contracts. and effectively, what it does is it takes a lot of factors into consideration, but under the 14.d ordinance it specifically targets the local business enterprise contractors so the lbes in san francisco with the parameters around that and they have to have done business in san francisco and been domiciled here for 6 months and a few other parameters around the participation in the program. >> the program is monitored and administered by a third party administrator and currently they over see the out reach alongside with the human rights commission for the program, out reach into the community, getting the folks aware that it exists and that it is available to contractors locally. in 2008, the program received a bit of a change, and it was for the better, and it was to

operationalize what had been a long-standing problem for the program and that is, that the city puts up a matching amount of money for the surty to back it with a letter of credit with a bank agreement. and as part of the project, the individual project bidding, the contractors sometimes could not take advantage of the program, because the project was already at capacity. they did not have the money to put aside for the actual backing the city's piece of doing the program. and so, we worked with the hrc, the controller's office and the city attorney's office and we came up with a solution to create a self-insurance fund and we did that primarily to take away the other barrier of the projects that were in the late stage and did not have much money for the contractors to take advantage of the program. so that has been in place since 2008 and also increased the letter of credit facility agreement to 5 million to

provide more program capacity, which seemed to be working very well. so the program structure, how does it work? we have contractors, that come in with requests for utilization of the program. they are then assisted with any number of things, if they don't have an insurance broker, the program administrator will help them find one that they can utilize, if they don't have certified financials their incentives to assist them getting in touch with qualified cpa and getting their financials in order and there is a city match of up to 3200 dollars to get those certified financials done there are also various monitors along the way. so, that we make sure that we are not leaving them out there on their own. we have the funds control administrator that helps them make sure that their suppliers and subcontractors get paid as well as other services that the administrator provides along the way.

so the current legislation, is to do two things. in the late summer and early fall of 2012, the function was transferred for the over site of this program from the human rights commission to the city administrator's office. along with the contract monitoring division of which this could be a subset, since they over see all of the lbes in the city. and so as a result of that transfer function, we wanted to do some technical clean up to the 14 b legislation basically codifying the responses and where the authorities lie. and the second thing and this is the one that is the time sensitive issue that we are trying to deal with earlier than has been done in the past. is to remove the sunset data on the program, and every so often, when we get to the point of getting close to the sunset

date, we have a misalignment of agreements and of dates within the program. because we can only issue a letter of credit for as long as the program is authorized. and so the letter of credit, every time there is a sunset date has to be renegotiated which causes cost at the program level. at the individual contract level, with the contractors, they cannot, we cannot again, issue letters of credit beyond the date of the program and therefore, everything backs up and we wind up having to redo the letters of credit at cost over time. because those dates don't neatly align. we could be having a construction project that we know will be in 6 months but the program does not extend beyond 6 months, so we can't write the letter of credit. we have to write a short term and do the fix and write another one and which incurs the cost. that is what we are effectively trying to do.

we are very certain that the board of supervisors retains their control over the review of the program because there is an annual certification through the budget process. and to the appropriation process, and we are going to hopefully by doing this earlier rather than later, realize some operational and administrative costs not only for ourselves but for contractors and program users. so with that, i will take some questions. but i wanted to tell you a couple of other things that will be coming down the line for the program. we would really like to get away from using a letter of credit. because it costs money, number one and it is duplicative to the money in the self-insurance fund and it will help to stream line the process for not only the city, the administrator and the contractors. and so we are looking at alternatives to the letter of credit of being able to issue some form of collateral that is

effective to the surty companies to keep the program going in a stream lined fashion. we are going to continue to review the processes for efficiency and effectiveness. there will be further 14 d clean upcoming up down the line and we will be using that process to make additional recommendations to the program efficiencies. in this current legislation, we just wanted to make sure that deal with what we consider to be some what of a no brainer, in that it does, it has a very immediate impact with without a whole lot of down side. and essentially. and then, we are also going to take a look at options to increase the types of contracts that are allowed to participate in the program, we are also partnering with mta to make sure that we can use federal moneys, through this program, and that their subcontractors can have access to a surty bond program as well. so with that i will take your questions.

