October 22, 2025 Council Finance Committee/Investment Review Committee

Video

Transcript

[00:00:00] Member Chris Clark: Unto the, um, the Castle Finance, uh, committee and investment review committee meeting of uh, October 22nd, 2025, it's 8.33 AM, I'll call the meeting to order. So note that all committee members are present. Um, 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. Um, We've already said roll call, um, I noted that all the committee members are present. Um, uh, including our, uh, including the, uh, of the investment review committee, which includes non-counseling approach film. Thank you everyone for being here. Um, Item three, we have minutes to approve from the December 2024 meeting item 3.one. Um, that's the minutes of the CFC IRC meeting, um, Number 6 2024, would any member of the public join us virtually or in person like to provide comment on this item? If so, please click to raise hand button in Zoom, and in-person attendees can fill out a blue or, I guess, we have a yellow speaker card. Um, or raise their hand to be called upon, um, and we'll, um, public speakers may speak for up to 3 minutes on this item. So this is just the minutes, uh, if anyone from the public has any comments on the minute. Nope. Um, So we we don't have any in-person or virtual speakers, I don't know, are there any, um, VD member, uh, comments or, um, or motions, move to approve the notes? Second?

[00:01:36] Unknown Speaker: Oh, um, I wanted to fix, uh, 5 point to, uh, those 8 each, on my name. Oh, about beltage.

[00:01:46] Member Chris Clark: He said 5.2 on the minute. Yeah, on one... Well, right here. paragraph. Oh, I see it. That's that's all. Thank You want to, um, get them into your motion? Move to approve this amended. You leave a motion by, uh, member, Ramos, sectioned by, uh, committee member, Ramos. Um, I will, uh, we'll do a role pub on this, but I'll abstain since I was, um, on the committee at the time or, uh, holding back to office. So, um, It's okay to do a little call, but that one, so we have a record individual.

[00:02:30] Unknown Speaker: Mm, so maybe one of this for me.

[00:02:36] Unknown Speaker: I'm sorry, I didn't hear. Roll call. Roll call. Yes.

[00:02:40] Ronnie Zeiger: Committee member, the Viking. Here.

[00:02:43] Member Emily Ann Ramos: Um Council, you can you ranch?

[00:02:47] Member Lucas Ramirez: Yes.

[00:02:48] Member Emily Ann Ramos: I remember Emily Venice?

[00:02:50] Member Emily Ann Ramos: Yes.

[00:02:51] Member Emily Ann Ramos: And share.

[00:02:52] Member Chris Clark: Yes. Oh, that's oh, abstain. Thank you. So that includes uh, item three. We'll move on to item 4, which is oral communication from the public. Um, so this portion of the meeting is reserved for persons wishing to speak on anything that isn't on the agenda today. Um, so, uh, 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 these can raise their hand, then like. Right. Seeing them will close oral communications for the public and move on to, um, 5.one, um, presentation of the status of the city's portfolio and investment policy, the administrative, or the finance administrative services director, um, will make brief remarks, uh, before the presentation, um, by Chandler Asset Management, the city's investment advisory firm.

[00:03:51] Member Chris Clark: Well, I'll turn it over to you.

[00:03:54] Derek Crampos: Thank you. Thank you, Chuck Park, and committee members, Derek Crampos, your finance and administrative services director. Um, Item 5. is our annual update where we hear from our investment advisory firm. Um, today we have Bill Decky here, who will are on Zoom, who will be uh, walking us through the most recent uh, investment report, which is from June 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.

[00:04:24] Bill Decky: Oh, good morning, everyone. Thank you for having me. I'm just confirming you can hear me clearly. Yes Great. And I'm just gonna share my screen real quick. I think.

[00:04:40] Member Chris Clark: Okay, sure.

[00:04:42] Derek Crampos: I forgot this, I should be honest.

[00:04:50] Bill Decky: For some reason. For some reason, my computer isn't letting me share. I don't know if it's the settings in Zoom, 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 night? We would all have the presentation. Oh, great. So, Perfect. If you could just go to um, to page four. All right. So if you could go to page four. So staff has asked me to keep my comments to around 5 minutes, so I'm going to go relatively quickly, but if anyone has any questions or concerns, I'm happy to go into greater detail, um, as we all know since October, I'm assuming, as we all know, since October 1st, uh, the US government has been shut down, uh, based on our reconciliation bill. Um, 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 5.30 AM. 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 adjustments for social security payments. But if you look at the employment picture, this data is a little stale, but it does show the overall trend. And overall, the employment backdrop, although softer and job growth is softer, some of that is largely attributed to the lack of immigration that's happening right now based on the current policies of the administration. You can see the unemployment rate of both the U3 and the U6, 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 higher, 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. Um, the inflation data. So on the left, we have the consumer price index. Again, this report will be released this Friday at 5.30 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 forecasts 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%. Uh, based on Chandler's forecasts, which assume that we will get um, a brief period of 2 to 3 months of more firm inflation at the core level, and then revert back to trend, which is, which we view as around 2 tenths per month. Um, really inflation, core inflation will end December, um, above 3%, and it will also be, um, right around 3% as of June 2026. So we do expect monetary policy to be in play, and we do expect the Fed fund rate to be reduced at the October meeting. But we are circumspect, given the, um, the trajectory of inflation that the Fed funds rate will be able to be lowered, um, in a really meaningful way, i.e. more than a 100 basis points, looking out into June of 2026, which is what the market is softly pricing in currently. I'm going to go to page 13, which really just shows treasury yields, and I think this is a big part of the story. So the graph on the right, uh, the green bar shows yields as of June and that dash purple line as of June 2024, so the prior year. So, um, you can really see, um, that the Fed funds rate has been reduced. And so because of that, we see the shorter term yields are lower. But as we move further out the curve, and you go to the 7, um, and really the 10 year and 30 year point, you can see those yields are peri passu, and in in the 30 year case higher than they were in June of 2024. So what this is exhibiting is a steeper yield curve, and we no longer have, or we think over time, we're no longer going to have an inverted yield curve, or short term rates are higher than longer term rates. Currently, the spread between the two-year note and the 10-year treasury note is just above 50 basis points. We think this needs to migrate to be closer to 100 basis points, and we think that will happen over, you know, a 3 to 9 month forecast horizon. And we really think that needs to happen because front end rates stayed anchored or come a little bit lower. And those 10 year old feet a little bit higher. The good news is, is that the city of Mountain View's portfolio invests, you know, kind of out to 5 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 um, economy is poised to slow down, but we are not poised to have um, a recession in our view because we do believe that the employment picture is going to um, remain in this low fire, low higher environment. Um, and we also believe that because of the, of the fiscal one big beautiful bill that was passed earlier this year. We are anticipating some fiscal stimulus in the 1st half of 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?

