We shall start with the pledge of allegiance. I pledge allegiance to the flag of the United States of america and to the republic for which it stand, one nation under god, with liberty and justice for a all. Item two, role call. role call . The standard rules will be applied to include Public Comment restricted to three minutes. Ill recognize commissioner cas irirkcasiado to make a statemen. Thank you to darlene for a members issues, one of our elderly members called in and said that he was having trouble finding his sister, checking on her wellbeing. Staff routed that phone call to me and we were able to fe get te Police Department and Fire Department to respond. His elderly sister was found on the floor next to her bed with a broken hip. To make a long story short, had she laid there another 24 hours, she would not be with us but she in the hospital recovering. So i want to thank staff for their attention to duty and Quick Response and the family is very, very, very pleased. But the take away that i want here is that when someone calls in and theyre worried, lets act on it all of the time like we did here because time is of the essence and her brother, the one who call in here, he was actually concerned because he didnt want to break down her door because he was afraid she would be angry if he broke down the door and went in. I assured him we wouldnt do that and the Fire Department put a ladder to the second floor and got in through an open window. So the door wasnt broken. So i want to express those sentiments and on behalf of tom milburn and his family, thank you to everyone participated and darlene, thank you for your Quick Response. That takes us to item 3, closed session and do we need Public Comment to go in . Any Public Comment regarding us going into closed session . We will not start the open Public Session again before 2 30. closed session. All those in favour, say aye. Item 4, Public Comment. Im john stenson. Im a 44year member of our engine phones. Today i would like to comment on Public Comment. I would like to comment because i think you need some reforms that need to be made. The first reform that i would like you to make is that i would like you to change your starting time from 10 0 1 30 to 2 00 p. M. I dont think you have started one meeting on time and the second one is to put an end to closeddoor meetings. A few months ago a Public Commenter said he did not like you having secret meetings and i agree with him. The third reform that you need to make is if any of our members ask you any questions about how you are investing our money, you should answer those questions. And in the past meetings, ive asked you what were the retainers ended june of 2019 and how much money you paid in Management Fees and performance fees to get those . And i also ask mr. Kocher to give a written report on large pension forms like coffers, the state of new jersey . Did he ever give you a report like that . I dont think so. Another question i would like answered is, what is your managers definition of protection . My definition is not losing any money. Please ask your Hedge Fund Manager what his definition is. Thank you. Any further Public Comment . That takes us to item 5, approval of the minutes of the october 9th meeting. Any corrections, deletions or additions . The motion to adopt the minutes is in order. All those in favour say aye. And item six, consent calendar. Any members of the board that would like removed for separate consideration . Please remove item 6d, shall not be considered until theres a change in that operation, 6d, d as in delta. Any questions . Motion to adopt is in order. To be removed. To remove it from the consent calendar, thats the own way under policy they can travel. I understand. The travel request will be canceled to begin with and therefore, no need to vote on it. Oh, your travel request . Yes. Ok, got it. Its just one item. Thank you for the clarification and does not take a motion to remov item to remova consent calendar. Got it. Any further questions, motion to adopt is in order. And seconded . You got it. All those in favour, say aye. And before we move to item 7, i will make a note to call item Public Comment . Excuse me, Public Comment, thank you. No Public Comment. If things keep going along swimmingly, i will not need to pull 10 and 11 off but that sequence will be taken out of order. Item 7. Item 7, action item. Recommendation to hire any pc as general investments consultant. Very good. Board members any pcs fiveyear tenure is coming up in june of this year is staff requested and the board approved a recommendation that we issue an rfp for general consulting services. We received two bids and we are remming to again, reup, with any pc, and they are a deeply resourced firm with more than 600 billion in aum with public Pension Plans, including many our size and larger. And allen continues to express a desire to serve for the term of our recommendation. Im going to ask kurt and anna to further walk through a recommendation and well answer any question. Ill talk a little bit about the process and then our conclusions. As bill noted, youll recall at the june 12th board meet, be they issued an rf. For Investment Service servicest was received from nep c. We formed an Evaluation Team comprised of bill, anna and myself and it included a thorough review of the submitted proposals, on site meetings and reference calls with both current and former clients. This work occurred over the past few months but was augmented by similar work confirmed by bill and me on the Retiree Healthcare trust which issued an rfp earlier in the year to which nakita and an nepc responded and they had an opportunity to present on october 16th. Its a meeting, ibelieve, most of you were able to attend. It was divided into three primary duties, total funded policy and allocations. Public markets oversight and performance measurement. And