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Steel Cities Capital Roundtable - August 2019

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ACKNOWLEDGEMENTS This final report on the Steel Cities Capital Roundtable is meant to provide a window into some of the participants comments We thank PNC Bank the PRI the AFL CIO HIT the USW and all of the sponsors along with the CORO Fellows Maya Saravanan and Nathan Ober

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STEEL CITIES CAPITAL ROUNDTABLE PAGE 02 OUR INSPIRATION FOR OUTREACH In 2019 the SVA and Heartland The goal of the Roundtable Project was to Network convened in Pittsburgh our tenth foster responsible investments RI to capital roundtable which rebuild our communities and advocate for featured State Treasurer Joe Torsella USW good paying sustainable inclusive jobs President Tom Conway and PRI partnerships North American Director Chris Fowle We brought together The Roundtable aimed to foster Heartland affiliated investors and other sustainable impact capital and public responsible global investors elected partnerships to invest in leaders and capital stewards from banks advanced manufacturing and developers labor industry and the technology opportunities including community Since 2012 Heartland has business growth turnaround and layoff hosted or participated in road shows to aversion strategies for manufacturing revitalize our cities renew our industries firms and grow the clean economy smart affordable and multi family housing and other responsible property Commissioned by PNC Bank and co projects sponsored by the AFL CIO HIT the PRI and wind solar and hydro renewable energy SVA s Heartland Network the initiative projects endeavored to identify capital gaps and civic infrastructure transportation opportunities in distressed communities in related housing and efficient the Pittsburgh region transportation initiatives

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STEEL CITIES CAPITAL ROUNDTABLE EXECUTIVE SUMMARY PAGE 03 The Authority began conducting fact finding sessions in 2018 in the region to determine capital gaps and opportunities This endeavor was also to promote inclusive training pipelines to create family sustaining jobs for minority youth women and dislocated workers in union apprenticeships The highest community priorities thus far Business Turnaround and Growth Community Scale Infrastructure Energy Efficiency and Renewable Energy for businesses real estate Affordable Housing The Roundtable identified the following opportunities or challenges in moving forward a sustainable investment strategy for the region Explore a sustainable finance hub financing clearinghouse to encourage responsible investments in the city and tri valleys region Participate with Federated Hermes in a place making real estate forum in Pittsburgh 3 25 Set up an enhanced early warning network with the Steelworkers Heartlandaffiliated industrial funds and the SVA s SEWN program Explore a responsible investment ESG educational platform with the Treasurer PRI Federated Hermes Hamilton Lane labor and other responsible investors and supporters at the state city and multi employer pension plans Support current efforts to stand up a more robust minority women apprenticeship training pipeline with the building trades led by three groups The APRI The Builders Guild and Partners4Work Conduct research with Federated Hermes help providing a way to securitize and capitalize projects under 1 million which are generally too small for Heartland investors Explore the Ohio city solar purchasing partnerships for application in the city of Pittsburgh in collaboration with the Mayor s Office Blue Green Alliance and Treasurer s office Facilitate a discussion at the City of Pittsburgh regarding long delays in building permits

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STEEL CITIES CAPITAL ROUNDTABLE PAGE 05 INTRODUCTION Pennsylvania State Treasurer Joe Torsella was the Keynote Speaker for the Steel Cities Capital Roundtable held on August 6th at the United Steelworkers Building in downtown Pittsburgh with over 80 attendees Treasurer Torsella thanked the SVA and Heartland Network for having organized the event Speakers included high ranking investment policy leaders from Federated Hermes and Hamilton Lane both large Pennsylvania investment houses Attendees heard presentations from two dozen prominent Heartland Network investment managers economic development banking and labor leaders The afternoon focused on regional investments opportunities located throughout Pittsburgh and communities along the three rivers The Roundtable kicked off with a welcome from newly inducted International President of the United Steelworkers Tom Conway right SVA Heartland Executive Director Tom Croft left provided opening remarks thanking PNC Bank the PRI and the Heartland members who have invested in our region As you know the Pittsburgh region suffered the worst industrial dislocation in the US these past 30 years While some communities have recovered many haven t and working families have been left behind That s why 25 years ago Leo Gerard and I launched the Heartland Capital Strategies Network which is a community of practice of responsible investors focused on our mission to revive cities renew the industrial commons grow the clean economy and make the boss accountable Our goal today is to foster responsible capital partnerships to invest in our communities including affordable and multi family housing civic infrastructure renewable energy advanced manufacturing and technology and clean transportation We ve already witnessed hundreds of millions of dollars of worker s capital invested in our region we want to increase that Our speakers will also advocate for good paying sustainable and inclusive job partnerships and speak to the need to organize apprenticeship pipelines for minority women and dislocated workers

