option to extend for up to one year. >> supervisor cohen: thank you very much. rob penning, are you here? there you are, front and center. take it away. >> good morning, supervisors, i am rob penning, with the office of contract administration. and we are presenting items 4, 5 and 6 today in connection with three contracts that form part of the technology marketplace and we have a brief presentation to provide you with context for the proposed amendments. those responsible for overseeing the procurement of information technology products and services, to the same that the department has created a contracting mechanism called the tech marketplace that is used extensively to meet i.t. needs. and within the current marketplace they were selected by a competitive process and all contracts in excess of $10 million were approved by the board of supervisors in 2014. the existing marketplace has been operational for almost four

years and during that time o.c.a. has allowed vendors into the framework to enhance the applied diversity and to expand the need for products and services. and it is important to note that the agreements within the marketplace are requirements-based contracts and this means that the vendors must compete against their prequalified peers within the marketplace for sales opportunities and vendors receive no guarantee that they will be awarded work. and all spending within the tech marketplace is goff other thanked by appropriations approved by the board of supervisors. the marketplace is currently comprised of three tiers and there's 13 tier one contracts, seven tier 2 contracts and 13 contracts that have been set aside for microl.b.e.s. and so we have historically worked with c.n.d. to make sure that the services and the avenue for our local businesses to grow and prosper. and so current l.b.e.s account for 6% of the direct spend in the marketplace and businesses that have graduated from the

city's l.b.e. program account for an additional 38% of the direct spend. and in addition, 15% professional services work within the marketplace must be sub-contracted to l.b.e.s. the following slide will give you an indication of how much has been spent in the marketplace from october 2014 to the end of february 2018. the majority is concentrated in three of the vendors in this tier that now require contract increases so they can continue to compete for work inside of the marketplace over the next six months. and it is important to know that r.c.a. had an r.f.p. for a new marketplace framework and it was created after consultation with the department of technology, c.m.d., local 21, and the use of the departments with large i.t. needs. and the conference was held on july 9th and bids are currently due on august 1st. it's our hope and intention to have the new marketplace operational in january of 2019. the r.c.a. will present the new

marketplace's tier one contracts to the board of supervisors later this year for their review and approval. to recap, we request permission to have the cap on three tier one marketplace contracts so the contractors can continue to compete for work inside of the marketplace inside the o of thet six months. >> supervisor cohen: i'm going to pivot and here from the l.b.a. and hear her recommendations. >> yes, as mr. penning said this approves amendments to three existing contracts in the computer store, central computers and intervision and xtech and we have the increase in each of the contracts on page 19 of our report in table 1. and the total contracts would increase to $136 million to $155 million, an increase of $19 million, through the end of the year. page 20 of our report summarizes actual expenditures as of

february on these contracts and projected expenditures through the end of december 2018. and as you can see here in table 2 the projected expenditures are $152.6 million or less the not to exceed amount of $155 million. and the difference has to do with the expected expenditures for airport technology projects. we did talk to the airport and determined that this is probably a reasonable request and recommend approval. >> supervisor cohen: thank you very much, thank you for that. we will go ahead and have public comment. any member of the public to comment on item 6 in seeing none, comment is closed. all right, supervisor stefani. >> supervisor mandelman: i would like to forward this -- >> supervisor stefani:, i would like to forward this. >> supervisor cohen: without objection, thank you. all right, moving on, item 7 and

8. >> clerk: to authorize the execution and the delivery of a multifamily revenue in one or more series in an aggregate principal amount not to exceed $35.7 million for the purpose of providing financing for the construction of an 8 is million unit multifamily renting project. and item 8, to approve and authorizing a long-term ground lease for 490 south finesse housing associate on city-owned land. >> supervisor cohen: thank you very much. i would like to make a motion to continue these items for one week. >> can we open up for public comment? >> supervisor cohen: public comment on items 7 and 8. seeing none, public comment is closed. thank you. and make a motion to continue motions 7 and 8 for one week's time. without objection. item 9, please am.

