These concerns moving forward. What is your response to that . ~ supervisor, i would say i definitely hear your point loud and clear. Certainly and i think the rest of this hearing will indicate, this is a lot of why we want to bring the americas cup to San Francisco. And i would, i would like to point out again the commitment to pay prevailing wages on a temporary event, not a construction event, a privately run event, is a significant sort of concession during the agreement. And as you know, supervisor, you were very much involved in the sort of negotiation of the final workforce plan provided by the americas cup authority. Certainly if we had it to do over again, we would love to avoid this conversation. But looking at where we are now, i just want to echo what supervisor farrell said. Im very appreciative of the Event Authority and studios saying we want to make this right for the worker. ~ hartman through this crucible we have a much better template moving forward. Certainly through what olse did were able to identify potential pitfalls Going Forward and we have a much better line of communication and sort of spotting those issues ahead of time. So, with the much larger events coming this summer, we want to use these Lessons Learned and make this event deliver on its promises. Hopefully use it as a way to avoid these pitfalls on other projects. Thank you. Could you do corrective action moving forward on the mou and how you see that being implemented . So, the mou is a shortpage mou. But it talks about hartman reaching out to the subcontractors and moving quickly to pay their workers that were identified in the audit. We provided them with the information of the audit so they are more easily able to do so. The mou does contemplate the possibility that these workers are not easily reached or just, you know, they cant get the payment within a reasonable amount of time which i think is 60 days. I dont have it in front of me unfortunately. If there is no payment made by then as what was mentioned, olse would be the recipient of those funds and would work to return those funds to the workers. If that task remains unfulfilled after two years, it would be the monies would be basically kept by the olse for future enforcement efforts. And also, excuse me, the apprenticeship funds ms. Levin mentioned would be paid to oewd in support of apprenticeship opportunities in the city. Thank you. I think its important for me to reiterate that i supported this project because of the concessions made. At the time the concessions were made, i pressed my appreciation for them. When it comes to actually carrying out the construction and set up of the facilities, i would expect that they actually get carried out. And thats not too much to ask. My disappointment about that is somewhat great. And i know that we now have learned how we can perhaps do things better in the future, but its you know, people like me who have to approve projects like this, its a very difficult place because we work really hard to get the best we can, to get concession like this that help overall san franciscans that dont get carried out. And i feel like people have not been communicating in good faith. Even when we do it in the public place like this. So, i am very happy that we have this conversation to know that we actually are going to move forward and make things better. But, you know, im unhappy with what happened in the past. Hopefully well see some strong corrective action. Supervisor, i want to definitely say that i understand your point of view and what you just said, but i do have to push back on the words good faith. I dont think anyone has come into this with bad faith or intent not to pay. The olse report presents the opposite. As soon as the findings were put together, we work with the contractor to say how can this be made right. I look back and say as i have, i already acknowledged your concerns about our offices ability to oversee this event and im trying to give you every commitment i can to say that we will oversee this event appropriately. But there was i dispute the idea there was an intent to get to this place because i dont think there was. I wouldnt say intent necessarily. Possibly [speaker not understood] neglect, which is different. But that doesnt amount to a lack of good faith, i guess is my point. I understand your point. Thats the point were here, wanting to do this right. I appreciate your presence. Yesterday i invited [speaker not understood] from the Event Authority and i would like to actually call him up if hes interested in talking with us about his experience and how we can make sure we can have a Strong Partnership moving forward on these commitments. Mr. Barkley. Welcome. Thank you, supervisor avalos. Pull the mic down in front of you. Thanks for inviting me here today. The speaker from the office of labor standards, i just learned that its difficult to apply ~ the rules or obligations to private events, but the office of labor standards stand really to assist. Its a bit unfortunate that that tone wasnt carried through to the report. The report in actual fact has a tone about it that suggests someone is trying to hide something. If the office of labor standards had come down to the Event Authority officers, they would have been shown the contract with hartman. And they would have seen the words in there that read, Company Shall pay its representatives and or subcontractors prevailing wages as set forth by the city and county of San Francisco and the San Francisco administrative code section 6. 