize
that
this
is
a
once
in
a
generation
opportunity
to
increase
our
risk
levels
so
going
into
the
pandemic
our
risk
level.
Our
volatility
was
somewhere
around
10
and
a
half
percent,
and
so
this
was
an
opportunity
to
increase
our
risk
still
within
the
level
recommended
by
a
risk
consultant
at
12,
but
at
the
same
time
take
advantage
of
cheaper
asset
prices,
and
so
in
some
extraordinary
moves
that
the
boards
and
the
investment
committees
made.
We
met
multiple
times
from
mid-march
to
march
end.
C
We
actually
increased
our
exposure
to
growth
assets
cheryl
if
you
can
go
to
slide
five
and
then
briefly
and
then
to
slide
six
so
slide.
Five
shows
that
the
volatility
in
march
was
just
the
same
as
the
volatility.
This
is
the
proxy
we
used
to
the
mix
index,
which
is
a
volatility
index.
You
can
see
in
2008
2009.
C
So
we
had
growth
that
growth
exposure
of
about
60
percent,
depending
on
the
plan
around
the
60
mark,
and
now
we
went
to
around
the
70
mark
now,
as
council
member
perales
pointed
out
earlier,
the
funding
source
for
that
is,
we
did
have
a
lot
of
short-term
investment
grade
bonds,
and
that
was
if
we
can
actually
share
my
apologies.
If
you
can
go
back
to
slide
three.
I
just
want
to
point
that
out
and
you
can
see
here
on
the
low
beta
strategy.
C
We
had
short
term
investment
grade,
bonds,
15
and
what
they
really
mean
is
you
know,
obligations
issued
primarily
by
the
us
government
treasury
bills
and
really
bonds
with
the
maturity
of
two
years
or
less
and
cheryl.
If
you
can
kindly
go
back
to
slide
six,
so
we
can
use
that
as
a
funding
source,
because
the
value
of
those
bonds
had
not
changed
and
we
could
then
deploy
them
to
buy
growth
assets.
C
C
People
generally
talk
about
the
s
p,
500,
there's
a
reason
why
we
actually
manage
a
well-diversified
portfolio
and
the
evidence
of
that
you
can
see
in
quarter.
One
returns
now
in
quarter,
two,
the
markets
bounced
back
dramatically.
In
fact,
I
believe
it
was
the
the
highest
quarterly
return
after
world
war
ii,
and
just
coinciding
with
that,
we
had
increased
our
exposure
to
equity
and
therefore
both
clients
actually
benefited
drastic
tremendously
from
that
move,
and
you
can
see
in
q2,
federated
was
up
11
and
police
and
fire
was
up.
C
9.6
percent
and
our
calendar
year
return
through
june.
30Th
was
slightly
negative,
but
I'll
talk
about
july
or
this
in
september.
In
a
minute,
and
the
result
of
this
is
that
for
fiscal
year,
2019-20
federated
plan
returned
3.6,
police
and
fire
returned
3.1
percent,
and
you
can
see
our
peers
in
the
public.
Planned
universe
returned
1.3,
so
we
actually
outperformed
by
peers
by
almost
two
and
a
half
percent,
which
translates
to
almost
150
million
dollar
gain
for
the
plans
as
a
whole.
C
Thanks
to
the
very
swift
action
by
our
boards
now
our
calendar
year,
return
was
was
slightly
negative,
that
that
is
january
1st
to
june
30th.
But
if
you
look
at
again,
if
you
look
at
a
peer
comparison,
our
federated
plan
was
in
the
top
percentile.
It
was
the
number
one
plan
number
one
percentile
and
police
and
fire
was
in
the
12th
percentile
and
both
plans
for
the
fiscal
year
2019-20
finished
in
the
top
20
of
their
peers.
C
Now,
what
does
this
mean
going
forward?
Right,
you're,
certainly
not
out
of
the
woods
yet.
The
pandemic
is
still
unfolding.
We
expect
a
lot
of
volatility
in
the
markets,
especially
because
we
have
an
election
coming
up,
but
from
a
quant
perspective.