[00:10:27] Member Chris Clark: Um, I do have, um, well, I guess this is more a portfolio question, so I'll I'll send it to you, yes. Okay.

[00:10:35] Bill Decky: Um, fair enough. So if we could go to page starting on page 16. Oh, so the next 3 Yes, sir.

[00:10:45] Member Chris Clark: We're not in there, have I? And any other committee members stuff? Sorry. Sorry about that. Go ahead.

[00:10:52] Bill Decky: So if we go to page 16, it shows the statement of compliance, this is our compliance dashboard. This report is sent to, uh, the finance team staff at the city of Mountain View every month by the 3rd business day. We just like to highlight that everything is in compliance. And I'd also like to highlight on page 17. Um, It really highlights about a third, 2 thirds of the way down, it shows the socially responsible prohibit investments, and you can see the stuff that we have file that we have profiled not to invest in, including 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 of 25 and June of 25, you can see the duration did extend a little bit from 196 to 207. It is just shy of the benchmark duration of 211. Um, if you look at that average purchase shield, it increased on a quarter over a quarter basis from 328 to 340. 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 short term rates went from basically the 0 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 on 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 weights and the change on a quarter of a quarter basis from the Treasury Agency corporate supernational, et cetera. So the overall allocation, everything here looks pretty stable. Um, we would note that the agency allocation is lower than it is historically, and that's because, um, 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 uh, draw your attention to those annualized returns at the one year, 3 year, and 5 year point. So you can see the overall portfolio is very much in line with the benchmark, so the one year return was 577 compared to the benchmark of 576 and that 5 year to return was 143 versus 144. If you move 2 columns over to the right, you can see the all corporate portfolio. So this had a one year return of 669 compared to 662 and then a five-year return of 214 compared to 142. We would just like to highlight to the committee that, uh, based on the, um, both investment policy and the constraints of the city of Mountain View, that corporate portfolio, although it's very well diversified compared to the um, index, it is a very concentrated portfolio. So we do expect to see some, um, volatility with those returns relative to the benchmark, but we are optimistic that will 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, um, of the investment policy last year where 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, JP Morgan, Walcom, Wells Fargo, et cetera. So this is basically broadening out the overall portfolio based on the investment policy change that you made. So this is what I I hope I'm within my 5 minute window, and this is what I was prepared to present today, and I'm happy to answer any questions on behalf of the committee.

[00:14:59] Member Chris Clark: Thank you very much. Um, Are there any, uh, questions, uh, on this item, on the report? Nice mayor?

[00:15:10] Member Emily Ann Ramos: Yeah, thank you. Um, we received some public comment, uh, via email.

[00:15:18] Member Chris Clark: Yeah, I think for, um, I think we determined that for, uh, if folks have comments on the the actual investment policy, um, um, is probably the most appropriate under 5.2, which is the next item, um, for either the public for us to discuss. I mean, it, it melds in with the report from the last year. So, um, but I, I think if we want to consolidate things by .2 is probably the most appropriate time, but I,

[00:15:44] Member Emily Ann Ramos: I was wondering, um, um, based on, um, ask from the public, do we know if, uh, any of these companies would be not on there anymore?

[00:16:00] Bill Decky: Could you reframe the question I couldn't hear? I apologize.

[00:16:02] Unknown Speaker: Okay, Bill, the question is of the corporate issues that we currently have in the portfolio, would any of them, uh, be involved in businesses that the public had commented on, whether it's prisons, detention centers, uh, military, industrial equipment, and things of that nature.

[00:16:25] Bill Decky: So, um, the answer in Chandler's interpretation is no. I will tell you that we have seen other cities, um, uh, with mixed results, uh, bring up caterpillar as a name because of even though those are not, um, defense companies per se, but the way their, their, um, equipment is being used in the Middle East, some cities have brought that up as a, as a red flag. When we um, evaluate caterpillar, it is even, it um, profiles as a capital equipment company. So it does not um, 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. Um, 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 that you have, as well as the overall conservative nature of the portfolio that would be consistent with any of those factors. Thank you.

[00:17:25] Member Lucas Ramirez: Thank you I had a few questions. 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, um, in addition to the, um, market yield versus the purchase yield, just so we get a sense as to what the average dollar price is there.

