Council Finance Committee - meeting_joint_regular

Onto the the council finance committee and investment review committee meeting of 10/22/2025. It's 08:33AM. I'll call the meeting to order. So note that all committee members are present. This is a hybrid meeting allowing the public to comment in person and virtually, and instructions for addressing the committee virtually can be found on the agenda.

We've already set a roll call. I noted that all the committee members are present, including our including the of the investment review committee, which includes noncouncil approved. Thank you, everyone, for being here. Item three, we have minutes to approve from the December 2024 meeting. Item 3.1, that's the minutes of the CFC IRC meeting, 12/06/2024.

Would any members of public join us virtually or in person like to provide comment on this item? If so, please click the raise hand button in Zoom, and in person attendees can fill out a blue or, I guess, a yellow speaker card, or raise their hand to be called upon, and we'll public speakers may speak for up to three minutes on this item. So this is just the minutes. If anyone from the public has any comments on the minutes? No? So we we don't have any in person or virtual speakers on that item. Are there any committee member comments or or motions to approve events? Second.

Oh, I wanted to fix 5.2. There's the on my name.

Oh, You said 5.2 on the menu.

Yeah. On one

Oh, right

here. Paragraph. Oh, I see it.

That's that's all.

Thank you. Yeah. Do you want to amend your motion? Yeah. Move move to approve as amended. So we have a motion by, member Ramirez, seconded by, committee member Ramos. I will we'll do a a roll call vote on this, but all all abstain since I was not on the committee at the time or or holding back to the office. So is it okay to do a roll call for that one so we have a a record individually?

I'm sorry. Didn't hear.

Roll call.

Roll call.

Committee member Doug Becky?

Here.

Council yes. Council member Emily Reynolds? Yes. And chair, press 5.

All all abstain. Thank you. You. That concludes, item three. We'll move on to item four, which is oral communication from the public.

So this portion of the meeting is reserved for persons wishing to speak on anything that isn't on the agenda today. So would any member of the public join us virtually or in person like to comment on items that are not on today's agenda? Please, if you're on Zoom, please click the raised hand button and attendees can raise their hand. They'd like Seeing none, we'll close oral communications from the public and move on to item 5.1, presentation of the status of the city's portfolio and investment policy. The administrative or the finance administrative services director will make brief remarks before the presentation by Chandler Asset Management, the city's investment advisory firm.

We'll turn it over to you. Right, Mr. Rambeau.

Thank you. Thank you, Chair Fark and committee members. Derek Rambeau, your Finance and Administrative Services Director. Item 5.1 is our annual update where we hear from our investment advisory firm. Today, we have Bill Dempiche here who will or on Zoom, who will be walking us through the most recent investment report, which is from 06/30/2025. And and he'll be happy to answer any questions that you may have at the end. So we'll go we'll just kick it off with Bill. So, Bill, thanks for being here.

Good morning, everyone. Thank you for having me. I'm just confirming you can hear me clearly?

Yes.

Yes.

Great. And I'm just gonna share my screen real quick. I think

gonna do the now. I'm just here.

For some reason For some reason, my computer isn't letting me share. I don't know if it's the settings in Zoom. Could is it possible for someone to pull up the the quarterly report that was in the agenda as of June 30 and share with the screen I

We all have the presentation in front us.

So Perfect. If you could just go to, to page four. Alright. So if if you could go to page four. So staff has asked me to keep my comments to around five minutes, so I'm gonna go relatively quickly.

If anyone has any questions or concerns, I'm happy to go into greater detail. As we all know since or I'm assuming as we all know since October 1, the US government has been shut down, based on our reconciliation bill. You know, because of that, the economic data that has been released in the month of October has come to a standstill. We will be getting the CPI inflation report this Friday at 05:30AM. And the reason why that report is going to be released is those employees were deemed essential, because those calculations are used for the annual cost of living cost of living adjustments for Social Security payments.

But if you look at the employment picture, this this data is a little stale, but it does show the overall trend. And overall, the the employment backdrop, although softer and job growth is softer, some of that is largely attributed to the the lack of immigration that's happening right now based on the current policies of the administration. You can see the unemployment rate, both the u three and the u six, which is referred to as the underemployment rate. Both of those remain low and are really consistent with full employment. So we would characterize the backdrop as more of a low hire, low fire environment, And, it's our base case that this is likely to continue, going forward.

I'm gonna forward over to page six, which just shows, the inflation data. So on the left, we have the consumer price index. Again, this report will be released this Friday Okay. At 05:30 in the morning. And unless the government reopens, that will be the last time we will get, some really meaningful economic data.

The Fed really forecast based on the chart on the right, which is the personal consumption expenditures index. The dash line or the core number, you can see it's just marginally below 3%, based on Chandler's forecast, which assume that we will get a brief period of two to three months of more firm inflation at the core level and then revert back to trend, which is which we view as around two tenths per month. Really, inflation core inflation will end December above 3%, and it will also be, right around 3% as of June 2026. So we do expect monetary policy to be in play, and we do expect the Fed funds rate to be reduced at the October meeting. But we are circumspect given the, the trajectory of inflation that the Fed funds rate will be able to be lowered, in a really meaningful way, I e, more than a 100 basis points looking out into June 2026, which is what the market is softly pricing in currently.

I'm gonna go to page 13, which really just shows treasury yields, and I think this is a a big part of the story. So the graph on the right, the green bar shows yields as of June and that dash purple line as of June 2024, so the prior year. So, you can really see, that the Fed funds rate has been reduced. And so because of that, we see the the shorter term yields are lower. But as we move further out the curve and you go to the seven, and really the ten year and thirty year point, you can see those yields are peripassu and in in the thirty year case, higher than they were in June 2024.

So what this is exhibiting is a steeper yield curve, and we no longer have or or we think over time, we're no longer gonna have an inverted yield curve where short term rates are higher than longer term rates. Currently, the spread between the two year note and the ten year treasury note is just above 50 basis points. We think this needs to migrate to be closer to a 100 basis points, and we think that will happen over, you know, a three to nine month forecast horizon. We really think that needs to happen because front end rates stayed anchored or come a little bit lower, and those ten year notes are a little bit higher. The good news is is that the city of Mountain View's portfolio invests, you know, kind of up to five years.

