February 12, 2007

CITY AND COUNTY OF SAN FRANCISCO
SMALL BUSINESS COMMISSION
City Hall, Room 400
1 Dr. Carlton B. Goodlett Place San Francisco, CA 94102
MEETING MINUTES
Monday, February 12, 2007 5:30 PM

Small Business Commissioners:

Michael O'Connor, President
Jordanna Thigpen, Vice President
Florence Alberts, David Chiu, Gus Murad, Dr. Raye Richardson, Richard Ventura

Executive Director – Agnes Briones
Commission Secretary – Martha Yañez

Members Absent: None

Call to order:
Item 1 - ROLL CALL
The Small Business Commission met on Monday, February 12, 2007 in regular session. The meeting was called to order at 5:38PM.

Item 2 – APPROVAL OF THE JANUARY 8, 2007 MEETING MINUTES
Commissioner Thigpen requested that the minutes be amended to reflect her actual statement on page 6, Item 11. She stated that one possible consultant is MBIA, not that they would be the consultant.
Commissioner Chiu made a motion to approve with amendments. Commissioner Thigpen seconded. Unanimous approval from the Commission.

Item 3- GENERAL PUBLIC COMMENT
Jean Feilmoser, President of the Mission Merchants Association stated that she has recently been under siege due to the new business Kink.com, which will take residence in the old Armory building on Mission Street. The Mission Merchants Association is a non profit organization made up of businesses and property owners who seek to improve the public safety and appearance of the district. She said Kink.com has approached them and is interested in joining, which has caused a huge uproar amongst them as well as other groups in the area, mainly non profits. She said this really isn't a morality issue, but rather a land use and business issue; do they plan to make improvements to the building and to the surrounding area. She is seeking support from the Council of District Merchants and presented a letter from the president in support of Kink.com's membership. Many media outlets including national and international have picked up on the issue and have phoned her for a response. She said she is interested in continuing to push the business of the Mission, cleaning up the area and making it a good commercial district. She reported that Kink.com has proposed to improve the area, proving security and increased lighting on their block, as well as utilizing local businesses for their needs, including local restaurants for their catering needs. She said she was not speaking for Kink.com, but said that their business will be done behind closed doors and her concern is with business in the Mission and the ability to develop it. Commissioner Thigpen said that she would be interested in hearing from the Planning Department with respect to how they deal with projects which contain small business requests for development, stating that she is concerned that the proposals are not being handled in a timely manner. Commissioner O'Connor asked if this request pertained to prior proposals to develop the old Armory, stating that it goes back to streamlining the permit process which the Commission had taken interest in and hoped to continue to work on. He agreed with the business aspect of the new tenant and that it should be viewed as such, but said that he would have liked to see it used differently, allowing for more businesses and more jobs. Commissioner Richardson asked if the city had taken a position on the use of the building. Ms. Feilmoser responded stating that the project had already gone through the planning process and is zoned for the use intended. Commissioner Alberts suggested putting this on the next agenda and asked what the timeline was. Ms. Feilmoser stated that their next meeting would be on January 20th. Scott Hauge, President and founder of Small Business California and Small Business Advocates. He distributed the Governor's Executive Order regarding state procurement and small business per Supervisor Ed Jew who had called for a hearing to discuss something similar to that in the Governor's Order. He said basically he requires that city departments make an effort to do 25% of their business with small businesses and the key to this is that there is some type of oversight to ensure that this happens. He proposed for the Small Business Commission to take the lead and suggested that the Commission hold hearings and ask departments to come forth and report to the Commission, providing information on how much business they currently do with local small businesses and what their plan is to increase that number, and how they plan to work with the small business community. Samantha Weeks, expressed her support for WIFI agreement with EarthLink, stating that it holds so many benefits for businesses and the community, making San Francisco a better place.