[00:17:48] Bill Decky: So I believe we have that in the summary report, um, at a different element, but I will highlight that to staff and have them get back to you on that.

[00:17:55] Member Lucas Ramirez: Okay, thank you. And then the 2nd question, since last year, when we approved the purchase of single A securities, there've been a handful that have been added, I see. On page 30, you know, starting with Bank of America and ending with Paulcom. 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 AAA to circulate securities? Sure.

[00:18:26] Bill Decky: So, um, we've also, from June of last year to June of this year 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. Um, 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 back notes, most of those financials were rated single A. So that's really been able to enabled us to diversify the portfolio more. And just generically, I would say, um, because we've been able to invest in some of those larger, um, 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 J.P. Morgan. 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, um, I think we're just in the 1st 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, um, 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, um, increase diversification in the overall portfolio, which we think will benefit over time. Thank you

[00:20:23] Member Chris Clark: There are questions. Um, so we'll, uh, we'll take public comment on this item. Um, would a member of the public join us virtually on person, comment on this item, and so, basically raise hand in Zoom, or in order to, so the kids can, don't want to yell to be required to raise their hand. Now, like I said, if we want, we can consolidate any, um, comments around the investment policy on the next item since they're attached, um, but it also kind of bleeds into this. So it's usable. Isn't there anyone on? Okay. Um, Well, um, thank you, Bill, for the presentation. Um, I did have, um, just one quick, this is no extential, I guess. Um, Because we're, we're living a world where I, I never thought I'd be in a presentation where we said, you know, we don't have US data on the economy. For forest economy, doesn't isn't producing data at the moment. Um, or only some data, and we might not get more data for a while. Um, Which raises the question of, you know, the concentration that we have in, in U.S. treasuries. I know they've kicked the debt limit, uh, hand down the road again, and I'm sure they'll continue to do so, but, you know, it, if we continue with this Brinkman brinkmanship and we get to the world where, okay, we're closer than we've ever been to what the, what the treasury says is the, is the X day. Um, I guess in that world. It doesn't really matter where your money is. It's, um, because it's just going to be such a very strange world, but, uh, it's a very long way of saying, Um, we live in unusual times, is this, is this an, is this inappropriate? Um, mix of treasuries for a portfolio like this, even a city that's doing something. I think this traditionally makes sense. I just curious, sort of what your thoughts are. um, more globally or not globally, but just high level. So,

[00:22:27] Bill Decky: um, my 1st 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, um, 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. It's separate. So it's not, the government shut down is not going to impede the ability of the U.S. 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, kind of gets close to that brakesmanship point, and then is always sort of pushed down 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 brinkmanship, but we do believe that the U.S. Treasury, uh, understands the significance and importance of not defaulting on its debt, um, 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, uh, throughout the different administrations, I think all the treasury secretaries, um, 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 U.S. defaulting on its debt is extremely low. And we would also argue that, um, 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. Um, but we continue to think that the U.S. will ultimately, uh, remain the reserve currency and remain the global benchmark for risk free rates.

[00:24:10] Member Chris Clark: That makes sense. Thank you. Yes, very, very, very, very small risk of default, but probably the highest sweep I've ever had in my lifetime at least. Anyway, that makes sense. Thank you, Bill, um, for the 1st invitation. We really appreciate it. It's my pleasure. Thank you. So, well, um, there's no action on this item since it's just a presentation. Um, If there are no other comments or questions, um, in the committee, we'll move on to the next item. Um, 5.2, the end report of the investment review committee, the fiscal year, 2425. Um, finance the services director again, uh, there's

[00:24:48] Derek Crampos: my phone will make the marks on this item. Thank you again. So if item 5.2 is the annual report that goes to the city council from the committee. Usually we'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 going to briefly just walk you through the draft report, a couple minutes, and I'm going to turn it over to Grace and Elliott now for that. Sorry, thank you. Let me go. Thank

[00:25:19] Elliot Young: you, Derek Elliot Young, principal financial analyst. So this draft report is as of 630, 25, the same as Bill's presentation. So I'll just send 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. Uh, the city wasn't confined with the policy, the 15% at all time, but the duration of benchmark. And within 3% of the benchmark 9 of the 12 months. There was a significant increase in the benchmark, uh, from June 3024 where we went up from one. 190 to about 2.11. Uh, 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 might to invest. Um, so we are trying to catch up with that, but we have uh, matched it uh, in recent months. Uh, the total rate of return for both the corporate holdings and the city holdings um, are the highest they've been in 10 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, uh, but the yields, uh, to maturity have also been strong at about 3.4% as of June 30. Uh, next page. Polo portfolio is now just over a 1000000000 and we averaged the earnings rate of 3.07% on the year, which was about $31.300000 in interest for the year. On the next page, the diversification compliance. Uh, we were within policy limits in all categories. Uh, our treasuries have increased. I think, as Bill mentioned, that our agencies have decreased, and that's just a function of the availability of agencies as well as the limited spread between treasuries. Corporates are up to 11.7% as of June 30 and it's actually higher to about 13% as of September. Uh, and that's as we increase uh, diversification because of the changes to the investment policy. Uh, the next page we look at the allocation of the portfolio, you see the majority is between the capital projects funds and uh, a restricted funds, which is the water, waste, water, sewer, or sorry, water, waste, water, 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 group works to council. And so in summary, we are in compliance and have no violations over the past year. Thank you.

[00:28:09] Member Chris Clark: Are there, um, any questions on this?

