By Philadelphia Public Banking Coalition, July 17, 2025

Investing in Philadelphia Workers: A Strategic Proposal for Better Returns and Community Economic Development

Executive Summary: The Financial and Community Case

Philadelphia workers are unknowingly financing the destruction of their own communities while paying Wall Street firms well over $20 million annually for the privilege. Their Pension Fund has allocated more than $1 billion to private equity strategies that systematically eliminate jobs and extract wealth from the very neighborhoods where these workers live and retire—all while delivering inferior returns compared to simple index funds.

This proposal reveals how pension Fund investments could begin – safely and prudently – becoming a powerful engine for community economic development. Rather than endlessly enriching distant Wall Street firms with poor track records, we propose that the Pension Board take a mere 2% of its total portfolio—$186 million—and reallocate it into local investments that would generate competitive returns while providing hundreds of rental vouchers for very low-income families, well over 1,000 jobs in Philadelphia neighborhoods that desperately need that kind of economic boost, and community solar projects that would deliver clean energy cost savings to low-income households while generating stable utility-backed returns for the Fund.

What should be particularly striking about this proposal is that it isn’t radical or risky—it’s actually a return to how pension funds successfully operated for decades. Under the historical doctrine of “fiscal mutualism,” pension funds invested primarily in municipal bonds and government securities, lowering borrowing costs for local governments while helping build the public infrastructure that supported America’s post-war boom. Wall Street systematically dismantled this system in the 1950s and 1960s, convincing pension managers to chase higher returns through riskier investments while abandoning their communities.

The choice is stark: continue enriching Wall Street firms that consistently underperform while weakening worker communities, or redirect that capital to build wealth in Philadelphia neighborhoods while earning competitive returns. Let’s turn this Fund into one that advances the interests of both workers and residents of our City instead of a vehicle for extraction of wealth by corporate interests that care little about our fate.

I. The Performance Crisis: Wall Street Extraction Versus Community Building

How Fiscal Mutualism Built America—And How Wall Street Killed It

Pension funds didn’t always leave their investment decisions to Wall Street. For decades, American public pension systems operated under what historians Michael Glass and Sean Vanatta have termed “fiscal mutualism”—an investment regime where pension managers “funneled the savings of government workers into government securities” to build public infrastructure while providing safe, stable returns for retirees.

Under fiscal mutualism, public pension managers used pension investments as a governance tool, investing in government bonds to lower public borrowing costs and encourage public infrastructure development. By purchasing municipal bonds, pension officials lowered borrowing costs for local governments while helping finance the construction of schools, roads, bridges, and other critical infrastructure that supported America’s post-war economic boom.

Pennsylvania followed this successful pattern for decades. Until 1929, the Pennsylvania Public School Employees’ Retirement System (PSERS) invested funds “exclusively in Pennsylvania state, county, city, borough, and township bonds with preference for school district bonds,” financing local infrastructure while providing stable returns. By 1935, “at the height of the depression, the year’s annual report noted that through PSERS’ bond investments, jobs had been created building schools and roads in Pennsylvania.”

This successful model was systematically dismantled through a coordinated campaign by the emerging asset management industry. Pennsylvania completely abandoned fiscal mutualism, liberalizing common stock investment authority in 1975, allowing up to 50% stock allocation by 1982, enabling investment in “limited partnerships and separate accounts as well as venture capital” by 1984, and finally adopting the “prudent person” investment standard in 1994.

The transformation wasn’t driven by superior performance—it was driven by changing concepts of “fiduciary duty” promoted by the emerging asset management industry. As they disinvested from municipal bonds, public funds hired professional asset managers, shifting investment authority from government officials to private financiers. This shift systematically undermined the community investment approach that had actually worked for decades.

Once state governments gave in to pension trustees’ demands to open high-yielding corporate securities to investment by pension funds, fiscal mutualism quickly went out the window, ending decades of successful infrastructure financing that had built essential projects—from water systems and highways to hospitals and universities—while providing stable returns to government workers and keeping borrowing costs low for taxpayers.