Item 4 – COMMISSIONER AND STAFF REPORTS REPORT
Mike Farrah, Acting Director reported that in his role as Acting Director he had gone out to meet with some small business groups and hoped to continue to do so, including San Francisco Council of District Merchant Association Board members, San Francisco Chamber of Commerce Small Business Advisory Council, Kevin Westly of the Golden Gate Restaurant Association, and Office of Labor Standards Enforcement staff. He reported that the Paid Sick Leave Ordinance FAQ had been completed and is available on the website and would be updated regularly. With respect to the retreat he asked the Commissioners to get to him a list of three things they would like to discuss at the retreat so to help him prepare an agenda. On Small Business Week, he reported he met with the planning committee and was tasked with securing the Mayor's attendance, preparing and releasing a press statement about Small Business Week through the Mayor's Press Office, and securing necessary permits. He encouraged the Commissioners to actively promote Small Business Week to their networks and encourage participation in the weekly events. He reported he met with the Cortland merchants and said they have experienced increased crime in their neighborhood. He said this seems to be going on in many merchant corridors in the city and said that it is a concern, adding that it is also a reason that the use of cameras continues to be debated at the Board of Supervisors. With respect to Kink.com, he reported there is a hearing at the Planning Commission during the week which he encouraged Commissioners to attend to the extent that they want to voice their opinion on the issue. He also announced an upcoming hearing at the Taxi Cab Commission on whether or not to add 100 cabs. With respect to legislation he too mentioned Supervisor Ed Jew's call for a hearing on procurement and small business, as well as legislation for a street encroachment permit for Little Saigon Neighborhood, which he said is an attempt to re brand a section of Little Saigon. He said there is legislation to install safety cameras, and finally a proposed street name change in Japan Town as part of the 50th anniversary of the city's Sister City program with the city of Osaka. Finally he reported that Muni is currently considering transportation improvement projects, stating that new neighborhoods are being created and Muni needs to address how to bring service to those neighborhoods. He suggested this may be an issue of the Commission to consider at a future meeting. Commissioner Ventura, speaking to Small Business Week, reported that the committee had been able to fundraise $94,000 of the budgeted $100,000 needed to put on Small Business Week. He said they would need to secure and additional $6,000 and said he would be working on that. On another subject he reported that he recently met with a representative of the American Conservatory Theatre (A.C.T) regarding some issues with aggressive panhandling and homelessness in and around their theatre. He said they are interested in the city's 10 B program in which they would pay to hire off duty SF Police Officers as security for the area; however he said there have been some recent changes and increase in fees that make it very difficult for them to do so. He reported that he would work with the Mayor's Office of Economic Development to look at the possibility of a Community Benefit District in the Area. Commissioner Thigpen agreed that the Commission ought to discuss Muni's transportation effectiveness project, stating that there are several issues of concern to her regarding Muni, including the fact that the fast pass is not sold after the 7th of the month. She reported her efforts on a new Eat Local campaign that she was working on stating that there would be a menu available soon. Commissioner Alberts asked about Small Business Week budget and wondered if any of it came from the Commission's budget. Commissioner Ventura reported that $25,000 was left over from last year's event and said it was all corporate sponsorship money.

