>> welcome to the monday, november 18, 2013 meeting of the san francisco small business commission. the meeting is called to order at 2:07 p.m. our thankses goes didto city hall building management media services and sfgov tv for making this possible. members of the public silence cell phones and electronic devices. speaker cards are at the front for those wishing to speak on any agenda item. speaker cards enable a more

accurate record of public comments. you can return completed speaker cards to me. additionally there is a sign in sheet at the front table for those that would like to be added to our mailing list. we will now take a roll call. commissioner adams? >> here. >> commissioner dooley? >> here. >> commissioner dwight? >> here. >> commissioner o'brien? >> here. >> commissioner ortiz-cartagena? commissioner white? >> here. >> we have a quorum. >> next item. >> item 2, general public comment: allows members of the public to comment generally on matters within the commission's purview, and suggest new agenda items for the commission's future consideration. >> any member want to make a comment to the office of commission of small business that is not on today's agenda? seeing none, public comment is closed. next item. >> item number 3, presentation of a small business commission certificate of honor recognizing the san francisco chamber of commerce small business advisory committee as part of the sbc's "small business recognition program". >> that's you.

>> down here? >> um-hm, wherever you prefer. >> all right, here we go. put on my glasses to read it. okay. this is a certificate of honor to the small business commission -- from the small business commission to the small business advisory council of the san francisco chamber of commerce. on this monday, november 18, 2013, the small business commission is honored to recognize the san francisco chamber of commerce's small business advisory council for its contributions to the vitality of san francisco's small businesses. the small business advisory council has been a welcomed addition to the chamber's organization in an effort to ensure that the small business community has a voice on par with large corporations.

the council's advocacy for small business interests during public policy discussions on significant issues including neighborhood commercial district parking and the family friendly workplace ordinance demonstrates the chamber's commitment to better understanding the needs and concerns of small business. for these reasons the small business commission commends the small business advisory council on a job well done. >> thank you. >> thank you. >> photos. >> photos unless -- i'd just like to say a few comments in terms of -- because i've worked with the small business advisory council through my tenure as the executive director and how invaluable it's been for me to be able to go and present and be a sounding board for me and then also work together with you as we continue to foster and promote our small businesses in san francisco. and umenyiora been doing an excellent job advocating for small businesses.

>> and i'd like to repeat what re jean a said. it's been a pleasure working with you, michelle, leslie, and the chamber. ~ regina i think we all work together as a team. for the same common good, to make san francisco a better place for small businesses, so, i can't thank you enough. >> i'll add this advisory council was kind of just coming into being in my first tenure at the chamber of commerce and i've just rejoined the chamber of commerce board of directors. and i'm really delighted to see how it's developed over the years. and i think it's really gained momentum and it's going to be a great thing going forward for our collaboration. >> let's take a picture.

>> okay, next item, please. >> the next item is item number 4, approval of the october 28, 2013 meeting minutes. this is an action item. >> do we have a motion to approve the minutes of october 28 meeting? >> so moved. >> second. >> all in favor? >> aye. >> any abstain or -- no? okay, next item, please. >> next item is item number 5, discussion and possible action on board of supervisors file no. 130998. we have a staff presentation by

justin true, legislative aide to supervisor david chiu. >> thank you very much. good afternoon, president adams, commissioners, [speaker not understood]. justin true, legislative aide to supervisor david chiu. i introduced this ordinance a little while ago after working with the planning department on t. at the most basic level this ordinance implements state law that took effect earlier this year and is called the cottage food ordinance because we're not selling cottage cheese or anything about cottages. it's about a small operation, small food making operation being allowed to exist in residential areas as an accessory use. the provisions that allow this to exist are defined pretty clearly in state law. the city had some -- has some options in terms of how we're implementing it. this is what the planning department recommends. this item is at the planning commission this thursday. most specifically, the cottage food ordinance that's proposed

allows for the sale -- for the production and sale of certain foodstuffs out of the home in a space up to a third of that space. and the reasons for this are that it provides some more healthier options, helps people supplement their income slightly and pushes us along the path for more sustainable food sources at a small level. supervisor chiu has long been interested in these issues. he carried a urban agricultural legislation in 2011 and looks forward to carrying further ag legislation when additional state law changes in the near future. the legislation also makes two changes related to accessory uses more generally. accessory uses essentially -- the secondary use, aside from whatever the primary and essential use of a particular site s in a residential situation, the accessory use in this instance would be cottage food. the other two general accessory use changes are extending the floor area allowed from quarter to a third.