Meanwhile, pension funds became the largest institutional capital pool that fueled the growth of mutual, private equity, and hedge funds—in other words, of asset manager capitalism. Rather than building community infrastructure, worker retirement savings began financing corporate raiders, hostile takeovers, and the very job elimination strategies that would later devastate working communities.

Philadelphia’s Financial Underperformance and Hidden Costs

The current state of Philadelphia’s pension Fund demonstrates the devastating consequences of abandoning fiscal mutualism. The Fund consistently underperforms simple benchmarks while paying extraordinary fees for complex strategies that add no value.

The Performance Gap: If Philadelphia had simply invested in S&P 500 index funds, it would have enjoyed a 10-year annualized return from 2014-2024 of 11.3%, compounding to approximately 192% total return over the decade, with management fees under 0.1% annually. In contrast, Philadelphia’s pension Fund achieved only 96.7% total return over the same period—essentially half the performance while paying dramatically higher fees.

The underperformance extends beyond market index comparisons. While the average public pension fund achieved 10.3% returns in 2024, a number of the Fund’s complex investment strategies failed to meet their own benchmarks over the ten-year period, according to the Marquette Associates performance report. This persistent long-term underperformance has cost workers hundreds of millions in foregone returns—delaying full funding while requiring oppressively high new contributions from workers and taxpayers.

The Hidden Fee Crisis: Philadelphia’s Pension Board reported a 0.29% expense ratio for FY24, but this figure represents a significant understatement of actual investment costs. The Fund uses a bifurcated fee reporting system that excludes fees paid to alternative investment managers, which control approximately 21.6% of the portfolio ($2.01 billion in private equity, real estate, and infrastructure investments). According to the Fund’s financial statements: “Investment expenses consist of investment manager fees and investment consultant fees related to the traditional investments only, and not those fees related to the alternative investments.” This methodology deliberately obscures the true cost of investment management, creating a dramatic understatement that impedes fiduciary oversight and public accountability.

Why would the Board want to hide those fees? It might be because research by Callan Associates shows that private equity funds typically charge 2% annual management fees plus 20% carried interest on profits, with total effective costs varying based on fund performance over the investment lifecycle and these rates showing no decline over time unlike other investment types. With fee levels like these being applied to Philadelphia’s $2.01 billion in alternative investments, workers are clearly paying far more than the reported $27 million annually (calculated as $9.31 billion total Fund assets × 0.29% = $27M in reported fees).

Of course we don’t know how much more the Fund is paying because the Board’s reports just don’t tell us. The City Controller has complained about this transparency problem to no avail. A 2019 Controller’s report stated that “Disclosure of fees and other manager-based costs are crucial to properly evaluating managers and the Pension’s investment strategy,” and calling for the Board to publish an annual Comprehensive Annual Financial Report (CAFR) like pension management does in Chicago, Houston, and Baltimore, that would disclose these fees as well as detailed performance data, noting that private equity is “notorious for a lack of transparency and non-standard reporting practices” and “requires vigilant monitoring to ensure that stated earnings and cash flows best reflect actual investment performance.” The Controller’s recommendation has not been implemented.

Beyond poor financial performance and opaque reporting, these investment strategies actively harm working communities. Private equity firms operate through leveraged buyouts that systematically eliminate jobs, reduce wages, and extract wealth from local economies. Harvard Business School research documents that private equity firms cut employment by 4.4% over two years while reducing wages by 1.7% for remaining workers.

Recently this pattern played out dramatically right here in Philadelphia when private equity-backed investors closed Hahnemann University Hospital after just 18 months of ownership, eliminating 2,500 jobs and displacing 500 medical residents while extracting valuable real estate assets. Research from Harvard Business School and University of Chicago confirms this pattern across thousands of transactions, documenting systematic job elimination and wage suppression as core private equity strategies.