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STEEL CITIES CAPITAL ROUNDTABLE PAGE 06 FUNDS FRIENDS PANEL THE AWESOME PEOPLE BEHIND RESPONSIBLE INVESTING STEVE SLEIGH JIM NOLAND THALIA LANKIN SLEIGH STRATEGIES LLC PENTRUST REAL ESTATE AFL CIO HIT Hear t l and Net wor k co chai r St eve Sl ei gh wel comed t he r es pons i bl e i nves t ment manager s and t hanked t hem f or t hei r wor k He al s o ment i oned t he uni que t abl e Hear t l and r epr es ent s whi ch i ncl ude as s et manager s uni on l eader s pens i on s t ewar ds and cons ul t ant exper t s He as ked t he f und manager s t o not onl y des cr i be t hei r pr oduct s but how t hey i nves t r es pons i bl y and pr es ent Or gani zat i on over vi ew I nves t ment por t f ol i o exampl es Any i nves t ment s made i n mi ds i zed ci t i es s uch as Pi t t s bur gh t hat hel ped r egr ow communi t i es Types of i nves t ment s t hemes s ect or s s uch as RE PE i nf r a s t ages of i nves t ment ERECT Fund was started with an initial investment of 7M with support of the Iron Workers and Carpenters Today they manage 225M in assets in three states The fund has 23 building trade pension investors plus institutional assets of PA and Allegheny County ERECT has completed 106 projects with total investments of 600M The total value of these properties is 3B The real estate fund requires 100 union labor for all financing projects Notable investments in the Pittsburgh area include Bakery Square Hazelwood Green Cork Factory Lofts Strip District Terminal Bldgs The HIT has a current initiative called Midwest Work investing 1 2B in assets related to manufacturing and training businesses They have targeted 9 cities including Pittsburgh where they ve previously supported the Heinz Lofts and New Pennley Plan The main HIT vehicle is real estate bond funds with roughly 6 4B in assets with low risk competitive return investments HIT buys whole loan securities use 100 union labor and roughly 75 of their 300 investors are multi employer pension plans HIT feels affordable housing is always going to be a need they can help fill

