hiring in san francisco. after great deliberation and fanfare, advanced and led by supervisor avalos, on mandatory local hiring, questions remain about whether the other areas of the city that we can do to buttress mandatory local hiring. for example, in the mandatary local hiring legislation that did not pass a couple months ago, it affects for the most part public utilities commission project and airport projects. it does not affect redevelopment projects or part -- port projects. when you subtract the possibilities of where we could potentially innovate and legislate our requirement of those who want to do business and the city, it would extend

into the hundreds of thousands potential of jobs for the people of san francisco. so this hearing is designed as informational, but it is to learn for the next steps if we want to legislate for those opportunities are -- where those opportunities are in the public- sector side and the private side, that would be able to influence and compile those companies, businesses, and contracts that should reflect a strong, binding local hiring goal. i have asked a number of the principal players within the city family to help participate in this discussion that they have been absolutely essential in moving forward recent legislation with mandatory local hiring. several years earlier, i had

commissioned an audit through the comptroller and a budget analyst, two different documents on reforming how workforce is done in san francisco. we have learned through the audit that the city spends upward of $55 million a year toward workforce endeavors and that there has been little accountability built in between the nine different city departments who were responsible for administering that sun -- that some of money. some departments are doing a better job than others. the net effect was that we were not putting many san franciscans to work or getting them trained in a way that one would expect for that investment that was routine for the city on workforce. the aftermath of that lead into legislation that helped reform

how we spend some of those dollars to try to synthesize the tens of millions that would go into work force placement and training of economic and weekend work force development. that happened about three years ago. the idea was to help take some dollars out of departments that were not subordinate to the board of supervisors and try to put those dollars and funnel it back into oewd. it has been under the supervision of rhonda simmons, we will hear from. some departments have been very cooperative and letting those dollars go. others have not. this is an evolutionary process in us trying to make sure that we are getting the best return for our investment from all the city departments tasked and

funded with work force. first source was something the city used to stand by in terms of making sure that those who contract with san francisco and public contracts are doing their best to hire locally. this is a predecessor to mandatory local hiring. it was not under oewd, but was an island in itself. the people who had run that had left the city. it was without the kind of leadership that would modernize its approach. we legislated that first source would be put under the rubric of oewd. now, most everything we have been leading toward in terms of synthesizing work force dollars, which is still in play and evolving -- first source, which was never under oewd before, and

the question of how weak influence legislatively both the public and private sector on their compliance with our local hiring. that would also go under oewd. it is a full-frontal strategy try to make sure the investments we make every single year to our budget, and grants brought in from state and federal sources, are used in a way that they are held accountable. we have seen since the birth of various legislative strategies of the last three years the growth of one-stop job training and placement centers in the city. up until three years ago, there had only been one on mission, and the edd office, which is really state-run. try to include western edition and other areas throughout the city and witness this infusion of satellites from city hall to

try to get people engaged in a way that they understand what is eligible to them, available to them, and how they can best take use of the resources that we provide. that was always something -- the city had plenty of resources. they were not reaching out in ways beyond what was becoming more commonplace or well-known, like city build, which is a success in its own right. people know of it much more. other programs that people were less familiar with or are beginning to become more familiar with because of these approachable satellites try to engage our citizenry and who are looking for jobs insistence -- job assistance. i would not be surprised if what emerges from this is the next round of legislation that begins

to shore up where mandatory local hiring is looking for the enlistment the we have not been able to bring in yet. if i could, i would like to bring upper n -- bring up naiomi kelly and rhonda simmons. >> thank you, supervisor. i hope you're feeling better. i can hear it in your voice. i am the deputy city administrator and city purchaser. i have been asked by interim mayor lee to help facilitate the rollout of the local hire ordinance that expert primarily focused on construction. i am sure you have heard it is one of mayor lee's top five priorities. he has constantly said he does not think that local hire should

just be on the backs of the construction industry. it should be more than that. we welcome this hearing, looking forward to what comes out of it, and looking forward to the presentation by phonda -- rhonda simmons. the current ordinance that was adopted by the board of supervisors in december goes into effect on march 25. we have a tall order in front of us. i am merely the facilitator, but the folks who are implementing that are rhonda and guilliermo. we have a tall order in front of us. although we will be ready by march 25 to make sure all our contract documents are ready to go live pop -- live, it will take a year for us to make sure it is rolled out in an efficient way to make sure people can

benefit from this ordinance and to make sure we provide predictability within the contracting process so we get good bids and hire locally. i am looking forward to this hearing, and i in here to answer any questions. supervisor mirkarimi: i am fine for now, and thank you to mayor lee. if i could bring up ms. simmons? >> good afternoon. rhonda simmons, director of work-force development. i am going to kick the presentation off and then defer to my colleague, guilliermo, to get into more detail about what first source is and is not. i will start with the high-level view of what we have been doing around first source. then we can get into questions and answers.

just to talk a little bit about the history of first source, because it is actually an interesting history of how we got started with first source -- if you can remember back that far, in 98, we were in a very different economy, a very different climate. we were, at the federal level, in half -- in some historic changes around welfare reform. a lot of cities and counties across the country were looking at ways to integrate the segment of the population that had not really been engaged in our economic dynamics.