Let's
see
what
impact
this
this
increase
in
risk
level
can
do
to
the
plans
sheryl
if
we
can
go
to
the
next
slide.
C
If
we
have
another
great
financial
crisis,
emerging
markets,
crash,
911
and
so
on
in
all
those
scenarios
are
are
slightly
higher.
Risk
now
will
negatively
impact
the
plans,
but
it
is
to
be
pointed
out
again,
but
in
the
long
run
we
believe
that
our
risk
stands
and
again
it
is
still
within
the
12
recommended
by
a
risk
consultant
should
pay
off
cheryl.
If
you
can
go
to
the
next
slide,
and
this
again
shows
us
a
similar
chart.
C
That
shows
what
will
happen
shocks
to
the
portfolio
for
police
and
fire,
and
mr
mayors
and
city
council
members,
I
believe,
that's
the
last
slide.
We
just
have
a
conclusion
slide.
So,
in
short,
what
I
would
like
to
say
is
that
we
had
a
defensive
stance
going
into
the
pandemic.
It
really
helped
our
pension
plans.
Our
boards
moved
very,
very
quickly
and
aggressively
which
also
benefited
the
plans.
C
C
Our
estimates
are
that
between
the
two
plans
we
added
another
somewhere
between
five
and
six
percent.
So
again,
we
are
positioned
for
the
long
term.
We
did
not
time
the
market,
we
had
a
chance
to
increase
our
risk
level
and
buy
growth
assets,
the
cheap
price
at
the
end
of
march,
and
that's
what
we
did
I'm
happy
to
take
any
questions.
L
L
I
used
to
tell
people,
you
know,
don't
count
your
your
your
chickens
before
the
eggs
hatch,
because
you
bought
the
stock
and
it
looks
good
today.
But
until
you
take
the
profit
you
haven't
made
any
money.
Do
you
have
a
strategy
for
getting
out?
I
I'm
I'm
hearing
from
some
of
my
friends
in
the
stock
market
still
that
they're
taking
a
defensive
position
and
they
actually
think
that
joe
biden's
going
to
win
and
taxes
are
going
to
get
raised
and
the
market's
going
to
drop
are
we
are
you
going
to
get
defensive
towards?
L
C
That's
that's
council,
member
camas.
Thank
you
for
asking
that
question.
That
is
a
great
question.
So,
firstly,
I
need
to
point
out
so
when
we
make
changes
to
our
asset
allocation
in
the
boards,
so
there's
two
types
of
changes
we
can
make.
One
is
called
a
strategic
asset
allocation
change
and
the
other
is
a
tactical
asset
allocation
change,
and
so
when
we
made
the
shift
in
march-
and
I
don't
want
to
speak
for
the
boards
and
my
colleagues
on
the
board-
please
feel
free
to
jump
in.
C
C
Quite
dramatically,
so
what
you
are
suggesting
now
in
terms
of
taking
money
off
the
table,
falls
under
the
category
of
a
tactical
asset
allocation
shift,
and
typically,
we've
tended
not
to
do
that
for
and
the
main
reason
is
this
for
two
reasons.
Actually
one
is
it's
a
very
hard
to
time
the
market
and
many
people
have
tried
it
without
great
success.
Of
course,
people
occasionally
get
lucky.
C
The
second
thing,
what
I
would
point
out
is
there's
a
difference
between
managing
a
portfolio
for
an
individual
and
managing
a
portfolio
for
a
pension
plan
as
an
individual.
We
have
time
frames
that
are,
you
know,
often
one
year,
three
years,
five
years,
depending
on
our
stage
in
life
and
what
we
have
to
do,
and
so
it
does
make
sense,
sometimes
to
take
money
off
the
table
and
lock
in
those
gains
for
a
pension
plan
such
as
ours.
C
As
I
mentioned
before,
we
have
real,
very
real
obligations
that
are
due
in
20
years,
which
will
be
almost
a
billion
dollars
a
year.
So
it's
my
hope
that
the
city
of
san
jose
will
be
around
in
100
years.
