businesses, and he asked for some enlightenment about the excluded areas and westportal was one of them. maybe i can give him enlightenment there. a lot of the regulations, especially ours for our n.c.d., were created in like 1980 and that was 30 years ago, and the entertainment category was very, very in conflict and it had no subcategories and at this point westportal would still object to the much larger regulations for entertainment, but now that you have a subcategory that's the limited live performances, westportal would be in favor of that and if that tier existed at the time that our n.c.d.'s were created, we would have asked that those be included. really, to exclude them, and i know to wait to say we're going

to do this down the road, is putting areas like westportal at a distinct economic disadvantage, waiting for two years or a year or two for these to come about while everyone else is having the limited performances makes it very, very difficult for our businesses to compete. i mean, you know, you can go to one place and have it and another area that's very, very close by not have it, it puts us at a real distinct disadvantage. we're sort of a sleepy area, you know, westportal basically now shuts down at 9:00 or 10:00 and this would give us an opportunity to get more people in, to get younger people in with disposable income and really help westportal stay on the map, so i'd like for you to consider that. president o'brien: thank you. next speaker. >> good evening, commissioners,

rob black from the golden globe restaurant association here to represent our nearly 1,000 member locations throughout the city and the bay area. i want to start off with saying how excited we are with the legislation and supportive of the supervisor's efforts and really want to applaud that because he's shown great leadership in an area that really will make a big difference for local businesses, and for residents, quite frankly. this will enhance the experience of going out, it will make our neighborhoods more vibrant, more exciting, and the dining experience more exciting, so we're very supportive of that. the only comment that i would make is reiterating what was said by the previous speaker, we would urge that this be citywide. we think there are many businesses, whether westportal or south of market, that would really benefit from this activity. as we were discussing -- as the commission was discussing, this is a tourist-driven town in many ways as far as economic activities. we had 16 million tourists come to san francisco last year.

50% of those tourists said they came to san francisco, the number one reason was to eat. that's eight million people coming here to eat. that's fantastic, but it underscores the importance of the industry we're talking about and making it more exciting especially around that convention area, as well, in the south of market, a more pleasurable dining experience, coffee experience with brunch, that's great for the city. it means they come back. it means they spend more money next time so we would encourage you and encourage the supervisor to expand the scope but really applaud his leadership and continue to support the legislation. thank you. president o'brien: thank you. any further public comment? sorry, i can't -- seeing none, we can take an action item on this, right? can we have a motion from one of my fellow commissioners? >> i motion to approve this ordinance but i'd like to motion

that we approve it citywide including the south of market and westportal and pacific avenue. >> make that a recommendation? >> approving it, recommending that we also include the south of market, westportal and pacific avenue n.c.d.'s. >> can we also incorporate the 11:00 p.m.? >> yes, at 11:00. >> i second. president o'brien: o.k. do we need to read it out, chris? or just take a count? secretary: read it out. >> point of clarification. is the modification for the 11:00 p.m., then, to extend the 10:00 p.m. time to 11:00 p.m. and then but not include the additional hours up to 12 p.m.? president o'brien: yes. all those in favor, i guess.

>> aye. >> aye. >> aye. president o'brien: any no's? motion is approved. secretary: commissioners, you are on item no. 7. briefly, item no. 2, presentation of the small business commission certificate of honor recognizing a local small business, mac, as part of s.b.c.'s small business recognition program. >> it's my pleasure to give this award this evening to an outstanding small business, mac,

or otherwise known as modern appealing clothing. not only are they just an amazing paragon of a successful small business but they are also really pioneers who go out of their way to promote underused neighborhoods. they, being such a successful business, have, over the years, made themselves relocate to underserved, less busy areas, and have helped to just make all the boats rise in that area because they, themselves, are such an outstanding business. so without further ado, you want to come up? let me read our proclamation.

on this monday, june 13, 2011, the small business commission is proud to acknowledge the contribution that the auspatell family and modern appealing clothe has made to the community of san francisco. mac has been a vibrant part of san francisco's family of locally owned retailers since 1980. mac is recognized by the s.b.c. as also being a retailer that supports and promotes local designers and in their new location, 50% of the goods in the yellow building will be made in san francisco. the auspatell family is active in the community, serving on the board of directors of paws and the creative growth center. mac and the auspa.