>> commissioner comments? >> commissioner ortiz? >> this has helped many, many small businesses get to the next level. they will be using this program. i am excited to hear that you might expand to the professional services because there are a lot of rfps in the city and with the artificial barriers regarding the laws and we hope to see development with that. >> commissioner o'brien? >> yes, just a comment on one of the things that i discovered from the system. it would be great to ensure a response to a contractor if they will be get the bond or not as early as possible. because really the first thing that he really has to know do i have a bond or not? because that is the difference between am i going to take on the job or not? and the minute that he makes a

decision that he is taking on the job he has to start spending money right away. >> correct. >> and it is unfortunate if a contractor starts spending money, only to find out later, that he is not going to get the bond, that is kind of a killer for a small business with their cash flow needs, so just one comment that i put there. >> totally understand that. and that is one of the main reasons why we created the self-insurance plan was to be able to immediately guarantee that there were funds available to even go out and look for a bond and then also, the timeliness of the response not only the program administrator but my city colleagues who have to sign-off on approvals of each transaction that goes through. we are looking hard at the step on the process and time out where we can and make it more efficient and condensed. >> and i like this and i got to agree that what the

commissioner ortiz said and it helps a lot of people out, and it is a very good program, and i want to thank you for, you know, pushing this out there. and just kind of stream lining it. so i really appreciate that. with that said, do we have public comment on item number 7? >> commissioner riley? >> sorry. >> that is okay. >> yeah. >> how often do you have to renegotiate with the sunset period? >> well that it is really an option of the board. they have the authority to set a period that they choose and what i have seen historically for the program, and again this is my first six months or so really dealing with this, the nuts and bolts of the program and was every couple of years. and it kept rolling forward every couple of years and this last one was a four, five and a half year extension.

but, even so, as we get within a year or a year and a half and even a year and three quarters. we have to thinking about renegotiating all of the agreements. because we are starting to put projects into the pipeline that could bump up against the date and then would also hit the letter of credit because that is a different date. that is a transactional date based on what the bank will agree to and now we have to go back and renegotiate with the bank to extend the letter of credit should this be successful >> and this just lifts the sunshine? >> yes, it does. >> that will stream line your process and save you a lot of time and money. >> it will. >> great. since 1977, or 97? >> 1997, do you have any... >> one, that was not the contractor's issue, it was an

issue that came up within, it was i believe, i want to say, in the early 2000s and it was a situation in which a project and other folks decided to let it happen and he learned a lesson. >> one case is not bad. >> that is why the program administrator stays very close to the projects that we write bonds for. so that we can make sure that support the contractors every step of the way. >> thank you. >> any other commissioner comments. >> okay, do we have public comment on item number 7? >> seeing none, public comment is closed. commissioners? do we have a motion to approve item number 7? >> yes. i would... >> commissioner riley? >> i am going to move, just wanted to let you know that we heard this at the commission committee meeting. and we recommend approval.

>> second. >> roll call, please? >> commissioners, i have a motion by commissioner yee riley, recommending approval to the board of supervisors, file 121211. in the san francisco bonding and financial assistance program i have a second from commissioner dooley. >> on the roll call, commissioner adams in >> yes. >> dooley. >> yes. >> dwight. >> yes. >> o'brien in >> yes. >> ortiz-cartagena in >> yes. white in >> yee riley in >> yes, >> commissioners that passes 7-0. >> great, thank you very much. >> next item.

>> next item three. >> they renumbered, i forgolt. >> commissioners. item 8, presentation and discussion on mobile retail by christian murdock, office of small business and this is a discussion item only. >> while christian is getting set up. i just wanted to provide you with an update in terms of the work that we are doing with the office around mobile retail and research, while we are not at the place to make a specific recommendations we are getting close but i want to give you an update and get your feedback and let you know what has been involved and taking a look at developing some policy and permitting guidelines around what we are calling mobile retail and probably more non-mobile food business. >> and welcome. >> thank you, good to be here, good evening, mr. president, and honoral commissioners and as the director said i am here to give you an overview of what the office has been doing in

the area of what has ex-spended from mobile retail to the end serve use category. >> so what we are trying to do is develop a new city-wide program to permit retail sales and services from and within the motor vehicles on city streets. this stemed from an increasing number of requests asking for permits, people would come into the small business assistance center and i want to open a truck that sells wigets and we will say sorry you can't sell on the street, what do you mean that people are selling food out of trucks and why can't i do that? we have to tell them that they have a specific process in permitting what you can go through for that and no such process exists i can't help you, think of a different business, not exactly. but that is where things stand currently. some people are doing that, without a permit. but these folks are trying to do the right thing and come in

and get their business, vetted and regulated so they can get up and running. >> so, as you probably know from your personal experience, the mobile concept is sort of emerging in a lot of different areas related to small business and service and retail. luckily, for mobile retail, the presence on san francisco streets right now is minimal. you know? it is not as pervasive as mobile food has become. but there is growing interest. we think that it is good that there is interest but it is not widespread because it gives you a chance to get ahead as a city and develop regulation and prepare a proper response whatever that might be as we work through the process. these groups are not just a rag tag bunch they are organizing, the west coast mobile retail association is the main group that we are aware of. they have members from seattle down to san diego and everywhere in between. so, you may be wondering at this point, what exactly does

