>> i have to say, i completely understand that perspective and a share a little bit of that myself. he of the commission feels a smaller number is more appropriate to give a little bit of a preference, i don't know if the number is two or four, but i am open to that feedback. that is another feedback, but i just wanted to kick start the conversation. commissioner clyde: i would like to refer to a previous hearing where we discussed the been preferences between local businesses and non-local businesses. at land use today, the cost of employing people here in san

francisco are 10%-25% higher than just employment costs 10%- 25% higher than other counties. we discussed that the appropriation differential for been preferences would be closer to 15%, and with the budget, it was not doable. at that time, 15% was not doable. i do want to call attention to that. i wouldn't be interested in lowering 1 and increasing the other because commissioner dwight did bring up the cost of administering these programs in addition to the many programs and record keeping mandates that are on small businesses already.

maybe an increase for the local and a decrease, again, that is a discussion. it would be closer to 15%. >> i will say right now i would very much support an increase in the bid preference for local businesses. oftentimes, local businesses are not as competitive as they need to be in our own contracting practices. if the commission would prefer us and my legislation to reduce the out of city bid preference for benefit corporations, i am happy to do that. it would take a bigger piece of legislation, but it is something that i would support. >> it is not my desire to complicate the issue even more, but it is a legitimate comment to make.

perhaps it is specific to each type of business, but i have to believe that for a lot of the businesses, if the service being provided by an entity outside of san francisco or the bay area, it is inherently going to involve being less green when a company that is providing the service in san francisco. just the fact alone that if it is labor-intensive, they have to bring people from outside the san francisco -- to san francisco. that has an effect. we don't want someone to make a wise crack but got preferential furbishing a good company, but they are creating as much pollution doing the job because they are outside -- just a comment by wanted to make. >> i appreciate that, i think it might be true in certain industries like the one that you

represent. in other ones, there are lots of goods and services that can be provided without the transportation cost. a point well taken. i am hearing some feedback that for non-local benefit corporations, there is a desire to ratchet that number down. if anyone has a suggestion, i would be all ears. >> i would like to thank you for your leadership on this legislation. i've been reading about benefit corporations allot in the last six months, and there is no city on the west coast that is doing this correctly right now. i think it would be an awesome thing if we were the first one. >> that is very much my thinking behind this. with that, unless there are other questions, i'm bummed. i was prepared to speak to all

three of my pieces of legislation. i wasn't sure if you want me to take a moment to talk about the other two or ticket in order. my aid can also do the same. >> commissioner adams, you would need to -- commissioner adams: we would have to do public comment. >> extend the item and read- refer it back to be heard and call the other items for the supervisor to make his introduction. and those with me to be referred to called b back. close of the item and refer back to 6 and 7. >> she is probably better than

her boss, so not to confuse things, why don't we keep it in the order in which it was. if i could make to closing comments, another has been a lot of discussion about the role of the small business commission ha, two of the three pieces of legislation, we very much want to move forward with them. i know there has been a discussion about whether the small business commission might mean more than once a month. given the volume of legislation, we move about 2000 pieces of legislation a year, and many of that touches upon different aspects of the small-business world. rest assured, i would support that. i am happy to support that during the budget process. i wanted to mention that because i feel bad for having to leave at this point. i know we have commissioners

departing, this is probably your last meeting commissioner clyde and commissioner o'connor. i brought certificates of honor from the board of supervisors and recognition and the points of the work. i will give them to the executive director to present them to you, but i wanted to say thank you for your service. the rules committee will be considering several new applicants, and hopefully you will have your full panel of seven to give us feedback. >> it's in your hands, katherine. commissioner adams: we will open this up for public comment and it will be on item 6, the presentation that we had on the benefit corporations, and also item number seven.

i am opening this up for public comment. do we have public comment? >> i neglected to mention when i called item seven, it is a legislation digest. along with a list of companies that are b-corp certified or benefit corporations and to the state of california. if you would like to stand up on the side wall over your head and speak your name clearly, please. >> my name is matthew bauer and i am president and co-founder of better world telecom. we just moved happily into our new offices, and i am sort of a kitten in a candy store right now after being involved since