98 was very different in terms of economics and what was happening in the workforce. first source was enacted in that kind of a climate. it was enacted initially around in the use or permanent jobs -- end use or permanent jobs coming out of our calwork county welfare system. it was focused on trying to integrate that population into the workforce, having them take advantage of what was going on in the economy than. the also wanted to integrate it with a training component and make sure folks had the property -- the proper training they need to access those jobs. we were in the midst of the dotcom boom and all of that. it was a very different climate at that time. the way it works on a high

level -- three areas of how we engage employers around first source. public-private employers become subject to the ordinance when they enter into a contract with the city. you see the threshold. these include contracts and grants through moh. the threshold is $350,000, or $50,000 in services. so not so much development related, but in other sorts of services. we have had some amendments to the ordinance over the last few years that supervisor mirkarimi put forth. private development is subject to first source. it has a commercial space, 25,000 square feet of the floor area. we have a number of some of our private developments that are

subjected to this. we just were in meetings with fresh and easy last week, which is opening a number of stores. that is a company that would meet that kind of a threshold, one example. then city leases. all city leases of property require some sort of a first source participation. the way we do it is on the front and in terms of meeting with these developers and getting them engaged in what first source can do. my office is the office that sort of access as a -- acts as a supplier of job-seekers working toward employment, and construction opportunities they may have from projects through city build. that is a high-level view. as i said, we did a number of changes to try to clean the ordinance up and make it more user-friendly, if you will.

easier to read for developers and contractors to comply. i am good to turn it over to guilliermo to walk through that level of detail, and we will talk a little more about specific projects of note. some of the mark in your district, some of them outside. >> guillermo rodriguez, office of economic and work-force development. to continue the conversation around first source, looking at opportunities to hire more san franciscans in areas other than just public works construction projects. the legislation overtime has changed. -- over time has changed. if i could have the power point back up. as she indicated, the legislation was enacted in 88 in

response to the welfare reform act. we have had a couple of amendments since then. we have expanded to cover more public and private projects, to include not just construction, but training positions and professional services on the private side. supervisor mirkarimi carry the legislation that gave first source at home. it originally set in health and human services organization, and then was centralized under oewd. we also expanded the definition of economically disadvantaged to capture additional communities and individuals san franciscans with different types of barriers to employment, to ensure we were reaching out to those communities in san francisco that traditionally had not been able to access opportunities to gain meaningful employment and build careers here in san

francisco. we expanded that definition. the other items that we have done is clarified again what new hire and entry-level means. often, with contractors who are subject to first source, there was a constant debate between city and project sponsors are around, "i have no new employees. i am running my own employees in. i have no entry-level positions." we became clear from a city perspective and administrative point of view the difference between definitions of these to ensure there would be opportunities for san francisco residents seeking opportunities. you will recall the legislation also have a sunset provision. after 10 years, that sunset provision was lifted so that first source would continue. the other item that was changed,

if you may recall -- the board of supervisors and the mayor, in the last legislative section, past coordinates amending our planning code to expedite some of our projects that have already been approved. but for situations of financing, they were yet to begin construction. one of the changes the board required in that aspect was a requirement that this was an ability for us to make sure projects did not slip by and oewd did not know there would be subject to first source. the department of building inspection cannot issue a building permit to the contractor unless there is a signed first source agreement. this is a great way to insure product and not aware of is

subject -- are subject to first source. as the first source hiring transitioned over to oewd, the goal was to link the services that oewd was providing in terms of training and one-stop operations throughout san francisco clients looking for employment. in this process, we looked at three different phases of work. given that city buildings already in existence, it was easy to transition all the construction contract from hsa to city build. we indicated that in our overall program. with respect to the permanent jobs, we have fully transitioned all of our and use -- end use construction program into a larger work force system, focusing on one-stop career centers and sector-training academies to place san francisco

residents with barriers to employment into training they need to be successful. phase three it is really getting our tracking and monitoring system together. on the construction side, we use the city's online certified payroll as a means to track and monitor how our private first source projects are going. on the and you side - end use side, we are using our public matching system online at all our operations are connected to. we are tracking the connection of a first source residents to protect in the capacity. phase four, larger steps we are examining to increase opportunities that exist. one is in proving our tracking and compliance. at the moment, it is a voluntary program. focusing more on professional

