so, we're not looking -- it's not the kind of operation -- it's not a full-on sort of -- an operation that's going to have a big impact in a neighborhood, for example, and that's really important because the whole reason that we restrict home base businesses in certain ways is to preserve the residential character of our residential neighborhoods. >> right. was there any negative -- >> i believe this will be discussed particularly at the planning commission, but i believe that there was one neighborhood organization that weighed in with planning raising concerns about that exact point. that's why we wanted to narrowly tailor this to neighborhood before we broaden it to staff. >> commissioner white. >> i guess i'm curious on the process here. so, in order to be allowed to conduct such a business, you

have to get a registration from -- >> tax and treasurer's office. >> tax and treasurer's office. will you, regardless of the fee will you have to get a permit from the planning department? >> at this point there isn't a -- i don't believe that there is a permit from the planning department -- [multiple voices] >> public health has a -- and i believe this might be how it works in general with d-b-i when the get to building permits and whatnot, too. the permit issuing department in this case will be public health and in the case of building permits it's d-b-i, department of building inspection. but they do a referral to the planning department for planning code related issues. and the planning department staff will take a look at it and say, the drawing that you have, you know, shows the kitchen and the window you're going to sell it out of or what have you, and that matches the planning code. so, my understanding is that the planning department -- i can double-check this, but they're not issuing a permit,

but they're referred by the permit issue lending department. >> again, if there was a permit, if there was a planning permit of some sort, the fee would be higher. >> the cfo permit comes from the health -- [multiple voices] >> the cottage food operation -- >> it's permitted through the department of public health. >> but they're not charging a fee? >> they are charging $100 for the type -- well, there's -- [multiple voices] >> registration fee? >> it's $100 for type a and then it is -- i don't have this. [multiple voices] >> i think that's for -- >> and then for type b -- >> i can read all that. >> so -- >> but nowhere is the health department showing that they're charging any kind of fee but adhereses the permit or certificate of operation comes from them, no? ~ appears

>> there is an application for the tier bs which the department of public health is charging, 332. this one because of its more involved, i think they do have to go out and do an inspection, where the type a, they are not going out and doing an inspection. so, generally it would be -- i think if there's issues with -- that might be called, it's going to be around the department of public health. for home-based businesses, other home-based businesses, the requirement in the planning code is to use no more than a quarter of your home -- home-based businesses that are allowed, that does not require, you know, home based business to go and submit that to the planning department to ensure that their business is not utilizing more than a quarter of the square floor. >> this sounds like something your office is going to get a lot of questions about. the process that i go through to see -- >> the process is is that you get your business registration. you have to go to the --

department of public health to then fill out the appropriate forms and pay the appropriate fee whether you're a type a or a type b. >> okay. >> and then the department of public health right now is charging the zoning referral fee and that is where i think our discussion is, is it absolutely necessary since it's zoned, you know, upon passage of this legislation, it's permitted in all areas of the city. and, so, we don't have the department of public -- planning here to say that what happens from department of public health to the -- what the planning department is doing at this particular time. with the zoning. >> not to belabor it, but it seems like the department of public health needs to make some type of determination, not the planning department. i don't understand why they're bouncing the fee to the planning department or they're

not allowed to charge fees or something like that. it just doesn't seem -- i guess it tier b, but beyond why tier a someone goes to the department of health to get approved, and then they for some reason refer it to the planning department, really just is going to rubber stamp it. so, i just don't quite understand the process on why the fees are aligned the way they are. >> i am checking to see if planning department staff is available. reiterate a little bit, i'll try to put it a different way. the planning department is going to be involved, you know, with almost any use because uses are governed by zoning. the planning code is where the zoning lives. planning department staff is going to be involved. i mean, i believe on almost any sort of business application or where it's a change of use. so, i think that this matches, for example, the restaurant example. and it could be at a much more robust level and we've tried to