So you should be insulated from this move, but we do think that the treasury curve will be steeper over time based on our sovereign debt profile as well as the sovereign debt profile of other developed market economies. So our view is that the, economy is poised to slow down, but we are not poised to have, a recession in our view because we do believe that the employment picture is going to, remain in this low fire, low hire environment. And we also believe that because of this of the fiscal one big beautiful bill that was passed earlier this year, we are anticipating some fiscal stimulus in the, 2026, which should be a tailwind for the economy. So before I talk about the portfolio, does anyone have any questions on our economic outlook?

I I do have, I guess this is more of a portfolio question, so I'll I'll send it to after. Yes.

Okay. Fair enough. So if we could go to page starting on page 16. So the next three yes, sir?

We're nodding their heads. Any of the other committee members have? Okay. Sorry. Sorry about that. Go ahead.

So if we go to page 16, it shows the statement of compliance. This is our compliance dashboard. This report is sent to the finance team staff at the city of Mountain View every month by the third business day. And we just like to highlight that everything is in compliance. And I'd also like to highlight on page 17,

it

really highlights about a third two thirds of the way down. It shows the socially responsible prohibited investments. And you can see the the stuff that we have file that we have profiled not to invest in, fossil fuels, firearms, and tobacco. So that is something we do test for on an ongoing basis. On page 19, you can see the portfolio characteristics.

So between March '25 and June '25, you can see the duration did extend a little bit from January to '2 zero seven. It is just shy of the benchmark duration of 02/11. If you look at that average purchase yield, it increased on a quarter over quarter basis from three twenty eight to three forty, but it is still below the market yield, and that really reflects the adjustment of the portfolio because of the change in monetary policy and the increase in the Fed funds rate where those shorter term rates went from basically the zero lower bound all the way up to above 5% and are now, as of today, just over 4%. So this implies that there's a modest loss in the portfolio in aggregate, but, the total returns of the portfolio, look very good, and I'll get to that page in a moment. On page 20, we have our sector distribution.

So you can see the the the weights and the change on a quarter over quarter basis from the treasury agency corporate supernational, etcetera. So the overall allocation, everything here looks pretty stable. We would note that the agency allocation is lower than it is historically, and that's because, you know, the relative value and the opportunity in that space has changed in the sense that there isn't a lot of relative value because there's really not much issuance. So we are seeing both in the portfolio that you manage, by your staff as well as other portfolios that we see in the state of California, you know, that agency allocation has really contracted. So this is pretty consistent with what we're seeing across the board.

And then I'd highlight page 23, and this shows the total returns of the respective portfolios. So I'd really, draw your attention to those annualized returns at the one year, three year, and five year point. So you can see the overall portfolio is, very much in line with the benchmark. So the one year return was five seventy seven compared to the benchmark of five seventy six, and that five year return was one forty three versus one forty four. If you move, two columns over to the right, you can see the all corporate portfolio.

So this had a one year return of $6.69 compared to $6.62, and then a five year return of two fourteen compared to one forty two. We would just like to highlight to the committee that, based on the, both investment policy and the constraints of the city of Mountain View, That corporate portfolio, although it's very well diversified compared to the, index, it is a very concentrated portfolio. So we do expect to see some, volatility with those returns relative to the benchmark, but we are optimistic that we'll continue to generate, some of that relative value with the with the outperformance compared to the benchmark. And then lastly, I would direct your attention to page 23. So this really shows the overall diversification of the portfolio.

It also highlights of the change, of the investment policy last year where we're we've been able to invest in single a rated corporates as opposed to just double a rated corporates. So some of the new names, excuse me, in the portfolio include Morgan Stanley, Toyota, JPMorgan, Qualcomm, Wells Fargo, etcetera. So this is basically broadening out the overall portfolio based on the investment policy change that you made. So this is what I and I hope I'm within my five minute window, and this is what was prepared to present today, and I'm happy to answer any questions on behalf of the committee.

Thank you very much. Are there any, any questions, on this item, on the report? Vice mayor?

Yeah. Thank you. Sorry. I was we received some public comment via email regarding

Yeah. I think for I think we determined that for if folks have comments on the the actual investment policy, is probably most appropriate under 5.2, which is the next item, for either the public or us to discuss. I mean, it it kind of melds in with the report from the last year. So, but I I think if we wanna consolidate things by point two is probably the most appropriate time. But

I I was wondering, based on the ask from the public, do we know if, any of these companies would be not on there anymore?

Could you reframe the question? I I couldn't hear. I apologize.

Okay.

So, the question is of the corporate issues that we currently have in the portfolio, would any of them, be involved in businesses that the public had commented on, whether it's prisons, detention centers, military, industrial equipment, and things of that nature?

So, the answer in Chandler's interpretation is no. I will tell you that we have seen other cities with mixed results, bring up Caterpillar as a name because of even though those are not, defense companies per se, but the way their their equipment is being used in The Middle East, some cities have brought that up as a as a red flag. When we, evaluate Caterpillar, it is profiles as a capital equipment company. So it does not, screen out based on either an ESG or a sector basis of a name that we would avoid to be consistent with some of those entities that we're looking to avoid weapons of mass destruction. So so the Caterpillar holding in our judgment would be inconsistent with that.

But there is nothing in your portfolio, you know, based on the SRI, the socially responsible investing constraints you have, as well as the overall conservative nature of the portfolio that would be consistent with any of those sectors.

Thank you.

Thank you.

I had a few questions.

Yes, Steve.

I think it would be helpful if on page 19, you also, in the future, show the average dollar price in addition to the since the portfolio is currently at a discount, in addition to the, market yield versus the purchase yield, just so we get a sense as to what the average dollar price is there.

So I believe we have that in the summary report at a different element, but I will highlight that to staff and have them get back to you on that.

Okay. Thank you. And then the second question is since last year when we approved the purchase of single a securities, there have been a handful that have been added, I I see, on page 30, you know, starting with Bank of America and ending with Qualcomm. I mean, do you have any comment on that as to what the yield pickup was and whether that's been successful in terms of allowing the city to diversify more and get additional income from going from double a to single a securities.

Sure. So, we've also from June to June and working with Derek and Elliot and Grace, we've actually increased the overall allocation to corporates on a year over year basis because the policy has become, you know, closer to California government code. We've also been able to increase our sector diversification. Previously, we were more heavily weighted towards industrials and less towards financials because other than the insurance funding agreement backnotes, most of those financials were rated single a. So that's really been able us to diversify the portfolio more.