>> clerk: to authorize the mayor's office of housing and community development to have the community stabilization funds in the amount of $125 million to address the impacts of destabilization on residents and businesses in soma. >> supervisor cohen: we have our guest with the community development to be here today and i was told that katie fong from supervisor kim's office is going to be speaking. please come on up and we'll acknowledge you first. and then we'll get to your presentation. thank you. all right, so this is miss kitty fong from supervisor kim's office. >> thank you, madam chair. >> supervisor cohen: this is her first committee appearance, ladies and gentlemen. >> thank you. >> supervisor cohen: all right. >> very honored to be here, good morning, supervisors. so a brief background on the soma fund for the planning code in 2005 which won... (indiscernible) and for the

infrastructure fee and create a community fund to deposit the fees collected. and four, to have a soma stabilization fee of $10.75 per square foot on new residential development and in the district and to have a soma fund to deposit the fees collected. and to establish a soma fund community advisory committee. and the board of supervisors on expenditure of the fund. and the planning mandates that the funds be for soma residents for the impacts of the destabilization that includes affordable housing and community acts of building and other services. and the board of supervisors approved a resolution in 2008 approving the soma community stagization fund strategy plan and authorizing the

administration to work with the soma fund c.a.c. on assuring r.f.p.s for non-profit organizations. last year in 2017 the board of supervisors approved a resolution approving the amount of $1.2 million to 22 soma-based non-profit organizations in year one. and based those, soma had a manager desarjoe and awarded the grant in year one for the performance expectations. and here we are today to propose with the same amount of funding for stabilization in the second year. therefore, i hope to get your support and move this item to the full board. >> supervisor cohen: thank you. well, miss derosay a joe rosarid your delivery for you. anything to add? >> i will add that we will come back for approval of probably

the last cycle of the funding next year. a little bit before this. >> supervisor cohen: thank you, ladies and i appreciate your presentation and we'll hear from miss campbell on her thoughts on this item. >> yes, good morning again. and so this actually, as has been discussed, funds the second year of funding for the community-based organizations selected last year for services to soma. table one of our report on page 29 summarizes the amount, totals $1.2 million. and approval of these expenditures will leave a balance in the soma community stabilization fund of $2.6 million and those amounts of summarized on page 30 of our report. we recommend amending the proposed resolution for retroactivity to july 1st and otherwise we recommend approval. >> supervisor cohen: thank you, we'll take that under advisement. any member of the public that

would like to comment on item 9, come on up. seeing none, comment is closed. thank you. and may i have a motion... or i'll make a motion to approve and send to the full board with a positive recommendation and as a committee report. >> clerk: would you like it amend the item? >> supervisor cohen: yes, as amended. thank you, without objection. and i should say thank you, ladies, because there are no gentlemen up here. thank you, miss fong and thank you miss delrasrio. call items 10 and 11 together. >> clerk: 10, to declare the intent of the city to reimburse expenditures from the proceeds and to have the mayor's office to submit an application to permit the mortgage revenue bond to 1000 tomkins avenue. and to reimburse expenditures

from the future bonds and authorizing the mayor's office of housing and community development to submit an application to permit the issuance of residential mortgage revenue bonds for 3101 mission street and 141 and 143 persita avenue. >> supervisor cohen: thank you. we have our presentation. >> thank you, chair cohen, i'm adam cray with housing and community development. and i'm here to have acquisition and rehabilitation work at two projects sponsored by the neighborhood center. both don't require the funds towards the repayment of the bonds and the city will not provide any gap financing or subsidies to these projects. in terms of the project descriptions as described in the package before you, market height is a rehabilitation project for an all-affordable project at 211 putnam street

next to the farmers' market. and 32% of the markets will serve households with 52% of the median income. and the scope of the work at this particular project include new roofs and exterior paint jobs and replacement of lighting and new water heaters and ann accessible restroom and a new play structure for the kids. and the residents will be displaced as a result of this financing as all residents have the right to return following any temporary relocation that might be required by the rehabilitation here. and also residents will want be financially responsible for any costs with relocation. it's an acquisition that we have a rehabilitation property at mission street at caesar chavez. and 27% will serve households with no more than 20% of the

median income. and so very deep affordant on half of the project. and the remaining units serve the households with no more than 60% of the median income. and this particular project includes replacing major components of the hvac and plumbing systems and having features for the units, waterproofing and thermal protection throughout the project and various common area improvements. as with the other project, no residents will be displaced as a result of this particular rehabilitation. and for both of these projects the sponsor plans to submit an application to the california debt limit allocation committee by year end and they'll return to the board for approval next year is the plan. and on behalf of the project sponsor and the mayor's office of housing and community development i look forward to your support for these projects. i conclude the staff report and answer any questions that the committee may have. >> supervisor cohen: thank you, mr. cray and i appreciate