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STEEL CITIES CAPITAL ROUNDTABLE PAGE 07 FUNDS FRIENDS PANEL THE AWESOME PEOPLE BEHIND RESPONSIBLE INVESTING KEVIN RIVEST MICHAEL RENDINA TODD FOWLER BENTALL GREEN OAK GCM GROSVENOR AMERICAN REALTY ADVISORS BGO i s t he r es ul t of a mer ger s wi t h US r eal es t at e equi t y as t hei r mai n i nves t ment wi t h of f i ces i n t en count r i es Over al l t hey manage 46B i n as s et s Thei r MEPT i s a cor e f und wi t h as s et s of 1 0B maki ng of f i ce mul t i f ami l y and r et ai l r eal es t at e i nves t ment s GCM Gr os venor has over 55B i n as s et s under management and l aunched t hei r l abor i mpact f und about a year ago Thi s was pr ompt ed t hr ough wor k wi t h t he Mayor of Chi cago who was f r us t r at ed by a gr owi ng need f or i nf r as t r uct ur e wi t hout capi t al t o f i l l i n t he gaps GCM r ecogni zes t he s i l os of pr i vat e capi t al gover nment and or gani zed l abor and hopes t o br eak down t he bar r i er s Af f i l i at ed wi t h t he PRI BGO MEPT have l ong pr act i ced ESG i nves t i ng pr i or i t i zi ng envi r onment al s oci al gover nance cr i t er i a Pi t t s bur gh i s one of t hr ee t act i cal s econdar y mar ket s wher e BGO i s i nves t i ng Cur r ent l y t hey ar e t he l ead i nves t or i n t wo St r i p Di s t r i ct pr oj ect s al ongs i de ERECT f und The 1 00M pr oj ect wi l l i ncl ude cr eat i ve mi xed us e of f i ce s pace r et ai l and r i ver f r ont acces s Wi t h t he adopt i on of r es pons i bl e cont r act or pol i ci es GCM pr omot es PLAs wher e pos s i bl e Thei r newl y es t abl i s hed Labor I mpact Fund wi l l announce new pr oj ect s s oon Led by Jor ge Rami r ez f or mer Pr es i dent of t he Chi cago AFLCI O t he or gani zat i on hopes t o mar r y i nves t ment wi t h l abor and gover nment ARA manages 9 8B in assets with 68 of the capital coming from Taft Hartley pension funds WIth over 250 funds invested the original one has been in place for 15 years As an ERISA fiduciary their primary focus was to be a steward of capital ARA has an interest in rising secondary cities including Pittsburgh Currently in PA they have two projects in Harrisburg Crossroads and Park 78 Nearly all of their investors are building trades They are also organizing a new debt strategy fund and are looking to connect with others about this endeavor

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STEEL CITIES CAPITAL ROUNDTABLE PAGE 08 FUNDS FRIENDS PANEL THE AWESOME PEOPLE BEHIND RESPONSIBLE INVESTING MIKE LIVANOS SAM ASTOR TOBY KREIDLER STELLEX CAPITAL ATLAS HOLDINGS CALIBRE GROUP St el l ex f ounder s Ray Whi t eman and Mi ke St ewar t ar e cont i nui ng i nves t ment s t r at egi es devel oped when t hey wer e wi t h t he Car l i s l e Fund Cl os i ng t hei r f i r s t f und i n 201 7 at 870M t he UAW Heal t h Wel f ar e Fund and Cal PERS ar e t hei r mos t pr omi nent i nves t or s Wi t h a f ocus on i ndus t r i al and manuf act ur i ng bus i nes s es St el l ex wor ks t o i mpr ove f ami l y bus i nes s es deep t ur nar ounds and car ve out s i n t he 1 50 500M r ange St el l ex t ar get s equi t y i nves t ment s of 25 1 00M They ve al r eady encount er ed 5 compani es i n Pi t t s bur gh t hat f i t t he bi l l f or t hei r s er vi ces With over 20 000 employers in their network Atlas has 3B of capital under management All of their portfolio firms are industrial and distribution They invest in companies that make capital equipment steel pulp paper auto supply power generation and distribution With the Atlas Leadership Academy the company works with young people who get to spend time in portfolio companies learning how people work together and how things are made There is plenty of capital available it s just a matter of working with an Atlas or Stellex to provide the talent to do things the right way As a small Pittsburgh based merchant bank Calibre provides interim turnaround management as well as tradition investment banking services with a proprietary equity arm They work with larger institutional funds to coinvest Recognizing that Wall Street knew nothing about unions Calibre realized there was an untapped opportunity to help labor and capital partner for better outcomes They stress the importance of finding good people in every sector especially small manufacturing and know how to work with management and labor