this is planning department's estimation of what is a more reasonable amount. particularly with cottage food, there was consideration of exempting the kitchen or having half the kitchen count. instead to make it cleaner and easier to enforce they're going with this recommendation of a third, a third of the square footage. and additionally right now, accessory use [speaker not understood] only apply in certain zoning districts. not including, for example, pdr and the planning department's feeling is that these accessories provision should be applied city-wide. so, again, the two changes related to accessory uses are going from one quarter to one-third and making the accessory use guidelines city-wide. i believe aaron star from the planning department is going to be here soon and can also help answer technical questions. we had been in discussions with staff about looking at

expanding these cottage food provisions to other activities. right now this with cottage food we would continue to have the discussions and really appreciate the work of christian and regina with their office and the conversations we've been having. i did want to make one additional detail about the cottage food ordinance. it allows for one person to be hired and to work out of the operation, which is not allowed right now. so, that is one of the specific provisions that's allowed in the ordinance. my understanding is that there have been some discussions at the committee level of the small business commission about the planning department's fee that would be charged to help -- to review the cottage food application. this is really a permit that's going to be approved by the department of public health and would get referred to planning similar to the way that restaurant applications are handled. we understand that concern and really want to do everything we can to keep this streamlined

and easy for cottage food operators to do. and we believe that at this point that one-time fee is understandable from planning's perspective since they're a fee based department to recover the cost. it is important that it is one time and not an ongoing fee, for example, the business license fee registration. we're interested in hearing the commission's thoughts on that item. i'm here for any questions, happy to hear anything that you all have to -- would like to talk about the item. >> commissioners, any comments? commissioner white. >> yes, the $130 zoning fee, why is that required for this cottage food ordinance? >> because there is -- it's a planning -- the cottage food operation is essentially enshrined in the planning code. so, the planning department will get the referral from the department of public health and make sure that it matches what the zoning is. and, so, because planning has an involvement in it, that's

what they've calculated their fee to be. there's not really -- we don't really see an alternative for planning not having that referral. i do expect them to be here soon and they might be able to elaborate a little bit more, but at the most basic level, it's a planning code issue. cottage food is defined in the planning code. planning has to, has to review it. and, so, that's why there's a fee. >> are there any other zoning fees for other home-based businesses in san francisco? >> this would be the first -- this would be the first allowance of something like -- exactly like this out of a -- it's in the planning code to my understanding. i don't know that there's anything comparable, but the planning department does make -- does look at, you know, whether a particular use matches a planning code all the time. there are charges and fees associated with that. so, it's not unprecedented in that sense. it would be very unusual for planning to have to review something and not, and not have

a fee associated with it. >> any other? but if the health department -- so, it does have to go through some type of planning? >> planning just has to -- it gets referred from planning similar to what happens with restaurants now is my understanding. so, they basically look and make sure that -- the health code is looking to make sure it's safe from a health perspective and planning is looking at it to make sure it matches the planning code. there is not a commission review at the planning department which would be a significant additional expense, for example, so that is not being proposed. that's an option, and that would be significantly higher. if you apply for a conditional use or something like that, you're looking at a much higher chart potential fee. so, we're working with the department, the planning department sees this as the most limited involvement that they can have and therefore the lowest fee that they can reasonably charge. >> commissioner ortiz.

>> first of all, i love this, i love this legislation. i think the only question i had in reviewing this is anything to do with cannabis, you know like how there's edibles in the industry, would that -- any legislation or ordinances overlap with this? >> i'd have to look at it, but i don't think this directly involves the ntd regulation is a separate operation. i can clarify that -- >> i'm saying like edibles like a brownie or cookie cottage industry. would they still have to follow the ncd regulations or would this now fall under the cottage industry and they're allowed to sell their products as such? he >> i believe they're still required to follow the ncd regulations but i can confirm and check for you. >> thank you. >> commissioner o'brien. >> so, if i understand, you're talking about making this ordinance effective city-wide?

>> cottage food ordinance is effective city-wide, correct. an accessory use provision would be made across all zoning categories. accessory use requirements would be across all zoning categories. >> so, i'm trying to understand exactly what would the planning department do. i mean, so, they don't have to get an approval from the planning department. if it's an approved activity city-wide, do they? they don't have to check that it's zoned for this or anything like that because it's approved city-wide already. >> there is still a referral at the staff level to make sure that the proposed activity matches what the planning code describes. so, for example, if someone proposed -- had a diagram or drawing and they were using half of the space, the planning department would be the one that says, no, you're only allowed to use a third of the space for the accessory use. and, so, even though the general category is allowed, the planning department staff

will still have a role in making sure that the proposed operation matches the planning code. >> okay, thank you. >> commissioner dwight. >> i guess we need to hear from the planning department because it's not clear what would be -- i mean, i had the same question. if it's allowed everywhere, what exactly do they have to do short of the registration fee, which should be sort of the gate, i would think, you either can register or you can't. so, and i can see where perhaps they have to do a review of whether it meets the space allocation. so, i don't know, but i'd like to know because if all they're doing is rubber stamping it, then i'm not quite sure it should be any more than a registration fee and why actually it should be up at all. >> one argument that i remember the planning department making at one point they made was by having planning review it you're protecting the cottage food operator against future complaints.