your presentation and i have a question with item 10. how many residents will be affected by these construction -- by the construction? >> it's a 46 unit project and i'm not sure exactly what the resident count is because i'm not sure what the breakdown is within those units but it's, you know, i would say -- >> supervisor cohen: 46 units is the answer to my question. thank you. and there is a b.l.a. on this item, and public comment. any member of the public to comment on these items? seeing none, public comment is closed. thank you. all right. oh, okay. i'm going to make a motion to reopen public comment. thank you. yes, sir. >> i was wondering if after the resting period the funds would be distributed -- sorry -- equally pe pupil and we already spend the most of any u.s. cit .

>> supervisor cohen: thank you, public comment is closed. a motion to approve and send to the full board with a recommendation, positive recommendation. and send this as a committee report. colleagues, thank you, without objection. and okay, item 12. >> clerk: to authorizing the city officials to secure on behalf of the city and the actions necessary for the purpose of obtaining state and federal financial assistance under various grant programs. >> supervisor cohen: we have ann cronenberg here to present on item 12. welcome. >> thank you, president cohen and supervisor fewers, and supervisor stefani. and it's a library t pleasure te before you. we did give the clerk a minor clarifying amendment to the res resolution which i believe that

you have at the request of the city attorney's office and we have one whereas, the department of emergency management is authorized to execute the grants only if they are consistent with state and local law. as you know the last two years as we've had the issue of urban area security initiative funding that there has been some controversy and that goes back to the urban shield exercise that alameda county puts on each year. i'm happy to say that in the last year i sat on the urban shield task force which made recommendations to alameda county which were adopted in january and i think that everyone feels good about the direction that we're going. alameda county said that urban shield would no longer look or feel like it has in the past. so it will be substantially

changed and i don't see any controversy with this. san francisco receives about $23 million for the bay area annually through the funding. we fund 39 city employees through this. and i'm happy to answer any questions. >> supervisor cohen: thank you very much. i am glad to see your amendments and i want to acknowledge that supervisor fewer has also circulated amendments and have you had a chance to review them? >> i have. >> supervisor cohen: are you in agreement? >> i am. >> supervisor cohen: what was the outcome of the committee that you joined? >> i'm sorry, could you repeat that. >> supervisor cohen: what was the outcome of the committee that you joined? >> so the outcome, there were 27 different recommendations that went forward and basically recommending that urban shield would no longer look like it had in the past. and that there would be more emphasis on emergency preparedness as opposed to militarization of the police departments which is the way that it was characterized by the

stop urban shield people. that the trade show would no longer exist as part of urban shield. >> supervisor cohen: is that known as the expo with the trade show? >> yes. which was very controversial and so that no longer exists in 2019. and there were a number of other amendments put in that specifically addressed accountability and also transparency in the process. so the alameda county will have to report back to the board i believe quarterly on progress towards the new urban shield, whatever it will be called, the new exercise program. and there will also be a great deal more of the community participation. >> supervisor cohen: excellent it. sounds like a small victory for all of the advocates that came to this chamber and to multiple sites across the bay area, particularly in oakland. >> i did invite the advocates to come to testify today because i feel that it's been a win-win for all of us. i know that john lindsay polen

was unable to attend and i don't know if anyone else could come, but i feel that it was a very productive year. >> supervisor cohen: good, good, i'm glad to hear that. and supervisor fewer, why don't you talk us through that amendment. >> supervisor fewer: i have a few amendments is that last year there were some concerns about some militarization of our law enforcement agencies, in particular our san francisco law enforcement agencies. and i am so glad through these discussions and your committee that we've come to the same agreement that this is indeed very, very important for us to have this cross-county collaboration around emergency preparedness. and it's actually imperative to have to keep us safe. but we did not agree on the militarization of our police department. so i am pleased today to present this amendment that i have been -- our office has been in contract with director

cronenberg that agrees with these amendments and you have them before you today that basically affirms what alameda board of supervisors voted on in march 201 2018 upon the acceptae of the funds for use in 2018, and the result that urban shield would be redesigned and not look like it has been but also that they'd repurpose the funds. so concentrate more on emergency preparedness and not on the militarization of our law enforcement agencies. >> supervisor cohen: all right, thank you very much for your work on that, supervisor fewer. i appreciate that. and also i want to recognize supervisor yee has spent a significant amount of time as has myself and my staff and working with your advocates and the department and the overall structure to try to better understand exactly the best way to utilize taxpayer dollars. so i'm going to table public comment on item 12. and open it up to the public. to any member of the public that would like to comment on item 12? please come on down.