family demonstrate the growth factor that small businesses provide to san francisco. [applause] >> thank you so much. and on behalf of my family, my mom, gerry, my sister, chris, we thank the commission for this recognition and only feel more invigorated to do more business and create more businesses in san francisco. thank you. >> can i add a couple of quick words, please? i want to thank you and acknowledge other small businesses that take risks and open businesses where others don't exist such as, the store on post street, when there was no stores in that area and your store popped up and really invigorated a lot of small micro businesses in that area and you've done the same thing with grant and also in hayes valley so thank you very much for helping trigger growth and activity in the city.

thank you. >> we love our city. so thank you all.

secretary: commissioners, you are on item no. 7, discussion on possible action to make recommendations on board of supervisors on board of supervisors file no. 110546, administrative code, healthcare security ordinance. president o'brien: o.k. we have a number of presenters tonight beginning, of course, with supervisor campos. welcome. supervisor campos: thank you very much, mr. president, and i want to thank the members of the small business commission for giving me the opportunity to be here today. i'm very proud to speak to you about this piece of legislation and before i begin, let me thank my fellow members of the board of supervisors for their co-sponsorship of this

legislation, board president david chiu, supervisor avalos, ross mirkarimi, jane kim, thank you for their sponsorship. we are here today to talk about a very modest piece of legislation that essentially tries to make sure that in the course of implementing the very ground-breaking universal healthcare legislation that we indeed live up to the original intent and spirit of that legislation. i'm proud to say that i come before you with a full support of the father of universal healthcare in san francisco, then supervisor, now assembly member tom omyiano because this is a common sensicle piece of legislation that is essentially trying to address an unintended consequence, a loophole that was unintended to be there when healthy san francisco was first

enacted. for members of the public who are watching and members of the audience, to remind you a little bit about what the ground-breaking piece of legislation that was introduced did, it required that employers who have more than 20 employees and those that have 20 to 99 employees, essentially, and those who have 100 or more, that they make specific money available so that money can be spent by their employees on their healthcare. i don't need to tell you how, since the years that healthy san francisco has come into being, how we at the city here in san francisco have really benefited from the national attention that universal healthcare in san francisco has received. we have, indeed, become a model for the rest of the country in how to address this very complicated issue of healthcare. during the debate around national healthcare reform in the white house itself, san francisco was looked upon as

a model of how to do this right. having been a legislator for 2 1/2 years and having represented as an attorney the board of education, i can tell you that legislation sometimes has unintended consequences and needs tweaking from time to time and that's the tweaking we're doing today. we are here to address a loophole that essentially allows employees to meet their obligations under healthy san francisco through the use of what i call health reimbursement accounts. these are accounts that are use-it-or-lose it account. the money required to be spent by law is put into these accounts with the idea that somehow eventually that money will be spent on the healthcare provided to that employee. and i have here and i want to share with you copies of

receipts that, from restaurants, from all over the city, where you have, in this case, restaurants meeting their obligations under healthy san francisco by actually adding to the bill that's given to the consumer an item that reads, depending on the restaurant, in this case, it reads, as a benefits offset. in another restaurant it says, let's see here, healthy sf. so many of us probably if we've gone to a restaurant in the last couple of years, we have, when we get the bill, seen this item added to our bill. the reality is, and the very close study that we did of this item, is that that money that goes into these accounts and we're talking about $62 million, 80% of that money, in fact, is not spent on the employee.

