supervisor avalos: we will close public comment. that is what i think we would like to do. you can walk us through a mechanism for reporting back, a process, the best way that could be done? >> sure. the think the best thing in this instance would be to put it in a resolution so it would be clear that the committee is expecting a report that identifies the dollar value of each contractor on and annual basis. supervisor mirkarimi: and so after an activation of when that 12% kicks in, at least a

report back. >> well, i think the department should report any changes to the contract amounts each year. so some contracts may not have change at all, and some may have change. to the extent there is any challenge, that is reported to the board or the committee, i think that would provide you with the information as to there is either growth or additional service or other kinds of changes that have been implemented by the department consistent with their appropriation. supervisor mirkarimi: but through the chair. i'm wondering of the timing of when this committee is in the throes of budget delibyations, if there is any information pertinent as it might instruct us, even during the intensified process of add-backs, that type of reporting would be much more useful to us. >> that would be the exact time

because by the end of the fiscal year, the department would know which contracts had been increased over the course of that year. it would be very easy for the department to provide the committee with information by agency, the original amount, the year ending total and the expected dollar amount for the new fiscal year. then that can be considered by the committee during the budget . supervisor avalos: it makes some sense if we are talking about -- if we are making decisions as a committee around our restorations and add-backs to have that information. that would be most pertinent for that discussion. >> yes. supervisor mirkarimi: yes. >> i could help with the department and the clerks to put some language in the resolution so that there is certainty as to what the reporting requirement is and when it curse. supervisor mirkarimi: good. thank you. supervisor avalos: ok.

so we can make that amendment. colleagues, i think that would be -- any other amendment we would want to add to that? i don't think there are. supervisor mirkarimi: i would motion to support this,. just forward i want to say that we then are prefacing our support of this based on a trailing resolution that clarifies a report process on how the 12% contingency fee would then be communicated back to this committee and the board of supervisors. supervisor avalos: we also want to make an amendment -- make the resolution retroactive, is that correct? it already is? supervisor mirkarimi: it is implied. supervisor avalos: colleagues, based on the amendment, can we approve? >> mr. chairman, can i ask if

that includes the first recommendation to specify in this legislation, the contractors, amounts and types of services being provided? the first recommendation, not the $602 million, the entire amount that the committee is approving, but to specify. there is no specificity on these contracts. supervisor avalos: can we add that to the resolution? >> yes. supervisor avalos: that would be part b of that recommendation. colleagues, we can take those amendments without objection? ok. very good. would you call items five and six? >> item number 5, order north korean authorizing department of emergency management on behalf of the city and county of france, serving the primary grantee for the regional

catastrophic prepared ns grant programs funds in the amount of $3,470,000 from the california department of homeland security and providing matching funds. so reflect one gravent funded position. item number 6. ordinance authorizing the department of emergency management on behalf of the city and county of france for the combined bay area urban area for a grant in the amount of $34,262,131 from the united states tep of homeland

security, and amend ordinance number 11-10 to reflect the addition of two grant-funded positions. supervisor mirkarimi: the department of emergency management. >> we have before you two regional homeland security grants that are managed by the way area. they are both before you because san francisco is the fiscal agent for it. that means the federal government cuts the checks for the regional grants, and we disburse it to the region. these are annual grants the we bring them before you every year. the first grant is $3.5 million. it is too the entire bay area over three years. approximately $500,000 of that will come to san francisco. the san francisco money provides continuing funding for two planners, emergency

management and one grant manager. there is one new position, which is a regional low justics planner four, and they will be doing planning for the entire region. they will sit at emergency management. the rest of the grant funding for the region does things like long-term recovery planning, transportation plans, life lines, utilities, and designing and runs exercises to run the plans. happy to answer any questions you have on kcra 3 weather plus five-day forecast. supervisor mirkarimi: mr. chair? supervisor avalos: no questions. ok. thank you. that was on both items? >> that was item 5. i would be happy to it inwith item six. supervisor mirkarimi: both were called. >> that is the -- another one