mobile retail, entail. >> clothing and accessories, bank and financial services, document shreding to things that you may not have imagined like a mobile photography, and mobile arcade vehicles. these are not made up. these are businesses that we found through research or that we witnessed first-hand. >> a quick question. so these are all currently you can't do any of these, right now in san francisco as a mobile, like a mobile bank or real estate office? >> there is no clear process to permit those for items like retail, merchandise sold out of a vehicle they are specifically prohibited and it is a legal gray area for anything else service related that is not mobile food. >> i did not mean to interrupt and i saw the things on there and this is interesting. >> so, if you could continue with the presentation, please.

>> specifically in san francisco, like i said, limited occurrences so far. items that we have seen first-hand are this creative use here it is a mobile show room and it is adapable to the configurations depending on the needs. this evening, they have configured it to be a mobile art gallery a collection from a local artist and brought it out to the event to try to support that artist getting outside of his traditional area, which i believe was in the richmond? and elsewhere, at that same event, i can see a line up here of a variety of different mobile retailers, most of them are clothing boutiques there is one specialty animal supplies and a mobile, personal stylist and you can go in there and they will help you redo your look or what you have. it runs the whole gamut already with the limited number of businesss that we have identified. so, as we work through this, the office of small business is taking the lead, we tried to

jump out front and prevent any particular department from crafting regulations, you know, that did not necessarily take into account interest of small businesses. so we see this, as an exciting concept. something that could be beneficial for small businesses in particular, excited very small entrepreneurs. a number of the people that we have run into, are people coming out of local fashion schools, they want to do their own fashion line but as you can imagine that takes a vast amount of resources to get a brick and motor location. this is a avenue to take the brand and take it from there and see where it leads them. >> so as you can see, we wanted to develop the full issue as much as possible. what are the motivations for this? we don't want to assume that okay, take it for granted and accept mobile retail should happen. you know, is this a lack of small spaces? 500 to 1000 square feet, if that is the primary factor

maybe it changes the zoning regulations to mandate the small spaces for businesses, it is more complicated for that. each business has a little bit different reason for going into it so it is not such a simple black and white answer. we want to know the impact of the retailers. a lot of people say that it will be direct competition and they will under cut the brick and mortar locations that have invested 10s of thousands of dollars. we see it to be complimentary where the retail may specialize in woman's clothing and these folks may come in and have events that bring in jewelry or shoes or something like that, that may not be a direct competition and it may help everyone around and it may be a win/win situation. >> we are thinking, and is there a relevance to requiring some sort of transition plan, do we want to allow a open,

ended mobile retail type of use? or do we want to say that we understand that there are constraints to the start up small business and we want to envest in the corridors so we will give you a three or five-year mobile retail permit. these are the things that we are trying to flush out. should mobile retail be included or excluded? as you can imagine there are a number of departments involved in this, we are trying to partner with them to develop a responsable permitting process. as with certain permit and requirements that can take the weeks if not months or longer. that is not going to work for these folks in what we can tell talking to them. >> they don't want to be in the places but they want the flexibility to go to the place wheres the people are. and using social media to generate demand. hey, we are going to be here and the people on my social media group, come check me out this weekend from 2:00 to 5 p.m. and so they are doing all kinds of things that do not

lend themselves to city permitting or traditional permitting process. but we think that it is, there is a way to balance it whereas the mobile food folks go through a public hearing and potentially but they are going to be there several days a week. these folks may drop in to several hours and so there is a balance between the heavy handedness sometimes of government and the flexibility that these types of business owners are seeking. we also need to develop, you know, some list of allowed goods and services, we probably do not want to open it up to anything and everything. we don't want to ratchet it down to where we stifle recreativity. what areas should be elible? not everywhere but we should not make it too restrictive. >> and who receives the enforcement responsibility. and not everybody wants to take on another task as far as regulating the uses on the streets. but someone has to do it and so figuring out what makes sense and what is feasible with

limited resources that we all face, these are things that we are sorting through right now. potential challenges that have popped up already. first and foremost, the present regulations prohibit selling merchandise from a vehicle in a business district, it is defined as more than 50 percent business usage in a 600-foot length of roadway on one side, or 300-foot length of roadway on a street with 2 frontages. there is overlapping jurisdiction which requires a lot of delicate discussion and responsibilities. we have parking responsibilities with mp a and regulating illegal goods from the police department and managing the general street uses like public works department is responsible for. land use, traditional planning and hybrid food and retail uses, and so very complex as you can see, there is also issues regarding to the access whereas the food uses can serve