And just generically, I would say, because we've been able to invest in some of those larger, you know, globally systemically important banks that are domiciled in The US, and I would really highlight, you know, Morgan Stanley, Bank of America, and JPMorgan, They tend to trade at a an additional pickup and spread relative to the other finance names that were previously just double a, and I would say that spread pickup would average between 20 to 25 basis points for those individual holdings. So, I think we're just in the first year of seeing the benefit of the expansion of the investment policy, and I would expect it to continue to benefit the portfolio going forward. But we're still, we're still working our way through of kind of increasing the diversification and taking advantage of the change of the investment policy based on the additional monies the city's been able to allocate to the corporate portfolio as well as maturities. We've made a decision not to sell securities out of the portfolio. So we're really, constrained by maturities and then new monies that the city is able to allocate to this portfolio.

But in general, we would view it as a success, and we would really just highlight that additional spread that we're able to pick up in some of those names. And also just the benefits of having, increased diversification in the overall portfolio, which we think will benefit over time.

Thank you.

Are there questions? So we'll we'll take public comment on this item. Would any member of the public join us virtually or virtually comment on this item? If so, please raise hand in Zoom or in person, Jason, if they're only able to be in charge to raise their hand. Now like I said, if if we want, we can consolidate any comments around the investment policy on the on the next items as they're attached, but it also kind of bleeds into this.

Is there anyone else? No. Okay. Well, thank you, Bill, for the for the presentation. I did have, just one quick this is not existential, I guess, because we're we're living in a world where I I never thought I'd be in a where we said, you know, we don't have US data on the economy.

But where the economy doesn't isn't producing data at the moment or or only some data, and we might not get more data for a while, which raises the question of, you know, the concentration that we have in in US treasuries. I know they've kicked the debt limit hand down the road again, and I'm sure they'll continue to do so. But, you know, if if we continue with this brinkman brinksmanship and we get to the world where, okay, we're we're closer than we've ever been to what the what the treasury says is the is the x date. I guess in that world, it doesn't really matter where your money is. It's, because it's just gonna be such a very strange world.

It's a a very long way of saying, we we live in unusual times. Is this is a is this an is this an appropriate mix of of treasuries for for a portfolio like this, you know, in a a city that's doing something? I think this traditionally makes sense. I'm just curious sort of what your thoughts are, more globally or not globally, but just high level.

So, my first, I would just answer unequivocally yes. We do think that treasuries are an appropriate investment for this type of portfolio and really almost all fixed income portfolios, whether it be a pension plan, reserve funds, or or what have you kind of across the board. So the government shutdown is not affecting, because the debt limit was extended. Right. It's it's separate.

So it's not the government shutdown is not gonna impede the ability of the US treasury to make payments on our government debt. We do think that it is it is sacrosanct, and we've certainly been down this road before where the debt ceiling, you know, kinda gets close to that breakmanship point and then is always sort of pushed out and extended. And we would expect it's our base case that that will continue to be the case. We would agree that they'll continue to be brinksmanship, but we do believe that, the US Treasury understands the significance and importance of not defaulting on its debt. And it's really kind of a semantic thing with the debt ceiling, and we have the utmost faith that it will ultimately always be extended.

And I think all the you know, regardless of the political party, throughout the different administrations, I think all the treasury secretaries, have been really steadfast in that belief, and I believe ultimately that is what will happen. And that that is the Chandler view that it is very unlikely that, you know, we think the probability of The US defaulting on its debt is extremely low. And we would also argue that, you know, although our political sausage making, looks pretty ugly, a lot of other developed market, economies are facing similar issues. You know, France would be certainly a case in point, but we continue to think that The US will ultimately remain the reserve currency and remain the global benchmark for risk free rates.

That makes sense. Thank you. Yes. Very, very, very, very small risk of default, but probably the highest risk we've ever had in my lifetime at least. Anyway, that that makes sense. Thank you, Bill, for the for the invitation. We really appreciate it.

It's my pleasure. Thank you.

So we'll, there's no action on this item since it's just a presentation. If there are no other comments or questions, from the committee, we'll move on to the next item, 5.2, the annual report of the investment review committee for fiscal year twenty twenty four-twenty twenty five. Finance and Services Director, again, Derek MacDonald, will make brief remarks on this item.

Thank you again. So item 5.2 is the annual report that goes to the city council from the committee. Usually, they'll provide the draft during this meeting, and then the chair will work with our team to kind of finalize any final comments to in preparation for submission to the city council, and we're anticipating that to happen in December. We're gonna briefly just walk you through the draft report, couple minutes, and I'm gonna turn it over to Grace and Elliot now for that. Shall we? Thank you.

Here we go.

Thank you, Derek. Elliot Young, principal financial analyst. So this draft report is as of 06/3025, the same as Bill's presentation. So I'll just turn on a couple of highlights.

If you go to

page three, we have the performance versus the benchmarks for duration and total rate of return. The city was in compliance with the policy, the 15% at all time with the duration of benchmark. And within 3% of the benchmark, nine of the twelve months. There was a significant increase in the benchmark, from June 3024 where we went up from 1.9 o to about 2.11. So you see we lag it a little bit as we try to catch up.

Our ability to increase our duration is limited by available money to invest. So we are trying to, catch up with that, but we have, matched it, in recent months. The total rate of return for both the corporate holdings and the city holdings, are the highest they've been in ten years. A lot of that is due to the market value increases, which we don't realize because we tend to hold our mature our investments to maturity. But the yields, to maturity have also been strong at about 3.4% as of June 30.

Next page. Total portfolio is now just over 1,000,000,000, and we averaged earnings rate of three point o seven percent on the year, which was about $31,300,000 in interest for the year. On the next page, the diversification compliance, we were within policy limits in all categories. Our treasuries have increased. I think Bill mentioned that our agencies have and that's just a function of the availability of agencies as well as the limited spread between treasuries.

Our corporates are up to 11.7% as of June 30, and it's actually higher to about 13% as of September. And that's as we increase diversification because of the changes to the investment policy. Next page, if we look at the allocation of the portfolio, you see the majority is between the capital project funds and, our restricted funds, which is the water, wastewater, sewer I'm sorry, water, wastewater, and solid waste, as well as the Shoreline Regional Park community and our housing funds. And for internal control and reporting, we hold a monthly internal meeting to discuss strategy and status of the portfolio. We also post the monthly statements on the city website and the quarterly investment reports to council.

And so in summary, we are, in compliance and have no violations over the past year.

Thank you. Are there questions on this?