Meanwhile, Federal Reserve Bank of Philadelphia research shows corporate investors now own nearly 9% of the City’s single-family rentals, while raising rents 60% faster than typical increases.

The irony is striking: Philadelphia’s pension Fund has allocated nearly $1 billion to real estate investments that consistently underperform industry benchmarks, yet seemingly cannot find suitable local housing projects to invest in—apparently out of some distorted notion of due diligence. This represents a fundamental failure of investment strategy where workers’ retirement dollars finance housing speculation in distant markets while delivering poor returns, even as Philadelphia itself faces a housing crisis that those same dollars could help solve with both better returns and community benefit.

Defenders of the current approach often point to recent improvements in pension funding as evidence of successful management. However, these improvements came primarily from external revenue sources: the City dedicated 1% of its sales tax revenue directly to pension funding, and employee contributions increased significantly starting in 2019. The City of Philadelphia confirms that the reduction in unfunded liability came from “dedicating additional assets to the Fund—by increasing contributions to the Fund made by the City and its employees, as well as a portion of the Sales Tax.”

II. The ETI Solution: Three Strategies for Community Wealth Building

Economically Targeted Investments (ETIs) represent a fundamental shift from wealth extraction to community wealth building. ETIs are pension Fund investments that meet the same fiduciary standards as traditional investments, delivering competitive market-rate returns with appropriate risk management while generating measurable economic development benefits in the communities where pension beneficiaries live and work.

ETIs have established a proven track record of success across multiple decades and asset classes. The AFL-CIO Housing Investment Trust has delivered competitive returns relative to the Bloomberg U.S. Aggregate Bond Index for over 35 years while financing community development, with net assets exceeding $7.1 billion as of 2025. Community Preservation Corp., funded by New York State pension systems, has deployed $9.7 billion to finance over 170,000 affordable housing units across the Northeast. California’s pension system committed $3.6 billion to climate solution investments in 2024, building on decades of successful ETI implementation.

Existing Legal Authority for ETI Implementation

Philadelphia’s Pension Board has already established the legal framework necessary for ETI investments through its adoption of Environmental, Social and Governance (ESG) investment criteria following a 2021 City Council resolution sponsored by Councilmember Katherine Gilmore Richardson. The Board’s current Investment Policy Statement includes ESG provisions that explicitly authorize consideration of environmental, social, and governance factors as consistent with fiduciary duty. This existing policy framework demonstrates that the Board has already recognized that investments generating community benefits while delivering competitive returns are not only permissible but align with responsible pension management. The ETI strategies proposed here would operate fully within this established ESG authority, requiring no new legal interpretation or policy changes—only implementation of investment vehicles that fulfill the community-focused investment criteria the Board has already endorsed.

Democratic Finance vs. Extractive Finance

Perhaps most importantly, the ETI approach would shift decision-making power from distant Wall Street firms to community-accountable institutions that operate with transparency and democratic oversight. Worker pension dollars would become tools for community empowerment rather than weapons for community destruction, aligning the financial interests of pension beneficiaries with the economic health of the communities where they live and will eventually retire.

There is a rich panoply of potential ETI investment types documented in over 100 examples across the United States in which the Fund could invest or utilize as models. Below is what we think is one group of compelling ideas for such investments, but it is in no way intended to exclude others which may be just as sound, and we would welcome a conversation about how best to shape an ETI program for the Fund.

Our proposal would redirect $186 million from underperforming Fund allocations (detailed in the Appendix) into three safe and strategic investment areas that could protect workers while helping solve some of the City’s most intractable problems.

For detailed impact analysis and fee comparisons, see Appendix A.

Affordable Housing: Creating Stability Through Strategic Rental Assistance

Philadelphia’s housing crisis demands an innovative approach that maximizes impact while providing immediate relief to the most vulnerable families. A $62 million investment could create a powerful leveraging effect through a novel but practical financial mechanism that would generate both competitive returns for the pension fund and rental assistance for families most in need.