>> hello, i'm not always in the city so i'm not always up on events but i was wondering, had a former school board member been arrested for agreeing to import weapons into the u.s. in some kind of strippin sting open before? >> supervisor cohen: all right, any other member of the public? seeing none, public comment is closed. thank you. supervisor fewer, do you want to make a motion? >> supervisor fewer: i move with a positive recommendation -- first to approve with amendments to the full board. >> supervisor cohen: we'll take that without objection. thank you. all right, ladies, let's go to item 14 please. >> clerk: item 14, ordinance to amend to establish and set the rules governing the appointment of the director and the qualification and the duties of employees of the office of sexual harassment and assault response and prevention under the direction and the oversight of the human rights commission. >> supervisor cohen: all

right, thank you very much. just want to recognize mr. l. davis is out of town, unavailable. i thought that she was sending a representative to speak on this item. okay. supervisor ronen is coming to speak on item 14. just as a way of background this ordinance establishes the sharp program for sexual harassment and assault response to be housed at the human rights commission. this item was previously heard at the rules committee and it's been discussed at length throughout the entire budget process. i want to welcome supervisor ronen to join us in our discussion. >> supervisor ronen: thank you. >> supervisor cohen: thank you. supervisor. >> supervisor ronen: i'm sorry -- >> supervisor cohen: no apology needed. supervisor yee and we took 13 first. >> supervisor ronen: oh, gosh, sorry about that. so thank you so much for hearing this item.

colleagues, today -- sorry, excuse me -- so today we are hearing less tha legislation thi introduced with all 11 of my colleagues that creates a sexual assault office under the human rights commission. the intent is to ensure that there's a dedicated team to oversee accountability within our city family when sexual assault and harassment cases are disregarded by any city department or employee. and to also help survivors to find solutions that restore their dignity and their sense of safety. and as i have repeated in the previous two hearings, sixual violence is a terrifying national epidemic. one in two women and one in six men report experiencing sexual violence. i have been meeting with sexual assault and sexual harassment survivors and advocates for over six months. in april i held a hearing with

the public safety committee where we heard two hours of testimony on this issue. i have heard too many stories that clearly show that we have a big problem in our city government with our response to sexual assault and sexual harassment. these are not just a few isolated incidents. there is a pattern of negligence and mistreatment that i consider abusive towards rape victims. from hospital workers sending a pregnant woman home to heal after disclosing rape during a check-up to a police officer saying that both parties involved needed to take responsibility as if there's no difference between victims and assailants. we see the departments unable to keep san franciscoians safe from sexual violence. in fact, we have yet another very appalling example of a city employee disregarding date and acquaintance rape as less egregious than stranger rape. just a couple days ago in a san

francisco "chronicle" article a city employee said these assaults were not date rapes. these were not acquaintance rapes, he said. these assaults were violent rapes committed by a serial rapist and a predator who is not going to stop until he was caught. how can anyone say that getting raped by someone you know is less violent just by the nature of it? this is wrong and should never happen again. this is the culture that minimizes sexual assaults and sexual harassment and the type of culture that leads to disregarding hundreds of women who deserve justice. let's not forget that seven out of 10 rapes are committed by someone known to the victim. disregarding these types of rapes endangers the vast majority of women who are raped. this is precisely why i am creating "sharp," the office of

sexual harassment and assault response and to remedy the complaints, and having transparency and developing policies to improve the systemic responses to sexual assaults and sexual harassment in san francisco. i'm looking to establish a team of three employees for the sharp office, one staff member will be tasked with interacting with sexual harassment survivors and their advocates to navigate through options for remedy. and one staff member will collaborate with the city departments and community agencies to gather data, understand current patterns of violence on the ground and have yearly reports with policy recommendations. and the sharp director will provided meiation between survive -- mediation between survivors and written guidance to remedy mistreatment and to proceed with cases. the director will also serve as the public spokesperson and liaison with the board of supervisors and the mayor. instrumental to the work of the sharp office will be to collaborate with the department