[00:28:13] Member Lucas Ramirez: I had a question, not specific to the report, though, but at the last meeting, um, a question, and it relates really to, um, the breakout of the portfolio, between, um, what's allocated to the general son, what's allocated to capital projects and what's allocated to, um, reserves or restricted funds, the city manager asked, um, Chandler to look into possibly doing something in terms of having a different investment policy, based upon the length of the liability. Um, and this is something I think I had mentioned had come up 10 plus years ago, you know, as the portfolio has grown. Um, It is still all being managed as if it was kind of a cash account, um, you know, a short-term cash account, but some of the, um, funds, especially those for capital projects and restricted, have much longer term liabilities, but are still being managed in a very, um, restrictive way in terms of duration and credit quality. Um, and I think you had asked, you know, can anything be done? 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. Um, and I think as the portfolio has grown to a large amount here. Um, and so much of it is restricted and, um, in the capital projects fund. This is a of a question. Yeah.

[00:29:53] Derek Crampos: 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 5 years, and...

[00:30:03] Bill Decky: We did discuss this, and I think 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, um, we would still believe in that view based on our outlook on where the 10 year note should gravitate towards. But this should be a continuing discussion in regards to bifurcating a portion of the portfolio, and I'm not privy to what that amount would be, but 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 5 years in just specific asset classes. Um, really treasuries, agencies, and um, mortgage-backed securities, and municipals as well. So, um, it would uh, to fully take advantage of this. We would, um, probably look to update the policy in regards to some mortgage securities to provide a little more diversification and flexibility. Um, but that would 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 the extent that our view is valued. You know, we really do think that, you know, that the curb needs to steepen more. But as it gets to that, you know, maybe closer to that 100 basis point differential between 2 year and 10 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.

[00:31:45] Unknown Speaker: And Bill, just under California law, does the duration have to always average below 5 years? Is that how you would do it? Do you barbell the portfolio? Are you just allowed to have certain asset classes? It more than 5 years?

[00:32:00] Bill Decky: You're allowed to just have certain asset classes be beyond 5 years and depending, we have a, a, 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, 3 and 3 quarters as opposed to the current portfolios too. And they'll invest cut between 0 to 10 years. We also have, um, 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 5 and 10, which will really push up your duration on that portfolio to closer to, you know, 6 and change. So, um, 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 more, the more conservative 1st step would be to take a portion of the portfolio and manage it versus a one to 10 year benchmark. And, um, and we could ascertain, uh, you know, what made sense from a credit a, a mortgage slash securitized basis and a municipal basis, um, as well as treasuries and agencies.

[00:33:06] Member Lucas Ramirez: Yeah, 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.

[00:33:22] Bill Decky: I would say that to an extent, the city of Mountain View is already doing that because they have investments in life and, you know, local government investment pools, more for liquidity. And then this portfolio, um, although it is still pretty short, um, it does invest out to 5 years. So it would be very consistent with what we see from a reserve portfolio. We do see larger cities and certainly the city of Mountain View, given the corpus of assets that you have would qualify. Over the past 2 to 3 years, we've seen, um, The desire to have a longer duration portfolio from some larger cities were previously, uh, that was really dominated by GPAs 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. Um, they, in their investment policy, they have the ability to invest out to 7 years. Um, in certain security types, but they're still running their portfolio versus a one to 5 year benchmark, which is a little bit longer than what the city of Mountain View is doing. And then we were seeing some other cities, the city of Stockton would be an example, where they have split out their reserve portfolio between a one to 5 and a one to 10 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.

[00:34:56] Member Lucas Ramirez: I think I would encourage the staff to look into that to a greater extent as the portfolio continues to grow. And, um, roughly two-thirds of it. I don't know what the liability is on the capital projects or their restricted money. Um, I don't know when you think you would need that money and when the projects would be funded. But, um, to me, it seems like it's a sound, um, a sound policy to at least explore having separate portfolios for the cash account. That would be my recommendation, not aggregated all, but to have it separate. As, as Bill said, some municipalities are do, um, and have the ability for the, uh, portion of the portfolio that's restricted and for capital projects, to try to match the liability more to the duration of the, um, securities as opposed to just kind of man, having it all together. I think the city 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 services.

[00:36:10] Member Chris Clark: Are we gonna answer your question? Yeah.

[00:36:13] Member Emily Ann Ramos: Um, so back to the, uh, letter that, you know, we received, uh, public. Um, I'm, I think staff got a letter as well. Um, they asked for more uh, items to be prohibited from us investing in. Um, what are the next steps if we would like to pursue that?

[00:36:33] Derek Crampos: Sure. So we're in have been researching. We started researching it with Chandler Asset Management. And I think, um, today we'd like some direction from the committee on what we, what your intentions or desires would be, um, but definitely something that we are can research. That will take a little time.

[00:36:55] Member Chris Clark: Any questions before we do public comment?

[00:36:57] Unknown Speaker: Oh, yeah, I got 2 um. The, um. Sir, it's going under um, actually, uh, what's the new actuarial evaluation? Is there any anticipated like changes with that, like in the discount rate or?

[00:37:13] Unknown Speaker: Would be the same, the same as always.

[00:37:18] Unknown Speaker: Oh, yeah. Yeah, go ahead then.