The Financial Mechanism: The Pension Fund would provide $62 million in market-rate loans to replace public financing currently used in Mayor Parker’s H.O.M.E. plan lending programs. This substitution would generate competitive investment returns for the pension fund while freeing up an equivalent $62 million in constrained public dollars that were previously committed to those housing programs. These newly available public dollars would then be transferred to a Philadelphia public bank, or to the Philadelphia Public Financing Authority, to enable a dedicated rental subsidy program for families earning 30% or less of Area Median Income.

Those families can afford only $447 to $741 per month for housing, based on HUD’s Area Median Income calculations for the Philadelphia metro area. However, Philadelphia rents range from approximately $1,520 for one-bedroom apartments to $2,200 for two-bedroom units, creating an affordability gap of $1,073 to $1,753 per month that prevents these families from accessing stable housing. That’s where the rental assistance program would step in.

Program Design and Impact: The rental assistance program would operate as a managed annuity fund earning 4% annual returns while providing subsidies for up to 10 years from a total pool of $62 million to each family it serves. Using the standard annuity formula with $62 million principal invested at 4% annual returns, the program would generate $7.64 million in annual payouts for 10 years, depleting the fund. With an average monthly subsidy of $1,413 (representing the midpoint of the affordability gap range), the program could serve approximately 451 families simultaneously ($7.64M annual assistance ÷ $1,413 average monthly subsidy ÷ 12 months = 451 families). As families transition to permanent housing assistance programs over an average of 2-3 years, or out of the need for assistance entirely, the program would have the capacity to assist 150-225 new families each year, potentially serving 1,500-2,250 unique families over the full 10-year program period.

Community Benefits: The $7.64 million in annual rental assistance would flow directly into Philadelphia’s rental market, supporting local landlords and property managers while stabilizing neighborhoods through reduced tenant turnover. Unlike construction-focused programs that may take years to show results, rental assistance would provide immediate economic stimulus while addressing the urgent needs of families facing housing instability. This approach demonstrates how Pension Fund investments can create multiplier effects: the same $62 million would generate both competitive returns for the Fund and provide powerful community benefits.

Addressing Historical Housing Discrimination: Importantly, this approach would directly address the lingering effects of redlining by targeting rental assistance in neighborhoods that were historically denied access to credit and homeownership opportunities. By enabling affordable housing stability in these same communities, the strategy would help ensure that longtime residents benefit from neighborhood improvements rather than being displaced by gentrification, while pension Fund investments generate returns that rebuild rather than extract wealth from these communities.

Small Business Development: Rebuilding Economic Ecosystems ($62 million)

The $62 million small business allocation would address capital deserts through Philadelphia’s established network of Community Development Financial Institutions. The CDFI industry demonstrates both scale and impact, with recent federal awards exceeding $408 million to 357 CDFIs. CDFI Program recipients have grown their lending capacity from $26 billion annually in 2020-2021 to over $85 billion in fiscal year 2022, based on documented examples like Calvert Impact Capital’s Community Investment Notes and the CDFI Bond Guarantee Program’s returns at small spreads over treasury rates.

Job Creation Through Economic Multiplier Effects: Local investment generates substantial multiplier effects as local businesses spend more of their revenue locally than national chains, creating a virtuous cycle that strengthens the entire regional economy rather than extracting wealth to distant shareholders. The $62 million small business allocation would create 1,690 direct jobs based on Opportunity Finance Network data showing CDFI members have created or maintained 3 million jobs with $110 billion in financing, equivalent to approximately one job per $36,700 of investment ($62M ÷ $36,700 = 1,690 direct jobs), with additional indirect and induced job creation through local economic multiplier effects.

