i also want to thank lamar at asian inc. doug parish. nick colina. miguel for their work on this. it has been a long road. this is a really good piece of legislation that is going to help a lot of folks. i do think there are some outstanding issues that need some study. that should be moved forward as well. i just want to point out that in looking at the way that we contract out in the city, we have to realize that during the pandemic we saw where the cracks are in our system. for communities of color, every contract, every dollar the city puts out through a minority

business contractor or woman-owned contractor has a multiplier effect in the community. communities that have been traditionally left out of the economic development opportunities in our city. i am so glad that we are moving forward with these crucial issues like increasing the threshold. there are issues that i think we still need to work on, particularly knowing where we are in terms of the department. i do -- i have been working with supervisor chan to propose some amendments to require reporting by the departments of bidders and the contractors who are awarded the bids. along with also thinking about increasing the penalties for

folks who, you know, list subcontractors on the bid but then don't use them. that has repercussions for folks as well. i will leave my remarks until after the public comment. i look forward to hearing the presentation from the city administrator. thank you. >> thank you, supervisor melgar. with that, city administrator chu. >> thank you very much, chair peskin, to the members of the committee, supervisor mental man and chan. thank you for hearing this today. i i want to thank supervisor melgar and president walton for sponsoring this and partnership as we have gone through it. of course, i want to thank supervisor safai, ronen and the

mayor's office for sponsorship of this legislation. today i will go over providing an overview of the package before you today. this is a package that predated my time for years, actually. we have heard a lot from the lbg advisory committee, talked to the coalition of economic equity and members of the small business community and i want to note this is a package also supported by the small business commission prior to coming to this committee. i wanted to make sure we shared an overview with you what is changing. jennifer johnson will put up the presentation. it will be a few quick slides to share the key elements that are changing.

>> just as a quick introduction. the 14b program is local business enterprise l.b.e. it was put into place after prop 209 passed that took away minority and women owned business program. what the l.b.e. program provides is bid preference for certified local businesses. as many of you know contract monitoring division is within the city administrator's office headed by the administrator. the ordinance was last amended by the board of supervisors in 2015 and made a number of changes including increases to threshold but not for all categories. i will get into that in a little bit. in terms of some of the major

changes i will get into more detail today with you on. a few things. one, i think as president walton presented it increases threshold for certification for l.b.e. firms. our program is currently categorized to three categories. thresholds for micro businesses, small businesses and category called sba small businesses. second changes is minimum competitive and threshold amounts. ensures greater accountable for prime contractors. a number of programs would help increase and build capacity to l.b.e. to participate in city contracting into the future. just quickly to note. here are the changes to the certification threshold that we are proposing. you will see the columns showing

different categories of certification and groups and the current level for the thresholds. there is a grouping for micro businesses, small businesses and threshold for sba/l.b.e. category. what we have done is taken the different level that existing pride to this amendment and increased by the consumer price index. i will note the professional services contracts or categories did not see a threshold increase in 2015. in fact has not had an increase in thresholds since 1998. we propose all categories increase. other elements related to certification thresholds proposed in the package include

a few things as president walton mentioned. instead of three year average for annual gross receipts we propose five. we understand that provides more comprehensive picture of what businesses experience in terms of their business. it does include automatic cpi increase every five years based on cpi. we would work closely to an loop that and adjust accordingly. the other piece is that we did create nine sub categories within the professional services line. those categories are for legal services, accounting, a and e and related services. computer systems, management and scientific and technical services scientific research and development advertising related services and other professional scientific and technical

services. these wore worked on through the l.b.e. advisory committee and shared with us and we grewed with. the threshold would be upon passage immediately effective for this threshold for the other elements of what is proposed operative july 1, 2020 so they can promulgate rules necessary for the programs. next page. second major element of change has to do with setting and increasing minimum competitive threshold amounts. currently for chapter 21 the minimum amount which the competitive process has to occur is $129,000. we propose to increase that to $200,000. chapter six or construction type projects amount the currently $706,000. we propose to increase to

