look. supervisor campos has been steadfast in saying that this is a nonstarter issue and has refused to look at anything other than what he wants. this applies to more than just restaurants. it applies to people who are in need who will go without care. thank you. supervisor chiu: thank you. next speaker. if there are other members of the public who wish to speak on this item, i have gone through all the cards. feel free to line up. >> thank you for the opportunity to comment. i am and owner of two restaurants for nearly 15 years, and we employees -- we employ about 115 san franciscans. we support health care and health care access. i am here today to strongly advocate for an amendment that

first and foremost does work and is practical for our employees, but one that also is achievable for businesses. i am appreciates at our legislators are working very hard to find a solution that provides health care for our employees without adding additional costs -- i appreciate that our legislators are working very hard. small businesses are a very important employer, creating tens of thousands of jobs, entry-level jobs and also career advancement opportunities, and in these difficult economic times and our high unemployment rate, striving to find a solution that achieves what this legislation wants to achieve without compromising businesse'' ability to keep their doors open, many of which really are struggling to stay open and

maintain their work force. supervisor chiu's proposal can work to accomplish this, improving health care access. we believe that is an important thing to clean up with this situation, but really feel back proposing this undue burden financially on businesses is not a responsible way to proceed. i think we have this two-year gap between what we have now and what we will have with federal government, and i understand wanting the most progressive solution is very commendable, but what is being proposed puts businesses significantly at risk in these two years, and i think we will lose a lot of businesses that just will not make it until whatever is ideally going to be best for this country with health care is determined.

so i urge you to proceed with due diligence and to take the necessary time to really work on determining a consensus amongst all of the parties that achieves what we want for our employees but also does not risk businesses and jobs. i want to thank you, supervisor chiu, very much for this amendment and i hope your colleagues will support this well thought out and thoughtful amendment. thank you. supervisor chiu: thank you. next speaker. >> good afternoon. i am the less gregarious general manager of escape to new york pizza. [laughter] i have had lots of conversations with paul about the solution. the ordinance several years ago

for delivering health care to san francisco employees politically allow businesses to pay for it. there are a lot of flaws in it. not a perfect lob. in trying to solve the problem, it actually spectacularly fails at delivering health care. hra's are not a very good way to deliver health insurance. you have identified many of the flaws, but we need a pragmatic answer. short of me being able to jump up and down and take my part- time employees to help the -- healthy san francisco and sign them up, no hra will allow me to do that. the only people i can make that preventative care, make be covered on a daily basis are my full time employees that we cover through kaiser, so i am

left with this gap. i will do anything. i run around and tell them to use it. to buy health insurance. to do anything. if they had a lump sum of money, that is all they see. until they get sick, they will not use it. if you can make a mechanism which says i can sign them up, it will cost me $600 or $700 a year for the average part-time employee. i am not trying to advocate -- abdicate my responsibility. i would rather they go get a shot then be out with a week with -- out for a week with the flute -- the flu. what i need is a pragmatic approach where i can pay the bills. whether it is six months, a year, 18 months, you cannot make me move the money into account, which we all agree that under the best circumstances, 50% will get used over time.

let me pay it on a cruel. they need it, i write a check. but if you make me move that money, park it into account that over the next couple of years, $150,000 might be used, i do not have it. anyone wants to ask questions, i have numbers. i can show you i have $30,000 of liability. there has been an extensive talk about leveling the playing field. i have a competitor on one side of me with 19 employees, no liability. one of the other side with 25 to 30 employees. they have 65% of my employee -- of my liability. let me pay on an accrual basis, and i can survive. supervisor chiu: thank you. the speaker. >> good afternoon. i own a small hotel and a

