CITY AND COUNTY OF SAN FRANCISCO
SMALL BUSINESS COMMISSION
City Hall, Room 400
1 Dr. Carlton B. Goodlett Place San Francisco, CA 94102
Monday, April 9, 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: Commissioner Richardson
Call to order:
Item 1 - ROLL CALL
The Small Business Commission met on Monday, April 9, 2007 in regular session. The meeting was called to order at 5:36PM.
Item 2 – APPROVAL OF THE MARCH 12, 2007 MEETING MINUTES
Commissioner Ventura pointed out a spelling error on page 7, line 12.
Commissioner Thigpen made a motion to approve the minutes with the amendment. Commissioner Chiu seconded the motion. The motion was unanimously approved by the Commission.
Item 3- GENERAL PUBLIC COMMENT
Supervisor Ed Jew thanked the Commission for their interest in the city's procurement practices and for looking into the matter, stating that this was of great interest to him. Additionally he said he would like to look at simplifying the process of doing business in the city, and said it would be something his office would be working on, adding that one idea is to have all necessary forms available on-line. He said he looked forward to working more closely with the Commission. Commissioner O'Connor informed Supervisor Jew that the SBC and then Supervisor Ma had co created a group of departmental representatives to look at streamlining the permit process. He reported that the group had help from a Berkeley graduate student who had put together a final report on the issue as part of her thesis. He commended Supervisor Jew for his efforts and said he looked forward to working with him. Supervisor Jew said that he also had spoke to the Treasure about this and was aware of the report and looked forward to discussing the issue further.
Item 4 – COMMISSIONER AND STAFF REPORTS REPORT
Commissioner Thigpen invited everyone listening to the Kick-off event for Small Business Week on Monday, May 7, 2007 at 5:30PM in City Hall. She also reported that she had been attending the MUNI meetings and announced that the official opening o the T-Third Line would be April 17th, which she said was a huge accomplishment, however she complained about Lines 47 and 49, stating that they are out of control and need to be dealt with. Furthermore she reported that she had been attending the Health Access Program (HAP) meetings and announced that San Francisco had recently received 70 million dollars to effectuate the HAP over a three year cycle. Commissioner Alberts reported that a former student at San Francisco State who had participated in Small Business activities in 2005 had recently formed a Student Association of Entrepreneurs at SF State. She said that they were very impressed with past SBW activities and have asked to be involved this year.
Item 5 –SMALL BUSINESS AWARD PRESENTATION
Commissioner O'Connor reported that the Commission had decided to implement a small business award program, whereby each month Commissioners would nominate a small business for the award. He said this was the Commissions way of recognizing the contributions of the small business community to the City. Commissioner Murad presented the Commission's first award of 2007 to Mr. Mike Musluh, owner and operator of The Pork Store in San Francisco. He said he has known Mike for many years and remembers him as youngster who used to run around helping his father, then owner of The Pork Store. He said Mike was able to buy his father's business and now his father helps him in the store. Since then they have opened another business on Valencia Street. Mr. Mike Musluh accepted the award and said he was honored.