I had a question not specific to the report, though. But at the last meeting, a question, and it it relates really to the breakout of the portfolio between what's allocated to the general fund, what's allocated to capital projects, and what's allocated to reserves or restricted funds. The city manager asked Chandler to look into possibly doing something in terms of having a different investment policy based upon the, the length of the liability. And this is something I think I had mentioned that come up ten plus years ago. You know, as the portfolio has grown, it is still all being managed as if it was kind of a cash account, you know, a short term cash account.

But some of the, funds, especially those for capital projects and restricted, have much longer term liabilities but are still being managed in a very, restrictive way in terms of duration and credit quality. And I think you had asked, you know, can anything be done to to change this so that, in essence, the city derive higher levels of income around the portion of the portfolio that has a different liability characteristic than the short term cash fund that's used for general fund operations. So I was just wondering if anything had happened on that. And I think as the portfolio has grown to a large amount here, and so much of it is restricted and, in the capital projects fund, this is a a good question.

Yeah. Bill, do you remember exactly what we talked as far as what was researched when we discussed it? And wasn't it limited due to the policy, the length of time as far as five years?

You we we

did we did discuss this, and and I think a part of it, the reason why we didn't do anything was based on our overall market outlook and for the change in the shape of the yield curve, which is still our base case, that the yield curve needs to be steeper. And we felt like it made more sense from a protection of principle and total return environment that this wasn't sort of the time frame to do that. And, we would still believe in that view based on our outlook on where the ten year note should gravitate towards, but this should be a continuing discussion in regards to a portion of the portfolio. And I'm not privy to what that amount would be, but we we have talked over the years about bifurcating a portion of the portfolio when the yield curve normalizes to take better advantage of this. Within California government code, you know, you can go beyond five years in just specific asset classes, really treasuries, agencies, and, mortgage backed securities and municipals as well.

So, it would, to fully take advantage of this, we we would, probably look to update the policy in regards to some mortgage securities to provide a little more diversification and flexibility. But but that will be something that we we should continue to discuss. And, not that we're trying to time the market, but we should be in an environment where we're getting compensated for taking that longer term risk. And as the treasury curve is no longer inverted, you know, that would be the time to start considering it. And based on to to the extent that our view is valued, you know, we really do think that, you know, that the curve needs to steepen more.

But as it gets to that, you know, maybe closer to that 100 basis point differential between two year and ten year notes, that might be the time to make a strategic decision to, bifurcate a modest portion of the portfolio into a longer term strategy.

And, Bill, just under California law, does the duration have to always average below five years? Is that how you would do it? Do you barbell the portfolio? Or are you just allowed to have certain asset classes each more than five years?

You're allowed to just have certain asset classes be beyond five years. And and depending we have a a significant number of clients who have done this. It's predominantly, water districts and joint powers authorities that have longer liabilities, and, typically, they'll have a benchmark that maybe has a duration closer to, you know, three and three quarters as opposed to the current portfolio's two, and they'll invest between zero to ten years. We also have, and this is more limited, but we do have some entities that have bifurcated their portfolio and just taken a portion of it and only invested it with a benchmark duration of between five and ten, which would really push up your duration on that portfolio to closer to, you know, six and change. So, there's multiple ways that we could do it, and we'd work with staff to explore what made the most sense.

I would say the mow the more the more conservative first step would be to take a portion of the portfolio and manage it versus a one to ten year benchmark. And, and we could ascertain, you know, what made sense from a credit a mortgage slash securitized basis and a municipal basis, as well as treasuries and agencies.

Okay. Thank you.

So there are other municipalities that actually do bifurcate the portfolio. So they'd have one portfolio that would be more like a cash account and then a separate portfolio that might be longer term and for capital projects.

I I would say that to to an extent, the city of Mountain View is already doing that because they have investments in leaf and, you know, local government investment pools more for liquidity. And then this portfolio, although it is still pretty short, does invest out to five years. So it would be very consistent with what we see from a reserve portfolio. We do see larger cities and and certainly the city of Mountain View given the corpus of assets that you have would qualify. Over the past two to three years, we've seen the desire to have a longer duration portfolio from some larger cities where previously, that was really dominated by JPAs or joint powers authorities and water agencies.

I would say it's limited, but there are a very small number of cities that are doing that. Some of your some of your neighboring cities that we work with, the city of Sunnyvale would be an example. They in their investment policy, they have the ability to invest up to seven years, in certain security types, but they're still running their portfolio versus a one to five year benchmark, which is a little bit longer than what the city of Mountain View is doing. And then we're seeing some other cities. The city of Stockton would be an example where they have split out their reserve portfolio between a one to five and a one to ten year strategy amongst a couple of different managers.

So but I would say, just to be clear, you know, it's limited in the amount of cities that we're seeing to do that, although this conversation is getting more interesting. But we do see it with a lot of water agencies and other entities.

I think I I would encourage the staff to look into that to a greater extent as the portfolio continues to grow and roughly two thirds of it. I don't know what the liability is on the capital projects or their restricted money. I don't know when you think you would need that money and when the projects would be funded. But to me, it seems like it's a sound a sound policy to at least explore having separate portfolios for the cash account. That would be my recommendation, not not aggregated all, but to have it separate.

As as Bill said, some municipalities are do, and have the ability for the, portion of the portfolio that's restricted and for capital projects to try to match the liability more to the duration of the, securities as opposed to just kinda having it all together. I think the city over over a longer term time period, if the portfolio remains this large, could really obtain some higher levels of income that could be used for for services.

Comments or questions? Vice mayor? Yeah.

So back to the letter that we received from Yep. Public. I'm I think staff got a letter as well. They asked for more items to be prohibited from us investing in. What are the next steps if you would like to pursue that?

Sure. So we're in have been researching. We started researching it with Chandler Asset Management, and I think today we'd like some direction from the committee on what we what your intentions or desires would be, but definitely something that we are can research, but it will take a little time.

Other questions before we do public comment? Yes.

Oh, yeah. I got two. The SERP that's going under act what's the new actuarial evaluation? Is there any anticipated, like, changes with that, like, in this discount rate, or would it be the same same as always?

Yeah. Go ahead, Diana.

Yeah. Assistant finance administrative director. Thank you for the questions. We are the sir the OPEB study, we usually conduct every two years. So there's one coming up as of 06/30/2025. In the last study, our discount rate was actually 5.6%. That's what we use for the evaluations. But in this one upcoming one that we are anticipating, there might be a we're in the process of doing the evaluation. And, the discount rate is actually is in discussions. Currently, we anticipate it would be higher than 5.6% given the current markets, but we haven't determined what would be the rate of city would use at this point. And we do anticipate we have the study done probably in December, January time frame.