Item 5 –DISCUSSION AND POSSIBLE ACTION TO ENDORSE FILE NO. 070120 [ORDINANCE TO ESTABLISH 120 DAY TRANSITION PERIOD FROM IMPLEMENTATION OF PAID SICK LEAVE ORDINANCE]
Supervisor Sean Elsbernd stated that the legislation is an ordinance that he introduced along with Supervisors Peskin and Jew and would be up for a vote at the full Board the following day. He said the legislation does not delay Prop. F, but if passed it would still require employers to account for hours worked, and allows employee to take sick leave. Additionally, from now to June 5th it allows employers to pay out for sick time, but gives the option of not paying. He said it allows for a bit of a grace period on penalties. Commissioner Chiu thanked the Supervisor for all his work as well as the other Supervisors who signed on to it. He said he was prepared to make a motion to recommend adoption of the ordinance. Commissioner Thigpen also thanked Supervisor Elsbernd, stating that it attempts to address the problem that OLSE faces of not able to answer a lot of the questions of abuse. Commissioner Alberts also thanked the Supervisor. She asked what kind of advice and accountability is suggested to employers in the way that they will not be challenged, asking if there will be a uniform form. Supervisor Elsbernd said that there would not be a uniform form. Scott Hauge applauded the Supervisors for brining this legislation forward. He suggested that the Commission support it. He also praised Donna Levitt, stating that she is charged with a very difficult task but has always been very responsive. He said that as part of this there will be an advisory group to iron out the issues and said that it was very critical for the Commission to have a seat on that committee. Linda Mjellum of the Union Square Association said that she wished to add her voice to the choir, thanking the Supervisor for the legislation, stating it is important as there continues to be many unanswered questions. She urged the Commission to approve the legislation.
Commissioner Chiu made a motion to recommend that the full Board of Supervisors pass the ordinance. Commissioner Alberts seconded. Unanimous approval from the Commission.

Item 6 – DISCUSSION AND POSSIBLE ACTION ON File No. 070020 [ORDINANCE TO DELETE WAIVER PROVISIONS CONCERNING PLACEMENT OF GARBAGE RECEPTABLES ON THE PULBIC RIGHT OF WAY; AND MAKING ENVIRONMENTAL FINDINGS
Item tabled

Item 7- DISCUSSION AND POSSIBLE ACTION ON FILE NO. 070077 [APPROVAL OF AGREEMENT WITH EATHLINK, INC, FOR A CITY-WIDE WIRELESS BROADBAND INTERNET ACCESS NETWORK]
Chris Vein of the Department of Telecommunications and Information Services stated that in the past year and a half the city had been doing research and exploration around a city wide WIFI network. He said they issued an RFQ to gage the publics and business community's thoughts around WFI. He said they signed an agreement in the beginning of January that was sent to the Board of Supervisors and is currently under 30 day rule. He said the agreement would provide free and affordable WIFI access in the city, which would take place at no financial commitment to the city, adding that the partners would doing everything, stating that the city would allow them access to the city's rights of way (poles etc) in exchange for their work. He said the agreement allows the city to collect money for higher speed access, which will be used to help bridge the digital divide. Furthermore he said the city would get $600,000 in prepayment as well as $100 for every pole used. He said that they crafted the agreement in terms that made sense to the city stating that it is a 3 year agreement with the potential for 3-4 more years, and said that it is not an exclusive agreement, stating that they have required EarthLink to open the network which will allow for competition. Commissioner O'Connor asked how the company will get money back on their investment. Chris Vein said that they would make their money by providing the higher connection for a fee, and by charging others a wholesale access fee. For example, if AOL wants access they would have to pay EarthLink a fee. Commissioner Thigpen asked if it would be possible to include in the contract a discount for ads for small businesses. She asked if it was correct that service would only go up as far as the 6th floor, and asked what about businesses and residents that live above the 6th floor. Chris Vein said he would take her suggestion back to them. Regarding access above 6th floor he said it is a problem that they are trying to work out. Commissioner Murad asked how much the fee would be for higher speed connection. Chris Vein replied stating that the fee for higher speed access would be about $20 including upgrades and maintenance. Commissioner Chiu thanked Mr. Vein and said that he supported the city's vision to provide access to all, but said that there seems to be a lot of questions such as what out does the city have if EarthLink does not meet its contractual agreement. Chris Vein addressed his concern stating that an out would be the short agreement and clause that EarthLink must provide services at a rate and speed in which service is provided in other cities. Commissioner Chiu said he had been following the discussions at the Board of Supervisors around this issue and said he was troubled by the Budget Analyst report that suggested looking into a city run WIFI. He asked why the city should not wait for more information before proceeding with the agreement. Chris Vein said that the study does not support its own conclusions, stating that in fact 10 of the cities that they looked at are going with a private public partnership. He said that the financials in the report are questionable and said that the risk is not appropriate for the city to undertake, stating that they had looked into it but decided against it. Commissioner Richardson asked how it would help independent small book stores, stating that the internet has hurt these stores. Chris Vein suggested that it would help them because they would now be able to compete with the online stores. Stephen Cornell, owner of Brownies Hardware asked if the connection/installation would happen all at once or would it be done in sections stating that when cable arrived, it was done in sections and some folks did not receive it until much later than others. Chris Vein said that this is different than cable which needs to be laid down thus the reason it took long and done in sections. He said the agreement states that it must be done within 18 months. Commissioner Chiu suggested putting the issue off until more dialogue could be had around it. He asked if it was true that the agreement did not need to be signed for another 5 months. Chris Vein talked about the importance of bridging the digital divide sooner rather than later and said that was and continues to be the reason they began discussing this in the first place, adding that every day delayed is one more day that people don't have access. Commissioner Thigpen asked about the health risks of providing the service and wondered if she should be concerned. Chris Vein said that the health impacts are negligible and said that it is less than the use of cell phones to the head.
Commissioner Murad made a motion to support the agreement. Commissioner Thigpen seconded. The motion passed 6 to 1.