Item 6 – SMALL BUSINESS AND CITY PROCUREMENT PRACTICES
Naomi Kelly, City Purchaser thanked the Commission for the opportunity to present and requested that Virginia Harmon, Director of the Human Rights Commission first speak about the City's 14B program, which is the City's Local Business Enterprise Program, and sets the standards. Virginia Harmon of the HRC said that the Commission actively participated in the development of the new Local Business Enterprise Program (LBE) or 14B, which certified businesses as small and micro LBE's with the participation of Director Ubalde and Commissioner Ventura. She explained that in 2004 the courts ruled that the prior Minority Business Enterprise Program (MBE) violated Proposition 209 and said that in September of 2006 the new Local Business Enterprise program (LBE) was implemented. She said that the LBE requires that the principal place of business must be in San Francisco, and the business must pay payroll on at least 51% of staff, as well as demonstrate that a majority of its principals are located in San Francisco. Furthermore, to demonstrate that a business is small or micro, it must show average gross receipts for a three year period below the following economic thresholds respectively: Public works/Contruction-$14 and 7 million; Specialty Construction Contractors-$7 and 3.5 million; Good/Materials/Equipment and /General Services-$7 and 3.5 million; Professional Services and Architect/Engineering-$2.5 and 1.25 million; and Trucking-$3.5 and 1.75 million. The program provides a 10% discount for certified small and micro LBEs when bidding as prime contractors, and there are also subcontracting goals based upon the extent of opportunities in the contract and availability of LBE contractors. She said they are most excited about the micro program because it will bring in businesses that would not otherwise be able to compete. Commissioner Chiu asked if they had noticed a numerical impact since the new LBE program was implemented and asked what advice could be given to improve the program. Virginia Harmon said that it was too soon to note any numerical impacts yet. Commissioner Ventura commented that there were two things that they learned through their work on this, the first being that small businesses lack access to opportunities and secondly, small businesses are often not contract ready. He expressed interest in continuing to work with the HRC on these two specific issues. Commissioner Thigpen was surprised to learn that in order to be certified the business must be able to show they pay payroll tax, stating that this eliminates a lot of micro businesses that do not pay the payroll tax. Virginia Harmon responded stating that this applies only to companies that have several offices outside of San Francisco. She said that there are Certification Officers that can assist businesses with the certification process and said that they also offer workshops on certification. She said interested businesses could call 252-2500. Naomi Kelly reported that the Office of Contract Administration (OCA) is in charge of about 60% of all city commodities, or roughly 200 million dollars worth of commodities. She said that departments have a one time purchases of $10,000 or less that they can administer themselves. She said the OCA conducts competitive bidding practices, stating that there is a 10% bid preference for small businesses, and said that they look forward to the set aside to increase opportunities for small businesses. She reported that the OCA also conducts workshops and participates in trade fairs in an attempt to get the word out and reach out to small businesses. She recommended that the Small Business Commission continue to work with the Human Rights Commission to increase opportunities for small businesses. Commissioner Chiu asked if there are specific recommendations on how the current ordinance may be tweaked to increase the amount of business the city does with small businesses, such as increase the bid preference percentage for example. Naomi Kelley responded stating that before any recommendations could be made, they ought to assure themselves that the numbers are accurate. She suggested for the Commission to obtain that data first from either the Controller's office or the HRC and then think about and come up with recommendations. She said she would be able to provide the data on the OCA side and said she was happy to work with the Commission, but said she did not have any recommendations without further review. Commissioner Thigpen asked if anything could be done to encourage or require departments to use their discretionary monies with small businesses. Naomi Kelly said that her department attempts to educate department representatives about the discretionary spending by telling them that it is a one time use only. I. Lee Murphy-Reed, a member of the public and representative of the S.F Black Chamber of Commerce. She commended both Ms. Kelley and Ms. Harmon for their efforts to increase opportunities for small businesses, but said that she has been denied opportunities to participate as an interior designer. She said that Architects have used her portfolio to get a contract with the city but then they never use her services, stating that she has never received a contract from the city. Cliff Walldeck, a member of the public and small business owner said that San Francisco is the largest employer in the city and as such the city ought to start looking at green businesses for its commodities. He said green business contracting could be the domestic partners of the year. He agreed that bid discounts don't work for small businesses because the businesses will say whatever to get the contract but will not follow through on their word. He encouraged the City to work collaboratively to increase business opportunities for small businesses. John Schweizer of Remediation Services Inc. in the Bayview said that they look to hire from their neighborhood and said he would like to see the program extended to include the San Francisco Unified School District. He said that it is difficult for them to compete, adding that even on prevailing wage jobs they can not compete, stating that there is a differential and he asked the Commission to consider this. Stephen Cornell said that 10% set aside is not a lot when you consider sick leave amounts, adding that his per hour fees of local mandates average $11.44 per hour, adding that if there is a 10% reduction of that amount it is not very competitive. He said the city's biggest cost is to its employees, adding that it should have the same attitude toward its local small businesses. Scott Hauge of the Small Business Advocates said it's time to do something to increase opportunities for small businesses. He said there ought to be a goal and it should be monitored, stating that this is not currently happening. He said the state has set a goal; the city needs to take the lead through the Small Business Commission and the HRC and OCA, adding that the Commission ought to hold hearings on the issue and ask departments to report to them. Michelle Menendez, a member of the public and local business owners said that she was awarded a contract for auto products but said that it had nothing to do with competitive prices, but rather that the prior people had the bid, which was not put out to bid for 10 years. However she said while she is fully capable of fulfilling the larger bid of over a million dollars, she is only getting $100,000 of it and she is a local business will cheaper rates. She said Bid # 71615 is not bid, but rather a joke.