nightclub. these guys that have come before me i think what it pretty well. it is irritating to me as someone who has $3 million of my own money invested in this community to hear a supervisors say this is policy. it is not policy to me. it is my livelihood, the money i have worked my entire life to earn. over the last few months, i have raised almost $2 million in a private fund to expand my business, and yesterday in a board meeting because of this issue and this hearing, my board members decided to table two offers we were about to make in restaurants in san francisco that currently employed no one because they are close. when i bought my restaurant, it had four employees. it now has 22. i have had a proven track record of creating jobs, and we're going to take that track record and get out of the city and county of san francisco because the board of supervisors in particular does not appreciate what small business does, and we are going to look to liquidate our holdings in san francisco

and moved outside the city and county. thank you. [applause] supervisor chiu: next speaker. >> good afternoon. i lead a human-resources function for a small private restaurant group. we employ 900 team members. of those, just shy of 90 reside and work here in san francisco. i will not even get into the administrative issues that this causes, particularly with small organizations. definitely here in support of president chiu's amendment. i will echo some of the comments already. it is all about the accrual. i think we lose track of the larger issue. healthy san francisco is intended to provide access to health care, not intended to pay for that mri in full or that c section in full.

we offer full-time health benefits. any employer who works for us 30 hours or more per week has full access to a full medical, vision, and dental coverage. we also offer a major program which will likely be going away in 2014. -- we also offer a mini program. we have less than 50% of our part-time employees who even participate in that catastrophic health insurance provided for them. they can use the hra to pay for that. we communicate that to them. i want to be clear -- our restaurant does not charge a surcharge. i think it is horrific that restaurants are charging the surcharge and not using that for

their employees. i urge you as a board of supervisors to help us. supervisor chiu: thank you. and if i could ask anyone else who wishes to speak to police lineup. >> my wife and i are the owners of san francisco suit company. we started our business in the city and continue to try to grow the business in the city. i was asked a couple of days ago from a reporter what small business is doing to create jobs in san francisco. i thought about it and said that was an amazing question. we made plans to create and grow business. the natural consequence is creating jobs. i'd not have a job plan. i have a business plan. -- i do not have a job plan. i have a business plan. one of the most important issues

to everyone in the city, state, the country is jobs, jobs, and jobs. we have heard time and time again that uncertainty and fear is what is preventing economic growth in our country. i am afraid to say that the amendment that supervisor campos has passed and hopefully will not come to walk, but that amendment that has been passed will create a significant amount more -- of more uncertainty and fear in san francisco. it requires that businesses put a massive cash outlay for potential health care expenses. this will send a massive shock to the existing economic system, which will without a doubt cause a major impact on the jobs market in san francisco. i specifically and very close to signing a lease on a new location in the city. however, if this law does pass

and goes into effect, i will certainly not signed that document and wait to see how it all plays out because you never really know. but when there is a massive change like this, that is just not a risk i can take to invest more and more into the city and a plan that i am really very fearful of. the accrual account proposal is much more manageable and in line and something we are more comfortable with doing and have been doing. i think that supervisor chiu -- or president chiu's proposal does close a lot of existing loopholes. our current -- company right now does not charge a surcharge at this time. hope we do not have to in the future, but i am more comfortable with that as far as growing our business, the economic vitality in the city and the success of all of us working together.

thank you very much. supervisor chiu: thank you. next speaker. >> good afternoon, supervisors. executive director from the golden gate restaurant association. we represent just over 1000 member locations in the bay area, most of which are in san francisco. i think there has been some compelling testimony today, and i just want to reiterate some of the issues that were raised because i think there are some very important points we do not want to lose. primarily it is the accrual versus cash component. there has been not one single episode since they have tracked this where an employee has gone to them and said -- filed a complaint.