it is, in fact, reimbursed back to the employer. so we are here to close that loophole because as supervisor, now assembly member omiany will tell you, the whole intent of healthy san francisco was to provide that healthcare to the employees that were supposed to be covered by healthy san francisco. let me share with you text from the original legislation that talks about the original intent of that ordinance and i quote -- "all san francisco residents should have quality, affordable healthcare. currently approximately 82,000 adult san francisco residents are uninsured even though more than half of those individuals are employed. san francisco taxpayers bear the cost of paying for emergency room visits and other unnecessarily expensive healthcare for the uninsured. by establishing a health access program for uninsured san francisco residents with an emphasis on preventive care and

by requiring businesses to make reasonable healthcare expenditures on behalf of their employees depending on the business' ability to pay, the burden on san francisco taxpayers for providing healthcare for the uninsured can be reduced," and i end the quote from the text of the original legislation. there are four reasons why we are here today. one, we are here for the same reason that healthy san francisco was passed, to protect workers, and you're going to hear later on today from at least two workers who have been courageous enough to actually come before this commission and actually come all the way to city hall not withstanding fear of retaliation to explain to you why these accounts make it difficult for workers to in fact use the money that is being allocated into these accounts. the way that these accounts work is that there are incentives that the individuals who use these accounts have that make it

very difficult for the employee to actually benefit from the account, so it is thus not surprising that the account, that the money that is being allocated into these accounts, only 20% of that money actually as it stands today is being used for the healthcare of those employees. the second reason we're here, though, is not just about the workers. it's also about the small businesses and i am proud to say and i believe this wholeheartedly that this is a pro-business legislation that tries to level the playing field by recognizing that the great majority of businesses in san francisco are in fact complying with the spirit and the letter of healthy san francisco. in fact, the numbers bear that out. 87% of all businesses, in fact, that comply with their obligations under the law, do not use these accounts. we're talking about a very small percentage, essentially one out of 10 businesses, that are using

these accounts. move businesses in fact are following the rules as they were intended and are providing healthcare to their employees. now, this individual could not be here today but i want to quote a statement that was made by one of your constituents, a small business owner here in the city and county of san francisco, the owner of zasy restaurant who said the following -- "this legislation levels the playing field for the vast majority of businesses in san francisco that provide health insurance to our employees. a loophole should not disadvantage those of white house agree with the spirit of the healthcare security ordinance and who believe that employers should contribute to the wellbeing of our employees." i am here as a supervisor who believes that all businesses should play by the same rules and that to the extent that businesses are taking advantage of a loophole, that is an advantage that is hurting other

businesses, the vast majority of which are actually doing what they're supposed to. but there is a third reason that we're here and that's to protect the consumer. i have heard repeatedly as a supervisor from a number of my constituents who point out as i indicated earlier in my presentation that they do have that idea added to their bill and the expectation and sometimes when they say that, some are o.k. and happy to pay that, others are not. but the expectation in every single instance that i have spoken to on the part of that consumer is that this money that line item that is included in the bill will in fact be used for the purpose of providing healthcare to the employee and will not revert back to the employer. in fact, i think if you ask consumers in san francisco, they will be not only surprised but, in fact, shocked to hear that 80% of the money that goes into these accounts in fact is money that is not expended on behalf of the employee. this is a pro-consumer piece of

legislation that tries to make sure that when a business tells consumers that we're going to spend money a certain way and in fact charges that consumer for that amount, that that money should be spent the way in which that promise is made to the consumer. there's a final reason why we're here, and it's, quite frankly, one of the primary reasons why healthy san francisco was passed. we are here to protect the san francisco taxpayer. something happens to that employee who is not provided healthcare or access to healthcare. that person, that individual who is working hard, somehow their health needs have to be addressed and what ends up happening is that if those needs are not addressed by the employer as the law requires, those needsville to be addressed by the city and county of san francisco. that means they will have to be met by the san francisco text pair. that's one of the main reasons why healthy san francisco was enacted and passed because we want to make sure that burden is

not unduly placed on the taxpayer here in san francisco. that's why this is also a pro taxpayer piece of legislation that has the very modest effect of simply having the original intent of the law followed. that's why we're here. so, i can go on and on and on about this legislation, i want to end my presentation here. we have a couple of other folks here to present on the piece of legislation. i can either take your questions now or wait until the other individuals present, however you would like to, mr. president. president o'brien: i'll leave it up to you. i think it would be more effective to hear all of them. supervisor campos: why don't i call upon matt goldberg from the office of labor standards and enforcement. i want to thank them for their