[00:37:20] Unknown Speaker: Gracing our system, finesse, and sure, so far, sure, and people have questions. Um, we are the, um, the OPEP study and we've usually conducted every 2 years, so there's one coming up as of June 30, 2025. In the last 30, our discount rate was actually 5.6%. That's what we use for the valuations. But in this one upcoming one that we are anticipating, there might be a, we're in the process of doing the evaluation. And actually the discount race actually is in discussions. Currently, we anticipate it would be higher than 5.6%, um, giving the current markets, um, but we haven't determined what would be the rate the city would use at this and we do anticipate. Uh, we have the study done probably in December, January type.

[00:38:03] Unknown Speaker: Um, Comment on the investment policy too? Something...

[00:38:11] Member Chris Clark: It will be comments after we take publish. comment if that's okay. Yeah, it'll come back to you. All right. What other questions we can do now? Okay, um, 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 by comment on this item, please, if you're on Zoom, please click raise hand. Uh, Please click the raised hand button if you're in person. Um, you can either raise your hand or a pill and a yellow uh, speaker card to be followed upon. Um, And we'll, we'll take in-person speakers 1st and then, um, we'll do, we'll do 3 minutes and then, um, then we'll move over to Zoom if that's okay. So if you're, if you're online, um, go ahead and queue up, click your race hand button so we know you want to speak, and we'll start with in-person speakers that there are, I need to comment on this item. Um, just raise your hand.

[00:39:05] Sammy: Um, yeah. Um, so my name is Sammy. Um, I'm a Mountain View resident. Um, and I think, uh, as you guys, uh, may have seen, uh, uh, uh, I'm with some of the people who've been proposing this uh, 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. In our participation in the 2017, uh, ammacus brief to protect our ammac. Um, I'm, um, whose family has been directly impacted by, or and by an international arms industry that profits from it. Um, and it's an American with values. As a resident of Mountain View, it pains me to think that my city could eventually be invested in companies that sell arms or military services, um, 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. Um, 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 band and codify these values further in our investment policy. Thank you.

[00:40:31] Member Chris Clark: Other comments? Yeah, go ahead.

[00:40:34] Ronnie Zeiger: Hi, everyone. I'm Ronnie Zeiger. A long time mountain, be resident. I've practiced medicine here. Um, I also am a tech worker. I worked at Google and local startups. And I'm commenting here today because I've been able to thrive here. Um, uh, after my family, um, left, uh, Chile when I was a kid. I'm fleeing state sponsored violence, and before that, my grandparents left Europe, fleeing Nazi persecution as Jews in Europe. Um, I really want to recognize the city's prior work, um, in prohibiting uh, unethical investments uh, in firearm cigarette and fossil fuels. Um, and today, um, uh, I have many friends who are facing daily threats from ICE and a federal government that's escalating the use of violence that's making many of our, um, community members feel less safe. And by updating our investment policy, as I was proposing written public comment, the city can take this modest, but morally clear action to help ensure that our local funds are not funding such violence. Thank you.

[00:41:43] Member Chris Clark: Thank you Republic speakers. Anyone online who'd like to speak? No. Um, so we'll close public comment on that item and, um, bring the item back to the committee for any, um, any other discussion or suggestions this app or, um, or discussion amongst ourselves, um, uh, on this particular item. And I think, um, let's start with, um, Durek, I think you had, um, I had something short, uh, unrelated, you know, um,

[00:42:18] Unknown Speaker: section, uh, 8 on the, um, authorized, uh, institute and broker dealers. Um, maybe just pitch just back the staff, just, um, maybe a just iteration of another bullet, like a number four. Um, you know, like the requirements are like audited financial statements, a broker dealer questionnaire and a statement. Um, Uh, just from like my end, like I've noticed, um, increasing like, um, enforcement from like board of accountancy. And so, you know, firms and audit broker dealers have to be registered with the PCOB. And sometimes have been, um, Issued like all these financial statements with a clean opinion. But then the firm gets in trouble, maybe like many, many, many, many years later. Um, 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, is both the, uh, PCOB, state board accountancy, uh, and their member, like AICP. Um, I think this is like a small additional kind of like check just to, you know, make sure everything. compliant. That's all I have, yeah.

[00:43:44] Member Chris Clark: Other, I'll answer questions. Did you want to do that? Yeah, your regular earbugs.

[00:43:52] Member Emily Ann Ramos: Yeah, that would be wonderful. I I don't really understand. As a wreck, he's a thing that I would support, it sounds... Sensible. Sensible. I was like, it sounds like not a problem for us, but like, um, but I know you never know sometimes. Um, But we did receive as a public comment and the letter that was sent ahead of time, um, some asked to add more prohibitive items, uh, to our investment plan. So I would love to know what would be the next steps, what kind of time frame we would be looking at, if we want to make this change, um, if it's the exact language or if it's a different language. I, I, my understanding when I met with the, the public on this. Um, they weren't, we weren't tied to the, the, identified by, but I thought that might just be easier for us, but if it's not easier than us, then I'm happy to be business away from that, but I would love us to, um, Ensure that we don't invest in, in a lot of these companies that assist ice in going after our own residents.

[00:45:07] Derek Crampos: Yeah, thank you, Vice Mayor. So what next steps would, for me would be to work with Chandler asset management and come up with maybe some proposed language that fits, that will work with our investment policy, if that's 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.

[00:45:38] Member Emily Ann Ramos: You have a sense of the actual timeline? Are we are we gonna wait for another year? Because we just did our minutes. And I was just like, 0 my gosh, Lisa. I was just like, oh, it's been a while.