Comment Okay. On the investment policy too?

Something I think we'll It will be comments after we take public comment if that's okay. Yeah. And I'll come back to you. Alright. Yep. What other questions we can do now? No. Okay. So we'll open this item for for for public comment. If any member of the public join us virtually or in person would like to provide comment on this item, please if you're, on Zoom, please click raise hand.

Please click the raise hand button. If you're in person, you can either raise your hand or fill any little speaker cards we called upon. And we'll we'll take in person speaker first, and then we'll do we'll do three minutes, and then then we'll move over to Zoom if that's okay. So if you're if you're online, go ahead and queue up. Click your raise hand button so we know you wanna speak, and we'll start with in person speakers if there are any to comment on this item. Just raise your hand.

So my name is Sam. I'm a Mountain View resident. And I think as you guys may have seen,

I'm there seem that people have been

proposing this change in the language for our investment policy because I've been for a while now concerned about how our city invests during these dangerous times that we live in. I really love our city's commitment to community for all and our participation in the 20 '17 amicus brief to protect our. I'm with some

of them with me,

whose family has been directly impacted by war and by an international arms industry that profits from it. And he's an American with values. As a resident of Mountain View, it pains me to think that my city, could be eventually be invested in companies that sell arms or military services that could be used in violation of human rights or international law. And it's unconscionable that the city funds could be invested, for example, in mass detention, especially as the current administration in Washington is using ICE to attack our communities and lock people up unjustifiably. So that's why I believe it's crucial for us to uphold community for all and expand our previous firearms manufacturer ban and codify these values further in our investment policy.

Thank you. Other comments? Yeah. Go ahead.

Hi, everyone. I'm Ronnie Zager, a long time Mountain View resident. I've practiced medicine here. I also am a tech worker. I've worked at Google and local startups.

And I'm commenting here today because I've been able to thrive here after my family left Chile when I was a kid fleeing state sponsored violence. And before that, my grandparents left Europe, fleeing Nazi persecution as Jews in Europe. I really wanna recognize the city's prior work in prohibiting unethical investments in firearms, cigarette, and fossil fuels. And today, I have many friends who are facing daily threats from ICE and the federal government that's escalating the use of violence that's making many of our community members feel less safe. And, by updating our investment policy as, was proposed in written public comment, the city can take, this modest but more really clear action to help ensure that our local funds are are not funding such violence.

Thank you. Thank you.

Are there public speakers? Online who'd like to speak? No? Okay. So we'll close public comment on that item and bring the item back to the committee for any any other discussion or suggestions to staff or or or discussion amongst ourselves on this particular item. And I think we'll start with with. I think you had

I had something short unrelated to that. Oh, okay.

Sorry. Section

eight on the authorized institute and broker dealer. Maybe just it's just back to staff. Maybe

a consideration of another bullet, like a number four.

I know, like, the requirements are, like, audited financial statements, broker dealer questionnaire, and a statement. Just just from, like, my end, like, I've noticed increase in, like, enforcement from, like, board of accountancy. And so, you know, firms that audit broker dealers have to be registered with the PCOB. And sometimes they've been issued, like, audited financial statements with a clean opinion, but then the firm gets in trouble maybe, like, many, many, many, many years later. So I had a just a suggestion just to consider, you know, maybe a check that the auditor of those financial statements are registered with the PCOB, that they're in good standing.

It's both the PCOB, state board of accountancy, then they're a member of, AICP. I think this is, like, a small additional kind of, like, check just to, you know, make sure everything's compliant. That

that's all I have. Yeah.

K. Other comments or questions? Did you wanna to the Yeah. Your regular thoughts?

That would be wonderful, and I I would support it. I I don't really understand. That's a a thing, but I would support it. It sounds sounds

Sensible.

Sensible. There, I was like, it sounds like not a problem for us, but, like, but I know you never know sometimes. But we we did receive as a public comment and the letter that was sent ahead of time. Some asked to add more prohibited items, to our investment plan. So I would love to know what would be the next steps, what kind of time frame we will be looking at, if we wanna make this change, if it's the exact language or if it's a different language.

I I my understanding when I met with the public on this, they weren't they weren't tied to the the I that identified by, but I thought that might just be easier for us. But if it's not easier than this, then I'm happy to be this way from that. But I would love us to to ensure that we don't invest in in a lot of these companies that assist ICE in going after our own residents.

Yeah. Thank you, vice mayor. So what next steps would for me would be to work with the Chandler Asset Management and come up with maybe some proposed language that fits, that will work with our investment policy if that's the what the committee would like to do, explore, potentially adding some language to clarify some additional prohibited investments. So we'll work with Chandler. It'd probably be a little while, but we'll work with Chandler and come back to this group with the proposed any proposed modifications.

Do you have a sense of the actual timeline? Are we are we gonna wait for another year? Because I we just did our minutes, and I was just like, oh my gosh, Lisa. And I was just like, oh, it's been a while.

Typically, we meet annually, but we can all obviously meet sooner than annually. So I I would imagine it would be within before the next twelve months. So a couple of months. At least through two or three months. So early next year, I would imagine.

And part of it would be to reverse engineer it and actually identify the firms that would meet that criteria so we kinda have, you know, like, a a no fly list and go from there.

Would it be helpful if the public comment sent in a list of actual companies?

So I I I would suggest that, we look to our firm, who has a lot of experience in this, and they they've worked with other cities in this regard too. So I think we, we know what the gist is that our residents are looking for. So I would suggest that we have staff work with our our our firm on on that, and then we can look into those categories. The good news that we've heard is that right now, we do not appear to have any investments that would cover any of those concerns that residents have raised other than perhaps tangentially caterpillar. So I think we have some work to do to work with the firm and follow-up on it, and then we will definitely come back before that one year mark and give you all an update and update the public as well.

Comments before I'll I guess I'll save my comments for the end. Did you

I was gonna make a motion.

Oh, okay. I I'd like to comment before we move. That's okay. Go ahead.

My my comment is that while I personally support being as socially responsible as as possible and and agree with the public's comments before I was asked to vote on a new policy, I'd really like to know what criteria Chandler uses to make this determination. I think on the earlier socially responsible topics, was fairly straightforward, tobacco, firearms. What's the third one? Oh, fossil fuels. I think as we move into this new area, it becomes more difficult and more subjective as to what is in this in this category.