of those grans we are the fiscal agents for. it was for $34 million. there no match. this grant is more specifically targeted on terrorism and law enforcement. out of the $34 million, san francisco is going to get about $9.5 million. that funding is allocated for things like the police department, come stat, crime lab. there is money for medical analysis equipment in case we need to identify path generals like anthrax, things for the fire department. there is money for disaster service workers and things like that. the grant will fund two deprant management positions at the department of emergency management that we are going to detail. these positions used to be work-ordered from the controller's office, and we were advised to fund it direct l from this grant. additional money goes for equipment planning, training for four courses, exercises and

the like. i would be happy to answer questions about any of the projects. supervisor mirkarimi: just one. what is it in terms of the allegation to the crime lab? >> the amount? >> yes. >> let me look that up. supervisor mirkarimi: and specifically to which purpose in the crime lab? >> let me find that for you. it is in the equipment inventory and lab development. you asked the amount, and i believe it is $334,000. it is focus on terrorism, enabling us to recognize things that are biological hazards or explosive hazards, giving our crime lab the ability to do that for terrorism prevention services. supervisor mirkarimi: and this is a grant renewal, correct? >> that is correct. san francisco has been getting pony for though grant since about 2003. supervisor mirkarimi: i am

aware of that. what happens since we, touch woodall, have not had a terrorism incident or biological incident with the money that has been sent to the crime lab before for these specific purposes? >> i am sorry, supervisor. what i am clear on your question. supervisor mirkarimi: unused funltsdz in terms of being -- funds in terms of it being applied to the crime lab. how is that then reconciled? since we have not had an experience like that, but we are renewing a grant for funds allocated but that don't, fortunately, have to bed used. where are those funds? >> i think i understand your question. i am not sure that in the past that we have had funding to the crime lab for that kind of analysis. i would have to be back and check previous dwrants to see if we have had that before. when we developed these

allegations, the police department and departments submit their requests for what their requirements are each year. they are not necessarily the same for each year. the chief submitted the priorities for his department. i am not sure if we have done funding for a project like this in previous years. i would have to check and get back to you. supervisor mirkarimi: this is labeled as a renewal, so it is a natural question to ask. before renewing it for a grant of moneys that have been allocated for those specific needs in the past, and those needs have not been allocated, luckily, because we are trying to be preventative, is there a way to find out if this has happened? >> i would be happy to check with the police department and ask them the way they have spent their funds in the past, and if they have spent it on crime lab purposes in the past. the grant is a renewal, but the projects funded change year to year depending on what the

priorities are and what the grant guidelines are. the department of homeland security changes every year. two years ago they decided that 25% of the grant had to go to law enforcement. we had never had to do that before. was of that we had to we prioritize more funding for things requested by the chief and the sheriff. they are going more than in the past because that is what we are told to do. supervisor mirkarimi: through the chair, is it possible to get more clarity on that? not now, but in the future. >> do you mean before this goes to the board of supervisors? supervisor mirkarimi: no. any time. obviously the crime lab has been of import to the board of supervisors and the ski government. allocation of funding is important to us and how these funds are being applied. >> sure. supervisor mirkarimi: a renewal, if it is a renewal, i would like to know exactly if that is the case, or is this

new for this specific slice of this grant. >> absolutely. we can confirm with the department and get back to you in a few days. supervisor mirkarimi: appreciate that. thank you. >> sure, no problem. supervisor avalos: thank you for your presentation. we will go to public comment for items five and six. items five and six? >> walter paulson. all i am saying is give peace a chance. all i am saying is give item six a grant. all i am saying is gives peace a chance. all i am saying is please give money to item six grant.

supervisor avalos: if there are no other members of the public who would comment, we close public comment on items five and six. we will move those forth with recommendation and take that without objection. to the full board with remuneration. i need to check with my legislative staff. it wil supervisor avalos: ok, wore back in session. if members of the audience could go to a whisper, that would be great. thank you. would you please call item number seven? >> item number seven. order nancy amending the san francisco administrative code, chap six, public works contracting policies and prose,