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STEEL CITIES CAPITAL ROUNDTABLE PAGE 09 FUNDS FRIENDS PANEL THE AWESOME PEOPLE BEHIND RESPONSIBLE INVESTING DAVID WILHELM BRIAN HALE HECATE ENERGY ULLICO Hecat e vent ur ed i nt o r enewabl e ener gy and encour ages ot her s t o add i t as a pot ent i al i nves t ment Ther e i s a huge gap of s ol ar gener at i on devel opment i n PA Due t o new l aws and r egul at i ons t her e i s a movement t owar d pr oj ect s of 1 000MW 5x of what cur r ent l y exi s t s Ullico Investment Advisors Inc UIA has established the Ullico Infrastructure Fund UIF or Fund to assist in the investment maintenance and refurbishment of our nation s infrastructure UIF finished the year with over 1 5 billion in assets under management AUM and a portfolio that includes 14 completed transactions covering over 200 assets Separate Account J Fund commonly known as J for Jobs is a commercial real estate investment vehicle with a tradition of delivering attractive and competitive fixed income performance to institutional investors over its long term history all while growing unions creating union jobs and creating capital for their employers Wi t h our cur r ent pr oj ect Hecat e pr ovi ded near l y 1 000 uni on j obs dur i ng cons t r uct i on The j obs i n Sout her n Ohi o went t o coal mi ni ng f ami l i es and has t he pot ent i al of s pr eadi ng i nt o ot her ci t i es The mar ket pl ace i s i nes capabl e

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STEEL CITIES CAPITAL ROUNDTABLE PAGE 10 RESPONSIBLE INVESTMENT PANEL THE AWESOME PEOPLE BEHIND RESPONSIBLE INVESTING ERIKA STRASSBURGER CITY OF PITTSBURGH COUNCILPERSON With a background in environmental advocacy Councilperson Strassburger believes in shareholder advocacy as well The City of Pittsburgh will need to pay closer attention to where their pension funds are being invested These funds could not only be responsible but local There is much learning to do and a need to synthesize it into action CHRIS FOWLE ANNE KRUCZEK UN PRI FEDERATED HERMES Founded by two Pittsburghers in 1955 Federated recently bought 60 of London based Hermes Asset Management a responsible investment pioneer The new FederatedHermes now manages 575 9B in total assets The Principles for Responsible Investment PRI was founded by the United Nations and headquartered in London Our 2500 signatories include pension funds investors investment manager banks corporations and services providers With signatories owning 86T in assets the PRI works in the US focusing on ESG disclosure and vital shareholder rules The Annual PRI conference brings together international signatories while also supporting regional networks The academic network run concurrently with the conference summarizes the best evidence in responsible investing and corporate governance Hermes is assisting Federated with the integration of ESG and a build out of engagements in the U S The new firm has tools to provide customized information on RI and corporate governance Hermes is looking for investment opportunities in Pittsburgh and the U S for its responsible real estate private capital and infrastructure funds

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STEEL CITIES CAPITAL ROUNDTABLE PAGE 11 responsible investment PANEL THE AWESOME PEOPLE BEHIND RESPONSIBLE INVESTING EMILY NOMEIR DAVID SERAFINI HAMILTON LANE PNC BANK Hami l ton Lane i s a gl obal pri vate markets i nvestment manager offeri ng customi zed i nvestment portfol i os and funds desi gned to meet the needs of al l i nvestors gl obal l y Dedi cated to pri vate markets i nvesti ng for 28 years Hami l ton Lane has approx 67B i n di screti onary assets under management oversees an addi ti onal 422B i n advi sory assets 12 31 19 Hami l ton Lane i s commi tted to furtheri ng RI acti vi ti es has been a PRI si gnatory si nce 2008 Hami l ton Lane has a Responsi bl e Investment Commi ttee to oversee our fi rm s ESG i nvestment acti vi ti es Hami l ton Lane has devel oped targeted i nvestment programs i mpact focused product sol uti ons for i nvestors seeki ng attracti ve i nvestment returns whi l e generati ng meani ngful measurabl e i mpacts PNC is one of the largest banks in the country managing over 400B in assets With a long history in Corporate Social Responsibility the bank has long engaged in responsible banking practices PNC manages a national Opportunity Zone fund connected to Community Revitalization Act strategies in affordable housing small business and community stabilization Tax Credit Solutions Group is a new PNC program that includes federal new market and low income tax credits PNC also provides assistance to CDFIs city community fund small program grants and financial education