on the status of women, to bring upon -- to build upon the support and services and work that is performed by community-based organizations on a daily basis. i want to thank the survivors who have come forward to bravely share their stories and partner with my office to prevent more survivors going through this nightmare. i want to thank you the community-based agencies and advocates collaborating with my office on the legislation and doing work on the frontlines every single day. and last but not least i want to thank all of my colleagues on the board of supervisors who have unanimously signed on to co-sponsor this legislation with me. i look forward to the work of this office to begin this summer and for true accountability and transpatransparency to be the nr survivors in san francisco. today i'm introducing two simple amendments to clean up the language of the legislation and on page 1, line 18, i am deleting the words professional or administrative in order to clarify that this office is tasked with assessing if a case

should be referred to any appropriate disciplinary authority. and on page 3, line 25, and page 4, line 1, i am making the same deletion of the words professional and administrative for the sake of consistency. and, finally, on page 4, line 7 and 8, i am deleting one of the disciplinary authorities to which employees' cases can be referred to. this is not changed the operational work of the office, but it helps to highlight that we want this office to use internal procedures before removing the complaint up to a licensing authority. and with that i hope that this committee can accept those small amendments and send this to the full board with positive recommendation. >> supervisor cohen: all right, thank you very much. supervisors, any questions for the supervisor ronen? seeing none, we will go to public comment. any members of the public to comment? public comment? hello?

>> good morning. my name is sarah nesser and i work for the city and the county of san francisco. and i'm here today to stand in solidarity survivors of sexual violence in this city. in october 2007 a stranger broke into my apartment in washington, d.c., and raped me. i did everything that i was supposed to do and nothing happened. eight years later in 2015 after reading about the rape kit backlog i decided that i had to find a way to follow-up on my case for myself and others. and when i did suddenly there was a suspect. while the d.c. police were neglecting my case he sexually assaulted at least two other women just outside of d.c. in 2008 and 2010. i tell this story to remind you that the failure to take sexual

violence seriously is an institutionalized national problem. the survivor stories that you have heard do not represent isolated experiences. these are the standard practices of many cities across the country and they are directly related to the epidemic of sexual violence in this country. but i also come here today to provide hope. when i sent my lawyer and case manager some recent articles about the proposed ordinance they said this sounds like d.c. five years ago. progress is possible. one of the changes in d.c. that made a huge difference to me was the establishment in 2012 of dedicated highly professional multicultural staff that are available to survivors each step of the way and hold the city systems accountable. the trial for my rape finally took place two months ago and i was on the stand for three hours

and during questions from the defense attorney, like, why didn't you scream... >> supervisor cohen: i'm sorry, your public comment is over but maybe you can finish up with your last sentence. >> okay. i come here today to just say that it's urgent that you pass the sharp ordinance today as a critical step and to keep on going. >> supervisor cohen: thank you, thank you for sharing your testimony. we're grateful for it. any other member of the public to comment on item 14? seeing none, public comment is closed. and colleagues, i would like to make a motion to accept the amendments. if we could take that without objection? without objection. and i would like to approve and send to the full board with a positive recommendation as amended. oh, i'm sorry, supervisor stefani, please. >> supervisor stefani: i wanted to thank supervisor ronen again for her leadership on this and the amazing staff and for all of the survivors who have come out to share their stories

and i have been so moved by that. i have met with many and i thank them for taking time to meet with me as well and i'm very happy to support this legislation and to see it go forward. thank you. >> supervisor cohen: supervisor fewer any remarks? all right, thank you. so, again, i make a motion to approve this legislation and send it to the full board with a positive recommendation (please stand by)

-- to point out that the amendments that you aadopted last week actually were in some part aimed at accommodating the concerns from the p.v.t.s and that is why the new category for receipts above $50 million was included. >> supervisor cohen: all right, thank you. and public comment. i have two cards, first nima rahira and then kristen shoe macker and any other members would like to come, please step up. >> i'm here to ask you to please and respectfully to exclude private transit vehicles from this tax initiative.

there's only one private transit vehicle operator and chariot inc and it's in stark contrast to what this initiative is intended to target. unlike it they are w2 and not 1099 workers. they have rejected the independent contractor model. why is this important? chariot pays a payroll tax for its drivers. the companies with independent contracted drivers do not pay a payroll tax for their drivers. and chariot drivers are also representatives of teamsters local 665 while independent contractors don't have the benefit of organizing. and chariot invests in high skills training for san francisco residents and nearly half of chariot's drivers live in bayview and hunter's point and they pay for a point for each driver and pays an hourly wage. and unlike it they are permitted under the city. and they pay a fee for a number of vehicles permitted and that amount is $90,000 and this number will soon be $140,000.