subsection 6.22 g to establish a local hiring policy for city public works or improvement projects are choirs contractors and their subcontractors to perform a certain percentage of project work hours using san francisco residents. making find things in support of the policy, authorizing incentives for contractors who exceed local hiring requirement s, mandating assessment of liquidateded damages, and establishing monday torg enforcement and administrative procedures in support of the policy. supervisor avalos: thank you, mr. young. colleagues, if you can bear with me on the introduction. this is a very complex piece of legislation. i want to make sure i cover a lot of base ways. i'm reading from my talking points here. colleagues, for the past several months i have sat down with employers who perform

public work, met with unemployed construction workers who live in san francisco, convened meetings with advocates and community leaders to hear concerns, met with individual building trade unions, minority and small local contractors, read all the published reports on local hire, looked at what other jurisdictions like cleveland are doing to promote construction opportunities for their residents, spent time with our city attorney reviewing all the legal cases to support a mandatory program and work with the mayor's office and the contracting department to try and fashion a workable mandatory local hire policy, which is what we have here today. this process i have said a couple of times now is like threading the eye of a needle. it is very, very complicated negotiating with many of the stakeholders and hearing between the lines and directly what people's concerns are. the legislation we have here is

really above anything else, is changing what has traditionally been the policy around construction trade hiring in san francisco, going from good faith efforts to a mandatory program. the legislation before you is an effort to address multiple issues. one, combat san francisco's high unemployment rate, which is hovering near 10%. in other words, there are about 44,500 people who are out of work. if you look specifically at the construction industry, it is closer to 40% unemployment according to the building trades and certain neighborhoods in our city actually have a higher employment rate and chronic unemployment. since the passage of prop 209 that eliminateded affirmative action programs, the city has been without a local hire policy. our policy in chapter 6.22 of the administrative code was never revised, and the city

attorney recommended that local hire to be removed from all local contracts the city enters into. over the last year, tension at construction sites here in the city have risen to the point where contractors have been very alarmed about work stoppages and labor unrest. even as u -- at the hospital project in the bay area, it has experienced work stoppage. in these economic times, the city finds itself in the unique position of being the single largest if you saider of construction work. the city will spend nearedly $27 billion over the next 10 years. the city needs to leverage its funding position to ensure our residents benefit from this investment from the start. the issue of local hire is not new. the legislation should not come as a surprise to anyone.

we have been meeting and talking with multiple stakeholders for a long time, and i want to thank the many unions, builders, community advocates and departments that have assisted in crafting the legislation and its amendments. i particularly want to thank guillermoo rodriguez, the office of work force development, others in my office, all of whom will be working ash the clock for months to make this legislation work. in fact, it has been, for my office, the top priority that we have worked on because we want to make sure we get it right as we are threading this needle. first let me address some of the key amendments we made to enhance the legislation. to address the ideas of minority and small local small contractors that they have raised. the legislation increases the

threshold where the policy would apply from $100,000 to $400,000 to be consistent with the micro set-aside program we approved earlier this year. we made sure that large contractors can use local business enterprises to meet their mandatory staffing goals, which further support the use of our local business enterprise program. our l.b.'s have a greater ability because they are based locally to hire local people. recognizing challenges starting with 30% mandatory by trade and escalating to 50% in two years, we amended the legislation after reviewing the luster report and reviewing data to start at 25% and escalating to 50% over six years. we feel this is workable based on all the data we have reviewed. asking people how to change how they do business with the

cities is difficult. we went ahead and added a periodic review in year three where the mandatory level would freeze where the office of economic work fork and the controller's office do an assessment of the program to ensuring it working. they will do market analysis and extend the period if necessary. they made revise the escalation percentage and time to get to 50%. if for example the private sector economy changes and the demand for workers increases, then it may not be plausible to continue to escalate at the same percentage level. equally, the office of economic and work force development and the controller will also evaluate the innocentive program, since the idea is to get contractors to assist in building a strong pool of highly qualified and experienced local residents in the construction industry, which will have a net positive impact on the local economy.