2004. one of the first companies to bring this forward, to have this kind of discussion going down. it is very enlightening for me and i want to commend supervisor chiu for bringing this forward. i myself am on the board of american sustainable business council, and literally over 100,000 businesses that are having the same ideals, the useful comments that i can make based on my 25 years of experience, i feel this will attract companies to san francisco. it catches and on the leadership position. the unofficial leadership

position, that amount of capital that exists here, the people and the organization's that have paved a new path for businesses and society, the other thing is to stimulate companies within san francisco to step up to certification or to a higher purpose. the ripple effect, they treat their employees and a different way. the particle out into the community and i can advocate for that. on behalf of the hundreds of other corporations out there and other types of companies, there is a commitment that israel and has a true impact on the communities. it follows on well to the state legislation, it is a perfect

complement because it gives us companies that are trying to live up to a higher standard of playing field, finally after all these years to operate on that it separates us -- it's a $500 billion industry. i compete against at&t and verizon. i am spending the time to do these certifications. it is truly something that i think will be a landmark ripple effect. i appreciate you will considering this and your comments i think have been great. we look for the moving this forward in some shape or fashion. >> my name is david and i am a co-founder and director of an

organization called the american sustainable business council. socially- responsible business, and small business. before that, i did 25 years of work in the management- consultancy, and i have seen extraordinarily good businesses and that also seem quite a new business practices that i wish i had not seen, which were damaging to the staff, damaging to the general public, and damaging to the investors, frankly, so i believe we really do need the b corp. status, and i am glad we can do that if for no other reason than so we can have a safe harbor, said that those you want to do the right thing are supported in that. we have to make it easier and more profitable to do the right thing and harder and less

profitable to do the wrong thing, if we are going to of businesses that work well for the public and the economy as a whole as well as for the investors. we just have to make that possible, and i am glad this does make this possible, so i think you, and i encourage you to support this and to do everything we can in making san francisco a leader in promoting this. president o'brien: thank you. >> i think it is a great idea, but i think, commissioner clyde has already talked about it, between local businesses and whenever these assets companies, i would assume a company from out of the city, out of the state going to do this is going to bid on business city is going to be a larger company, said

they will have scale, so it to% difference from a local preference, i think 10%, and they are 8% is not that much. and you also mentioned that there is like a 10% or 15% difference in in play cost. i think that depends on the business. in my business, you obtain a payroll tax. i am paying health benefits. to compete with somebody outside of san francisco who bids in san francisco who does not pay any of those things. it is a big difference. also, minimum-wage. that is a lot more than 10% or 15%. so when you do this, the gap has got to be bigger. >> thank you. any other for public comment?

seeing none, public comment is closed. president o'brien? president o'brien: i think i am just heard a very important point in the last part of what the speaker said, in the last sentence. i think they should definitely have that credited to the local company or debited to the benefit of the outside company to negate that, because that is an immediate not apples to apples comparison, so that needs to be in there. their fees have to be credited because that has to be there. i would like to see that put forward. >> commissioner client? commissioner -- commissioner clyde? commissioner clyde: i want to be

careful because there are companies that hire in san francisco and are outside of the border. in oakland. i just want to be a little bit careful of that. we are in a regional economy, and i just want to be careful with that. we are in a regional economy. we are not somehow more arduous because we live in san francisco. i do want to support the companies that are doing socially responsible private, for-profit companies that are taking it upon themselves in their companies to be socially responsible, and it is harder than it looks, and it should be more than a branding campaign. you know, i absolutely agree with that, so i would propose at a minimum, we were all the non local back to 5% in that we increase the local, and the

local would be on top of, i guess 10% if you are local. right now, they are proposing 2%. perhaps that can be increased. i do not know. >> commissioner dooley? commissioner cooley: -- dooley: i am agreement commissioner declined. i think we need to raise this -- in agreement with commissioner acly -- clyde. we should raise the local to 13%. there has to be a balance, because we are already at a disadvantage, and i do not want to say.

commissioner clyde: going back to the president o'brien's comment, i would go to 13% or so. it needs to be done. again, san francisco has a unique, and expensive, mandated employment and work environments. >> commissioner riley? commissioner riley: maybe we should ask them to take the health care and the issues, that they have to pay, to take that into consideration and come up with a recommendation of how much percentage. >> director?