We'll
have
prosperous
pensioners
and
we're
really
managing
our
portfolios
for
the
long
haul.
So
we're
really
not
trying
to
time
the
market
here
we
are
making
strategic
shifts,
but
your
point
is
a
very
good
one.
The
market
does
appear
very
pricey,
and
now
I'm
not.
This
is
not
a
political
statement
by
any
means.
C
The
evidence
shows
to
your
point
about
joe
biden.
Winning
the
evidence
shows
that
the
markets
are
actually
performed
better
in
the
last
100
years
under
democratic
administrations,
and
I
don't
know
why
that
is
so,
but
we
are
certainly
not
trying
to
time
the
market,
and
I
would
certainly
encourage
my
colleagues
on
the
board
to
to
chime
in
if
you
want
to.
L
And
I
wasn't
trying
to
make
any
political,
I
I
don't.
I
was
really
not
trying
to
make
any
political
points.
I
just
think
that
there
is
some
nervousness
in
the
in
the
market,
folks
about
increased
capital
gains
taxes
and
increased
corporate
taxes
that
that
could
drive
investors
away
from
the
market.
I'm
I
I
again.
I
I
want
to
stress
that
I'm
not
trying
to
make
a
political
statement.
I
just
wanted
to
see.
C
Yeah
no,
no
thank
you
for
that,
but
our
strategy
really
is
that
you
know
once
a
year
in
the
end
of
january,
our
investment
consultant
makita
actually
comes
up
with
capital
market
assumptions,
and
those
assumptions
are
20-year
assumptions,
and
so,
once
again,
our
strategy
right
now
is
to
wait
and
see
what
those
revised
assumptions
are.
But
meanwhile
we
have
we're
taking
a
very
close
look
at
the
portfolio
constantly
and
just
as
as
you,
as
you
pointed
out,
there
are
certain
pockets
of
the
market
that
are
expensive.
C
There
are
also
certain
pockets
of
the
market
that
could
be
cheap,
and
so
we
tried
to
take
opportunity.
They
could
be
distressed
debt,
for
example,
real
estate's,
another
asset
class
that
we're
closely
looking
at.
So
we
try
to
take
opportunity
advantage
of
those
opportunities
and
we're
really
positioned
for
the
long
term
and
again,
if
any
of
my
colleagues
on
the
board
want
to
chime
in,
please
do
so.
A
I
A
D
D
A
A
Really
looking
at
it
from
a
diversification
across
asset
class
across
time,
and
so
some
of
these
some
of
these
decisions,
if
you
look
at
it
at
a
microcosm
in
a
moment,
they
look
great
you
roll
the
clock
forward,
10
20
years.
They
may
not
look
as
great,
so
I
just
want
to
make
sure
that
people
keep
that
broader
context
in
mind
as
well.
Thank
you.
L
Well,
well,
thank
you
for
your
comments.
I
also
want
to
thank
the
board
for
making
time
to
act
quickly,
as
I
mentioned
in
the
past,
that
wasn't
the
case
in
the
past,
where
the
boards
would
have
emergency
meetings
to
get
out
of
a
certain
position
or
get
into
a
certain
position.
So
I
really
want
to
thank
the
boards
for
their
dedication
to
moving
quickly
because
it
was
not
my
experience
in
the
four
years
that
I
sat
on
on
the
boards.
So
again,
thank
you
probably
for
your
leadership
as
well.
B
You
councilmember
any
other
questions
or
comments.
I
I
just
had
one
and
it
was
a
variant
of
councilmember
campuses.
Let
me
just
offer
this
scenario
and
ask
probably
if
it
would
have
changed
your
view
at
all,
so
undoubtedly
you've
heard
from
plenty
of
folks.
I
know
you,
you
read
a
lot
of
a
lot
of
what
experts
are
saying
out
there
in
the
market
and
lots
of
different
opinions,
certainly,
and-
and
we
all
agree-
that
market
timing
is
not
something
a
board.
Frankly,
it's
hard
enough
for
individual
investors.