22, et cetera. Of course, we cant handout confidential documents, but we can show people the relevant clause he in the real documents. I think its also a bit disingenuous of the office of labor standards not to acknowledge the part of the discussions with hartman regarding paying and when the payment should be made and if you dont pay part of the discussions, i should say, where the decisions were made not to pay until the audit was completed. And finally, id like to say that the reports ~ report makes quite a bit about the legal agreements between the parties. The legal agreement that mr. Martin referenced was signed on the 14th of august. It seems to have already happened. As the office of labor standards says, its difficult to understand how you apply these things to private events. It took two months to work out how to do that. And once it was done, then the allocation of prevailing wage to the contracts was agreed to all the parties. Hence, the memorandum of understanding. I think its also a bit disingenuous not to acknowledge that hartman studios pays union wages to local 16 and they did so on the project. I think its also a bit disingenuous not to mention the Event Authority paid prevailing wage on the significant construction work that we did for ourselves to create our own offices on pier 23. And i think the biggest point that id like to make regarding this issue and the local hiring issue is the Foundation Stone upon which the workforce plan was produced was the Development Deal that was going to take place on piers 3032. The Event Authority was going to spend 55 million and was going to be reimbursed by rent [speaker not understood]. Its was through that process that the workforce plan and the fact that we were on port land, et cetera, et cetera, contemplated the prevailing wage and the other provisions, et cetera. Of course, that deal didnt move forward, but there was still obligations or still requirements for the Event Authority to spend money upgrading or making ready piers 3032 for the team to arrive there. Of course, what happened subsequent to that was that the port of San Francisco took over those works. So, let me read out to everybody what the executive summary sees and Workforce Development plan. So, before august so, before august 14th of last year, had you had any discussion of prevailing wage . ~ yes, we had. Seems like it was a discussion of developing piers 3032, that was well before august 14. So it seems like there had been some time to anticipate there would be a need to for subcontractors about prevailing wage requirements and about what prevailing wage would be. It seemed like that had never happened. ~ that is incorrect. The executive summary says the city acknowledges that the event activities are not public works. All improvements subject to the laws and regulations pertaining to the city contracts. And the laws such as San Francisco administrative code section 6. 22 g do not apply to the event and activities associated with it. ~ but because the city has agreed to reimburse the Event Authority for all amounts expended on Construction Contracts, the parties have agreed to apply the provisions of section 6. 22 g. There is no reimbursement. The Event Authority is not being reimbursed one cent for any Construction Contracts being undertaken. So, all i can say to this committee is the Foundation Stone upon which the workforce plan was prepared and upon which the Event Authority agreed to pay prevailing wage and all the other things have been removed. And yet we have still voluntarily agreed to do it. And, so, in the backdrop of that, i really do question the tone here. The tone of innuendo that would try to tell somebody they were not trying to do the right thing. So, did you not agree to prevailing wage . We agreed to prevailing wage on the basis that we would be reimbursed for construction work. Beyond construction work we were being reimbursed for. So, the memorandum of understanding that has subsequently been signed, and that is a great story. The great story is that the Event Authority, a private organization, handed subcontractors had agreed to be bound voluntarily to the prevailing wage conditions, et cetera. And, so, as i say, i think thats a great story for the city and one that it can build on for the future. Thanks. Mr. Barkley, quick question for you. I dont want to get into comments of tone, tone and innuendos and so forth. My concern is really Going Forward the contract was president signed till mid august, and under that. What could we as a city have done better to ensure that this didnt happen . And let me also say i appreciate the fact there is acknowledgment of paying these fees, the back wages and so forth. I think we would all say we wish we wouldnt be here and it could have been identified up front. What could we do as a city Going Forward . I appreciate this is a unique contract and appreciate everything you said. I want to make sure we know what to look for next time around. Not only americas cup, but other events, other developments in the city. Sure. Unfortunately events of this size and the event will be expending hundreds of millions in running these events, et cetera, have been and will, they are bound on contract, legal contracts that take time to work through. In this particular version of the americas cup theres been a number. A host and venue agreement. Theres been a lease disposition agreement. Theres been the eir. Theres been the Risk Mitigation plan. Theres been the memorandum of agreement that was attached to it. And now theres been another memorandum of understanding. Et cetera. You cant accelerate those processes. And, so, the problem we were faced with was the final one of those documents was only signed on the 14th of august. The first event had taken place. And, so, if i could offer a suggestion, it would be that the conciliatory nature and the working collaborative nature of how we are proposing to work move forward should have been engaged through the process back in august, september of last year. That would have been my suggestion. So, theres a lot of timing issues seems like. Absolutely. Okay. You know, i was president here on the board when the deal was signed. I think which is neither here nor there, but it always struck me that this was done very rapidly and people were, you know, learning