director: moving forward, in order to provide supervisor chiu in order to move forward, we may have to weigh in before the final vote on a piece of legislation. i just want to make sure that you are also taking into consideration that there could be a contract where there is an lbe that is not a benefit corporation bidding on an item, and right now, they could both be lbe's, or the benefit corporation could not being an lbe. to make sure that our preference is that the lbe gets that,

keeping in mind why we have that preference for them. i just wanted to throw that in in terms that it will not always be benefit corporations versus non benefit corporations potentially bidding on a contract. commissioner: so it would benefit -- is that right? director: in your discussions if you will be talking about percentages, there might be a time when there is a non l;be -- lbe bidding and one bidding. >> commissioner dwight?

commissioner dwight: i am struggling that there would be a benefit preference to one or the other. we made a determination that we're going to give a preference for local versus non local. i think if we were going to make a determination that we would also give a preference, let's call in a preference for benefit versus non benefit, that should be a benefit. 2%, 3%, whatever it is. if you do not need to the local, you do not get that. if you do not meet the benefit, you do not get that, so as you come into this, you say i'm going to come in on this as a b corps, and i am going to compete against local companies that are going to get their presidential -- preferential treatment for being local, so i do not think we should boost the weight for a

company that is not local. you get that for being local or non local, and kind of lulling the plainfield, because if not, we will of a big discussion on whether it would have more b- ness, which is what we have said. we have gotten into a situation where we are not evaluating apples and apples here. so i think there should be a number for being local and a number for being a benefit, and that should apply equally, and we should consider that as a possibility as a theoretical underpinning for this, because salma -- somehow, it has been that the jon weight should be different. to me.

commissioner: i think some of what we are talking about, even with the 8% for the advantage, the out-of-town companies still have a major advantage financially in general, because when they are operating outside of the city, they can put a much lower bid in than the people in the city, so i am kind of hesitant. frankly, i am kind of hesitant to give the out of town any benefit. commissioner dwight: i think suggesting that it would have a higher percentage for its status versus a local company getting a smaller boost for the status, if we just eliminated that and send your status is worth this many points, and your local status

is where this many points, and you can imagine a whole collection of preferences that we would tally up, and they would not be weighted. they would be absolute. somehow, there is a theory of waiting them -- weighting them. this could go a great deal towards lowering the benefit of the local, that 10% or 8%, so anyway, i think there is a possibility to simplify this by saying this is what you get for being a b corp., and this is what you get for being back, and it is that simple. president o'brien: i like that. i am all for simplicity, especially when doing business

in san francisco. i want to get back to the director. with us coming up with percentages right now that might not be fully informed, what that really means, and that we could be given a figure that really understanding the impact of it. do you think we should wait until we hear more about work in 1% or 2%, how that plays out? >> -- director: no, that is not what i wanted you to think about. if you wanted to make a recommendation on the different percentages, i just wanted to make sure we had that discussion, and a motion is made if you want to go in that direction. i think, you know, and perhaps commissioner dwight could clarify -- right now, we have for our lbe and our sba lbe's,

which are slightly larger small businesses, we have a discount for them. president o'brien: for being local. director: and we say local because one of the state propositions, we cannot classify our businesses as a woman, minority, or small business, so whenever a local, an lbe designation, which is intended to encompass all of those, so the question comes up, and you can go the route to the commissioner dwight s. saying, if you are an lbe, you get this. you also get to add the benefit corporation percentage on top of that, but what i wanted to make

sure that we're keeping in mind, because the discussion just seemed it was benefit corporation versus the benefit corporation in terms of potential bidding on a contract, where you might have a benefit corp. and an lbe, which is not a benefit corp., said that was just -- president o'brien: ok. director: update, or you could go with commissioner riley's comment, which there was a big discount, which i think is what supervisor chiu was working off of as sort of a standard. commissioner: with the

supervisor be responsive to something as proposed by commissioner yee riley? >> i think we want to move this as fast as possible. commissioner yee riley: it is hard for us commissioner: i do t commissioner dwight's point of view, which, exactly. this is what the percentage is for this corporation, and if we have lbe's competing for contracts, that is part of the contract in process. commissioner yee ruil -- riley: have we done some study and came

up with that? commissioner: how long will it be before that report is ready? >> it is normally ready before the finance committee for the board of supervisors. you can ask for it to be earlier. director: if you want to have that, you may want to give a recommendation of no more a man or no less than a, sort of a range, but, yes. i mean, that is another way to think about it, providing the supervisors some direction and began thinking about the impact to our local small businesses.