B
H
B
Half
or
three
and
three
quarters
percent
and
the
fallout
was
essentially
a
credit
freeze,
and
you
know
is
it
the
the
economic
crisis
wasn't
bad
enough.
The
financial
crisis
is
what
really
froze
up
the
economy,
because
nobody
could
borrow,
and
you
know
there
has
been
a
lot
of
concern
that
that
may
happen
on
the
commercial
side
here.
That
is
that
the
other
shoe
has
not
yet
dropped
in
this
recession,
namely
that
now
we've
got
you
know.
B
B
So
if
six
months,
eight
months
from
now,
all
this
plays
its
way
out
and
we
have
a
very
steep
drop,
would
it
have
changed
your
mind
about
whether
or
not
hey?
Maybe
we
should
have
held
off
six
or
eight
months
before
we
decided
to
push
the
more
aggressive
investment
strategies
or
would
you
continue
to
say,
hey
we're
playing
for
the
long
run.
C
C
We
do
run
a
well
diversified,
real
estate
portfolio
and
we're
paying
particular
attention
to
our
exposure
in
real
estate,
and
luckily,
we've
actually
made
some
investments
in
in
warehouses
and
so
on,
which
have
all
benefited
as
people
shop
from
home
and
those
those
properties
have
actually
gone
up
in
value,
and
so
we've
done,
we've
actually
made
some
really
good
investments
there
it's
hard
to
predict
the
future.
So
I
think
at
any
given
point
in
time,
as
trustee
orr
pointed
out
we're
very
deliberate
about
our
decisions
we
take
into.
C
We
can
only
take
into
account
all
those
risks
out
there
and
we
have
to
make
a
calculated
decision
if
we
don't
take
any
risk.
We
are,
of
course,
putting
our
six
million
dollars
under
the
mattress
and
we're
not
going
to
earn
anything.
So
we
have
to
take
calculated
risks
in
our
portfolio
and
that's
what
we've
done
and
we
will
continue
to
monitor
the
portfolios
very
closely
and
I
think
we
made
the
right
decision,
I'm
not
sure
now,
of
course
things
could
change.
C
I
think
that
the
story
and
the
pandemic
unfortunately
is
not
over,
and
so
things
could
definitely
change.
Things
could
get
worse.
You
could
get
better.
The
markets
are
reasonably
good,
discounting
mechanisms,
of
course,
from
time
to
time.
You
know
they
do
deviate
from
fair
value,
but
over
the
long
run,
they're
reasonably
good,
discounting
mechanisms,
and
we
certainly
look
to
the
market
for
clues
as
well.
K
K
B
A
A
A
O
We've
seen
some
salary
freezes
and
reductions
at
least
under
discussion,
if
not
some
actual
implementation
and
we've
seen
a
discussion
of
reduced
or
deferred
contributions
to
their
pension
plans.
So
far,
the
reduction
in
contributions
that
we've
seen
has
been
cancellation
of
some
planned
supplemental
contributions
so,
like
the
state
of
colorado,
for
example,
has
a
poorly
funded
pension
plan
and
they
had
planned
an
additional
contribution
to
help
its
funded
status
and
they
canceled
that
also
some
systems
have
dedicated
revenue
sources.
O
But
going
forward,
that's
the
most
immediate
concern
we
have.
We
get
asked
a
lot
about
mortality
experience
and
I
have
to
say
right
now.
We
don't
know
the
impact
of
covid
has
been
very
different
on
different
populations
and
different
geographies,
and
so
we'll
have
to
see
how
that
impacts.
Individual
plans
we've
also
seen
some
upticks
in
retirement
rates
and
termination
rates,
with
people
having
to
stay
at
home
or
particularly
in
school
systems
where
teachers
have
been
asked
to
go
back
to
the
school
system.
O
O
So
with
that,
I
wanted
to
turn
to
san
jose
and
start
with
our
2019
valuation
results
and
just
remind
people
where
we
were
I,
and
these
funded.
This
chart
on
the
left
shows
the
funded
percentage,
and
these
are
based
on
the
market
value
of
assets.