and chariot shares its data with san francisco in real-time and among other things this allows for administrative enforcement of permit requirements through citations and fines. chariot is governed by criteria to complement public transit and not to compete with public transit and chariot reduces wear and tear on greenhouse emissions. for every chariot on the road we remove 10 occupancy vehicles and this amounts to thousands of cars off the san francisco roads every week. so i want to thank you all for what you do for this city and i appreciate supervisor peskin's effort here and i appreciate your consideration. thank you. >> supervisor cohen: thank you, next speaker. >> i am kristin schumacher, and i wanted to thank supervisor peskin for bringing this measure but to share some of our union's concerns about what happened in the last session regarding

amendments. initially this measure included an early sunset of the payroll tax exemption which was taken out. and our concern is this is a time when the city needs revenue for infrastructure and improving public services and that we shouldn't be chipping away from potential revenues in this measure and our concern is that this will continue in the future and i want to caution the board against that. and the twitter tax break had allowed the companies to avoid over $60 million in taxes and that early sunset of the provision would have meant around $7 million in additional and potential revenue. and considering the size of the tax break thus far, and the impact that the companies like twitter have had on our city i think that would have been fair to include that early sunset. so i want to thank you for bringing this measure but caution against further amendments that would reduce its potential revenue. thank you. >> supervisor cohen: thank you. any other speakers?

>> good morning, peter strauss on the board of the san francisco transit riders and the member of the transportation justice coalition and we want to thank supervisor peskin for all of the work in the past few years that led up to this. and i want to thank supervisor fewer and your colleagues on the full board for joining as co-sponsors of this measure which we strongly support. as you know the voters passed it by two-thirds in 2016. and also many people were part of the task force late last year and early this year which supported an investment program in transportation but failed to develop a revenue source to support it. so we look to this as addressing the revenue issues as best we can. and we also recognize that we have a lot of work ahead of us and we look forward to working with you on developing the allocation strategy that needs

to accompany this measure as we go forward. but today i want to thank you for your support and i urge the committee to pass this to the full board for it to pass recommendation. thank you. >> supervisor cohen: thank you for your testimony. any other members of the public that would like to testify or give public comment? seeing none, public comment is closed. supervisor peskin, is there any last-minute remarks? >> supervisor peskin: if i may i would like to address some of the comments from the members of the public. oops, i guess that my time is up. >> supervisor cohen: please, continue. >> supervisor peskin: regard to the comments on behalf of chariot. first of all, i want to acknowledge and to appreciate the fact that chariot does indeed use union labor and is not involved in the 1099 race to the bottom. and that albeit with a few

hiccups has had a relatively cooperative relationship with the san francisco m.t.a. and making sure that they don't compete against each other in ways that diminish the public transit. having said that, the fact that corporate players behave well does not mean that they should not be included in the tax. i mean, for instance, because hotels have agreements with unite here and local 2 and give those people w2s instead of 1099s doesn't mean that we shouldn't have a hotel tax to pay for arts and other things in san francisco. so i think if we go down the road that because an organization is using our streets and chooses to have union labor that they become exempt from taxation or fees is a dangerous road to go down and i am hopeful that the provisions

that we put in relative to the additional tier at $50 million, which was really designed to address some of the p.v.t. concerns would take care of those issues. with regard to the comment on behalf of the international federation of professional technical engineers, let me say that while i was not on the board when the so-called twitter tax was passed, the reality is that it sunsets in may of 2019 and it seemed to me that we would -- and, yes, i put it in in the beginning but it was really a distraction from the main event which is the tax that is before us and for five months it did not seem to be worth putting into this. that is why i removed it. but going forward this is actually a revenue source that

will be here for many years to fund transportation and other city needs, but -- and i appreciate the comments of the local 21, but i really don't think that five months of a tax that is sunsetting by its own terms is worth putting in the measure. >> supervisor cohen: all right, thank you, i appreciate that. all right, colleagues, i don't think if there's any other discussions or debate that we need to have on item 16 and i would like to make a motion to move this item to the full board with a positive recommendation. >> clerk: roll call vote please. >> supervisor cohen: let's take a roll call vote. >> clerk: supervisor fewer? >> aye. >> clerk: supervisor stefani. >> no. >> clerk: two ayes and one no. >> supervisor cohen: this passes. madam clerk, the last item is 17. >> clerk: item 17, motion

