>> we are joined today by president reilly, vice president clyde, commissioner o'brien, and commissioner kathleen dooley is excused. we have established forum.

item number two, presentation of the small business certificate of honor recognizing mayor gavin newsom for his contributions to the small-business community. >> the mayor could not make it, so we still wanted to publicly recognize him. first, we wanted to congratulate mayor gavin newsom on his election. before he leaves office, the commission is pleased to honor and recognize his work and commitment to small business. the commission appreciates the comprehensive approach to running and governing san francisco. to his focus on improving our schools to public arts, from healthy foods to a healthy environment, from gay marriage

to sunday streets, all of these initiatives have a great benefits to the economy and small business. this evening the small business commission wants to take the time to reflect on a few key initiatives that have helped sustain the diverse economy of san francisco's small business, and that is quite a few. he co-sponsored legislation that -- and he established an economic development unit with the neighborhood initiative and the communities benefit district. we have seen the great results of the neighborhood marketplace initiatives, and it has been a critical program to maintaining

commercial corridors during this economic crisis. in 2007, they created the small business center. the center has over 6000 clients, and for many of them, english is not their first language, and they would not be reaching out for assistance if not for the small business assistance center. he also raise the exemption for the first time in 20 years from 100,000 to 250,000. in response to the economic crisis, they have reactivated the revolving loan fund. they have 20 loans totaling about 400,000, and this year

they have also established the central market loan fund, which is 11.5 million. due to the mayor's leadership, san francisco aggressively developed the stimulus fund and then employed over 4000 san franciscans. they utilize tax credit, resulting in an increase and engaging in traffic. in 2004, there were two biotech companies in the city. today there are 73.

we're hoping to not have a misguided cost. green business has greatly grown and is highly sought after with small businesses. launching the initiative to boost the restaurant industry and reduce the opening cost for restaurant owners. this has been of great economic generator for small businesses, and as a result of leadership, san francisco's small business week is the largest outside of the sea. small business had nearly 3000 purchase of -- outside of washington, d.c.

we look forward to the opportunities to work to improve the business climate for small businesses at the state level. we greatly appreciate his attention and focus on the importance of small businesses to our economy. thank you. next item please. >> item 3 is the approval of the 2010 meeting minutes, explanatory document of the draft. >> i moved. those in favor? >> aye. >> next item. >> approval of the 2004 minutes.

was that commissioner o'brien? >> those in favor? >> aye. >> #5, the general public comment. this allows members of the public to comment generally and to suggest new items for future consideration. >> public comment? public comment is clothes. >> item 6, discretion to make a recommendation to the board of supervisors on file #10531. this ordinance is to establish

the local hiring policy for requirements requiring contractors to perform work hours using residents. they succeed requirements. mandating liquidation against contractors who fail to make minimal requirements and administrative procedures in support of the policy. we have the response followed by the task force responds along with the file and the legislative digest.

also, this item was heard at the legislative and policy committee as noted in the package and was recognized in the provided presentation. the you want to introduce the discussion? i believe we have a representative to discuss the committee's physician -- position. >> i would like to have them provide a portion and any additional updates to legislation at this particular time. for the commissioners, the committee heard the matter. on principle, i am very supportive of doing what we can to increase jobs, because jobs are an important economic

indicator. they did provide some unique situations in relationship and to how they may be affected, and the recommendation was to do a phased in in relationship with this particular legislation. i think there might be other things, but i would like to have him present, because they have looked at the affect of this ordinance quite extensively. >> i managed the local business enterprise program. we support the legislation and

the small business commission and support the idea of the legislation. the idea of san francisco working is important. there were a couple of concerns with the different legislation's that would be implemented, so we have been working with supervisor of a los -- avalos's office to express concerns we have relating to small businesses in san francisco. as a precursor and sharing some of our concerns, i will provide an overview as best as i can. i will provide you with that overview and give you an update as to where we are at right now.

the proposed legislation, and i am sorry if it is stirring up a bit small -- the city currently has legislation that if you are a contractor trying to do business with the city and you are working on public works or a construction contract that you must make a good-faith effort to secure at least 50% of your employees to be a san francisco resident. the community has generally disliked the good faith effort and provisions and have for years been advocating as a mandate, so that is really what this ordinance does. it goes to more of a mandate.

it grows to 20% and would have to be local, and over seven years it would be wrapping up to over 50%. this would apply to all city projects. there is an exemption for residents, and the reason is because of constitutional reasons, the city or the state cannot navarro -- cannot bar out of state workers from coming in and benefiting from out of state workers. for closer proximity for someone coming from new york and new

richard c. and things like that, i do not think it would not -- from new york and new jersey and things like that, i do not think it would be too much of a problem, but that provision was put in for constitutional reasons, and it seems to have withstood constitutional scrutiny of the same model that is currently in place for cleveland, ohio, and they have the same exception for out of state and for residents. the one difference is that rather than providing for 50% across the project, it is allowing a contractor to balance for plumbers and different

trades involved. this actually mandates the requirements across each trade. residents going forward. hopefully, it will build across a broad range. the legislation also provides incentives, so there will be incentives bake in to the terms of the contract, and it will depend upon the amount they exceed and the goal for each of

those trades. lastly, if the contractors do not meet those goals, one of three things will happen. one will be penalties that will basically translates into damages, and that would create a sense so the contractor can use to offset so if you have a job in vauquelin but are using san francisco residence, you may be able to count the to your shortfall in san francisco, and you could bring in contractors as apprentices to offset your infrastructure. that is the basic framework for legislation. where we do have concerns is the

way it would be applied to understanding the nuances of the legislation and specifically the penalty is and off ramps often referred to do. the first concern is the possible costs associated by any small business trying to manage zero local higher. if you are a small business, we see you have less overhead. you do not have the event it as a payroll person. the person is also the payroll person, and that same person does a lot.

the thing we are projecting his that there are a lot of costs that could easily be involved if you are a small business, and we are concerned that would make it difficult to manage without additional red tape. the implication is if they do not do it properly, there could been liquidated and bandages. if you do not reach the local higher numbers, you may be able to offset that. we are concerned that those are not viable solutions. did the first one being that if you are working on a non-covered project, you could use those to offset any shortfall.

if you are a small business and you are struggling, you probably do not have those contracts outside of the city. those non-covered projects only apply if you are paying the wage, and typically if you are a small business, you may have one or two jobs during renovation, but if you are doing this, that same person has probably renovated a kitchen, and you are probably not pain a living wage on the job, because the bid would be too high. they will not be able to be used because the bidding structure is not going to make sense to them.

that is the one concern we have that there is a viable off round -- ramp that is not there for the current legislation. the current legislation does not really provide for an incentive to promote for small business. everyone agrees they tend to hire locally. they have done a study that was somewhat informal, and we found corp. people tend to be local. you have your main group of people, and they are often san

francisco residence. our concern is once they do that, they are having to compete to bring in local businesses. it will probably be a lot less attractive to a potential san francisco resident, because of the packages that will likely be offered to a larger company. based on those concerns, they have proposed several solutions. the first thing we have proposed is the implementation.

they do not want an exemption that provides a leg up on a feeding. they agree local businesses have every of legislation, but we are not too sure what the impact this would have on local businesses and concerns. what is being proposed is to give us some time to evaluate what impact this will have on local businesses. if we find out they are using this as an unfair advantage,

then you take it away. if we find they can negate the impact on local businesses, they can give it some time to figure it out. i do not think we have a clear indication of what impact it will have. i am just as concerned. the second thing we are proposing is because of the anecdotal belief, we have done some studies showing businesses to hire locally, and they provide incentives to actually promote the use of small local businesses in the contract