keep it at the most minimal involvement from planning which we believe as possible. i'm not sure what it would look like not to involve the planning department. that's the party haven't been able to see. >> i don't have a fundamental objection against fees where work is done. i just don't understand where the work is being done in this particular case. seems like someone is doing work and not getting paid and someone is not doing very much work and is getting paid. i don't understand it. >> ms. riley. >> yes, you mentioned earlier record keeping. is the health department keeping record or the planning department keeping record? >> i would guess that they would both have some measure of record keeping. whether they could share that record keeping, i can ask the department. but i believe planning would have a record of anybody that, you know, any referral that would be tied to the address just like the department of public health would. i think it would be both. >> can the public health

department share the information with the planning? >> that's exactly what's happening here. public health is sharing information with planning. planning is checking it to make sure it matches the planning code. that's why there's a fee. >> so, they will share it. >> they're sharing information. then should they not charge the fee? i mean -- it's provided by the health department. >> you could potentially roll the fee into one fee and planning could take a bit of the health department's fee. i think this is probably the way it works for most use applications so, that's why they're proposing it in this case. fully understand the commission's desire, which we share to keep the barrier to cottage food operation as low as possible because it's something we all want to see happen. >> director dick-endrizzi. >> i'm sorry. >> commissioner o'brien. >> do we have any examples of cottage industries that have set up in the recent past, any

examples we can look at to see how the process took place? [multiple voices] >> we can check. there could be -- to the extent that a cottage food operation is defined as an accessory use within a residential dwelling unit, it's not allowed until now. there may be some. there's some of everything, but i'm not a irway of it. they're not actually allowed right now. >> so, the answer is no. the only thing i would say is -- so, you know, you have a primary residence today and the owner decides they want to use this building for a new use. and i think it's fair to say that that automatically triggers regulatory oversight that would give the planning department frankly -- a change of use in a building is always going to go to the planning

department and i'm pretty sure they'll have some convincing arguments about things like if they're going to put a window in to sell stuff out of a window -- >> they can't do that. >> they can sell, but there are other restrictions. they can't do a window. i should have said that. >> it's written in the ordinance. >> i think we definitely need to hear from the planning department. i'd be surprised if they're not able to come up with some convincing arguments about whether to engage or do some oversight on it because it is a change of use on the building. that does -- >> residential units and they're always going to be residential units. >> essentially additional use. >> you're right, it's kay change. so, it's kind of gray area. i really would love to hear from the planning department on it to see if they could justify it. ~ >> commissioner ortiz. >> frankly, i understand the planning part because it's a referral fee even though it's residential.

maybe planning has something saying, no way, because this used to be a dreier cleaner in the bottom and it's toxic. i think that's where they're just vetting to make sure it's safe for a food product or something of that nature. could be in a residential building because they might have something, conditional use or change of use of that particular residence might have happened. >> i don't think that -- it's not really proscribed in the planning code here. if a residence is above a dry cleaner, it wouldn't be permitted. right now it's being permitted in all zoning districts. so, and i think if this falls within that realm of the health concern realm, that might -- at this particular point might be more of a concern, you know, from the department of public health's concern. but we haven't defined -- it doesn't define right now any areas where -- if it's above a dry cleaner or not, it's

permitted in all zoning areas. so, there are no qualifiers in terms of where it may or may not be permitted. so, i think at this point in terms of the zoning department, maybe the most is just saying it might be looking at a map. are you familiar from the regulations when you're counseling if we tell individuals that they need to provide a map as part of their application process, do you recall at all? >> we don't get into that level of detail. we rely on the health department to inform the applicants of what the application requirements will be. >> right. so, anyway, so, i think that would be the most. otherwise it's just sort of documenting where there are

cottage food businesses taking place in residential districts. again, in case a complaint does come up. but, you know, through technology, sharing data information should not be difficult, you know, quarterly, being able to sort of quarterly submit from the health department to the planning department, the applications that have been approved that they have permitted to operate. ~ can be done. you know, we have data s.f. which is part of putting all of our data up, making it accessible. so, without kind of understanding what's -- unless the planning department is going and doing an inspection to ensure that, you know, there's no more than one-third -- one-third of the space is being used. so, i don't think that there is that level of detail right now. that would be more within the health department if there is concern about food being made