$1 million. why is this important for l.b.e. community? if you have an amount or contract or work that is underneath these minimum threshold amounts, they can set aside or create micro or small business set asides. local l.b.e. set asides for additional opportunities to participate without rigorous r.f.p. process which tends to be time consuming and very, very difficult for very, very small type businesses. >> next element that this package includes is some changes that will increase prime accountability for youtilization of subcontractors. prompt payment is big with subcontracting entities. for large companies with a lot of working capital it may not be

a big deal to submit receipts for reimbursements from the city months or a year later. for small businesses the difference reimbursed within a month or ends of the yes could be catastrophic or challenging for cash flow. one of the elements is requiring prime contractor to submit invoices within 30-days. that is getting reimbursement from the city back to the subcontractor. second element is penalty for failure to use subcontractor going from 10% up to 25% penalty of the subcontract amount. currently when ever prime contractors choose to or want to substitute l.b.e.s they have to subcontract through cnb for approval. some of the reasons the local work may have changed or other

issues need addressed. third element requires that documentation occurs at the evaluation point in time if a prime intentionally fails to use the you contractor. this is the final slide. it is one page it has quite a lot embedded in it. part of the legislation creates flex build for contract monitoring division to create a number of pilot programs that help improve local business participation and city contracting. one, a program for micro l.b.e. trucking businesses. understanding the chain of which different services are required. we find for trucking l.b.e.s they are at the end of the chain and by that time prime

contractors have already fulfilled the subcontracting requirements. the opportunity is more scarce for micro trucking l.b.e.s. this creates opportunity for cmb to evaluate the test cases to create set asides for this particular area. 2. it creates pilot program for the mentor offering 1% discount not to exceed $300,000 to encourage larger organizations to support growth of smaller l.b.e.s. third, as president walton mentioned, it does create a neighborhood l.b.e. program offering 0.5% to 1.5% discount depending whether the l.b.e. is headquartered in the neighborhood of where the project is occurring. this gives an opportunity for

local businesses to succeed and compete for business within the neighborhood. the other element is also extending bonding assistance for local businesses. it creates opportunity for cnb to provide the goals for micro small and sba level. currently they are at the l.b.e. level no matter the micro smaller or categories. this allows for establishing that if there are eligible or l.b.e.s to fulfill that requirement. i believe that concludes the presentation i have for you to provide overview of changes here. of course, i am available for questions alongside garrett taylor, city attorney, director of cnb and jennifer johnson on

my team. thank you very much. >> thank you, city administrator. would you like to hear from ms. johnson, ms. taylor? would any of the four of you like to add anything to the city administrator? >> thank you, supervisor peskin. real quick. i am going to leave after public comment. supervisor safai ecan come on so we don't disrupt rules of quorum. heads up. >> okay. >> why don't we go to public comment. supervisor mandelman. >> thank you, chair peskin. this is one of those days when i am grateful we have city

administrator carmen chu having worked through what i know is a long process. of course, the folks in small local business community looking for relief for a while and have been delayed through covid in getting this and have engaged with us and with you. president walton, thank you and supervisor melgar for all of your work on this. you did the heavy lifting. i got updates along the way from city staff apbe folks in the impactedded communities. we have gotten close. thankings everybody. i would like to be added as cosponsor. >> supervisor melgar. >> thank you, chair peskin. i do have some amendments to

propose to the committee and have been working in collaboration with supervisor chan and with the city administrator, who i will again thank profusely for her leadership and competent in all of this. i am so grateful we have her. i would like to propose first a clerical amendment to correct a typo on page 38 line 8. replace mmp with mpp. which stands for pilot mentor menprogram. the rest have to do with reporting. section 14b to read as follows:

page 30 line 16. section 14b. the city administrator and contract monitoring division. the following language under section 3. the controller contract awarding contractors and bidders. the city administration deemsness. under subsection 14. page 30, line 19. maintain data on the l.b.e. status of all bidders. on page 33 line 5, lines 13-17. to read for all categories of l.b.e.s including level of participation by all bidders. then report, shall make sure to

break out level of participation as mbe and wbe. then on page 34. lines 13 and 14. subsection 3 on the l.b.e. participation among all bidders including not limited to reports of participation of bidders certified as mbe and wbe. i have circulated amendments among all committee members, mayor's office and cosponsors. thank you so much, chair peskin. >> thank you, supervisor melgar. we can duplicate the file and amend the version that will remain in committee depending on the will of this committee. i suspect that will happen. supervisor chan.