Breaking Down Historic Credit Barriers: This investment would specifically target the credit deserts created by decades of discriminatory lending practices. Community Development Financial Institutions have proven track records of serving entrepreneurs who face barriers in conventional banking, with culturally competent lending practices that recognize the value of businesses that strengthen community economic foundations. By channeling pension Fund capital through CDFIs, as well as through other local institutions with similar characteristics like Minority Depository Institutions, community banks, and credit unions, this approach ensures that minority and women-owned businesses gain access to capital while generating competitive returns for workers’ retirement savings.

Community Solar: Environmental Justice with Stable Returns ($62 million)

A $62 million community solar allocation would address environmental and economic injustice while providing the pension Fund with utility-backed returns that reduce portfolio risk compared to volatile private equity investments.

Investment Structure: The pension Fund would provide debt financing to community solar developers through the Reinvestment Fund, a nationally recognized Community Development Financial Institution (CDFI) headquartered in Philadelphia with over 35 years of clean energy financing experience. The Fund maintains an A+ Standard & Poor’s rating and has provided over $2.7 billion in community financing since 1985, including pioneering wind farm investments in Pennsylvania and maintaining “one of the few among peers with a robust clean energy portfolio.”

The optimal structure would be a Segregated Portfolio Approach, creating a dedicated “Philadelphia Pension Solar Fund” within the Reinvestment Fund’s clean energy investment platform, building on their proven track record of direct investments in solar companies like PosiGen and partnerships with community solar developers like Sunwealth. This approach would leverage:

• Institutional-Grade Financial Management: Reinvestment Fund’s A+ Standard & Poor’s rating and 35+ years of experience managing institutional capital
• Established CDFI Reporting Standards: Regulatory reporting requirements to the U.S. Treasury CDFI Fund, providing accountability frameworks that could be adapted for pension Fund reporting needs
• Professional Investment Management: Proven ability to structure and manage complex community development investments with appropriate risk management
• Impact Measurement Experience: Demonstrated track record of measuring social and environmental outcomes across their investment portfolio

Superior Risk Profile: Investment through Reinvestment Fund provides professional due diligence and risk management backed by their A+ Standard & Poor’s rating and 35+ years of community development finance experience. Unlike private equity’s opaque valuations and volatile performance, this approach offers transparent, quarterly reporting with measurable performance metrics and established institutional oversight.

Community Impact: The solar projects financed through this partnership would provide electricity cost savings to participating households while generating returns for the pension Fund. Reinvestment Fund’s investment approach prioritizes projects that address environmental justice, consistent with their mission to serve underserved communities and their track record of financing solar access for low-income households.

Additional ETI Funding Source: Nuclear Weapons Divestment

It should be noted that there is another important candidate for funding all or part of this ETI program. 0.7751% of the Pension Fund, which amounts to nearly $100 million, is invested in the top 24 nuclear weapons producers. Liquidation of those investments could be another source of ETI funding that would conform to the Pension Board’s ESG mandate. According to nuclear weapons industry watchdog Don’t Bank on the Bomb: “Under the UN Guiding Principles on Business and Human Rights all business enterprises have a responsibility to respect human rights. This responsibility also applies to financial actors who should avoid causing or contributing to negative impacts on human rights associated with their activities or business relationships….[G]iven nuclear weapons’ potential largescale and irremediable impact, being linked to their production holds salient human rights risks.” On top of that, nuclear weapons do not even have to be used to have disastrous environmental consequences, from uranium mining to production and testing, with the looming threat of nuclear winter and global famine should even a ‘limited’ nuclear war occur. Just having and maintaining them is a social detriment. Therefore, investing in nuclear weapons — which pose the greatest danger to civilization that the world has ever known — is antithetical to the City’s commitment to ESG investing.

III. A Philadelphia Public Bank: Institutional Infrastructure for Local Investment

Democratic Finance Alternative to Wall Street Extraction

A Philadelphia public bank could provide the institutional center for managing the housing rental subsidy endowment created through the H.O.M.E. Plan substitution, while also serving as an intermediary for other parts of the ETI program. Public banks operate as government-owned financial institutions that prioritize public benefit while maintaining sound banking practices, offering fundamental advantages over private financial intermediaries.