in an area. >> if that's the case, you know, like we're all concerned what's the fee for, as you said, protection. protection of what, protection money, like i have to pay rent now? like, what is this? >> protection against the complaint. >> protection against the complaint. >> commissioner dwight. >> as i say again, i don't fundamentally object to fees. i think that what's at issue here is it's not clear to us -- it's not transparent what it is for and who ought to be getting fees. so, i think before we approve of anything on behalf of small business, we need to understand who are the governing bodies and who is getting paid to do what. and it is not clear from this document who is getting paid to do what. i don't have any argument whatsoever with the notion that the planning department needs to be involved in some way because this involves the use of a building. i don't have any argument with the fact that the health department should be involved because it has to do with cooking of food that's going to

go to third parties outside of the home. but before any of us can make any determination, it seems to me, there is some explanation due to not only us, but to supervisor chiu's office if they want to sponsor this, to understand what exactly are we approving. >> let me emphasize supervisor chiu and our office is comfortable planning has a role to play here similar to an application for a bar or restaurant at a much smaller level. >> i agree they have a role to play. i don't understand -- i also agree the health department has a role to play. this seems arbitrary toe me and arbitrary to the commission as to who is getting paid to do what. in the absence of that, i don't see how we can approve or disapprove it. we do have letters from groups asking us to disapprove this, groups that represent small business interests. and, so, we're being asked outside of the chambers to deny this. and, so, and we're being asked

by supervisors whose work we respect to approve it, but so now we're in a little bit of a conundrum. we don't think we have enough information. >> one additional information i was recalling from my conversation with planning, one thing planning will do is make sure the unit proposed for cottage food operator is a legal unit. so, that's just the kind of -- they'll probably have a checklist, make sure that's -- >> again -- >> again happy to hear from them. i think it's also very important, i think, i would request that the commission consider the alternative levels of planning department involvement in this. this could be a conditional use application. it could be a hearing at the commission. it could be a za hearing, that sort of thing. any one of those levels of process where a cottage food operator would require significantly higher fees. so, we would encourage the commission to look at the level of this fee and, you know, again, i think planning can always provide -- i know other

departments, i've seen the spreadsheets behind the fees of what they estimate in terms of the staff time involved and that sort of thing. we're more than happy to ask planning to provide that. you should have that. i do ask you to consider the alternative involvement from the planning department and where this fee falls on the spectrum of what planning, what level of engagement planning has. >> i don't -- i can't describe to the logic of comparing this to something that does not exist at present. that's not being proposed. what your argument suggests is this is below some pain threshold and we should simply approve it because there are alternatives that are worse. >> i'm not sure what's wrong with that argument. >> well, because now you're saying, okay, don't approve it. let's define a process that requires something more onerous. we're being asked to approve a fee. i am not here to argue whether it's above or below the pain threshold for an entrepreneur. i can imagine the equipment costing far more than this.

in some ways it's a nuisance to have to pay $130. that being said, it is a fee. it's a new one and we're being asked to approve it. as we know, as the years and decades go on, these things pile up and 1 hundred dollartoday becomes $1,000, and thousand dollars becomes $10,000 on top of permits. we're here to provide guidance as to what is absolutely necessary ~ in here to allow this to go forward with reason and to make sure everyone is duly compensated. i reiterate i don't think we have the information to determine whether that is or is not the case. >> i appreciate it. i would also respectfully request that the commission forward any objections that they have received to our office so we can respond as well. >> commissioner commissioner white.