So
the
police
and
fire
plan
was
about
72
percent
funded
and
the
federated
plan
about
51
funded
the
bars.
Are
the
liability
broken
out
by
a
group
of
people,
so
the
blue
bar
is
those
who
are
currently
receiving
benefits.
O
O
So,
in
that
2021
contribution
about
89
million,
it
is
going
just
to
pay
the
interest
on
the
police
and
fire
ual
and
51
or
52
million,
is
reducing
the
ual
for
federated.
The
proportion
is
different
and
most
of
that
ual
contribution
about
135
million
is
just
going
to
pay
the
interest
and
we're
only
reducing
it
by
about
14
million
based
on
contributions.
O
That's
been
reported
for
each
plan
and
in
combination.
We
have
about
nine
and
a
half
billion
in
liability
and
about
5.9
billion
in
assets.
So
the
unfunded
liability
we
would
expect
in
this
valuation
is
about
3.6
billion.
That's
about
three
and
a
half
percent
higher
than
it
was
the
prior
year
on
a
funded
ratio
basis.
It
only
drops
the
aggregate
funded
ratio
by
0.1
percent,
so
that's
fairly
level
that
will
generate
higher
contributions,
but
relatively
minor
in
the
first
year.
O
O
So
looking
forward,
given
the
pandemic,
makita
was
kind
enough
to
give
us
their
projections
for
some
post
pandemic
investment
return
scenarios
so
that
we
could
look
at
what
might
unfold
as
we
go
forward.
Assuming
we
don't
change
any
assumptions
or
any
methods,
and
so
the
first
scenario
we'll
look
at
is
a
15
increase
in
the
u.s
market
and
then
it
kind
of
returns
to
an
a
normal
level.
So
over
a
five
year
period
works.
We
would
expect
an
eight
and
a
half
to
eight
point:
nine
percent
return,
depending
on
the
plan.
O
O
This
slide
looks
at
what
that
would
do
to
our
unfunded
liability.
So
we
start
here
at
our
3.6
billion
for
the
combined
unfunded
liability
from
the
2019
valuation.
We
had
projected
over
the
five-year
period
that
that
would
reduce
to
about
2.9
billion,
but
depending
on
the
scenario
here,
it
could
range
from
2.4
billion
in
the
optimistic
scenario,
to
4
billion
or
to
5.2
billion
if
we
have
a
decline
without
a
recovery.
O
So
there's
a
significant
swing
here
in
potential
unfunded
liability
just
based
on
investment
returns
over
the
next
five
years.
Then,
if
we
look
at
the
contributions,
we
had
projected
things
to
increase.
Gradually
we
have
kind
of
built
in
increases
for
expected,
increases
in
payroll
of
two
and
a
half
to
three
percent.
O
The
other
issue
that
concerns
us
looking
forward
is
what
we
should
expect
as
future
investment
returns
and
one
of
the
things
we've
talked
to
the
board
about
every
year
is
that,
with
the
decline
in
interest
rates,
it's
really
forced
pension
plans
to
either
reduce
their
expected
return
or
increase
the
risks
in
their
portfolio,
and
historically,
we've
done
a
combination
of
that.
But
to
illustrate
back
in
1995,
the
yield
on
the
10-year
treasury
was
6.2
percent
and
for
federated,
the
discount
rate
was
eight
and
a
quarter.
O
O
We've
been
fairly
stable
for
the
last
five
years,
but
what's
happened
now
is
that
yield
on
the
10-year
treasury
has
dropped
again
down
to
0.7,
and
the
question
is:
is
that
a
temporary
drop,
because
I've
only
shown
a
few
years
here
and
there's
definitely
volatility
in
the
yield
on
the
10-year
treasury?
Is
that
a
temporary
drop
due
to
the
pandemic
and
as
the
economy
recovers,
we'll
see
it
bounce
back
or
are
we
going
to
be
in
this
low
interest
rate
environment
for
a
longer
period?