services, something we have had conversations about but have not put programs in place to take advantage of significant dollars being spent in san francisco. professional services, architects, engineers, construction management -- related opportunities with development. then expanding and targeting training to other sectors. as we look at san francisco's economy and look at what employers are coming to san francisco and looking for, and try to make sure we have appropriate training programs to match those needs. i want to talk a few success stories and examples of how first source has played out. the first one is a lowe's home improvement project. this was a first source agreement that was required as part of the entitlement of that program, which came out of the planning commission. on the construction side of the building, we were successful in having over 44% of the total work hours performed by san

francisco residents. 22% of that was from bayview hunters point. the end use jobs, the folks that have your-run jobs inside the building -- year-round jobs inside the building -- 115 residents from the surrounding area are actually employed. that was a very successful partnership between the employer, the city and young community developers we worked with. i wanted to give you a sense of one example. the other, mayor's office of housing. those are grants the come to this board for approval to develop. in that case, we make those grants subject to first source. here is 220 golden gate ymca, started on november 2010. because we have a good program in place, we are seeing a

significant increase in san francisco residents working on this, which represent 48% of total workforce hours. we are doing this out of first source to give you an idea of how that grant-funded project is connected to first source. the last two, i wanted to give you a sense of what is going on with bae systems, which is on port property. because there is a lease, we have the opportunity to develop first source. it is a ship repair facility. the cruise ship that got stranded of the gulf of mexico got repaired here in san francisco. we have developed a great program in getting some of our city build a graduate to go out and work at bae systems. we identified significant skills that are required to do ship repair work. we have developed a joint partnership to train more san

franciscans so they can become successful in gaining not work. the last item, as rhonda simmons mentioned, we have fresh and easy coming to san francisco with two stores. one is opening in the bay view, and one out in the richmond district. because of the size of the square footage, they are subject to first source. working with that employer, we're trying to alleviate their concerns. we will not ask them to hire unqualified individuals. whatever their qualifications are, our network of community- based organizations match residents with an employer. if you look at our successes to date, employers are truly understanding it is a great service that san francisco offers them. we want to continue the partnership with employers to increase the number of san

francisco residents on non- public work projects. with that, i would be happy to answer any questions. >> i would like to ask a couple of questions. what is the difference between first source and the public works construction ordnance? they are different creatures. there may be some overlap. i do not think a lot of people understand how these different strategies are supposed to approach different audiences and populations. >> first source is looking at all private employment and contracts for the city. construction is not the only opportunity where the system can

be developed to increase the number of sentences the residents. first source is a voluntary program, good faith. the requirement is 50% of new hires were new jobs created because of the project, the city has the right of first refusal. we get to give an employer a list of qualified residents for those jobs before they advertise those in the larger public market. if i am an employer coming to san francisco, first source is a would come to the city and say i have 200 jobs. the city has the right to help the staff those. if you give me qualified san francisco residents, if not, i will go through normal channels and recruit individuals to perform the work.

first source gives the city an opportunity to present our candidates for employment before the general public has a chance for the jobs. it is good faith. it is still up to the employer to make that decision. the chapter 6 public contracting changes made with respect to mandatory local hiring, that is for all public- works projects, just construction. it does not include public services. it is just construction. we included a mandatory staff in requirement rather than the good faith program we had in the past. those are some of the fundamental differences. the mandatory program is just for construction. private first source is for construction and in use -- end use jobs. it is designed to provide opportunities for economically

disadvantaged residents. >> one of the words you describedused in describing firt source was good faith and voluntary. it does not compel the way that mandatory local hiring does for public works construction. what would be some ways for us to strengthen first source if there is a way to strengthen it at all? >> one of the changes the board enacted in looking at the planning code and building code is that on many occasions, there were many projects that came to the city and the developed. it was after the fact noticed that construction had already started or hiring decisions were already made on private projects. we did not have a good effective

system at capturing all of the opportunities that existed. the change the board made with respect to making it a requirement before issuing a permit for construction or occupancy, there has to be signed first source agreement. that huge loophole that existed in terms of having no information was closed. now it is about managing all of those kinds of projects to ensure the city has the necessary infrastructure in place to take advantage of many more opportunities and linking that with our overall one-stop system and work force delivery system. supervisor avalos: how do you enforce something that is good faith and get requiring the contractor to interface with the city?

oewd is saddled with the responsibility of making sure that due diligence is done. quite often, it is not. >> it is due diligence and the enforcement mechanisms are not as prevalent in first source as in the mandatory program. first source does speak of liquidated damages. it is part of the overall programming contract. it is not something that has the teeth of enforcement that other ordinances on local hiring have. supervisor avalos: let's bring up contemporary examples. we just secured the rights to the america's cup. one would think that mandatory local hiring would help us ensure that the notion of the america's cup would secure in local