>> i'm sure my question is targeted to planning. small business, obviously this is a good ordinance. but i mean with the comment you made earlier as far as an additional zoning for that residential property, is there going to be cost factors like for the property owners with additional zoning and will that trigger anything for that tenant? like are they giving something to the owner because maybe the tenants don't know? >> no, not to my knowledge. >> okay. >> director dick-endrizzi. >> so, i know we have public comment to get to, but one thought is -- because there are several important components that are in here, which is that it's being permitted in all zoning districts. that's a good thing. it is allowing one additional employee, that's a good thing. and then i'm not sure if there's a third component. so, after we hear public comment, a thought could be moving forward with those components, with a direction to

the planning department, because then the legislation doesn't necessarily codify the referral zoning fees, but a recommendation to the planning commission to direct the department to really assess whether the zoning referral fee is absolutely necessary. >> commissioner riley. >> yes, we heard this ordinance at legislation committee, and we like it. the only thing we have an issue with is the fee, the $130 to planning and what is that for. in looking at all the fees the cottage food operator has to pay, it's pretty high. you're looking at the tier b, it's almost -- it's over $800. so, for a very, very small business operator, that's a lot of money to start a business. >> is there any public comment? i'd be happy to track down my colleagues from planning. >> we need to move on.

if they're not here, they're not here. do we have public comment on item number 5? please come on up. >> oh, and commissioners, i did want to make a note that you -- i received two letters today from la cocina and s.f. made so they've been submitted to you. and that the public is interested in taking a look at them. >> welcome. good afternoon. my name is [speaker not understood] speaking on behalf of la cocina. it is a nonprofit kitchen and very low-income entrepreneurs [speaker not understood]. we are really excited about the california homemade food act in that it creates additional opportunities for entrepreneurs, lowers barriers to entry and makes it more inclusive for the food industry in san francisco and throughout california. and we're here or i'm here

speaking against the zoning verification fee. though it's a one-time fee and relatively low in relation to other costs of starting businesses, it is not an insignificant cost for a lot of the entrepreneurs that would most benefit from being able to start cottage food operation out of their home and we think it would work in detriment to this attempt to foster inclusivity in creating more opportunity. thank you. >> great, thank you. any other members of the public who would like to make a comment on this item? seeing none, public comment is closed. commissioners? commissioner dooley. >> i think that obviously the benefits of this are great, and i -- >> [speaker not understood]. >> i saw dooley up there, i

didn't see her. i'll call you next. >> and, you know, i think that we need to just give guidance on the planning referral part. but i don't think that we should condemn this entire piece of legislation over this one topic. >> i would agree. commissioner riley. >> yes, since we heard this at the legislation committee, i want to make a motion unless you have any more questions. >> i just have a comment, that's it. i have a comment. >> go ahead. >> i think especially after we've [speaker not understood] over some planning stuff, the spirit of this legislation, this is exactly what we need in san francisco. and like i think the sentiment of my colleagues up here, we don't want to make one issue seem like we're not for this legislation. it's very positive and, you know, it's just we want to know

why we're paying planning. that's all. >> yeah, i'd like to make a motion to approve this with some amendments. >> go for it. >> okay. number one is to prohibit the institution of zoning referral fee by either or both the department of public health or the planning department. the second one is to it authorize the department of public health to share with the planning department reference relating to cottage food permit, license, approval site, expiration date, permit location, permit holder's name and other personal information. >> we have a second? >> second. >> can i get some help with that? did you say [speaker not understood] on that fee period? you're approving it, but we're not approving the fee, did i understand that correctly? >> correct. >> thank you.

>> perhaps we should make an amendment saying we recommend. >> okay. >> rather than saying we're not going to approve the whole piece of legislation. >> we do approve. >> right, but we can recommend a prohibition, but we have to be realistic about whether or not there are going to be absolutely no fees involved with this. i mean, we can recommend -- i think we can recommend to delete the referral fee. that would be my recommendation. lou, what do you think? >> i think that would be fine. >> just to be clear, the referral fee is not referenced in the ordinance. so, you may need to act or make a recommendation to add something in the ordinance to prohibit the fee if that's what the commission's intent s. but there's nothing to recommend be deleted from the ordinance at this point. >> that's why this is very difficult because we want to approve the change to the ordinance, but the fee is

separate from but somehow got tied into this. i don't disagree at all with the spirit of enabling cottage food operation. i am just questioning the fee and where it goes and what it's for. >> director dick-endrizzi. >> there are a couple ways you can go. ~ as commissioner riley said, we can make a recommendation that the legislation be amended. it's a recommendation, the supervisor doesn't have to do it, but then staff can go and talk to other supervisors to see about amending the legislation so that it does say that no zoning referral fee is collected and/or staff -- or you can say amend to include that. and if not, to work with the planning department to, you know, not have the zoning referral fee.