to walk on the fly, if you will, throughout this agreement. Im thinking maybe thats the nature of hosting an event the first time in San Francisco, things happen so quickly. Im trying to see how we do it better Going Forward. Learning from this, how do you hold a event of this magnitude on public land down on the waterfront. There are a number of agencies involved in those decisions. Hopefully people can learn from this process. And as i say, i mean, this is a good story. This is the private organization agreeing to be bound by voluntarily agreeing to be bound by these rules and signed a memorandum of understanding, subsequent to the first event and now following through on that. Thank you. I appreciate the agreement, and the agreement was made. Its a binding agreement. It needs to be acknowledged. I appreciate the fact that the authority had voluntarily made that agreement, but they made the agreement. And once the agreement is made, its not a voluntary thing any more. Its something that is compelled. I completely agree with you, supervisor. But subsequent to the agreement being done, the foundations changed. The words that i read out of the executive summary say that because the city has agreed to reimburse the Event Authority for all amounts expended on Construction Contracts there is no reimbursement. Thank you. I believe we need to get mr. Martins take on that and we can move on to the next subject of this hearing. I appreciate, mr. Barkley, your coming in today. Thank you. Supervisor, im sorry, whats the question . Well, mr. Barkley discussed that prevailing wage is really to be applied in conditions where there is going to be a reimbursement for work that had been done. But now the idea thats different from what i had expected our discussion would be today. It seems like were applying it now across the board for projects that are part of the americas cup event. And im wondering what your understanding is where what the original intent was around prevailing wage. I believe it is actually just a standard weve applied for the americas cup project. I agree with parts of what mr. Barkley said in terms of the reference to the reimbursement for construction works. As i mentioned in my open or opening part of this presentation, we came back to you. The deal was recast as potentially the port doing the work and the port actually did do the work. So, the provision that mr. Barkley is referring to is right. We depth have the authority do the work and reimbursement for that. That would create other requirements. The work would be public works construction contract. However, there are other provisions in the workforce agreement that were referred to installation of temporary installation of event opportunities. And thats where the olse based its review on and thats where we got the mou through that discussion. Okay, thank you. Next up id like to call to talk about our first choice program, pat mulligan from the economic Workforce Development. Good morning, welcome. Thank you, supervisor. So, just to get a summary of how weve lived up to our first source agreement in this event. Sure. ~ just for background, so, first source hiring policies apply to this project as well as some additional language per the agreement. Theres two conditions. First, for the Event Management in staging, there is a 50 of allnew entry level hires as well as that exceed 150,000 or more. And then for construction work, a goal of 20 and overall goal of 20 . With 50 of all the [speaker not understood] and 25 of those the economically disadvantaged, identified as economically disadvantaged. Per the first source language, which is referenced just after the introduction, it refers to section 83. It speak to good faith efforts and notification of the office of economic and Workforce Development. We did not receive any notification for Employment Opportunities that may have arose during the staging component of this event. Thats the only thing i can really speak to. Seems that there was some scheduling constraints around this, but at no time did we receive any official notification for Employment Opportunities. And typically thats required under the First Source Program . First source, good faith effort speaks to notification of our office, yes. And, so, do you feel that the authority was actually notified of their requirement to notify oewd about Employment Opportunities . It is section 83 is identified in the signed document and that refers to first source language. Also speaks to the notification process. ~ so, that wasnt done . Thats part of the document, yes. But in terms of the oewd being informed of the Employment Opportunities, it wasnt . We were never informed you know, similar with donald levitts comments from office of economic or office of labor standards enforcement. There was no the event had a different feel, so, there was no precon meetings. There were no prebid meetings. We didnt have any sort of normal debriefing. For our office we do deal a lot with a considerable amount of private development, first source in San Francisco. Triggering mechanism is department of building inspection, to determine entitlement. Thats where our initial notification does come for development in San Francisco. Prior to the commencement of work theyre required to engage our Office Around Employment Opportunities and put a plan together. Because this project did not come through department of building inspection, it bypassed our normal notification process. And do we have data about how the authority did according to the workforce hiring goal, local hire goal . I dont have any information pertaining to what their goals, you know, how they performed in terms of residency involvement. I cant speak to that. It would be typical for knowing that in the city, again, that information, that data . ~ who first source compliance, what our office does track is San Francisco residents who gain employment. And we track Employment