everyone the same way or deliver the food for a customer. many of these mobile uses invite the customers into the back of the truck and that creates equal service issues and things like that and those are issues that we are sorting through and finally, the rest of the possible goods and services makes it complicated to say to list them all and say that these are good and these are bad and so, trying to group them into the category and find out what is workable. and something that we are sorting through as well. >> so our next steps and the definement in the department and developing a draft program by the end of march that we can take back on the working group and get their feedback and comments and move on from there and try to move the process forward. >> thank yo >> commissioner dwight? >> that was a really exciting project. is there any model legislation anywhere else that you have seen in the other cities? >> not like what we are contemplating here.

i have contacted cities from the east coast to the midwest and up and down the coast of california. many of them have a very limited sort of truck-based retail, or permit but they are restrictive on the type of goods and restrictive on the locations nothing that is as ex-spansive as what we are talking about here. so, we are kind of writing the script, if you will, at this point. boston is probably the closest jurisdiction that i found that has something similar. but again, they are just sort of doing a test program in one location for the time being and don't really have anything. >> i am familiar with actually a couple of the things that you showed on your slides and this can be very symbiotic for other retailers. we had a couple of these out in front of my company and it generally brings in more people, it is something that is complimentary to what we are doing and just provides another point of interest for an event, or you know, something that some way to generate interest in our own business. >> absolutely, and that is sort

of the tact that we are trying to take and present as an opportunity and not a hazard to business and it is all in how we research it and package it to show the potential benefits. >> thanks. >> commissioner dooley? >> i just wondering why you would even consider allowing formula retail to get involved with this. i am reading some of the things that would bring this forward, which is the high cost of renting brick and mortar, obviously formula retail does not have that problem. and it seems like that would be really inappropriate. and the other part to me is the disability thing, how is that going to work out? you know? once, again, that is you know, brick and mortar people have to deal with that, with their businesses. so i can't imagine that it would be exempted. so i am curious to see how you work on that. >> i am curious as well and thatcy huge piece of it and it is going to take a substantial amount of work to balance the

letter of the law with the intent of the law and the amply indication ... application on the streets. >> >> it has to be considered. >> director. in terms of the note, in the formula retail. what we are taking a look at the discussion that you had among yourself when supervisor weiner legislation is here right now there is no governor ans over site on the retail on the street. right? the planning department governors formula retail controls and brick and mortar and land. but we don't have any structure right now in terms of formula retail controls, guidance or direction. it is currently standing in terms of usage on the streets. so i think you know, what is that? we don't know yet. so, that is what we have to work on. so, just to give you a little

more information on that. >> commissioner o'brien? >> yeah. i kind of maybe misinterpreted the form of retail for that because i wondered if the formula retail and someone is very successful and he is branding a company through mobile retail. and decides to get another mobile truck and vehicle and all of a sudden he has got multiple trucks running around and i cannot... that is what i was seeing the formula retail. the question that i was wondering is something that these, businesses do take off, i am not really going to get an update on the mobile foods one of these, meetings to find out how that business is doing. was there any discussion about how they will contribute back into the community in terms of not that i am a tax advocate or

anything, the brick and mortar people have to pay into the community in various different ways and these people maybe with nothing more than a price of a permit can command the business and do very well if they are successful and just come right back out again. and really give anything back into the community. i am wondering has there been a discussion on that? >> i am not a free tax advocate. but, you bring up a relative point and these are things that we have heard from sides. >> we are trying to fill out and balance and there is an expense and tax profile for the brick and mortar establishment than there is for someone on full wheels. the argument that we have received from the mobile retailers already is that they are paying all of the taxes asked of them and collecting sales tax and they are paying the vehicle registration fees and gas tax and etc. and they are complying with everything that is asked of them and they will have to pay a permit i am

sure if this months forward into a formal program. >> you are concerned about balancing the effects in the neighborhood are certainly on our list of things to do to figure out a way if there is a way to develop a program that ties us to a transition to brick and mortar or if there are ways to otherwise link them to a neighborhood. >> thank you. >> commissioner dwight. >> well this is also a way to bring some important services into locations that either require them temporarily on a regular basis or temporarily because something or an event or something is happening the mexican embassy is around the corner from where i live they opened a couple of days a week to process applications on those days a guy drives up with a truck and processes passport-like pictures for folks. there is a federal express, you know, old kinkos conversion, six blocks away but it is