objective and unbiased assistance in providing information and facts which is critical when you're drafting a legislation as complicated as this one. so, mr. goldberg. president o'brien: if anyone has any cell phones, if you came late and missed the announcement, please switch them off or put them on vibrate mode. it's not fair to the presenters to have that distraction during the presentation. thank you. >> good evening, mr. president, fellow commissioners. i appreciate the opportunity to share thoughts and perspectives here tonight. as mr. campos said, i am matt goldberg with the office of labor standards enforcement. you may recall i was actually here about five months ago to tell you prospectively about the process we were engaged in to change slightly and streamlinetm employers about their compliance with this ordinance.

i am here to tell you, thankfully, that we successfully implemented that. i think it was a streamlined process. part of the reason i am able to be here to report on the statistics is because we moved that process online, which has set up the way in which we can gather data. i will schedule some highlights of the data we gathered and share a couple of perspectives we have come to while enforcing this law on a day-to-day basis. and i will be here to answer any questions you may have. the health care security ordinance requires us to collect on an annual basis compliance data from all of the employers who are required to make health care expenditures under the ordinance. we recently collected the 2010 data, the data for the 2010 calendar year that was due to our office at the end of april

in 2011. i will report to some statistics based on a cracker course we have just released here in early june -- based on a draft version we released here in early june. >> you have in the back of your packet the 2010 draft report, in case you want to refer to it as the presentation is being provided. >> thank you. i want to highlight a few of those particular points that are germane to this legislation. i am going to note a few disclaimers. all of the state itself reported -- all of this data is self reported. the data we collect is of a general compliance nature. it was not designed within the framework of this particular

legislation. there are some limitations in what we are able to tell you today. finally, by way of this clamor, we have data from approximately 3000 employers. we do not know with certainty that represents the entire community of employers subject to this law. that is a number that is unfortunately difficult to pin down. the development department reports approximately 51,000 businesses in san francisco. 4000 of those are over 20 employees. those are the 4000, approximately, that are subject to this law. we have data from about 3000. so we think it is relatively good-quality sampling of the employer community. i will note that there is a different health care expenditure rate that applies

to businesses between 20 and 99 employees, medium-sized employees -- medium-sized businesses. this ordinance declines those as medium-sized businesses. large businesses are those with 100 or more employees, and different expenditure rates replied -- apply to those. approximately half the reporters to us are medium-sized. have are the large size. the first way to broadly understand how these employers were making health care expenditures was the total dollars spent. supervisor campos alluded to this. 90% of all the health care data -- health care dollars are allocated to group health insurance plans. 3% son was allocated to the city

option, the health the san francisco program, and at 7% was allocated to reimbursement plans. we can answer follow up questions. andres powers -- president o'brien: sorry to interrupt you. 90% were spent on insurance programs? >> 90% were spent on health insurance plans, exactly. >> that table is on page 7 of the draft report in your packet. >> exactly. table six gives you the full dollar amount. table 7 is the percentage allocations. 90% health insurance. 3% to help the san francisco. 7% to reimbursement plans. >> just to clarify -- of the money that -- the business is

that this was targeted toward, to sign up and become participants in the program, so to speak -- only 3% are paying in to help the san francisco? -- healthy san francisco? >> the piece of the law we are talking about, putting aside the creation of the program, which was a landmark step in its own right -- we are speaking specifically to this employer spending requirement, the law that places a burden on employers to spend money on employee health care. employers have the discretion to spend that money on employee health care in the manner of their choosing. i think the understanding was always that the vast majority or a lot of employers would provide health insurance. in some respects, that is the ultimate goal. that continues to be true.

>> your figures show that 3% are paying in to help the san francisco, 7% -- to help the san francisco, 7% to -- to healthy san francisco? >> that is one option they have to meet this requirement. that is what this figure shows. with that, there is another way to look at this. we were able to determine the way each given employer makes the requirement. many employers choose a combination of factors. they provide health insurance to a number of their workers and pay into the city option for some of them. with respect to that, 80% of the employers have chosen health insurance