that is a component which is a solution that does not have a problem. i think it is also important to reiterate, as someone who represents the vast majority of my members are small businesses in san francisco. it is really important to remember that the small business commission, who is chartered to represent an be the voice of small business to this body and to the city government, voted unanimously to oppose supervisor campos' approach and unanimously to support chiu -- david chiu's approach. we need to be responsive and reflective of the guidance that comes from the entity chartered to provide that guidance. the issues that have been raised as far as problems -- the golden gate restaurant association agrees with and believes that

there are issues and ways to resolve some of these deficiencies in the current law. we want to increase utilization rates. we want to address the

together towards a consensus approach, including the mayor's office, in finding a way to move this forward without hurting jobs. thank you. supervisor campos: if i may, i wanted to also give you an opportunity -- last time you were here, you ask a question about -- we talked about some of the unfortunate, deceitful information that was put out their peer award to make it clear for the record backdgra -- that dgra was not involved in any of that. >> you said it just there, and i appreciate that. supervisor campos: can i ask a clarifying question? the issue of cash versus accrual is a different issue of whether or not the account accumulates up to a limited or and limit the amount -- or an unlimited amount. in terms of those issues, what is the level of importance of each?

on the former, whether it is cash versus a cool, i think that we have expressed certainly and openness are around that issue that i am trying to understand how that relates. >> thank you very much for that question. i think you have properly defined that as two very separate issues. the cash versus accrual really is a death knell to the business community because it takes cash out of their ability to pay the bills at a time when it is a very difficult economic environment. that is a very big issue. the liability -- so then the second question is the ability to grow the liability or to continue to grow the liability on the books. and a definite liability creates problems in the sense of if you want to sell your business, take out a line of credit, how you are paying your taxes, you have to account for all of those, you have to account for increased

liability, so it makes things difficult if you have that ongoing accrued liability on your books. that is why we support a proposal like supervisor chiu's that does not create a unending growth in the liability. to that, i am afraid of an unintended consequence. it has not been set in this environment, but it should be. it creates a perverse incentive to allow for a large accrual and then decreases the incentive to lay people off. if they have $30,000 sitting in their account, that is a strange incentive you have created now with the employee or employer about how they deal with that

employee. by allowing the sort of ongoing of cool, it creates a dynamic that you're so afraid would have unintended consequences. >> i see that. i do not know of the discussion about a cool and cash is one that i would think would involve more than just having one set approach, that maybe it is a combination or who knows? but i see your point. thank you. supervisor chiu: thank you. next speaker. >> thank you very much. i am a member of the small business commission, and i would just like to say that, yes, our commission did recommend the approach before you, the legislation before you at 6-0 because it really addresses employer responsibility for health care access, but it keeps our economic safety net intact.

i think it is important as we look at this issue to keep our focus on health care and health care access without eroding our employment base. we have absolutely nothing to gain as a city from a policy perspective by in sending our employers to reduce their staff, their hours, or relocate out of san francisco. i believe we need to preserve our economic diversity and keep the various levels of skill and education -- i am sorry, to keep economic or employment opportunities available to people of various levels of skill and education in san francisco. i am afraid that this policy that we are addressing, if we are not careful, will actually erode our working class employment base. also, if it really does and since the businesses -- if it really disincents the employment

base, it adds to the hollowing out of our city economically and socially. i would like you to look at the broader policy direction when this kind of legislation is being crafted. to that, i would really ask you to support the legislation before you. i think it is a measured approach. i think it addresses each point very clearly, gives us some certainty going forward. it allows businesses to continue on their business plan regarding job creation and increasing their employment. i really would like to support the consensus approach, and particularly recognize that this issue falls much harder on the

smaller businesses, particularly working class businesses and working-class families. i would really like you to keep that in mind. we do not have the same resources that the large companies have. we do not have the same resources or benefits that the large labor organizations have. we have very fixed income, and i would like you to remember that. thank you. supervisor chiu: final speaker, unless anyone else wishes to make any public comment. >> good afternoon. you have heard much from the business community that the small business commission has heard from. one of the core reasons for not supporting campos' legislation and supporting supervisor chiu's legislation is about the accrual

versus cash. that is really important. the commission has stated clearly that an accrual-based mechanism is what is extremely important for them in terms of maintaining as we move forward. i will not reiterate many of the other points of supervisor chiu 's legislation in what it addresses to resolve to correct the situation, but that the commission did vote 6-0 to support the legislation. supervisor chiu: thank you. any other members of the public wish to speak? if not, mr. chairman, if you would like to close public comment. ok. again, i want to thank all the members of the public for coming out and providing your testimony on this. there are a couple of things that i would like to make as final concluding comments. first of all, to our chair, a supervisor campos, and as i have expressed before, i am open and willing to engage with a variety of stakeholders.