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KEYNOTE SPEAKER PENNSYLVANIA STATE TREASURER JOSEPH TORSELLA Our good friend PA AFL CIO Secretary Treasurer Frank Snyder introduced Pennsylvania State Treasurer Joseph Torcella Now I ran for Treasurer three years ago to do three things First I wanted to restore integrity to an honorable office that has seen far more than its fair share of scandal While that work is never finished we ve made a start On my first day literally my first hour in office we banned placement agents the paid middlemen who ve been central in recent corruption scandals We put in place the first ever conflicts of interest policy and appointed the Department s first ever Chief Integrity Officer Tom Corbett s former Inspector General Second I wanted to be a good fiscal watchdog Not because I think government s a hopeless mess but exactly the opposite Because I believe in the role of government I think it s important to keep faith with the taxpayers who fund it And by the work we ve been doing on our pension funds and on our own investments where we re saving 300 million over the next 20 years by moving to smarter index investing we re delivering on that promise Those are important but the third reason is the one that got me up on those cold campaign mornings Three years ago I thought that the We I just talked about our sense of community of Commonwealth was becoming dangerously frayed Economically Socially And politically And I believed that this office could help fix it One of the ways we can do that is by investing taxpayer dollars responsibly Every dollar that is invested by Treasury whether it goes to our roads or our schools or the stock market comes from the hard work of Pennsylvanians And every dollar paid in taxes is a dollar that can t be used for medicine or housing or education or food on the table That s not something I take lightly So from a number of angles we ve worked to treat taxpayer dollars as something that is precious Like I mentioned we ve fully transitioned our investment portfolio to a low cost index strategy that will save 300 million over 20 years We ve also significantly shifted our focus towards environmental governance and social issues at the companies we invest in At the end of the day Treasury is investing on behalf of 13 million Pennsylvanians As index investors we re invested for the long term in a wide variety of companies Technology companies pharmaceutical companies healthcare systems you name it And by keeping our dollars invested for the long term we ve got a seat at the table when there is wrongdoing at the executive level of these companies It also means we re not going anywhere We re invested for the long term and we will continue to fight for better governance better transparency and better outcomes for the American people To give you a recent example there have been a flurry of issues surrounding Facebook in recent years With our privacy our safety our news the security of our elections As an investor I ve joined with a handful of other state treasurers to formally propose the separation of the roles of chair and CEO at Facebook While it s not the most glamorous proposal for a company or shareholders to consider its impact is global Boards of directors should act as a check on management teams not a tool of them Separating the positions of board chair and CEO is not only best governance practice it s just common sense policy We ll continue to engage with Facebook in coming years We ve had success with this at several pharmaceutical companies like McKesson and Amerisource Bergen in holding them accountable for their role in the opioid epidemic These are things that will have lasting impact not only for Pennsylvanians but for all Americans

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STEEL CITIES CAPITAL ROUNDTABLE PAGE 13 responsible investment OPPORTUNITIES MODERATED BY MICHAEL POLITE CEO CATALYST COMMUNITIES LLC Rebecca Flora President CEO ReMake Group LLC Hazelwood Green Project Hazelwood Green is the former LTV mill site in Hazelwood adjacent to Southside Oakland and the Pgh Technology Center Twenty year project costing more than 1B with 5 14 million square feet of property to develop Anticipate the creation of up to 19 000 new jobs through apprenticeship programs Partners believe it is critical to link to the Hazelwood comunities and create solutions to transit issues Michael Heinricher Director of Transactions RIDC Mill 19 and Carrie Furnace Mill 19 is the former steel plant which will host a solar array platform CMU Robotics Center Phase A and self driving vehicle company Phase B Phase C will include a Motor Room Food Court concept photo at right Seeking an anchor tenant for a 115 000 square foot building still under renovation Also collaborating with the Pittsburgh Film Office on the Carrie Furnace site featured in this report Lance Chimka Director Allegheny County Economic Develop Carrie Furnace Allegheny County Redevelopment Authority acquired the property in 2005 after USS closed the plant in 1982 In 14 years investments on remediation redevelopment and infrastructure have amounted to around 34m Uniform zoning and cohesive planning have been put into place by the Carrie Furnace Development Overlay District