Item 8- PRESENTATION OF UNLICENSED DOG AND CAT BOARDING FACILITIES
Ken Sato, Director of Food and Consumer Safety at the Department of Public Health, Environmental Health Section reported that he had come to answer questions about kennels. He reported that the Health Department does issue the permit to operate kennels in San Francisco. Kennels are defined as maintaining more than 3 dogs over 24 hours continuous time, stating that when someone applies for a permit, Health Department sends them to City Planning for a zoning referral and instruct them to pull a Building Permit Application for construction. Thus he said the Health Department is part of the permit process, stating that they review the plans and sign off on them. Additionally he said that if they receive a complaint, they do go out and investigate. He stated that currently there are 7 kennel permits issued by the City with 2 additional pending, and 3 pending notices of violation for illegal operation of kennels. Commissioner Thigpen asked about the listings in the phone book of which there are well over 7. Mr. Sato said that they had received referrals from the Treasure's Office of over 20 businesses from the phone book which they had followed up on. He said that of those, three have received notice of violation, and the rest are permitted as pet hospitals. Commissioner Thigpen asked about ads on Craigslist and those that advertise on their property. Mr. Sato said that his inspectors go out on a complaint basis, adding that they do not drive around looking for violators. Commissioner Richardson asked what the difference between a pet hospital and a kennel is. Mr. Sato said that the main difference is the health issue, stating that a hospital is for medical purposes and said that they may not house the dogs overnight. Where as kennels provide boarding if the owners want or need to go out of town. Commissioner Richardson asked if there were any health requirements for kennels. Mr. Sato responded that there are and said that they mainly have to do with the structure including proper ventilation and drainage, as well as garbage and rodent issues. Commissioner Murad asked how many pet hospitals are licensed in the city. He said it seemed there should be more licensed kennels. Mr. Sato said that it is hard to tell the actual business activity from an add, stating that some of the businesses may be day grooming type businesses, while others may be dog walking type businesses, neither of which would keep dogs overnight thus not need the kennel permit. Carl Friedman, Director of Animal Care and Control said that boarding facilities are necessary in San Francisco and said that they provide an important service for those individuals that own companion animals. He said the role of his department is strictly animal welfare, and said that if there is an abuse or neglect issue they will investigate and prosecute as necessary. He said the issue is that there are about 120,000 dogs in the city and the businesses that have sprung up to deal with this growing fraction of the city over the past few years, have out stripped the capacity of the agencies to keep on top of them. Commissioner Richardson asked what services a licensed kennel gets from the city for being licensed with the city. Mr. Friedman said that they inspect the facilities to make sure they are safe for the animals. Commissioner Thigpen said that she was shocked that there has not been more investigation into this matter and asked if there was a class 4334 in his department. She asked the same of Mr. Sato. Mr. Freidman said that their Animal Control Officers, while not a 4334, do have Peace Officer status and can arrest people and carry fire arms. Mr. Sato said that they also have investigator classification. Commissioner Thigpen said that the Treasure and Tax Collector does have a class 4334 and suggested that the agencies collaborate to look into this further. She said that the onus ought to be on the city not public. Mr. Sato also suggested that the public should ensure that the business they are doing business with is licensed. Mr. Friedman said that he agreed but said that they do not have the authority to cite a business for lack of a business license but if they find one that is unlicensed they do contact zoning and Public Health. Mark Klaiman owner of Pet Camp, a boarding facility in the Bayview said that it took