Opportunities as they arise and what San Francisco residents are employed on that project. Because we werent notified, i cant speak to any individuals who may have been hired. Different from the mandatory ordinance, we dont track overall percentages. We may try to make estimations around that, but we dont because we dont have access to relationstype data on a private development. It has a very different feel. ~ i know we had separate from americas cup recently in my district, there was an agreement that whole foods had signed onto that actually didnt fulfill around first source and local hire in term of their good faith efforts. Actually, the result was not quite so bad in terms of their hiring locales local residents. They didnt follow the local letter of the law. We learned from that in the 15 years, 16 years the First Source Program has been around, that not once has any entity ever been penalized for violations of the first source agreement. ~ is that your understanding as well . Correct, supervisor. My tenure doesnt go 15 year back, 15 months. At no time has liquidated damages been associated with first source. Is there a policy within oewd that tries, attempts to avoid having liquidated damages apply . I wouldnt say its a matter of policy, but the goal of city on our office on the employment side is to put San Francisco residents to work, not to penalize employers. So, we will frequently use that as leverage as a means to gain employment for San Francisco residents. Similarly with the mandatory local hiring ordinance, weve been fortunate to date not to have levied any liquidated damages associated with that, but we have used that as a means to put San Francisco residents to work successfully. So in the case with americas cup since we dont have any data available, we dont have any idea how the authority of the contract has lived up to first source agreement, is that correct . City build does not have any, yeah, we have no knowledge as to the success or failureses that they may have had with regards to employing would you call that a violation of our their failure to notify our office would be a violation, as defined in the first source language. So, moving forward because were going to have more staging, more vertical construction how can we fix this . Certainly our office needs to be more proactively involved as this project moves forward. And i think speaking to the Lessons Learned through this early phase of the project, we can move, you know, we will have a better understanding towards our goals of putting San Francisco residents to work. I think there needs to be also considered and used [speaker not understood]. And i think that with this new enforcement there is not really anything we have to compel anyone to really follow what the law is. Do you see that applying liquidated damages to be something that could be conveyed . We reserve office of economic and Workforce Development reserves the right to apply liquidated damage for any violation at any time. And i agree with you, supervisor. Laws or rules only exist insofar as they are enforced. So, taken to heart. It is very loose we make agreements about having a huge economic benefit for the city and were going to have local residents be part of that benefit and yet we dont do the work of the city to ensure that it happens and we dont and even if we do inform our contractors to do everything they can to follow the letter of the law, there is no way to enforce that or enforcement is not applied. I think moving forward it makes sense we are as strong as we can be and make it happen. I agree with you wholeheartedly, supervisor. If i can just offer, on private development theres always challenges associated with some of these measures. Its a different animal compared to projects that are funded by the city and county of San Francisco. Do we intend to apply liquidated damages . I cant speak to that at this time. But im sure well have conversations shortly to that effect. Thank you. Thank you. Quick question for you. Thanks for being here. So, obviously there was part of the agreement was to notify you guys and that wasnt done. Problem, got to get it resolved. So the end result is you havent been able to track. You dont even know. They could be doing okay. You just dont know at this point in time and its a matter of getting you involved and getting that data and verifying it . Yeah, if i could speak to supervisor avalos example, there was concern about the new whole foods on ocean avenue. They claimed to be unaware of the local hiring requirements for first source. After they had made significant number of hires associated with the new store opening, they did present all their data to us and they actually had a significant percentage of San Francisco residents and had done outreach nearby. Certainly not in the same manner that our office would have performed, but they did make an effort towards this. And i cant speak to that at this time with regard to the americas cup. Thanks. Okay. Okay. Mr. Barkley, if you can approach the podium, please. I think commissioner farrell or chair farrell has some questions for you. Actually, id like to ask you before if you heard of our first source agreement and the process of ensuring that our office of economic and Workforce Development is informed of Employment Opportunities as they arise so that we can actually do our work of getting local residents into the pipeline . Yes, i have heard it. And in this case, was that prior to you actually starting construction and bringing people on that you had heard and you just didnt contact the office of economic Workforce Development, or was there a lapse between when you were informed or were you informed after the Employment Opportunities arose . Im glad you mentioned office of economic workforce and development. I think the previous speaker works for the first source and that part of the
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