I don't know. I know the public gave the names of some organizations that do this service, but I don't know anything about those organizations. I don't know what their history is or who's on their group. So I would before I was able to vote on this, I would very much like to know what the criteria is, and I would not feel comfortable just saying that an organization that I don't know about is doing this or that Chandler's doing this, making the determination. I would like something a little clear on that. I would also like to know, one, it's Bill did comment. It does not appear that anything we own, and I don't believe we own Caterpillar.

Well, we

do own Caterpillar? Okay. I'm I'm sorry. Right. Three of you. Own Caterpillar. Okay. But other than Caterpillar, doesn't appear that anything we own may fall into that category. But I would like to also know I assume that Chandler works off an approved list of securities, and I'd like to know from that approved list which items would be impacted, so that, before we vote on it, we have a real sense as to what the impact is. And then the third thing would be so that we know what the the yield give up would be, what the impact would be.

And then we can make a educated determination as to what the the pros and cons of it are. So I I think while I personally support this, I think we need a lot more information and a lot more guidance from staff and Chandler as to how the mechanics of this and what the impact of this would be.

Other comments before I chime in? I largely agree with you. So I I I think there are I want to pursue socially responsible investing. I supported the changes that we made, I think, a long time ago around, environmental sustainability. But if you look at the policy, what you'll see is that at the time, we there was there was a there was council action around this, not just, committee action.

It was it was a a broad goal, and a significant one, and there were a lot of other, organizations that were moving in that direction. So there were we had outside resources that had lists of companies that weren't that were semi neutral or at least considered neutral. I think in the in the investment world, I I think we we we have, like, the or least we referenced the investment research, investor responsibility research center. And I don't know. They might have some resources around this.

But I I guess what I'm getting at is we were very specific in terms of what we wanted to prohibit, and that was manufacturers of cigarettes. You can very clearly does this company manufacture this thing, or do they not? You know, we've we've had investment or we had things that we wanted to encourage, but we also said, you know, no entities that manufacture firearms or or or or cigarettes or or direct exploration, production, refining, and fossil fuels. I think what we've received from the public is I I wouldn't even know how to begin to determine which company falls into, There are some of those categories that I think are would be easier to determine which companies could fall into that than others. And then there are some of the catchalls that were in there where, you know, I we we start talking about, you know, Caterpillar and Amazon, and, I I don't I just you know, in percentage of what revenue they receive from certain things, I just it and and also, like, I feel like we're trying to fix something that isn't broken yet.

So I think there are two approaches to this. One is to one is to for the committee to narrow down very specifically what it sort of like we did previously on what categories of things we might generally wanna avoid and maybe look at the investment whatever research centers that we we think would be most appropriate to identify those companies or those lists. Or we can create a policy statement, and I think we can sort of like we've done previously where we've said we've encouraged investments, in the building community and economic development or we discourage certain things. Our our, our managers kind of know what those are, but we also get every year, we get the opportunity to review that list just like we just did. And, I'm very comfortable with the list of issues that we have today, and that's that's more of a a longer term.

We just keep an eye on things as opposed to spending a whole bunch of time identifying what what you know, not investing in companies that promote violence. Yeah.

Well, they they did identify

The this

possible different lists to do.

They did. I do I'm not sure that those are commonly used in the investment world, though. Because there are there are there are, you know, peace institutes and things that identify these things that are, I think, clearly advocacy organizations, and then there are, like, more neutral investment organizations that actually go out and look at what is the percent of revenue that this organization gets from this particular activity, which I think is much more neutral than some of the other institutes. Also, I think if we were to make this decision today without, I I think there are elements within our community that would be very disturbed by us going in this path, and not having the opportunity to comment on it. I have

the best. I don't think we're passing the language today. Staff has kinda made that clear to me.

But they but they need to know what they're going to research.

Yes. But isn't that what, committee member Purnit wanted to know? He wanted to know what would this mean for us, and I think that's what

But we

have to tell them what it means to us first for them to like, is it are we are we concerned about weapons manufacturing? Are we concerned about all of the things that were enumerated, some of the things that were enumerated? Because I'm not comfortable with the entire list. So

Which item are you not comfortable with?

The catchall. So

if it was specific to so we already say we don't we don't invest any money And I don't for companies that manufacture arms.

Correct.

Can we also say military service? That's No. I did the letter. That is

contained. That's extremely broad. There because anyone who works even remotely with the US defense department I mean, US defense department uses Google for certain like, I don't know where you draw this line. You see what I'm getting at? Okay. Like, does Palantir account, or do they not?

Oh, I would tell Palantir.

Sorry. Thanks. So you may have heard how many

escapes this. I think it's

so I do recall receiving public comments, but I haven't seen the specific letter lately. So I think what we would want to do maybe is just have the committee give us direction to if there are certain as as the chair is saying, if there are certain, perhaps, categories, then I think staff and the firm can look into that. But I I don't know if the specifics would be something that staff would recommend. I I just don't know either way or the other. And as the chair said, I would imagine that staff might have some concerns about the broadness of some things, but I just don't know without, you know, doing the research.

But I think knowing where the committee is at now, if there are certain categories, if you wanna say, for example, the weapons of mass destruction or, you know, entities that what are some of the language used here? Mass incarceration and detention. Yeah. See, I just I just don't know about that because then that does that mean certain construction? It's just very broad.

I don't know what it means, and I would actually like to be able to talk to the firm and see what other cities have done in this regard that have kinda taken up this extension of the socially responsible investing. So I just don't know that we would be able to narrow it down. So some direction from the committee would be good if there are certain categories that you're interested in. But, otherwise, we'll we'll have to just look at whether this could or couldn't work.

I see. Mister Bill has his hand up.

Oh, hi. Sorry, Bill. And we'll come build with this.

Sure. If if it's okay, I would just like to educate. I know believe staff is aware, but I'd like just the committee to be aware. So Chandler, a couple of years ago, we contracted with SMP IQ, and we contracted with SMP IQ to provide ESG ratings. So we, as part of our, approval list across all the names that we follow that we think are suitable for all of our clients, those that follow California government code and those that don't, we do screen all those names for their ESG scores every quarter.

And so we don't we we use what's referred to as ESG integration, which means that we consider those ESG factors in determining investment suitability, but it's not the driving factor. The driving factor is still balance sheet strength, you know, the earnings outlook, you know, corporate governance, and overall, and we don't necessarily, have the ESG factors dominate all of those, but we do review those ESG factors on a quarterly basis and all the names that we follow. And when we do notice a change in those scores or trending lower, that is something that our credit committee will dig deeper into. So I just wanted to let you know that as a just an overall body, Chandler is, very engaged in environmental, social, and governance kinda oversight. But, again, I wanna emphasize we don't have an ESG approved list, but we do consider those factors in determining investment suitability.