him over 18 months to find a place suitable per the city's zoning code, and said he incurred a lot of costs to come in compliance with the city's health code. He said he is concerned that the city is not fairly and equitably enforcing the rules resulting in an unfair advantage for those in compliance. He said that the city knows of facilities not in compliance, stating that he had done a sunshine act request and provided a list of 7 facilities not in compliance and said the city has failed to investigate them. He said the issue is really about equity, the city should enforce its rules equitably so that no small business is put at a competitive disadvantage. He presented a letter of support from the American Boarding Kennel Association, an international industry group that works with boarding facilities asking the city to do the same thing, basically why have rules on the books if they will not be enforced. He said it is harmful to consumers and pets alike for these facilities to go unlicensed. Furthermore he wondered what else these businesses may not be in compliance with, sick pay, workers comp. for example, stating that one has to wonder. Susan Rouse, owner of Reigning Dogs and Cats said that the issue is that there needs to be follow through, stating that she has asked about places and they have yet to investigate them, stating that they continue to operate in the meantime. She also reiterated Mr. Klaiman's concern about equity, stating that she has been a good business owner for the past five years, she is happy to pay her share in order to do business in San Francisco, but said that it needs to be fair, adding that it is disheartening to see these places operate illegally. Douglas Bunker, one of the owners of SF Hound Lounge Dog Daycare facility that operates 7AM to 7PM. He said that this issue is forgetting a few things, stating that it also involves the City Attorney's Office and Zoning and said that with out the help of the four agencies, it will not do any good for anyone. He said it took him two years to find a legally zoned facility and lots of money. He said that he contacted the Department of Building Inspection 2 years ago to complain about unlicensed facilities only to be told after much follow up that they didn't have the time to deal with this, and quoted them as stating that for the northeast section the priority cases are illegal billboards and situations of serious neighborhood impacts, as such doggy day care has not been a high priority case since you have been the only one complaining. He said that he too had a list of illegal day care and boarding facilities. He complained about the Department of Public Health stating that he had approached them five years ago and asked them what he needed to do to operate a boarding and kennel facility and was told that they didn't know what he was talking about and referred him to Animal Care and Control. He said that four months ago he went back to the Department of Public Health only to be told the same thing. However he said that recently he was visited by inspector Martinez of DPH who asked him for his kennel permit and said he went back to DPH and again was told they didn't know what he was talking about, gave him an application for a restaurant, charged him $355 and said good luck. Commissioner Richardson asked for a list of the unlicensed facilities mentioned. Commissioner Ventura asked staff to send Mr. Sato a copy of all the unlicensed facilities received this evening. Mr. Sato also submitted for the record a list of those facilities that his department had already investigated. Commissioner Thigpen suggested that staff meet with the various agencies to discuss how to address the issue and growing problem. Acting Director Farrah agreed to set up an interdepartmental meeting to further discuss the issue. Kimberly Durandet of the Planning Department said that she had worked on an interpretation for Doggy Day Care and said that they had likened it to animal grooming businesses. She said Planning staff has been working on this issue, stating that they are looking at several factors and said she would be happy to share their findings with staff.
Commissioner Thigpen made a motion to direct staff to write a letter to the various agencies involved to inquire about their investigator staff positions. Commissioner Alberts seconded. Unanimous approval from the Commission.