in addition, there were matters to esg and governance and why we only received two responses to our rfp, both makita and nepc were suitable. Both are well resourced with experienced staff is both developed sophisticated methods for allocation and both aligned on a variety of matters but ended the day, we give a slight edge to any pc and our recommendation is that the board retain nepc as our general investment consultant. Board members . I make a motion to adopt the recommendation. Second. And any board questions . I have one question. Why are those two firms responding . A couple of things. Well, one is there has been a lot of consolidation in the industry. The number of large Consulting Firms is probably no more than half or less than it was eight or ten years ago. Theres a variety of reasons for that. And the big one is that most of them with cambridge being the exception, their business is primarily around corporate plans and public Pension Plans who dont pay very much. Buas a result, that puts a premm on cost control. And therefore, as a result of that, synergy is a scale and so theres been a lot of consolidation. There are probably some other reasons. We do know of a couple that we did talk with a couple of firms about why they chose not to reply. Without naming the firms, can you maybe give you feedback that you heard . The two i recall that i spoke to that i thought would respond and considered responding asked questions during that phase where they can ask questions and they looked at our meeting schedule and didnt feel they could adequately commit to senior resources meet a monthly meeting schedule, two of them. Is that because of the day of the month . Because they already have other commitments . In one case, that was it. The senior consultants they wanted to assign, had relationships. They meet at those times. The other is monthly versus quarterly. Thats unusual. Thats a big commitment. And what other feedback did you receive . Another one was we own learneonlylearned about this afe fact. Our returns have been pretty good and that we were probably, quote, unquote, satisfied with our existing services. And that was the second. There were some other things related to just some dynamics related to spurs that were also some reasons for pause and we could talk offline. You dont have to mention the firms. We know this is not you and we wont kill the messenger, but tell us what people perceive, yes. Its difficult. Difficult board. Difficult board. In what way . What you find online. This right here. [ laughter ] another one is being in the line of fire of esg. Thats another one. So these are some things that people think about. Theres one Consulting Firm i know of as a business to no longer work with public plans and they feel a lot of their research, both for Asset Allocation and Management Research is for priority work. Quite number of years ago, not related to spurs, they made a decision to no longer do business with public Pension Plans because they were sued for a large amount of money. And more recently, theres a public pension plan in the southeast and they sued everybody under the cover. And and i looked at that and thought nobody will do business folk. Folks. I wont go too long but its gad to knogood to know some of these things. Going back to esg and board dynamics, other than the fact were looking at esg and whatever those board dynamics might be, i dont know if its the way we talk to people or individual personalities or politics, can you maybe just give us more color around those two items . Its perceived political interference. Where politics trump investment decisions. Yes. Ok. And that goes for both esg and the board dynamic . I would say yes. Ok. Thats helpful and good to know. Thank you for sharing. Board questions. I have a couple the first question is from experience working with nebc, anything positive if terms of the collaboration working with nepc because as the allocation recommendations, they do things in the manager selection area. Theres always room for improvement and we speak with them, allen and dan, and allen and dan are very responsive and helpful when we bring those things up. Overall, an nepc and allen have been very Good Business partners. Any reluctance on their part to collaborate . No. Any reluc reluctance on stafo collaborate with nepc . As the way this nice report was written, its a glowing report, very similar to the one written five years ago which, perhaps, you were the author. But let me ask this question about makia, since the name on the first page, nothing is discuss. Did you find any strengths in makita that did not appear . Ill answer that and ill ask kurt and anna to opine, as well. Makita made a strong presentation and they were excellent. They established themselves they would be a very, very Good Business partner. I did two onsites with them, one in san diego and one in boston and in backtoback weeks, they did a terrific job. The differences, in my opinion, are marginal, but there is a slight edge in terms of resources, plans about our side, and allen is a distinguished and experienced consultant. There are not going to be too many Allen Martins in the industry. So the differences were marginal and we couldnt find an important reason to make a change. Nepc has proven to be a very, very Good Business partner. Kurt . The candid answer was no, there wasnt anything that makita demonstrated that was sitly better than nepc did or that we want to adopt. Noted, this is very close and both quite capable. But no, there wasnt anything that makita did exceptionally well or for that matter, deficient in. They were very similar. One is a little bit larger in many dimensions. I would add to that, that even within nepc, we dont leverage everything. For us, it was a good exercise to learn more about capabilities that we are not leveraging fully. Ill make two observations. One, theres an issue