So just a little maybe just a little something else to consider, and this is something I can explore with staff a little bit further. But I just wanted your body to know that, you know, for our clients that follow California government code, you know, we have a fiduciary responsibility as well, and we are very con you know, we are very cognizant of you are investing money on behalf of the public. And I think that's reflected in all the underlying investments that we make within the corporate sector on your behalf.

Would it be helpful in the future in future reporting that you provide that ESG rating on all of our corporate holdings so that this committee can see what the S and P ESG rating is? So right now, it's just a a black box. We don't know anything about what those ratings are.

Sure. So we do charge an additional fee for that, and I'd be happy to talk with staff about that. And, you know, it costs us to do those ESG scores and that I mean, there all the other all of our competitors who do that do charge. It it's a pretty modest fee. But nonetheless, there is a fee, to provide that, across the overall portfolio, and that's really industry standard.

I think that would be helpful if so we were sometimes when we talk about this, and I would agree with your comments very much. In the abstract, it all sounds very good. But when the the rubber meets the road and after being an investment world for forty years, it sometimes gets much more complicated and much more difficult than it sounds. So that's why I'm really interested in what the the mechanics are as opposed to, in addition to what the the policy would be. So I I think the more information we have, there may not even really be a problem here. That's

Yeah. That's what I was gonna say, Chair. Just looking at this list, we don't have investments in these. And I think that it's great that our residents are aware and have told us some of the cities that they're pointing to that have updated their policies. So just having the time to be able to look at Richmond and Alameda and and even some of our cities here on the Peninsula because this conversation is going on. So I think just having that time, but at least knowing we don't have investments in these right now. And then we can come back

to the committee and also look at what we can do to add the open a black box. Yeah. Yeah.

And I'll just add our current construct and framework is likely gonna weed out a lot of these anyway. For fun, I just googled Palantir's corporate bond rating. It's a b three.

Yeah.

So I think if staff can go back and work with Chandler within the construct that we currently have to identify to your your points and your point, you know, what what is it we would be talking about, I think we can come back with something that will then give the opportunities to focus a little more on what the universe could be because it's probably gonna be an extremely small universe that wouldn't meet our criteria anyway.

Yeah. I'm gonna go to Liz first, and then I I'll go to you. I'm I'm I'm misdirecting.

You're gonna attempt so some of us eventually have to go to work. Yeah.

We have to And

we have another immediate

I know. Right?

I have not run this. So I'm gonna do my best to to craft a a motion that hopefully will be acceptable to to the committee. So I will move to accept the the report and advance the draft subject to the review of staff and the chair to the city council with some additions. And the first would be to have staff evaluate the recommendations from from half an hour ago. They seem Yes.

Reasonable, you know, formally incorporate them. It it didn't sound too problematic to me, but I just wanna make sure, you know, staff can come back with appropriate language. I I'm I'm not ready to I don't know what a modest fee may be, but I'm I'm happy for staff to evaluate that and then return to the investment review committee, with the recommendation. I'm not certain that I would be ready to advance that to the city council for formal formal inclusion in the policy. But if it makes sense, then if staff says, yay, good idea, maybe in a in a future update, we can do that.

And then also to have staff evaluate, the letter and the recommendations from the public and return to the investment review committee. My my guess is it will have no impact to our portfolio. So I I I I don't wanna, you know, spend too much time crafting language when it probably will not materially affect our investments to begin with. But for staff to come back with, language and an implement implementation strategy, that's also an an important part of the the policy, that achieves the the, objectives that the, the public have laid out, but also are actionable, and, to come back with information to demonstrate to the investment investment review committee that there really is no impact to the portfolio, which I think is probably our shared expectations. So that would be my motion.

Oh, well, I'll suggest separately a minute. I wanna make sure we get mister Baracki in. Oh, okay.

Just real quick. I guess what also be helpful is with that with the S and P ESG score, Maybe, just get a couple Yeah. Couple offensive investments against gold standard, I guess, investments just to see, like, numerically, like, where those are all going just to better understand the rating mechanics, I guess. That that's that's all.

So so the reality I'll I'll just comment here. The reality is most companies that meet the underlying credit quality requirements of California government code are large just by nature. And because they're large, they take, for the most part, they take reporting on environmental, social, and governance factors pretty seriously. So I can tell you that the number of names that we have on our approved list that have a low ESG score are very few and far between. And the names that typically have a low score, basically have low data availability.

So they basically, either because they're private. So a good example of of names in your portfolio that would have a low a low ESG score would be, like, the Northwestern Mutual Life Insurance funding agreement back notes, which are extremely high quality and we think offer, you know, some compelling relative value. But because the company is private, they don't make that data available to S and P, so their score is low. So the companies like that that have a low score and low data availability, we tend to discount. And I can just tell you that the large companies that that provide that data availability, it's very rare to find a name that is, you know, much below the fiftieth percentile.

So you for the most part, we're not we're just not seeing that. The other name, and this one I find ironic, that always scores low is Berkshire Hathaway. And the reason why Berkshire Hathaway scores low is they provide very low data availability, which doesn't seem consistent with, with some of their overall themes on just corporate governance overall. So those would just be two highlights. But I can tell you when we I can tell you anecdotally, when we score your portfolio and looking at your names, we're really not gonna find names that have many names that are even below the fiftieth percentile relative to the peer group on an ESG basis.

Okay. That sounds. So the motion by, committee mayor Ramirez, I think I'm I'm generally okay with the direction. I think I think I wanna limit it a little bit more instead of just saying staff to investigate the public comments. Like, I just if we can focus it on there, I'm I'm perfectly happy looking at what other communities done and what might make sense in terms of we were talking about the, you know, companies or subsidiaries that are involved in mass incarceration, those sorts of things.

I think where I where I don't want them to spend a whole bunch of time is on the really, really broad, the you know, someone who facilitates violation of human rights. Like, I don't know what that means. And I think that would I I just think those are the or or or who is involved in military services. I don't know. I mean, these are just really hard to define.

And, honestly, at the end of day, I think what we're gonna find is we we're not gonna we don't hold these companies, and we're probably not going to. And so I just don't wanna I think the the real value in this is is kind of the the message that we send to the community and the statements, not really what's actually going because I I doubt that we're going to, in a world where I think just to give you an example, if you if you click on the military services link that they provided, Boeing is on there. Like, I'm not going to vote to divest from Boeing. I'm sorry. Do we?