[00:45:48] Derek Crampos: Typically, we meet annually, but we can all obviously meet sooner than annually. So I would imagine it would be within before the next 12 months. So a couple of months, at least through 2 or 3 months. So early next year, I would imagine.

[00:46:02] Unknown Speaker: And part of it would be to reverse engineer it and actually identify the firms that would meet that criteria so we kind of have, you know, like a, a no fly list and go from there.

[00:46:13] Member Emily Ann Ramos: Would it be helpful if the public comment sent in a list of actual companies?

[00:46:19] Unknown Speaker: So I would suggest that, um, we look to our firm, um, who has uh, a lot of experience in this and they they've worked with other cities in this regard too. So I think we, um, we know what, um, the justice, uh, that our residents are looking for. So I would suggest that we have staff work with, um, our firm, um, on that. And then we can look into those categories. Um, the good news that we've heard is that, uh, right now we do not appear to have any investments that would cover any of those concerns that residents have raised, um, other than perhaps, um, tangentally caterpillars. So, I think we have some work to do. Um, to work with the firm and follow up on it, and then uh, we will definitely come back before that one year mark and give you all an update and update the public as well.

[00:47:20] Member Chris Clark: comments before I'll, I guess I'll save my comments for the end. Did you? I was gonna make a motion. Oh, I'd like to comment before you move.

[00:47:28] Member Lucas Ramirez: Okay, go ahead. My comment is that while I personally support being as socially responsible as possible and agree with the public's comments before I, um, 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 3rd 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, um, 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 um, a little clearer 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. We do own caterpillar? Okay, I'm sorry. You own caterpillar. Okay, but other than caterpillar, it 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. Um, And I'd like to know from that approved list, which items would be impacted. Um, so that, um, before we vote on it, we have a real sense as to what the impact is. And then the 3rd thing would be, so that we know what the yield give up would be, what the impact would be. Um, and then we can make a educated determination as to what the, the pros and cons of it are. So 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.

[00:49:48] Member Chris Clark: Other comments, people, I'm in. Um, I largely agree with you. So I, I, um, 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, um, environmental sustainability. Um, but if you look at the policy, what you'll see is that at the time, um, we, there was, There was a, there was council action around this, not just uh, committee action. It was, it was a broad goal, um, and a significant one. And there were a lot of other, um, organizations that were moving in that direction. So there were, we had outside resources that had lists of companies that weren't, um, that were semi-neutral, or we considered neutral, I think, in the investment world life. I think we, we, we have like the, early, we reference the, uh, investment research, um, uh, investor responsibility research center, um, And I don't know, they might have some resources around this, but I guess what I'm getting at that 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? Um, you know, we've, we had, um, investment, or we had things that we wanted to encourage, but we also said, you know, no entities that manufacture firearms or, or cigarettes, or if you'll give you direct exploration, production, refining, or possible fuels. I think what we've received from the public is, I wouldn't even know how to begin to determine which company falls into, um, uh, there are some of those categories that I think are would be easier to determine which companies could fall into that in others. And then there are some of the catchalls that were in there where, you know, I, we start talking about, you know, caterpillar and Amazon and, um, I, I don't, I, I just, you know, and percentage of what revenue they receive from certain things. I just, and also, like, I feel like we're trying to fix something that isn't broken yet. So I think there are 2 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 want to 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. Um, or, We can create a policy statement. Um, and I think we can, sort of, like we've done previously, we've said, we've encouraged investments, uh, in facility and 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 longer term. We just keep an eye on things as opposed to spending a whole bunch of time identifying what, um, But, you know, not investing in companies that promote violence.

[00:53:18] Member Emily Ann Ramos: Like, they did identify, like, possible different lists to do.

[00:53:24] Member Chris Clark: They did. I'm not sure that those are commonly used in the investment world, though. Um, because there are, there are, there are, you know, peace institutes and things that identify these things that are, I think, where we 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, um, some of the other, um, institutes. Also, I think, if we were to make this decision today without, um, I think there are elements within our community that would be very disturbed by escaling this path. Um and not having the opportunity to comment on it. I invest.

[00:54:07] Member Emily Ann Ramos: I don't think we're passing the language today. staff has kind of made that clear to me.

[00:54:11] Member Chris Clark: But they but they need to know what they're going to research. Yes.

[00:54:16] Member Emily Ann Ramos: But isn't that what Committee Never Permit wanted to know, he wanted to know what would this mean for us? And I think that's what.

[00:54:23] Member Chris Clark: But we have to tell them what it means, us 1st 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

[00:54:40] Member Emily Ann Ramos: item are you not comfortable with? The

[00:54:41] Member Chris Clark: catchall. Um, So

[00:54:44] Member Emily Ann Ramos: if it was specific to. So we already say if you don't, we don't invest in when you ordered one, and I don't believe for companies that manufacture arms. Correct. Can we also say military service? That is, um, contained.

[00:55:02] Member Chris Clark: That's extremely broad. There, because anyone who works even remotely with the U.S. defense department, I mean, U.S. defense department uses Google for, like, I don't know where you draw this line. You see what I'm getting at? Okay. Like, does Palinter account or do they not? Oh, I would come volunteer. Oh, sorry, same manager, help me.