The Bank of North Dakota demonstrates this model’s success through over 100 years of operation, consistent profitability, more than $7 billion in assets under management, and annual profits returned to the state treasury. Unlike commercial banks that extract profits for distant shareholders, public banks generate returns for their government owners while supporting local economic development.

Operational Advantages for ETI Implementation

A Philadelphia public bank would offer unique benefits as an ETI intermediary: Democratic Accountability through city government oversight rather than distant fund managers; Fee Elimination by keeping intermediary revenue within the city rather than paying Wall Street; Local Knowledge through deep understanding of Philadelphia neighborhoods and development opportunities; Transparent Operations with public reporting requirements and community accountability.

Financial Projections: Current ETI intermediary fees range from $0.47-1.40 million annually (0.25-0.75% of assets). A public bank’s exact operational costs would need to be determined through a deliberative process, but the Bank of North Dakota’s track record demonstrates that public banks can operate efficiently while generating profits for their government owners. While a public bank might have similar operational costs to other ETI options, it would provide additional benefits including democratic accountability, local economic development expertise, and community wealth retention that justify any modest cost differential.

Legal Framework and Implementation Path

Pennsylvania law permits municipal banking through the Economic Development Financing Law (EDFL), enabling Philadelphia to establish a public bank without new state legislation. Philadelphia City Council authorized a pathway in 2022 by establishing the Philadelphia Public Financial Authority under the EDFL, which allows municipalities to form agencies that can borrow money to provide residents with loans and letters of credit. Implementation could begin with $30-60 million initial capitalization from the ETI allocation, followed by state and federal charter applications and pilot operations focused on housing and small business lending.

The governance structure would include professional management through an independent board with banking expertise, credit committee oversight for loan decisions based on financial criteria and community impact, and democratic accountability through a Community Advisory Board and annual public reporting and city council policy oversight.

IV. The Moment of Choice: Building the Future or Financing Its Destruction

Every day Philadelphia delays this transition, real costs accumulate. Families remain locked out of homeownership while their retirement savings finance corporate landlords who accelerate displacement. Small businesses close for lack of capital while pension dollars flow to private equity firms that eliminate jobs as a deliberate business strategy. Communities bear pollution burdens while missing opportunities for clean energy development that could provide both household savings and stable investment returns.

Meanwhile, Wall Street firms continue extracting millions in fees while consistently underperforming simple benchmarks available to any individual investor. The current approach represents the worst of both worlds—poor financial performance combined with systematic community destruction, all funded by the retirement savings of the very workers whose communities are being devastated.

The alternative offers a fundamental transformation: competitive returns with transparent performance measurement, substantial fee savings that stop Wall Street extraction, and community wealth building that creates quality jobs in neighborhoods that desperately need economic opportunity. This isn’t about choosing social benefits over financial returns—it’s about achieving both while ending the systematic extraction of wealth from communities that can least afford it.

The success of this initial $186 million ETI implementation would demonstrate the viability of community-focused investment strategies, creating the foundation for a much larger-scale transformation. Once the Board and stakeholders have observed the competitive returns and community benefits from Phase 1, the pension fund could expand this approach through a systematic reallocation of underperforming assets. Rather than attempting a sudden overhaul, this Phase 2 expansion would target one-third of each asset class that has consistently failed to meet performance benchmarks, providing a measured approach to portfolio transformation that maintains diversification while dramatically increasing community impact.

This expanded ETI implementation would reallocate $771 million—representing one-third of each underperforming asset class as detailed in the Marquette Associates performance report (fixed income: $101M from $303M total; real assets: $330M from $991M total; and private equity: $340M from $1.02B total)—into community-focused investments that would create over 7,000 direct jobs while generating $9.1-13.0 million in annual fee savings. The one-third reallocation approach would allow the Fund to maintain exposure to traditional asset classes while redirecting the portion that has delivered the poorest risk-adjusted returns toward strategies that provide both competitive financial performance and measurable community benefits.