Commissioner Chiu made a motion to request the appropriate data of what percent of business goes to small businesses, and to work closely with various agencies involved. Commissioner Alberts seconded. Commissioner Thigpen requested to amend the motion to ask staff to look at the feasibility of 25% procurement or higher. Commissioner Alberts seconded the amendment. The Commission unanimously approved the motion as amended.
Item 7- PRESENTATION ON THE COMMUNITY CORRIDORS PARTNERSHIP PROGRAM
Mayor Newsom briefly commented on the previous item stating that he issued an Executive Order in the past year which called on departments to do more business with local businesses. He said the Small Business Commission is responsible to oversee that Executive Order and said that this was not being done. He said that since his Executive Order, 33% of the City's 194 million dollars spent on materials and supplies, was spent at local businesses. He said that if we are to look at the data, it needs to be broken down based on the definitions. With regard to the Community Corridors Partnership Program, he said it came about as a result of the status of the city's streets, adding that he too was frustrated with the increasingly dirty streets. He said this has been a long standing issue, one of which they have attempted to tackle several times before via different programs, the latest of which included adding more staff to DPW to address the issue, as well as deputizing the staff, both of which have had negligible impacts. Regardless of past failed attempts he said they would not give up, adding that this is how they stumbled upon the Corridors Program. He said the idea behind the Corridors Program is to do an inventory or needs assessment of designated blocks and note what work needs to be done regardless of whose property it is, whether it be property of the PUC, PG&E, DPT, or DPW among others, stating that this jurisdictional issue had proven to be a road block in the past. He reported they initially picked 20 corridors and 100 blocks for a total of 8 million dollars. He said they found this is working, adding that event the Board of Supervisors are coming on board and requesting the addition of areas and blocks. He said it is working because they are giving up on the silo approach and instead, DPW is responsible for all the work by obtaining agreements from the various agencies that have property on the blocks that need to be fixed. Preliminarily he said there are 130 additional blocks in the pipeline and that he would be recommending the Board to approve. Commissioner Murad thanked Mayor Newsom for his attendance and for his efforts on the Corridor Program. He also thanked his staff for their hard work in seeing it through. Commissioner Thigpen thanked Mayor Newsom and asked if any agency had shown any resistance to the Program. Commissioner Chiu thanked Mayor Newsom and said that he had seen staff out on the streets and applauded their efforts. He said that small business owners certainly try to do their share, but said that there are vacant or abandoned properties and absentee landlords. Mayor Newsom agreed and said that they are working to identify the absentee landlords, and briefly referenced a program that the City of New York has implemented and is currently trying out, stating that there are creative things that can be attempted to deal with these issues. Commissioner Ventura also thanked Mayor Newsom for his leadership on this program as well as on the creation of several additional community benefit districts (CBD's). He said representatives from the Theatre District had reached out to him for help with some neighborhood issues and reported that the Commission working with his Office of Economic and Workforce Development are looking to help them and one idea is the creation of a CBD. Commissioner Alberts asked what else the City is doing in terms of matching grants to help small businesses to improve their façade or store fronts. Mayor Newsom responded stating that there is a façade improvement program through his Office of Community Development which provides those matching funds. He also said that DPW also provides a service to merchants whereby they go out to businesses and match the paint on the façade and provide the business with a free supply of the paint that can be used to cover over graffiti when needed. Commissioner Alberts asked how well the services are advertised. Mohammed Nuru, of the Department of Public Woks continued the discussion stating that they have received overwhelming support for the program and said that he is very interested in strengthening partnerships with the property owners. He said that they have created a list of the street furniture as they call it, stating that it has been helpful in the process. He said that while they have not been able to complete everything yet, he believes the evaluation of the program is equally important and said he welcomed it. He reported that the highest amount of call are related to graffiti and said that they are currently working with a few small business owners to help remove graffiti. Commissioner Alberts asked who is in charge of planting trees and asked how the ambassador program is being advertised. Mohammed Nuru said that the planting of trees is administered through the