for example, again to useedth simplest one, if i'm a neighbor and i don't like the cottage food operation that's happening next door i could say they're using ~ the whole house or whole apartment to create jam. so, if you've already had planning department review the plan, as long as what you're doing matches up with that, then that would protect that operator from the complaint and planning would have a record that they had reviewed it and that sort of thing. >> commissioner dooley. >> as far as our information, no other home based business is required to have this zoning referral. so, i'm just kind of wondering why this one particular home based type of business now has that. >> one important aspect of this is that no other home based business is allowed to hire any additional staff to help with the business. so, and that's one of the items that's -- that we've been

discussing with staff. so, it's actually going beyond for this cottage food category business what's allowed for other home based businesses. again, i want to be very clear that is based on the passage of the state law, that essentially requires us to regulate the cottage food operators. there were options how to go about that. the state says you can't deny an operating permit for. this the planning department is working with us on how to do it. they do have the item before the planning commission on thursday as i mentioned. >> so, does supervisor chiu support this fee? >> supervisor chiu respects the planning department's need to be involved and supports this regulatory structure that includes a fee, so, yes. >> okay. i can tell you that as someone who has taken out quite a few permits over the years that are

very, very expensive, a fee, a very minute amount of the services being offered for that fee being attributal to the part that the planning department takes care of. but the premium to that little bit of the service that they provided for that application is vastly not in proportion to what they provided -- what the fee s. so, the fee for their percentage is quite large and the service that they would provide. i could give you examples of where you wanted to do something as simple as a bathroom remodel and you go in and get a permit for 2 or $3,000 for the permit and the planning department has to weigh in on it and they do a little part of it, but their fee would be a thousand dollars. so, i got to try and get out of the bias mode and treat this objectively.

i know supervisor chiu is pretty objective on stuff like this. that's why i wanted to know what his view on it was. that's why i'd like to hear from the planning department to see what else they would need to do. the idea they could check to see they're doing what they're supposed to be doing as far as the space requirement, that's a fair argument, i think, although, you know, they can also say that, right, on their application and it's going to be up to -- if a neighbor complains, the same result is going to happen. if the neighbor is going to complain regardless with or without this situation with the fee, d-b-i will end up going out there to say you are, or you're not, we have to do an inspection. i think that has to be the case. >> i certainly respect those comments, commissioner o'brien, and i think supervisor chiu would agree that fees throughout the city are often too high and we should do more together to try to lower fees overall.

in this case i think it's an issue of whether or not the health department can interpret the planning code and that's simply not what their role is. so, because this is a planning code provision and it's really about the use, the cotvctiontionvage food use that's in the location, planning is going to have a somewhat -- i think the one reason why -- once we heard these issues from the small business -- from the committee and went back to planning and sort of pushed and had the conversation a little further is because we see this as the absolute minimum involvement that planning could have. ~ cottage again, you could require conditional use for cottage food, for example, as anyone who has gone through the development process knows, conditional use application fee is significantly higher because there is a noticing provision and a public hearing at the commission, and that isn't a route we went on because we want to do everything we can to encourage the cottage food operation. to that end, we think this is

as narrowly tailored from the planning department as we can reasonably expect given that it's a planning code provision. if the commission would like, i can check in on planning department staff and see if they're nearby or what the -- obviously someone could have come up for them, but i can check and see if you would like to hear directly from them. but that's really where we are on it right now. >> commissioner white. >> yes, has there been any outreach in the home based food cottage community in regards to like la cocina or anybody like that? >> we haven't done outreach. we know there is excitement organizing around the state law and we are in touch with the sort of urban ag and sustainable food community in relation to urban ag because there is another state law passed related to urban ag that supervisor chiu is going to

propose local implementation of relatively soon. so, i believe this has come up in those conversations. but i think there is widespread excitement in general in san francisco about this sort of, this sort of cottage food operation. and obviously it's not a full blown business. i don't know, the dollar threshold you're allowed to make each year i believe they start at 35,000 and escalate to 50. so, we're not looking -- it's not the kind of operation -- it's not a full-on sort of -- an operation that's going to have a big impact in a neighborhood, for example, and that's really important because the whole reason that we restrict home base businesses in certain ways is to preserve the residential character of our residential neighborhoods. >> right. was there any negative -- >> i believe this will be discussed particularly at the planning commission, but i believe that there was one neighborhood organization