[00:55:28] Unknown Speaker: So I, um, do recall receiving public comments, but I haven't, um, seen the specific letter lately. So I think what we would want to do, maybe, is just have the committee give us, um, direction to, um, If there are certain, as, as the chair of 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 just don't know either way or the other. Um, and as the chair said, I would imagine, the staff might have some concerns about, um, the broadness of some things, um, 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 want to say, uh, for example, the weapons of mass destruction or, um, you know, entities that, uh, what are some of the languages here? That's

[00:56:39] Member Emily Ann Ramos: incarceration and detention. Yeah,

[00:56:41] Unknown Speaker: see, I just, I just don't know about that because then that, does that mean certain construction? Um, 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, the, um, have kind of 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, um, but otherwise. Well, we'll have to just look at whether this could or couldn't work. See, Mr. Bill has his hand up. Oh,

[00:57:25] Member Chris Clark: hi. Sorry, Bill. And we'll come build it. Sure,

[00:57:30] Bill Decky: if it's okay, um, I would just like to educate, um, I know I believe staff is aware, but I'd like just the committee to be aware. So Chandler, uh, a couple of years ago, we contracted with SMP IQ, and we contracted with SMP IQ to provide ESG ratings. Um, so we, um, as part of our, um, 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, um, for their ESG scores every quarter. And so, um, 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 are 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 uh, very engaged in environmental social and governance kind of oversight. But again, I want to emphasize we don't have an ESG approved list, but we do consider those factors in determining investment suitability. Um, 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, 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

[00:59:19] Permut: it be helpful in the future? In future reporting that you provide that ESG rating on all of our corporate, um, holding so that this committee can see what the S and P, ESG rating is? Because right now it's just a black box. We don't know anything about what those ratings are. Sure.

[00:59:38] Bill Decky: So we do charge an additional fee for that, and I'd be happy to talk with staff. And, you know, it costs us to do those ESG scores and that, I mean, all the other, all of our competitors who do that do charge, it's a pretty modest fee. But nonetheless, there is a fee, um, to provide that, um, across the overall portfolio and that's really industry standard. I

[00:59:58] Permut: 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 40 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, um, um, in addition to what the policy would be. So I think the more information we have. Um, there may not even really be a problem here. That's. Yeah,

[01:00:35] Unknown Speaker: that's what I was going to say, church, just, um, looking at this list, we don't have investments. And these, um, and, um, I think that it's great that, uh, our residents are aware and have told us some of the cities that they're pointing to that have updated their policy. So just having the time to be able to look at Richmond and Alameda and even some of our cities here on the peninsula. Um, so 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. Um, and then we can come back, get a committee, and also look at what we can do as, uh, the open

[01:01:16] Member Emily Ann Ramos: a black dogs, just in case, yeah. And I'll just add our

[01:01:20] Unknown Speaker: current construct and framework. is likely gonna weed out a lot of these anyway for fun. I just Googled Palentiers, corporate bond rating, it's a B3. So, I think if staff can go back and work with Chandler within the construct that we currently have to identify to 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 going to be an extremely small universe that would meet our criteria anyway. I'm

[01:02:03] Member Chris Clark: going to lose 1st and then I, I, I'm, I'm, I'm, I'm, I'm, I'm, I'm, I'm,

[01:02:08] Member Lucas Ramirez: I'm, I'm, I'm, I. Yeah, we have another immediately. I know, right? I have not run this off. I'm going to do my best to craft a emotion that hopefully will be acceptable to the committee. So I will move to accept the report in advance, um, the, um, subject to the review of staff and the chair, uh, to, um, at the city council, uh, with some additions. And the 1st would be to have staff evaluate the recommendations from, from half an hour ago. Um, and they seem reasonable and, you know, formally incorporate them. It didn't sound too problematic to me, but I just want to make sure, you know, staff can come back with appropriate language. Um, I, I'm, I'm not ready to, I don't know what a modest fee may be, um, but I'm happy for staff to evaluate that and then return to the investment review committee, uh, with the recommendation. I'm not certain that I would be ready to advance that to the city council for formal inclusion in the policy. But if it makes sense, then if staff says, hey, good idea, maybe 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 guess is it will have no impact to our portfolio. So I, I, I don't want to, um, uh, you know, spend too much time, Grafting language when, It probably will not materially affect our investments to begin with. Um, but for staff to come back with, uh, language and an implementation strategy, that's also an important part of the, the policy, um, that achieves the, the, uh, objectives that the, uh, the public have laid out, but also are actionable. Um, and, uh, 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 pure application. So that would be my motion. Um. Oh, um. Well,

[01:04:23] Member Chris Clark: mostly just a friendly amendment. I want to make sure we get Mr. Grechian.

[01:04:26] Unknown Speaker: Oh, okay, just real quick. Um, I guess would also be helpful is with that, uh, with the S&P, uh, ESG score. Maybe, uh, just get a couple, 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's that's all.

[01:04:52] Bill Decky: So the reality, I'll just come in 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. Um, basically have low data availability. So they basically, either because they're private. So a good example 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&P, so their score is low. So companies like that that have a low score and low data availability, we tend to discount. Um, and I can just tell you that the large companies that provide that data availability, um, it's very rare to find a name that is, you know, much below the 50th 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, um, with some of their overall themes on just corporate governance overall. So, those would just be 2 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 going to find names that have many names that are even below the 50th percentile relative to the peer group on an ESD basis.