O
O
O
Given
the
pandemic,
the
uncertainty
about
the
futures,
even
it's
even
more
uncertain
than
what
we
usually
look
at
and
the
short
and
long-term
impacts
to
our
pension
plans-
are
also
very
uncertain.
At
this
point,
I've
shown
the
projections
assuming
the
retirement
boards,
don't
make
any
changes
to
their
policies.
I
just
want
to
note
that
they
can
and
do
adjust
the
pension
contribution
requirements.
O
B
B
B
O
Well,
I
think
we
we
are
meeting
with
the
boards
in
november
to
discuss
this,
and
I
think,
because
of
how
rapidly
the
the
interest
rates
have
dropped
here,
the
the
question
is
going
to
be
more
around.
Do
we
expect
a
quick
bounce
back
or
do
we
expect
this
to
be
a
sustained
low
interest
rate
environment
and,
to
the
extent
it's
sustained,
then?
Yes,
we
would
be
looking
at
lowering
the
discount
rate
probably
gradually,
and
you
know
recognizing
that
that
has
an
impact
on
contributions.
B
I
know
that's
not
in
your
wheelhouse
necessarily,
but
would
it
make
sense,
then,
if
we
were
to
think
about
a
strategy
of
reducing
a
discount
rate
in
concert
with
issuing
pension
obligation
bonds?
That
would
be
a
sensible
way
to
enable
us
to
reduce
the
risk
of
the
plan.
While
we
are
taking
at
least
some
of
the
sting
out
of
the
contribution
right
in
the
short
run,
or
would
that
have
no
effect.
L
Cameras,
well,
I
think
you
are
you're
you're
heading
towards
where
I
was
thinking
a
mayor
in
your
line
of
questioning.
Let's
say
we
borrow.
Let
me
see
if
I
could
dumb
it
down
for
myself.
Let's
say
we
borrow
at
a
rate
of
three
percent
with
with
bonds
and
does
does
the
the
bonds
that
we
are
borrowing
automatically
offset
the
unfunded
liabilities
so
that
it
could
reduce
the
interest
rates
that
we
pay
on
the
unfunded
liability
or
does
the
interest
that
we're
paying
for
the
bonds
get.
O
No
they
offset,
but
the
boards
would
have
to
decide
how
they
are
providing
the
credit
for
the
additional
funds
and,
and
so
if
they
didn't,
if
they
just
followed
their
current
policies
for
amortization,
it
would
offset
at
the
6.75
rate,
but
that
really
only
affects
well.
It
has
a
long
lingering
effect,
but
each
year,
when
you
get
actual
investment
returns
on
those
proceeds
that
gets
pushed
into
it
as
well
and
ultimately,
over
time,
it's
the
actual
returns
versus
the
three
percent
you're
charged
on
the
bonds.
O
N
Thank
you,
mr
mayor,
for
those
of
you
that
haven't
met
me.
I'm
the
vice
chairman
of
the
police
empire
board,
like
vince,
been
on
there
a
long
time.
So
let
me
tell
you
sort
of
what
I
think,
mr
mayor,
about
your
question
going
back
to
when
we
said
it
last
year.
I
think
the
question
is
geez.
Can
you
tell
me
when
this
free
fall
is
going
to
stop
and
I
think
we're?
Actually
we
may
be
stopped
now.
6.75
might
be
the
right
number.
N
The
reason
why
I
say
that
is
because
when
we
talk
to
our
so
we
we
set
the
risk
and
you've
helped
us
the
city
to
understand
risk
in
this
great
big
panoply.
We
look
at
other
plans.
We
look
at
the
markets,
we
look
at
you
representing
the
city,
so
I
think
we've
dialed
in
the
right
level
of
risk
and
when
we
build
the
portfolio
around
that
and
ask
our
consultants
varus
makita
and
look
at
other
high
high-end
consultants
and
they
and
ask
50
50.
What
number
are
we
going
to
hit?
N
N
O
B
A
Yes,
thank
you,
mr
mayor.
So
let
me
let
me
kick
off
that
one.
So
first,
we
want
to
thank
you,
the
city
council,
for
raising
this
very
important
topic,
especially
these
these
times.