Department's Urban Forestry Division. Regarding advertising the programs, he said they have done outreach and attended a lot of meetings with the community, but said that they could do a lot more. Commissioner Thigpen asked if there is a way for DPW to get a list of artists to do artwork on some of the more hit areas. Mohammed Nuru said that graffiti is defined when there is no permission and said that inviting people to create art on spaces with the permission of the property owner is something that they could look into. Commissioner Murad thanked Mr. Nuru and his staff stating that he has noticed a difference in some places. He agreed that the quicker one can abate the graffiti the better. He asked how the department works with the Police department to monitor and enforce graffiti violations, adding that it is the worst thing that merchants face on a daily basis. Mr. Nuru said that the department has a good relationship with the Police, stating that they have arrested more violators now than in previous years. He said they encourage businesses and residents to file complaints with the Police Department so that they can document the graffiti and attempt to identify the vandal, as well as link said vandal to any of his/her additional tags in order to make a stronger case. He reported that there is also an educational campaign that they are taking to the schools in order to educate the youth. Commissioner O'Connor said that the Commission overwhelmingly supports the program and he thanked the Mayor and his staff as well as Mr. Nuru for the update.
Item 8- PRESENTATION ON 2008-2009 PUC WATER/WASTEWATER RATE PROPOSAL
Tony Winnicker, Director of Communications and Public Outreach for the San Francisco PUC, joined by Scott McDonald, Assistance General Manager for Financial and Business Services thanked the Commission for allowing them to present to them, stating that it is one of about 50 like presentations to various community business groups and neighborhoods groups around the city aimed at educating folks about a proposal that will be before the PUC in a couple of months that will raise water and sewer rates. He said that the new rates would go into effect July 1 of this year and July 1 of next year, stating that it is a two year proposal. He said that for each of those two years the goal would be to raise overall revenue 15% for the water side and 9% for the sewer side. He said it is more difficult to pinpoint the percentage of individual rate increases because it is entirely based on consumption. He said they are also proposing a new connection charge or capacity charge which is a common charge in other cities for water services. He explained that they are a regional agency that delivers water to the Hetch Hetchy region, consisting of over 2.4 million customers in the Bay Area including retail customers in San Francisco, and about 20% of the cities electricity. He said that the rates go to support the operation and maintenance of the system, and said that the increases will help pay for 150 million dollars over 5 years of wastewater capital improvement projects, which began last year, adding that they must continue. He said that they are back at the Commission because they must continue work that they have been doing, including additional sewer work, 8 new flooding projects to break ground this year with 30 more in planning and design, begin the pick up of grease from restaurants and recycle it into bio fuel for use in Muni and the city's fleets, as well as continue improvements to Hetch Hetchy. Scott McDonald, said that staff created a rate proposal based on projected costs, both on the operating and maintenance, and capital side, and said that the process also includes the Rate Fairness Board, which was established by the voters in 2002 under Prop. E. He said the Rate Fairness Board is a committee made up of PUC rate payers and city financial officials who advice the PUC. He talked about how the rates are calculated, stating that generally it is related to usage so the less consumption the less the bill will be. He presented water and wastewater charge comparison tables and said that San Francisco is a bit above the mid level when it comes to water charges, but when considering both water and wastewater rates, by 2009 San Francisco rates will be above the mid level, but the average bill will be below mid level. This is due in part to the fact that San Francisco has a combined system whereas other jurisdictions have both water and wastewater systems, not to mention that San Francisco treats it's rain water and any overflow to a much larger extent than other jurisdictions. In concluding he encouraged the public to be involved in the process by attending the Rate Fairness Board meetings, the next of which he said is Wednesday, April 11th in City Hall, Room 263, and via the PUC meetings. He announced that the new rate proposal would be considered by the PUC at its May 8th meeting at 1:30PM, and he welcomed questions. Commissioner Thigpen asked about new hook connections for new buildings, and wondered what the capacity would be for all the new developments. Mr. McDonald said the new rate proposal also takes these new developments into account and said it is funding to deal with that fact. Commissioner O'Connor thanked the PUC for their presentation.