Item 9 – PRESENTATION AND FINAL REPORT ON SHOP LOCAL FIRST 2006
Don Shaffer, Director of BALLE (Business Alliance for Local Living Economies) reported that Shop Local First 2006 had been a successful event stating that the reason for it is to support local small businesses and local artisans among them. He said that they reached about 500 employers by canvassing the neighborhoods. Coupled with the media coverage including several of the local papers, he said it resulted in a great public relations campaign for both the Commission and the Mayor. He reported that the Union Square event had included 34 vendors, many of which sold out. He said that 75% of the Union Square participants said the event was valuable to their business, only 2 said it was not helpful. Commissioner Thigpen said that many businesses kept the posters up and said she has continued to see them in storefronts. Commissioner Alberts asked how much their contract had been for and if participants of the Union Square event had been charged to participate. She said she would like to know how this event compares to other events that they participate in.

Item 10 – DISCUSSION AND POSSIBLE ACTION TO HOLD PROPOSE AMENDMENTS TO THE BOARD OF SUPERVISORS FILE NO. 050922 PAYROLL EXPENSE TAX EXCLUSION FOR QUALIFIED CLEAN ENERGY TECHNOLOGY BUSINESSES TO INCLUDE ALL BUISNESES THAT PAY THE PAYROLL TAX
Item tabled

Item 11 – DISCUSSION AND POSSIBLE ACTION TO SCHEDULE A RETREAT OF THE SMALL BUSINESS COMMISION
Commissioner Alberts said that she did not think there should be a retreat with out Director Ubalde. Acting Director Farrah said that whatever comes from the retreat would be a working document and said he had notes from Director Ubalde including things that she would like the Commission to work on. Commissioner O'Connor said that the majority of the Commissioners seem to want to have a retreat sooner as opposed to later and suggested perhaps meeting for half a day instead of a full day. Commissioner Chiu made a motion to direct staff to identify a date for a half day retreat. Commissioner O'Connor suggested for the Commissioners get their availability for the first week of March to Secretary Martha Yanez.

Item 12– MEANINGFUL PAYROLL TAX REFORM
Commissioner Thigpen and Commissioner Chiu announced that they did not prepare a proposal as previously discussed for this meeting and said that they would be meting with Supervisor Peskin in the next week. They said there are several interested people and said they would be discussing the issue of a working group and would report back at the next meeting.

Item 13- NEW BUSINESS
Commissioner Thigpen said that she had previously requested to place on the agenda the budget for discussion, stating that she was concerned because of the approaching deadline for submittal of the budget to the Controller's office. Commissioner Chiu said that he would echo that sentiment but also asked staff for guidance on how to request additional staff for the Commission. Commissioner Alberts requested to get information on the Commission's current expenditures and balances, as well as an itemized statement of last years budget and how it was allocated. Commissioner Thigpen said that the budget is due to the Controller on February 21st and suggested that the Commission hold a special hearing to discuss and put forth a budget. She said this was important to the extent the Commission wants to request additional staff. Mike Farrah said that he would work with staff and figure out the timeline for submitting the budget. He said he would work to put something together to present either at a special meeting in the next week, or in the near future. David Popel of the Sunshine Ordinance Task Force advised the Commission that under Charter Section either 4.101 or 4.102, Chartered Boards and Commissions are required to submit a budget to the Mayor's office by the deadline, which this year is February 21st, and adopt that budget following a public hearing. Commissioner Ventura requested to place on the agenda a discussion and update on community meetings, stating that he had not yet confirmed a Polk Street merchant walk nor meeting since he had not been able to make contact with the Lower Polk merchants.

Item 14- GENERAL PUBLIC COMMENT
None

Item 15- ADJOURNMENT
Commissioner Thigpen made a motion to adjourn. Commissioner Richardson seconded. The meeting was adjourned at 8:25 P.M.