so, you can make an a and a b recommendation. am i making any sense? >> yes. >> so, you can be very -- say we're very clear that, you know, we are not supporting the zoning referral fee and, so, therefore want to amend the legislation. and if that can't be done, then to have staff work with the planning department to see about eliminating the zoning referral fee on an administrative side. >> commissioner o'brien. >> well, i think you kind of played into what i was going to comment on. i kind of agree with commissioner dooley. kind of an absolute is not a good way to go. rearguely, i think as commissioner dwight alluded to, we just don't have the information that we need. it could be the planning department would come in here and convince us, oh, this is

absolutely fair fee because it's so small. and, yeah, we should go forward for it. we don't know enough to make a decision on it. that's my personal opinion. i can agree with commissioner dooley on that point we should not say a prohibition. i think if i understand what you're saying is we're approving the ordinance and just putting an asterisk beside the fee and say please investigate this fee further, in so many words. i think that's what i understood you to say. >> great. so, that would be a friendly amendment to commissioner irene yee riley to say put in the ordinance not to do it, but, so -- >> i just don't agree we should say it should definitely not be in there and i don't think we should say it should definitely be in there. i think we should kind of make some point as a small business commission we're antiany unnecessary fees. if it is deemed it is appropriate or whatever, ~ leave it in there.

if you can figure that into it, then i can go along with it. >> what if we just say that we recommend more research be done as to the relevance of the fees and work with our staff to determine that? >> yeah, i'm okay with that. [speaker not understood] can you figure out -- >> give me one more moment to try to sort that out. one more thing, just the clarification because i just foresee a loophole, the whole edibles with cannabis. >> i did make a note to follow-up with the department on that. and i will also be very clear exactly what planning will do vis-a-vis this fee will be discussed thursday at the planning commission. and i can ask planning to respond in writing to small business to detail that. it is important to note, a christian noted, the fee isn't in the ordinance. so, i'm here defending what planning is basically going to

come up with as they're charged for their part of the process that we all support. you know, i think the other policy options for us to consider and this is more during the budget process, is whether we would want to cover whatever work planning is going to do out of the general fund instead of as a fee base, say, whether it's folded into another fee like a dph fee. so, i do completely understand commissioner dwight's and all the other commissioners' real -- trying to hold the line on any unnecessary or new fee or any charge no matter how well. and we want to respect that and we'll commit to working on the issue as the legislation move through the process. >> so, do i need to amend my motion, instead of saying prohibit, to recommend elimination of the referral fee? >> yeah. >> um-hm. >> yeah. >> that's fine. >> okay, christian. >> we have a motion from

commissioner yee riley to recommend to the board of supervisors approval of this item with two amendments or recommendations. one, to further study and carefully scrutinize the zoning referral fee for its relevance by the planning department staff. and two, to authorize the department of public health to share information with the planning department as outlined in the initial motion. >> correct. do i have a second? >> second. >> director dick-endrizzi? roll call. >> commissioner adams? >> yes. >> commissioner dooley? >> yes. >> commissioner dwight? >> yes. >> commissioner o'brien? >> yes. >> commissioner ortiz-cartagena? >> yes. >> commissioner yee riley? >> yes. >> commissioner right? white? >> yes. >> the item passes 7 to 0. >> thank you, justin. >> next item, please. >> item 6, presentation and discussion on the role and function of the new nightlife and entertainment sector position in the invest in neighborhoods initiative. discussion item. >> and we