Philadelphia workers built this City through generations of labor, creating the infrastructure, institutions, and economic foundations that make the City viable today. Their retirement savings should build its future, not finance its continued exploitation by distant firms that consistently underperform while charging enormous fees for strategies that systematically undermine the communities where they live.

The evidence is clear. The opportunity is immediate. The time to act is now.

Appendix: Detailed Financial Analysis

The following tables provide comprehensive breakdowns of investment allocations, economic impacts, and fee comparisons for both the initial $186 million proposal and the expanded $771 million program.

Comprehensive Investment Impact Summary

Phase 1: $186 Million Initial Investment

Investment Category	Allocation	Direct Benefits	Economic Impact
Affordable Housing	$62 million	• 451 families served simultaneously • $7.64M annual rental assistance • 1,500-2,250 families served over 10 years	• Housing stability for vulnerable families • Reduced displacement • Neighborhood economic stimulus
Small Business Development	$62 million	• 1,690 direct jobs created • Support for minority & women-owned businesses • Worker cooperative development	• Local ownership growth • Community wealth building • Economic multiplier effects
Community Solar	$62 million	• Financial returns to pension Fund through Reinvestment Fund’s proven investment approach • Community solar projects selected for environmental justice impact • Job creation through solar project development and installation	• Institutional investment returns with community co-benefits • Support for Philadelphia’s clean energy transition • Workforce development in growing solar sector
TOTAL IMPACT	$186 million	1,690 Quality Jobs from Small Business Plus Additional Jobs from Housing and Solar	Community Economic Transformation

Phase 2: $771 Million Expanded Program

Investment Category	Allocation	Direct Benefits	Economic Impact
Affordable Housing	$257 million	• 1,870 families served simultaneously • $31.7M annual rental assistance • 6,230-9,350 families served over 10 years	• Significant housing stability • Neighborhood revitalization • Reduced homelessness
Small Business Development	$257 million	• 7,000 direct jobs created • Extensive minority & women business support • Community ownership expansion	• Regional economic transformation • Wealth building at scale • Economic multiplier effects
Community Solar	$257 million	• Substantial financial returns to pension Fund • Large-scale community solar portfolio managed by Reinvestment Fund • Significant job creation in solar development and installation	• Major institutional investment returns with community co-benefits • City-wide clean energy infrastructure development• Large-scale workforce development in renewable energy sector
TOTAL PHASE 2 IMPACT	$771 million	7,000 Quality Jobs from Small Business Plus Additional Jobs from Housing and Solar	City-Wide Economic Transformation

Fee Savings Analysis

Phase 1: $186 Million Reallocation Savings

Source of Reallocation	Current Annual Fees	ETI Alternative Fees	Annual Savings
Opportunistic Fixed Income ($124M from higher-fee fixed income strategies)	$0.62M-$1.24M	$0.31M-$0.93M	$0.3-0.9M
Private Equity ($62M at 2% management + 20% carried interest)	$1.24M+	$0.16M-$0.47M	$0.8-1.1M
Total Phase 1 Savings	$1.86M-$2.48M	$0.47M-$1.40M	$1.1-1.9M annually

Phase 2: $771 Million Expanded Program Savings

Source of Reallocation	Current Annual Fees	ETI Alternative Fees	Annual Savings
Fixed Income Portfolio (1/3 of $303M)	$1.52M	$0.25M-$0.76M	$0.8-1.3M
Real Assets Portfolio (1/3 of $991M w fees at 2.0% + performance)	$6.60M	$0.83M-$2.47M	$4.1-5.8M
Private Equity Portfolio (1/3 of $1.02B with fees at 2% management + 20% carried interest)	$6.8M+	$0.85M-$2.55M	$4.3-5.9M
Total Phase 2 Savings	$14.92M	$1.93M-$5.78M	$9.1-13.0M annually