[01:06:39] Member Chris Clark: It's a motion by, like, Ramirez, um, I think I'm generally okay with the direction. I think I want to limit it a little bit more instead of the same step to investigate the public comments. Um, 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, um, We were talking about the, um, you know, uh, companies or subsidiaries that are involved in mass car 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 the violation of human rights. Like, I don't know what that means. Um, and I think that would, um, um, I just think those are the, or, or, or who, um, is involved in, um, military services. I don't know. I mean, these are just really hard to buy. And honestly, at the end of the day, I think what we're gonna find is, we're not gonna, you know, hold these companies that we're probably not going to. And so I just don't want to, um, I think the real value in this is kind of the message that we send in the community and the statements, not really what's actually going, because I doubt that we're, like, not, um, 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 die. I'm sorry. Wait, wait, no, we don't. But I'm just saying that even if we did, I would say that. I just, I can't support candidates. But, um, unless we, unless we narrow it down to, um, yes, mass incarceration, stuff that I think is very, very easy to, um, enumerate.

[01:08:41] Member Lucas Ramirez: Right, that's just me. One of the troubles with this is we can very, I'm looking at this from sort of a claim reading, like, you know, if, uh, I'm certain the military uses email, right? But I'm not I wouldn't call using Gmail, a military service. Right? Um, if our staff and and if 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. Um, I don't, I don't want to quibble on what he is or isn't a military service. It sounds like. You have some intuitive understanding either because you're, you're not doing that. going down the rat hole of, well, you know, military officials wear boots. So, therefore, every company that has any participation in the manufacturing of boosts is ineligible. I don't think that's what we're, we're trying to get at, right? It's, it's, um, 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 implementation strategy that I trust will probably have very little or no impact on our portfolio essence. I,

[01:10:20] Member Chris Clark: I understand the motion. If there's a 2nd we can vote on it. I probably won't support it because I think we're trying to fix something that isn't broken and we're doing it. And we're gonna do an enormous amount of work too, like, at the end of the day, make ourselves feel better, but not actually do anything differently.

[01:10:36] Member Lucas Ramirez: I would just also add that we're talking about 10% of the portfolio. Um, and the, while I agree, the, the, the, the purpose is, is, is good. Um, I mean, how much time does staff want to 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 going to be offloaded to a 3rd party like S&P. as opposed to, um, and even it seems like Chandler does that too. So I would discourage staff from getting into a role of making this determination as to what is, fits this criterion, what doesn't fit the criteria. It will be a lot of time and work and probably, um, um, friction from the public. Um, in terms of what the decision is, for something that is currently not a problem, and is limited to 15% of the overall portfolio, um, and really kind of falls outside of what, in my view, what the role of the city of Mountain View is to do. Um, so I would just be very careful how broad we make this, um, and how much, um, time and effort staff is going to put into, to this when we've, I think, acknowledge that the currently is not a problem, um, with the portfolio, but that there probably should be something in a 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, um,

[01:12:20] Member Lucas Ramirez: black hole we don't want to, a set, go down. 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 hour project that sounds like a 5 to 10 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 I suggested, where we're not investing a huge amount of time, you know, parsing every word, you know, going into the semantics, but achieving the spirit of the request from the public.

[01:12:57] Unknown Speaker: I'm gonna take a sab 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 going to be an extremely small universe of stuff we're talking about. Another way we could filter it, is, aside from the approved list, who's, 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 uh, 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, uh, 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, uh, show you may or may not be an issue in terms of portfolio construction with the types of names that we would only be allowed to invest in anyway.

[01:14:28] Member Chris Clark: reasonable. That, that would be reasonable. And you could include just if someone could just want to provide copies of the investment policies from the other jurisdictions that were mentioned, maybe 2 or 3 of them. And then, and then, the other final piece of the compromise, if we, um, I don't want to 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 schedule meeting, that that can be incorporated into an agenda is part of, I think that's the time to do it. I don't want to have a special meeting about this. Um, I, I, I think, broke. I just don't think it's a good use of time. Are you okay with that? It will 2nd your motion. I'm not sure I remember what it was, but, um, but I, I think, tell me if I'm, if I read that being remotely perfectly, um, it's to, take the action we're supposed to take today, which is to, um, um, to receive the draft of Fiscal 24, 2025 investment review committee report, the city council, um, to, um, there were earlier comments from committee members that you incorporated in the ocean, but have staff, correct? Yeah. Did, did, did you capture those? Okay. Yeah, that. And then, um, And then, um, and then based on the public comments of the lawyer that we received, um, um, reviewing, uh, basically, basically what, um, surrenders said earlier, um, taking a look and just identifying at the next, uh, meeting that we, it, the next reason, reasonable meeting that we have, uh, if we have one, 2 weeks from now, it's too soon, but, um, Just, um, Uh, uh, look at that and then maybe just, we can have some examples of other jurisdictions, policies around this that we're mentioned. I think that would be really helpful too. And then we can decide where we want to proceed from here.

[01:16:48] Unknown Speaker: Peer review is a standard staff practice. Happy to do that.

[01:16:50] Member Chris Clark: Okay. Does that work for everyone? Including. Yes, yeah. City manager, are you happy with your thing with that? Great. Um, so we'll, um, Are there any other comments before evoke? Oh, in favor of the motion, makes your hand. It looks unanimous. Um, anywhere opposed? No. So that passes unanimously. And we will, uh, thank you, everyone who, um, who, um, who particular stated in, in, uh, this particular item. Uh, and uh, thank you, Bill, again, are really, I'm just walking this through this. Um, uh, are there any staff, uh, item 6 or are there any committee staff comments questions or before? Uh, what not? Well, during this meeting? At 951? Okay. We're going to make it fast, right? Yeah, I'm going to go fast.

[01:17:51] Unknown Speaker: Just how fast? Do you have any latitude at all or do you need a hard 10 o'clock stop?

• ← Previous
• Next →