We we we know we don't. But I'm just saying that even if we did, I I would say that I just I can't support the candidates, but unless we unless we narrow it down to mass incarceration stuff that I think is is very, very easy to, enumerate. Right.

Guess that's just me. One of the troubles with this is we we can very I I I'm looking at this from sort of a plain reading. Like, you know, if I'm certain the military uses email. Right? But I'm not I wouldn't call using Gmail a military service.

Right? If if our staff and and Bill is telling us don't invest in these, they have a really good sense of what this means, which is why I'm I'm willing to defer to staff to help us understand sort of the universe of activity that has occurred. I I don't I don't wanna quibble on what is or isn't a military service. It sounds like you have some intuitive understanding either because you're you're not doing that. You're going down the rabbit hole of, well, you know, military officials wear boots.

So, therefore, every company that has any participation in the manufacturing of boots is ineligible. I I I don't think that's what we're we're trying to get at. Right? It's it's, you know, there's some some source that you're using to determine, you know, which companies would fall within these categories, and I'm willing to defer to your judgment on how to define that. We don't have to use this language. Right? It's just more staff, I think, already has a very strong intuitive understanding of how to interpret this, and I'm willing to defer to them to come to us with reasonable language, for the policy statement. And then an implement implementation strategy that I trust will probably have very little or no impact on our portfolio assets. I I

I understand the motion. If there's a second we can vote on it, I I probably won't support it because I think we're trying to fix something that isn't broken. Yeah. And we're doing we're gonna do an enormous amount of work to, like, at the end of the day, make ourselves feel better, but not actually do anything differently.

I I would just also add that we're talking about 10% of the portfolio. Right. And the while I I agree, the the the the purpose is is is good, I mean, how much time does staff wanna spend with exactly the topics that are being raised here of analyzing what the company is doing? That's why it's it's in the end, it's probably gonna be offloaded to a third party like S and P Yeah. As opposed to, and even it seems like Chandler does that too.

So I I would discourage staff from getting into a role of making this determination as to what is fits this criteria and what doesn't fit the criteria. It will it will be a lot of time and work and probably, friction from the public, in terms of what the decision is for something that it is currently not a problem and is limited to 15% of the overall portfolio, and really kinda falls outside of what, in my view, what the role of the city of Mountain View is to do. So I I would just be very careful how broad we make this, and how much, time and effort staff is gonna put into to this when we've, I think, acknowledged that the currently is not a problem, with the portfolio, but that there probably should be something in the policy that addresses this. But I think before we vote on it, we really need to know the mechanics of how this is being done. But I would discourage staff getting in a role of making this determination as to whether it's socially responsible or not.

I think that is a a, black hole we don't wanna, set go down.

I I agree with you. And I think the question I would have for staff is, this doesn't sound to me like, you know, a 500 project. This sounds like a five to ten hour project. So I think maybe helping us understand the workload that would go into this research. And is there direction we can provide to to narrow the scope as as the chair has suggested where we're not investing a huge amount of time, you know, parsing every word, you know, going into semantics, but achieving the spirit of the request from the public.

I'm gonna take a stab at this. I think if we look at their approved list, which you mentioned earlier, because that is the universe that we would only invest in, We can look at the names on that list and see if any of them appear to touch on any of these businesses, and we can come back to the committee and show those without staff making any determination one way or another. Because I do think at the end of the day, it's gonna be an extremely small universe of stuff we're talking about. Another way we could filter it is aside from the improved list, who's a and above. Most of these firms aren't even gonna meet that threshold.

So maybe there's a way without spending a lot of time, we can show what the universe would be, in consultation with Chandler because I think it's gonna end up being a moot point. So if that would help the committee if we come back just to show what the current approved list looks like and if there's any name that even looks like it could touch on one of these, then the committee can decide, you know, where they want staff to go from there. And that takes the judgment part out of it for staff. We're not making judgments because I concur that judgment decision should be vetted further by the committee. So this would just be a show you may or may not be an issue in terms of a portfolio construction with the types of names that we would only be allowed to invest in anyway.

Pretty simple. That that would

be reasonable. And you could include just if someone just wants to provide copies of the investment policies from the other jurisdictions that were mentioned, maybe two or three of them. And then and then the other final piece of the compromise, if we, I don't wanna do a special meeting for that. So if if whatever regular meetings that we have, I that that to me if if we were already invested in things that were concerning, then I think time would not be on our side. I don't think anything's gonna happen between now and whenever the next time we meet, which might be sooner than a year because of everything that's going on.

So whenever there's a regular scheduled meeting that that can be incorporated into an agenda as part of, I think that's the time to do it. I don't wanna have a special meeting about this. I I I think we're I just don't think it's a good use of time. Okay. Are you okay with that?

I will second your motion. I'm not sure I remember what it was, but but I I think tell me if I'm if I read that, It's to take the action we're supposed to take today, which is to to receive the draft of fiscal twenty four twenty twenty five investment review committee report to the city council to, there were earlier comments from committee members that you incorporated in the motion, but That's correct. Yeah. Did did staff did you capture those?

We did. Okay. We did. Yeah. That. Yep.

And then and then and then based on the the public comments of the letter that we received, reviewing, basically basically what mister Andrew said earlier, taking a look and just identifying at the next at whenever it makes sense at the next, meeting that we it the next reason reasonable meeting that we have. If we have one two weeks from now, it's too soon. But, just look at that, and then maybe just if we can have some examples of other jurisdictions policies around this that were mentioned, I think that would be really helpful too. And then we can decide where we wanna proceed from here.

Peer review is a standard staff practice. Happy to do that. Okay.

Does that work for everyone, including there yes. Yeah. Yeah. City manager, are

you happy with

Yes. You're okay with that? Okay. Alright. So we'll, are there any other comments before we vote? All in favor of the motion, please go ahead. It looks unanimous. Anyone opposed? No. So that passes unanimously.

And we will thank you, who participated in in this particular item. And thank you, Bill, again. I really appreciate your time walking us through this. Are there any staff item six, or is there any committee staff comments, questions, or reports? If not, we'll adjourn this meeting at 09:51. We're gonna make it fast. Right? Yeah.

We're gonna go fast.

Just how fast? Do you have any latitude at all, or you need a hard 10:00 stop?

Ten