Obviously,
as
we
can
see,
certainly
diversity,
inclusion,
very
critical
topics
and,
as
a
result
of
that,
we
we
reach
out
to
our
consultants.
A
F
Bless
there,
yes
thank
you
mayor
and
thank
you
roberto.
I
I
did
raise
this
this
question
because
we
have
a
very
diverse
workforce
and
I
felt
it
was
important,
and
I
know
that
my
council
colleagues
also
feel
that
it's
important
to
have
consultants
and
advisors
who
are
reflective
and
represent
the
makeup
of
our
their
employment
base,
as
well
as
our
residents
and
citizens.
F
I'd
like
to
see
all
of
our
advisors
in
companies
that
we
work
with
have
a
robust
inclusion,
diversity,
inclusion
efforts
and
would
constantly
want
to
see
efforts
to
diversify
the
staffing,
particularly
the
staffing
that
works
on
city
consulting
projects.
So
I
just
wanted
to
just
put
that
out
there
mir
in
terms
of
what
I
wanted
to
see,
and
I
want
to
thank
roberto
and
also
the
the
firms
for
providing
us
with
that
information.
F
B
F
B
P
Hi,
thank
you
for
allowing
me
to
be
first
today.
Thank
you
for
the
meeting
I
guess
to
start
off.
You
know
it's
become
my
usual
speech
that
at
the
time
of
the
protests
you
know
there
was
good
negotiation
about
how
the
next
year
of
the
poa
contract
can
be
an
open
process
and
to
work
towards
that.
Good
luck
in
those
efforts.
You
know
how
can
that
be
an
open
process
for
the
whole
community
to
be
involved
in
that
takes
effort
and
work.
Good
luck
in
that.
P
Thank
you
also
to
the
mayor
for
his
forecast
about
what
to
expect.
In
the
next
few
years,
with
foreclosures
and
and
the
like,
there
was
a
very
important
bta
meeting,
an
a
f
meeting
at
12
p.m.
Yesterday
that
one
of
the
vta
accountants
really
well
described
what
he
expects
for
the
next
year
or
two
that
I
I
very
much
suggest
that
people
look
into
and
read
and
listen
to
the
mayor
offered
his
same
ideas
yesterday
to
this
subject
as
well.
P
The
the
accountant
had
some
nice
forecasts
how
to
get
out
of
that
situation,
and
I
have
my
own
ideas
since
then
from
the
mayor's.
You
know
he's
offered
his
a
very
you
know.
I
guess
the
term
is
fair
warning
and
that
from
that,
we
really
have
to
consider
the
funding
practices
of
the
heroes
act
and
the
cares
act
and
ideas
like
that.
P
We
have
to
very
much
continue
to
develop
those
ideas
at
the
state
level
and
and
be
open
to
it
and
respect
its
ideas
and
what
it's
possible
it
can
work
towards,
and
we
passed,
for
instance,
ab3088
a
recently.
It
is
way
short
of
what
it
is
capable
of
and
possible
of
in
terms
of
housing,
and
it
can,
and
it
can
give
help
to
both
owners
and
tenants.
P
Q
Yeah,
if
you
want
to
get
out
of
all
these
problems,
that
you
have
start
opening
up
having
the
businesses
open
up
and
maybe
stop
bad-mouthing
the
president
united
states,
you
could
kick
you
down
some
federal
money,
but
you
know
the
more
you
bad-mouth
them
and
have
your
cutie
pie,
little
tweets
about
them
and
everything
I'm
not
going
to
get
any
money
from
the
feds.
I
hope
he
doesn't
give
you
you
guys
any
money.
Q
You
don't
deserve
it
after
how
you've
treated
him
for
the
four
years,
even
when
he
wasn't
president
and
he
had
san
jose
td,
stand
down
in
june
of
2016.
I,
as
a
voter,
I'm
never
gonna
forget
that
I
voted
for
you,
sam
and
you're.
Not
gonna
get
my
vote
again.