ordering submitted to the voters at an election to be held on november 6, 2018 and ordinance amending the business and tax regulation code to propose an additional growth receipt tax on growth receipt from cannibas business activities and the first $500,000 and exempting retail sales of medicinal cannibas. >> supervisor cohen: thank you for hearing this item today. over the past several weeks my office has spent dozens of hours speaking with advocates presenting at the cannibas tax force -- we have been on calls with the california growers association and, of course, in constant consultation with the kocomptroller's office. and i recognize safia liter. and they are concerned about the black market thriving under the proposed structure and i understand that they feel that

an additional gross receipt tax limits the quote, normalization process, end quote. but i want to let you know that i disagree and i think that we're a long way from normalization. thank you. we no -- we need better enforcement strategy against the black market. we need to fund the equity program. and above all else to make sure that it is successful. we need to give the workforce development programs that this body mandated in the process back in november unlicensed operators are a problem. but they will not go away on their own. the city needs the revenue to normalize this industry. i'm very sympathetic to the concerns but we have a difference of opinion on how to solve this problem. so today i want to propose a compromise amendment. i am proposing that we remove the, quote, phase-in year currently scheduled for 2020. and to have a full rate effect

of 2021 to be the first year of impelementation. this allows us to move forward with the plans with the city but also gives the city and the upcoming board to address the cannibas business in potential cannibas businesses in potential overhaul of the business tax program in 2020. so this allows us to move forward but also allows the industry to have some breathing room as it begins to normalize. since the ordinance does give the board the power to reduce or to delay the rates we will have the power to delay, to reduce, or otherwise change the tax rates in that particular process. these are amendments that we passed last week. and i believe that this compromise gives everyone the space to continue this conversation in the context of the greater business tax structure without kicking the can down the road. and i'm also including an amendment that i discussed last

week in committee which we are calling the wayfair amendment. i have circulated the amendments to each of you. this would impose a gross receipts tax on those businesses based outside of the city but distributing inside san francisco. it will -- it will level the playing field between the made-in-san francisco city and those operators that are operating outside of the city but conducting business inside of the city. given that we still need a bit more time to understand the legal and the fiscal implications of this particular amendment i am proposing that we duplicate the file and add this amendment to the new version. we can take the next week to further study the issue and move forward with one of two versions next week. and before i move on i have a question for the city attorney's office. thank you, mr. gibner. on the issue that has arisen in

many of my conversations, is the question of our medical cannibas exemption. and it's a very straightforward question, why does it apply only to retail? so my understanding is that it's due to state regulation. can you perhaps confirm that on the record and explain the issue a little bit to us. >> sure. deputy city attorney john gibner. the problem is that under the state scheme upstream cannibas isn't designated for medical purposes versus recreational. and so there would not be a way currently for the city to determine whether -- whether a business is -- is -- or a particular business is working as medicinal or recreational.

so there's no way for us to determine administratively whether you fit a medicinal exception because the state scheme doesn't break it down that way. >> supervisor cohen: all right. thank you. i don't know if that was helpful or -- it wasn't hurtful but i don't know if it was necessarily bringing the clarity that i was looking for. >> okay, maybe let me try again. >> supervisor cohen: yes, try one more time. [laughter]. >> if we tax medicinal and recreational differently there would be no way for us to -- and the manufacturer says that we're making medicinal and they tell us that and there would be no way for us to verify that they are -- they are manufacturing medicinal product as opposed to recreational because the state doesn't distinguish their business to be manufacturing for both or either. and we would have no way of

auditing and verifying that they are creating medicinal product. >> supervisor cohen: that's actually very helpful. colleagues, do we have any questions or need clarification? i'll go to public comment and i have a stack of cards and recognize david goldman and then we have jessica sharp and cynthia kenness, and rob king. if i haven't called your name please come up and speak. hello. mr. goldman. >> good morning, supervisors. and thank you for making some very needed amendments to help improve the tax measure. my name is david goldman and i'm the president of the san francisco chapter of the cannibas policy oriented club. i think that the amendments that you have made are good but i think that it needs to go further. there needs to be a way to exempt cultivators who have medical licenses, manufacturers, testers and distributors who have medical licenses from