Item 9 – PRESENTATION ON MAGIC (Mobilization for Adolescent Growth in Our Communities)
Sheryl Davis of Mo Magic thanked the Commission for allowing Mo Magic youth to come forward to share and talk about the entrepreneurial program, which is both a female and male program although none of the boys were able to attend the meeting. She stated that MAGIC is a program out of the Public Defenders Office, stating that it has been in Bayview for the past three years and said that from a recommendation by Supervisor Mirkarimi and support of the Board and the Mayor's Office it was funded to expand to the Western Addition. She reported that since November of last year they meet every other Wednesday at the African American Art and Cultural Complex in the Western Addition for two hours over lunch and said that since the beginning they have had 70 organizations including CBO's and City agencies/departments, community members and youth participate. For the purpose of the Commission meeting she said they would present the Economic and Vocational Advancement Component of the program. She explained that the youth present have participated in the program by either having businesses at the African American Art and Cultural Complex, or by catering events at City Hall and via participation in the Jazz festival and Juneteenth celebration. She said they worked on the power point presentation which they will show, and said that it is a trial run for them because she said they will be doing a presentation to DCYF as part of the Youth Entrepreneurial grant, which they applied for through them. She asked the young ladies to introduce them selves before starting their presentation and they are as follows: Myisha Collins, Anjeanette Coats, Shavanne Coats, Che Graftanay Mims, and Kelvina Burton. The presentation consisted of a cohesive business plan, whereby each youth presented a piece as it related to each of their personal endeavor, which included a flower shop and gift store, and clothing design and sales, and greeting cards. They said they hope to grow their business by expanding into other districts in the city and bringing in additional youth to work the store. They said they look forward to collaborating with the Commission and other business groups and organizations and hope to attract new customers with brochures and flyers and word of mouth as well as with radio advertisements. Sheryl Davis said that some of the ways to collaborate would be to participate in career day, attend workshops and mixers, and by co-hosting events with other business related organizations. She reported they are working with Urban Solutions and hope to have some workshops for youth in the summer months that will teach the youth about the many aspects of having a business, and give them an opportunity to visit businesses and talk to the owners to gain first hand knowledge. She asked for the Commission's help in identifying businesses to visit or events to participate in. They presented each Commissioner with gift basket representative of their work. Commissioner O'Connor thanked the students for their presentation and applauded them for their efforts, stating that this is exactly how everyone gets started, stating that it takes a lot of work, but it does have its rewards. Commissioner Murad thanked the girls for their presentation, and said that for him it has been one of the best things the Commission has done by inviting this presentation. He said there is no question each one of them is a small business owner and said they would go on to do very well.
Item 10 - NEW BUSINESS
Commissioner Ventura requested an update from the Department of the Environment on their SF Energy Watch program and outreach to businesses. Commissioner O'Connor stated that in the past the Commission had voted in support of the Marina Farmers Market. He said that he would ask staff to re issue the letter of support for this year. Acting Director Mike Farrah agreed to re issue the letter.
Item 11- GENERAL PUBLIC COMMENT
Mike Musluh commented on the proposed new rates for water and wastewater stating that he found it interesting that rates for restaurants are the most expensive rates. He encouraged the Commission to stay on top of this issue adding that the cost should be evenly spread. With respect to the city's work on identifying absentee landlords, he said that the city had helped him identify a person to rent one of his spaces and he commended the city for their efforts toward that end.
Item 12- ADJOURNMENT
Commissioner Alberts made a motion to adjourn. Commissioner Ventura seconded. The meeting was adjourned at 8:08 P.M.