>> thank you, chair peskin. i am wondering if there are things through all the things that happened and i am happy to make those motions we will be making the motion to make the clerical amendment to the original -- to the file as it current lie exists. then the motion to duplicate. that would have corrected clerical amendments on both. we will make the motion to move forward to the full board with recommendation and one to the call of the chair. i want to clarify those motions i will be making. whenever in order that you prefer, chair peskin. >> understood. >> thank you, supervisor melgar for hard work and leadership and

add more chu to make this happen. >> thank you. why don't we open up for public comment. mr. clerk. >> members of the public who wish to comment on this item call 415-655-0001. meeting id24810239510. pound, pound. star 3 to speak. system will indicate you have raise your hands. raise until you are unmuted to comment. we currently have 18 members of the public in line for public comment. >> first speaker, please. >> caller: supervisors i want to pay attention to what i am

saying. first and foremost, if it starts with the contract monitoring commission we have no commission. the commission should be there to see to the policymaking. we have the city administrator and we have the mayor who can meet with all developers to do whatever they want to. why are you raising something in the neighborhood? you don't know anything that happened with sfpuc? why are you living out npe as nonprofited enterprise? there are so many flaws in this amendment it trails the cooks. the main one is jones. what the hell is he doing with the project monitoring division. going back to the time that the san francisco housing authority put him on the shit list.

the city administrator has to pay attention to dwayne jones. if she doesn't pay attention to dwayne jones he will be audited. the fbi will visit her shortly. that is washing her. please do not have you entangled in dwayne jones and jailbird who happens to be the president of the board of supervisors. thank you very much. >> next caller, please. >> caller: hello. i am christopher roach, i am a

architect and local business owner. i am speaking in support for this amendment chapter 14b. i thank melgar and chu for helping us get this to this point. as owner of mararchitecture and design firm in the mission. i am aware of the increased pressures we face as a result of much higher cost of living increases with no corresponding increase over 23 years. the cost of running professional service firm has risen in the past decade. skyrocketing represents to increases in transportation, healthcare and insurance and overhead and expenses.

it is hard for fees to keep pace with these rising costs. gross revenues don't reflect the true financial precariousness of smaller firms trying to gain traction. our firm is located in the mission district from conception. we have had opportunity to provide services to help build the affordable housing in san francisco. we haven't been able to do that since 2019 due to the outdated revenue limits. we would like to stay in the mission, provide services to support local economy and have the opportunity to build more affordable housing in our own neighborhood. we implore you to move this to the full board of supervisors for a vote. thank you for your time and

attention. >> thank you. next caller, please. >> caller: good morning. i am michael gregory. owner of heavyweight trucking third generation black man of bayviews hunters point. a company that decided to hire previously incarcerated male and female from the community. for the last two years my community and my company of bayview district 10 has been heavily involved with other sf l.b.e.s and the changes of this legislation that i am asking you to please support. something that has been overlooked. by the trucking is involved in a contract all i ever hear is we don't need local trucking. we have met our requirement.

this allows gcs or subcontractors to hire truckers that is 40 to 50 miles out of our area to under bid us by 30 to $50. it is very frustrating to watch these multi-million dollar contracts come in this community and locals not walk away with it. the money we are here, the money we are here to put in -- the money we are putting back into this community not taking it out of the community. last i ask when the trucking pilot program is being formed that i have a seat at the table. thank you. >> next caller, please.

>> caller: good morning. thank you for the opportunity to voice my support for much needed amendments to chapter 14b. i am rosie letter. we focus on affordable house and community facilities. we graduated from the l.b.e. program last year. we are now competing against larger national and international firms staffed with full-time marketing departments with substantial resources. we know the cost of living in san francisco has grown over the last 20 years. with the proposed amendment a 25 person local firm can ones again be competitive against the larger practices. these are corrections to realign with the current time and honor original intent for a competitive marketplace. i ask you to support the

programs to protect small businesses, technical expertise, wider base of firms to bid on city work and keep taxpayer dollars. i hope you acwilling the need and you are -- acknowledge the need and urgency for these changes by supporting the 24b amendment. thank you. >> next caller, please. >> caller: hi, i am dr. matthew, president of the african-american chamber of commerce and owner of small business professional services firm in the city. i support amendments to 14b. it provides fairness. the l.b.e. program is about equity, fairness in the city of

economic opportunity. it is about providing to small businesses to survivor a change. this change in the. [indiscernable] for 20 plus years with no adjustment for inflation. climate conditions. the time is now to deliver from drowning for good. the l.b.e.s available in the city. they are less likely. more likely it will cost more. the only big businesses are like future contracting opportunities. it was not adjusted. you would have succeeded in creating a fair business climate in one of the business progressive cities in the world.

please consider the adjustments for chapter 14b for the most significant in the l.b.e. program as the lifeblood for small business in the city of san francisco. thank you. >> next caller, please. >> thank you. the rules committee and city administrator. i am randy collins, structural engineer and owner f.t.e. engineering from 19 years ago. no increase in 23 years. two years ago our office was cramped. we needed more space to grow. we