for example, i had initially proposed a one-year rolling period. there have been suggestions that potentially a longer time might be acceptable. what is important is that we not create an indefinite situation. anyone who has had to lay off a worker knows that that is one of the most painful things you have to do as an employer. folks who have been working with your organization, with your company for a long time, and i think part of what has been difficult about this, as i offer my alternative, is that we are really trying to talk about how we minimize those job layoffs, particularly if we had money that was sitting unused in accounts that could otherwise be used in paying for people's employment. the situation we are talking about is $50 million a year, of which we estimate that potentially half of that money -- let's say, for argument's

sake, $25 million could sit unused in accounts indefinitely. i think that is the situation i am trying to address, and i am open for other creative ways to go about this. the last thing i want to say is we have lost 30,000 jobs over the past few years according to our city economists. we have to do anything we can, i think, to really move things forward. i think my proposal really strikes the right balance, but i look forward to that conversation. i know we will have a second vote on supervisor campos' legislation this coming tuesday. the i do hope in the coming days of the various sides can get together and figure out of there is a way to come to some consensus on what we need to do to move things forward. with that, colleagues, i would like to ask we move this out of committee, hopefully with a recommendation or with

consensus without recommendation, just to move it out of committee. supervisor farrell: i would like to thank my colleagues on their legislation. after that, if this discussion is still alive, i want to reiterate and thank everyone here for coming together. we do want to build a consensus approach that works for everyone. that has to be the primary driver here. we have done that well at city hall and want to see that continue. i do not want to see job loss. that's the last thing we need at this point. however this goes forward, it's important for everyone to come together. everyone who came today to talk about it, i thank you. i'm happy to support either one. president chiu: if all three of us want to move the with our

recommendation, i would be ok with that. supervisor campos: i do want to thank everyone who has come out to this hearing today. clearly, the vast majority of comments, perhaps every single, and represented a certain perspective. there is a different take on this issue. i think it's important for both sides to continue to talk. i have said from the very beginning that i am open to that. contrary to what has been said, it's not that i'm open to different ideas -- not that i'm not open to different ideas and perspectives. while it is important to compromise, compromise does not mean you compromise your principles. there is a fundamental principle for me at the heart of where there is a difference of opinion. that's the question of whether or not we can agree to capping or limiting the kinds of benefits that an employee --

that an employee can compete -- that an employee can accumulate. that is the crux of the issue and there is a difference of opinion. i respect where people are coming from and i hope people respect where i am coming from on that issue. i think there is validity to everything that has been said. but the point i want to make is that i will respectfully submit in terms of what this means -- i understand why these proposals have been made. there is a rationale for different aspects of it. but i do believe when it comes to health care, there is a monumental shift this country is taking. when you look at the affordable care act enacted by congress and signed by president obama, at the heart of that care act was this idea that we need to move away from this notion when it

comes to health care that you should allow businesses to place limits on the benefits that are provided in terms of health care. at the heart of the affordable care act is this notion that there should be no annual remits on of the dollar value of health benefits. that is a part of what president obama proposed and that is what is at heart at of what was passed by congress. even though the applicability threshold is different, the principle is at the heart of what my legislation is trying to do. consistent with the congress of the united states and the president have done that we as a city should not go down the wrong path and in opposite directions where we are allowing for those kinds of limitations to be placed. to the