we also provided contractors with more opportunities to help the city grow our pipeline and pool our qualified construction workers by giving contractors pathways to avoid liquidateded damages. in the amended version, contractors have multiple options, including responsoring apresentses. giving them extra time to work off the hours they fell shors, and making a way for contractors to bank ours and credits so enauthor san francisco residents are employed. this way we are looking at a workforce development system that is not about a sickle job. the data suggests there are specialty trades like marine pile drivers or underwater welders where the pool of local workers is so small or nonexistent that have an exemption for these types of

trades are needed. colleagues, i hope you can see that the process i have used to present this legislation was one of collaboration and meeting directly with shareholders. to conclude, i want to spend a few moments on the cost this legislation will have. we have both the budget analyst 's report and ted from the office of economic impact reports on the costs they anticipate this legislation will generate. i want to admit, yes, the lester munson slation before you will cost money. if we want to do the cheapest thing possible, then we do nothing at all, and we have to live with the consequences. but i would say what we had to live with recently in terms of high unemployment and the misery and harm that does to our communities is not something that is tolerable here in san francisco. i can't ignore the 44,500 unemployed people. this legislation will not help all of them, but it is a start. the city will spend nearly $30

billion in public works projects over the next several years, and residents should have the opportunity to work on these projects. in reviewing mr. egan's report, i feel his analysis missed some company points. it is based on extreme conditions and does not take into account key provisions in the legislation. for example, given the slow ramp-up of 20% contract contractors in the out there, it clearly gives them an affirm pool of workers to meet the levens in the first few years. many of these workers will be able to be absorbed very easily because of high unemployment rates and the work that will be performed that will be affirm because of projects moving forward. i did not see how mr. egan's report factored in pathways to

avoid liquidated damages. the report suggests that contractors will flagrantly disobey their contract and just jack up prizes. i don't like that is going to be the case given the flexibility we have built in the legislation. the report did not factor in the review period, which is a recommendation we took, where in year three everything comes to a stop while we do another market study to ensure supply is in place to meet demand. the review period goes further and says if the supply period is not fast enough to people tacts, then the period needs to be changed. the report assumes the worst case. the report did not analyze the cost of doing nothing. i have jokingly said the cheapest thing to do is nothing, but that is far from the truth. mr. egan does speak to the

positive economic benefits this legislation will have on the economy, but it is not as pronounced as it should be. probably the most important economic effect of local hire on our economy is the spending effect. san francisco residents employed here will spend more of their wages and salary here compared to commuters from bay area communities, whose paychecks leave with them when they go back to their own communities. the greater level of spending will multiply through our economy after hand a greater impact on total spending. it is the worker who goes home and goes to third street are the fill more, buys groceries and shoes and clothes for the family, and that means the money will stay here in the community, be recycled back and have multiple sources of benefit for people in our communities. also, for example, the red level spending will multiply

throughout the economy and have a greater impact on total spending and employment. according to dr. -- the professor of economics at san diego state and the team that completed the labor market analysis for the city, it is around 1.51. at the metropolitan level, it is around 1.73. the difference between the two multipliers can be interpreted as the combined net effect of spending on local hire. in other words, it is the economic benefit to san francisco's economy of hiring a local resident for a local construction job. for example, for a construction job that pays a gross salary of $50 thousand. if if he would bia local residents, it would generate

$39,000 more spending in is spending than by someone else in the bay area. another effect is the effect on commuting. the labor market analysis commissioned by the city revealed that 59% of construction jobs in the city are workers who live in outlying bay area counsel and commute to construction jobs? the city. researchers have estimated that the environmental, congestion and other social costs of driving can be as high as 32 cents a mile. to put this into perspective, if a construction job were filed by a san francisco ress department who drive five miles a day to work, rather than a mill gray resident to drove 30 minutes, the transportation cost could be several hundred dollars. i am not saying this legislation will not cost money. i am saying that the costs of doing nothing far out weigh the

cost of otherwise. we support our local businesses. that is why we authorize a 10% local discount for local businesses in public contracts. that is an added cost and the right thing to do. we requires contract crors to provide domestic partner benefits, health care and ensure that contractors are using green products to protect our environment. all these things cost money and is the right thing to do more. this employs more people on construction projects and leverage more money to our programs. local high has ancillary benefits in our economy. i want to add that there is a real hunger out there in san francisco. there is a real hunger, and it is not a recent hunger. it is a hunger around for decades, people wanting to have greater access, wanting to have