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STEEL CITIES CAPITAL ROUNDTABLE PAGE 14 responsible investment OPPORTUNITIES PRESENTATIONS FROM THE VALLEYS Dawn Keezer Director Pittsburgh Film Office Milken Institute Study Carrie Furnace Since 1990 the PFO has helped bring more than 180 feature films and television productions to SW Pennsylvania generating more than 1 5B To continue the PFO needs purpose built film production facilities and an uncapped film tax credit program Would like to convert the Carrie Furnace site into the production facilities Phase 1 build out would cost roughly 32M with the entire complex valued at 400M Derrick Tillman President CEO Bridging the Gap 5th Avenue Dinwiddie Street This is a transit oriented development in uptown Pittsburgh connecting to the proposed Bus Rapid Transit system Site would include affordable low mixed income housing community centers and parks Joint venture already includes Michael Baker Internationa Pieper O Brien Herr Evolve EA Studios Nello Construction Two sites estimated to cost 51 85M seeking partners to finance pre development costs to accelerate the timeline Paul Jacob CEO Rye Development FFP New Hydro Limited impact hydropower projects Potential projects in Allgheny Lock Dam No 2 Charleroi Locks Grays Landing and Emsworth Back Channel Commercial operation up and running 2021 2022 Over 440M investment Meets sustainability goals in the area with a direct positive impact on the communities by adding real and local renewable projects

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STEEL CITIES CAPITAL ROUNDTABLE PAGE 15 responsible investment OPPORTUNITIES 2 MODERATED BY MAJESTIC LANE CHIEF EQUITY OFFICER CITY OF PITTSBURGH Breen Masciotra Project Manager Port Authority Dormont Junction The transit oriented development TOD seeks sponsors and advocates for sustainable land use along Pittsburgh s transit corridors In addition to improvments of station access there are 2 5 acres of property for commercial and residential properties This project could create greater land use density and improve commute times with a 23 minute ride to from Downtown Mark Masterson Executive Director Northside Development Vacant Property Recovery Fund Targeting vacant blighted properties to provide affordable residential rentals and needed commercial space in underserved neighborhoods Can place 2M into projects now with an additional 2M in the next two years Offering homes with URA deferred mortages Mixed use commercial properties are targeting 30 50 area median income A J Tedesco Community Director City of McKeesport Penn McKee Hotel People s Bank Riverfront development near the Great Allegheny Passage bike trails Market study assessed abatement costs at 500 000 with redevelopment costing 12M Development opportunities would include retail office space and a hotel People s Bank Building is currently in rehabilitation but seeking investment and tenant opportunities

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STEEL CITIES CAPITAL ROUNDTABLE PAGE 16 responsible investment OPPORTUNITIES 2 MODERATED BY MAJESTIC LANE CHIEF EQUITY OFFICER CITY OF PITTSBURGH Glen Ford CEO Praxis Food InCity Farms Duquesne Aquaponics Property site would include the vertical plant grow facility greenhouse beekeeping gardening offices shipping and parking The project would generate 130 200 full time jobs paying a minimum of 37 000 year Location is situated within an opportunity zone for additional funding sources Tom Sabol Founder The AM Group Chris Moehle Director Robotics Hub 51 Bridge Street Project is located in the Borough of Etna with an impact on the entire TriBoro EcoDistrict Community Allows for engagement with the Robotics Industry of Pittsburgh Building restoration enhances the community streetscape and increases tax revenue Located in a Federal Opportunity Zone Scott Wolovich Executive Director New Sun Rising Neighborhood Entrepreneurial Hub Creation of a cooperatively organized business and talent incubator Provides affordable buy in for groups under represented in entrepreneurship with access to talent capital and resources Estimated total cost is 1 3M with funding currently secured through foundations funds and the URA Anticipate offering more than 2M in pro bono business consulting in 5 years while putting more than 100 people into tech and techadjacent jobs

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I believe in the power of government to democratize the conversation Thanks for this robust dialog Rep Sara Innamorato