of cost of change. If you dont think theres enough value going through the cost of change and there tore t, dont change. But in terms of the product that makita discussed called cassie which utilizes a system or board of trustees, in terms of a better fix on an organization really wanted as opposed to the start way its done, does it have value or is it just a bunch of hooey in. I think it has an excellent value and an excellent product that they put together and we did we scored them highly. And thats one way where nepc, i think we can leverage more. We worked with the jeanette and worked a number of times with them. So i think we can put it together but it doesnt have the presentation that makita put together. As an asset liability study toolkit that differentiates makita. We think nepc has all of the components in it and maybe not the front side but has all of the components and we are also looking and leveraging other ways to look at liability studies. Not just within our consultants. So we feel its different but not enough to make this switch. Well, i didnt ask it for the issue of switching. The question is, when the consultant has a product or service that someone else doesnt have, do we want it . President , driscoll, i would say that in this recommendation, we reserve the right to come back to the board at any time if we have identified a tool or an asset that our current consultant is not providing go through another rp or rfi process to identify it. We have done that on the reporting side, on the private market side, hiring two separate consultants. Even though we had two responses here, we believe that if there comes a need for a tool or something we know is out there that is beneficial, we would come back and basically either do an rfi or rfp to identify folks to produce this and i think we look at consultants differently than five years ago when we hired nepc and certainly, you know, the staffs recommendation speaks for itself. However, if, in fact, theres a tool that is identified that we believe nepc does not have, we would come back and also recommend that we would engage them on a project basis to deliver that tool. Thank you. Yes, there is the issue of project work which is different from the issue of is there a difference to justify a cost as part two . And since kyron does work for us but youve supervised their other work and they are doing good work, similar to what nepc is doing but i will continue to talk to kyron because the whole subject of Risk Management which comes up again is again is again we have not so much mastered but it looks like questions we should be answering to give clearer direction to consultant and staff. As for this general recommendation, the way we are set up in our structure, it is awkward were asking staff to do the Due Diligence on a consultant that the board will use in deciding whom staff will work with. It appears to be b a conflict we cant get around. Weve discussed it and are they a good firm or not . Just putting that on the table now and more concerned about assessing how much risk this board is willing to accept when we set up the acid allocation mix which is scheduled for the next six, seven months. February. A bit of coin coincidence of events going on. I would add that we work with other firms to look at acid liability studies and other toolkits. Its not just consultants but we have access to one of the best acid liability studies through the couple of managers we engage in, especially on the global macro side that have this type of acid liabilities and we do intend to review that in addition to the acid liability studies we will start with. I forget, was a motion to accept staff Agency Recommendation made . You had a question . Excuse me. I, too, work with nepc and makita currently and here and with another group and i would agree with staff that the differences between the two are very i mean its so small that its not even worth it because theyre so similar in what they offer in terms of the services. My question, and i coup hav dona problem with your recommendation retaining nepc is the concession planning. Allen is marquis in the industry and leads the industry by far on any executive managers on the consulting side. I know at some point, hell probably think about this didnt im not sure if they talked about possession planning with you at nepc. Allen has indicated that hes going to continue to serve and doesnt plan on retiring any time soon. It is a deep team. We know dan very, very well. And we dont know sam, as well. Met sam several times and youre likely to see sam over time become more involved in the spurs. And the same kind of succession planning has occurred elsewhere throughout the industry. Recently, makita acquired or merged together with pca. Thats correct. Pca was really had one key guy who owns the vast majority of the firm. And hes beyond retirement age. And there was really no obvious off parent there. Of option apparent there. It was the merger. It makes it more difficult to recruit and retain, especially through a whole career. Now were fortunate that allen allen is very experienced. He was experience experienced po becoming a consultant is dan has now served both at allen builder and through nepc and quite experienced and sam is experienced, as well. So its a problem not just at nepc but throughout the industry. I agree. Wilshire had the same thing. Its something we need to monitor, for sure. And so we do that in a couple of ways. Cambridge is a deeply resourced team. So were not just totally dependent on one consultant. Tory cove is relatively deeply Resource Team and you have a strong staff and you have a relatively deep staff. So were able to execute on our strategy because we have multiple sets of eyes. A motion is made and any Public Comment . The future, you shouldnt hire any investment consultantseconconsultantsconsur without taking investments like h