taxation. because, clearly, what will happen is that the taxes they pay will will be passed down to patients. patients are being taxed enough. since july 1st, our tax rate has gone up 50% prior to 2018. and all it has done is to led to many of my friends in the medical cannibas community going back to the black market. they got sticker shock when there was a 15% increase on january 1st and there was a 35% increase for cultivation and testing fees on july 1st. that's 50% plus the sales tax is nearly 59%. adding this extra tax, even indirectly, will eventually trickle down and hurt patients. secondly, we think that the tax rate should be ecequal with other businesses and why should cannibas be higher than other businesses? and, finally, i believe that the money should be earmarked for

helping the applicants with no-cost loans and they should also -- we should also earmark the money to help low-income medical cannibas patients in the city get their cannibas at lower or no cost. thank you. >> supervisor cohen: thank you. next speaker, please. >> hi, i am jessica sharp and i'm a cannibas entrepreneur and co-founder of an organization called new era. i wanted to share today that the supervisors' pro poeing posal requires the cannibas businesses to pay a tax rate of 4 to 51 times of what other san francisco businesses pay. i'm a recovering technologists that moved into cannibas because of the arts and because of the community that it fosters. and there are very few of us that are making the transition right now and we are actively working currently as an incubator for the equity applicants. there are people who have money and resources who are wanting to connect and work with those who do not. and we just need time and we

need the ability to make that happen before the larger organizations come in and push out all of the small mom and pop and independent little companies that are starting out right now. so that's my request. >> supervisor cohen: thank you. thank you for your statement. next speaker. >> hi, i am cynthia with new era also. we are applying as an equity incubator and have seen the different equity applicants that are in the pipeline and seeing the struggles that they've been having with regards to not having enough money to procure real estate space or even creating a cultivation farm. and these higher gross receipt taxes are disincentivizing not only the black market cultivators that have already been out there but new ones that want to come into play. so if we're trying to not

perpetuate the unregulated market these extraordinary high taxes have created disincentives to licensure. and so the licenses businesses are at a disadvantage relative to unlicensed businesses. and high local state tax in san francisco will only exacerbate the disadvantage and more and more compliant businesses will be forced to shut down. if you want to normalize with the state and to help us to normalize the cannibas industry we are passionate and compassionate professionals who love what we do for our patients and customers and neighborhoods, employees and families. we simply want to be treated fairly and to be part of the great economy in san francisco and california. so one question that we wanted to ask was, what is the public policy justification for taxing cannibas more heavily than other industries? >> supervisor cohen: next speaker. >> hi, i am rob king, with a

small license cultivation company here in san francisco. last week i spoke about our company and how our team is proud to be in san francisco. and i work with the state university research on worker health and safety and how we broadly seek to be a positive example of doing it right as indoor growers. however, i still can't wrap my head around the taxes as the last speaker said. we're still being taxed at a rate far beyond that of any other business in the city. and i haven't heard a compelling argument for that. i don't like to compare cannibas with alcohol but, indeed, the health implications for alcohol are greater and in 2010 a much smaller proposed gross receipt tax on alcohol failed and this was earmarked to help some of those issues. this tax is not earmarked to address any of those issues and that might come up with cannibas, and the gross receipts taxes, smaller amounts for much larger industries are also receiving pushback. i think that we just heard about

a 1% proposed for those making over $50 million. and the cutoff is an issue at $500,000 versus a million for other businesses. further, i'd like to put cultivation into context. an article in "forbes" called "cultivation, a raise to the bottom." this makes sense when viewed in the view of agriculture which is what we're part of. the get big or get out model still haunts our food system and making it hard for small farmers across country. small cultivators, the only kind that can exist within san francisco face a similar outlook. if there's any hope of a model beyond the traditional legacy of get big or get out this segment of the industry especially must be supported. far from arguing for exemptions or further resources here today, i'm simply asking that we are taxed as any other small business brave enough to call san francisco home. and i thank you for your

consideration. >> supervisor cohen: thank you. next speaker. >> hi, my name is sarah rodriguez and i'm a small business owner of a manufacturing company here in san francisco, a cannibas manufacturing company. does this work? sfgov-tv, the overhead, please. the overhead, please. is your item on there? all right, one more time, sfgov. oh, turn it this way? oh, okay. so it needs -- i can just raise it up. i'm -- i'm responding specifically to the memorandum that was sent out last week regarding the predicted effect of the city tax on