Nor
are
you
gonna
get
my
vote
pam
fully
the
way
you
guys
talk
about
the
president
and
gladhand,
and
all
these
democratic
politicians
like
gavin,
newsom
and
everybody
else.
All
of
you
should
be
ashamed
of
yourself,
ashamed
of
yourself.
Q
N
Yeah,
thank
you
guys,
I'm
william
houston,
founder
of
bay
street
capital,
we're
based
in
palo
alto,
and
we
are
looking
to
start
supporting
the
city
on
the
advisory
side.
We
advocate
for
diverse
and
emerging
fund
managers
and
as
an
organization
we
manage
a
portfolio
of
renewable
energy
and
technology
assets.
I
want
to
start
with
a
story
that
I
like.
The
story
goes
like
this.
It
says
I
saw
a
dog,
he
spied
a
cat.
He
chased
the
cat
and
the
cat
fled
down
the
street
on
the
roof,
but
the
cat
got
away.
N
I
asked
the
dog,
hey,
why'd,
you
let
the
cat
get
away
and
he
said
I
was
running
for
a
meal,
but
the
cat
was
running
for
his
life
and
we've
been
listening
a
lot
today
and
I
see
the
dog
as
the
market
and
the
cat
has
the
diverse
manager.
You
know
we've
all
spoken
about
how
diverse
and
emerging
teams
are
able
to
outperform
the
market
over
time.
I
believe
the
city
and
palani
his
leadership
team,
the
proof
of
this
phenomenon,
as
we've
seen
during
the
presentations,
how
they've
outperformed
their
peers
in
this
space.
N
For
the
sake
of
time,
I
also
touched
on
kathy
wood.
You
know
36
returns
over
the
last
five
years.
Triple
the
s
p
bay
street
is
minority
owned
or
consultants,
or
a
diverse
team
of
four
cfas
four
cfps
four
mbas
and
a
phd
in
finance.
We've
got
58
returns
here
to
date
with
an
investment
thesis
of
investing
through
the
lens
of
history.
N
Paula
mentioned,
you
know
the
plan's
low
beta
strategy,
so
we've
got
a
weighted
beta
of
1.3,
which
means
we
take
on
30
percent
more
risk,
but
you
know
we're
seeing
about
nine
times
the
return
on
market
average,
and
it's
not
just
that
we're
taking
asymmetric
risk,
because
everyone
should
be
doing
that.
It's
we're
looking
at
sectors
that
are
supposed
to
outperform
this
as
land
touched
on.
We
also
spoke
about
the
interest
rates.
N
What
we
found
as
diverse
firms
is
it's
difficult,
even
if
we're
outperforming
to
get
over
two
hurdles
that
I'll
touch
on?
If
I
have
30
more
seconds,
the
first
being
plans
rely
on
the
consultants
like
makita
to
provide
fund
managers
which
are
often
in
internal
databases
and
those
internal
databases.
Don't
often
include
diverse
managers,
because
they
don't
hit
the
criteria
that
the
databases
are
holding.
Additionally,
few
consultants
attend
a
lot
of
the
events
where
diverse
managers
are
speaking
about
a
lot
of
these
issues.
N
If
you're
looking
to
borrow
with
these
pension
obligation
bonds,
there
is
a
prudent
approach
to
investing,
regardless
of
if
the
market's
at
a
high
or
a
low.
You
can
completely
remove
the
risk
of
market
timing
by
just
taking
a
market
neutral
strategy
where
you're,
not
necessarily
looking
to
time
the
market
you're
using
that
leverage
to
your
advantage
to
improve
the
returns
over
time.
I
think
that's
something
that
paulana
is
aware
of,
that
he'd
be
able
to
speak
to
at
a
later
date
and
so
yeah.
B
You
all
right
back
to
the
council
and
the
boards
any
final
comments
before
we
wrap
up.
I
I
just
want
to
say
thank
you.
I
really
appreciate
the
dialogue
and
I've
certainly
learned
a
lot
today,
and
I
know
we've
got
a
lot
more,
particularly
on
the
city
side,
to
learn
as
we
delve
into
this
question
pension
obligation
bonds.