Transcripts For SFGTV BOS Budget And Finance Sub-Committee 5

number one, is sponsored by supervisor weiner, and he is stuck in a meeting right now. and so we are going to call that item as close to 11:30 as possible. so i want to give everyone a heads up if case you are waiting to speak on that item. so we will skip >> will u /* /- skip and will you call, two and three together? >> resolution, declaring the intent of the city and county, san francisco to reimburse. concern expenditures from the proceeds of the future bonded indeadedness. and authorized by the director of the mayor's office. and item three, authorizing the issuance and delivery of the multifamily housing revenue bonds, no the to exceed, $16 million for the purpose of providing financing for the acquisition and rehab of the 50 unit, multi family residential rental housing project known as the park apartments. ? ethank you. >> good morning, i am the program manager from the mayor's office of housing and community development and i am to present, two resolutions for 100 percent of the affordable housing projects and the first is the resolution for the development of the black x, and the second is the issuance of the resolution, for the columbia park apartments. these are financings which will not require the city to put any of the funds to the retainment of the bonds, and the trade box x will be a 72 unit rental complex and will be located at 1101, connecticut industry. and the project sponsor is the bridge house corporation, and all of them will serve, families earning. and the project side is a vacant lot and so the construction will not displace any residents, and the apartment and this is daily that i presented in february to the subcommittee, and the fundamentals have not changed and no resource, and the double fund and all of the projects for the cities earning more than 67 percent of the median income, and the scope of the rehab, still includes, significant, repairs and up grades all of which are outlined in the project description before you. the project is back before the boards because of the increase, the amount for this project to cover,ed additional renovation, costs. in terms of the time line, and plan to submit an application, for the committee in six weeks and if awarded, it will return to the board for the approval to issue bonds and for kol boo ha park, and it is schedule to close in 6 weeks and the construction will begin shortly there after and is schedule to be completed by the end of 20 is 7. and here are me are brandy gordon and lori from mercy housing california, and we would like to thank you for your consideration today, and with that i would like to conclude the staff report and answer any questions that you may have. >> okay, thank you very much. colleagues any questions on item two or three? >> okay. no budget analyst report for two or three and so we will move on to public comment. >> anyone wish to comment on items two or three. >> okay. seeing none, public comment is closed. supervisor tang? >> i would like to make a motion to move forward items 2 and 3, with a positive recommendation. >> we have a motion by tang and seconded by yee and we can take that without objection, clerk will you call item four? >> resolution reauthorizing the issuance of tax exempt and taxable lease revenue commercial paper certificates of participation. and in the aggregate principal amount not-to-exceed $250,000 to finance the axis and construction and rehab of the capitol improvements and capitol equipment approved by the board of supervisors and the mayor. >> thank you very much. >> good morning, supervisors, jane with the office of public finance, this resolution before you reauthorizes the execution and the delivery of the tax exempt and paper certificates of participation. otherwise, known as the city's commercial paper program. in the aggregate amount not-to-exceed, 250 million. in march, 2009, and april of 2010, the board adopted two resolutions that authorized not-to-exceed, $150 million, and later in june, 2013, adopted the resolution to extend, to issue additional $100 million, which established a total authorized not-to-exceed level. and with this approval the board reauthorizes the program at its current level, with the authority to issue not-to-exceed, $250,000 in commercial paper. and in addition, this resolution also approves a replacement of the facilities in the ability of 150 million to replace the facilities that are schedule to expire this june, to be provided by u.s. bank and state street bank in each of the analysis of 75 million, totaling, 150 million. this is already has the existing credit facility of 100 million, which is not schedule to expire, until february of 2019. and in connection with the replacement facilities this authorizes the execution of the first suppliment, and the first amendment to the site lease and the sublease, and the documents in the final forms, including revolving credit agreement and other documents related to the execution of commercial paper. and i primary commercial paper is that if utilized as a financing tool because it achieves, the savings, due to reduced capitalized interest requirements and the lower cost of borrowing as a result of the lower interest rates, compared to the long term financing. and the projects are eligible access the program, once the board of supervisors and the mayor have approved the project and have approval of the long term permanent financing. the city cp program currently finances projects, and through no cd, and the expansion project through the city administrator's office, and as the general hospitals and sf, and sorry, sfe, program under the department of public health and i am available to answer any questions, related to this cp program or the replacement credit facilities. thank you. >> okay, thank you very much. colleagues any questions right now? >> okay. i want to thank you for bringing this forward and i know that this is a big cost safer for the city. mr. rose, could we get your report please? >> yes, mr. chairman, on page 6 of our report, we report that the city will incur, one time, estimated general fund costs of $600,000 to the new letters of credit of $150 million and that is provided by the u.s. bank and the state street bank, and these costs are for the bond council, and the rate savings and advisers and the rated costs and in addition the city will incur, the estimated ongoing, fund costs of 822,000. per year, to pay the fees for the new letters of credit of $150 million, again, provided by the u.s. bank and state street bank and that is showing in table two on page six. and we do recommend that you approve this resolution. >> okay, thank you mr. roads. >> colleagues, any questions? >> okay, we will move on to the public comment, anybody wish to comment on item four? >> okay, seeing none, public comment is closed. >> i move this to the full board with a positive recommendation. >> motion by yee, and seconded by tang and i want to say thank you for bringing this forward. and we could take that without objection. >> madam clerk, would you call item five? >> res lus, approving the agreement with the south beach marina to preserve, 101 affordable housing units in the south beach, apartments no the to exceed, $60 million. >> okay, thank you very much. do you have the mayor's office of housing? or who want to speak to this item? >> good morning supervisors. my name is april, and i am with the supervisor kim's office. last year, the south beach marina residents contacted our office because they have learned their little income restricted units have expired and were set to go market rate. for many of these households seniors and small business owners, and every day res residents this would have been effectively an eviction. while many of them have earned, good income, they do not earn enough to continue to afford to live in san francisco or the neighborhood that they have lived in for decades. the south beach, marina apartments located in the former south beach, redevelopment project area, were built with more than mortgage, revenue bonds and then, in 1980s and which related in the construction of 414 dwelling units. for more than 20 years, have passed since these restrictions took effect, and because of the low, because the mortgage revenue bond financing has ended, the owner is no longer obligated to provide below mark ketd rate units sending hundreds of our residents without a home. and the agreement that is before you today, permanently preserves 101, affordable units at the south beach marina apartments and prevents the displacement of the neighbors residing at the apartments all of the 101 units will remain affordable to households moving forward, and earning up to 120 percent of ami. and there have been, 190 units removed from the protective status in district six, and this is the fewest number of united removes of any district in the city. and without this solution, there would have been additional, 101, units removed. and i want to supervisor kim wants to recognize the tenants who be here today and who have spent the last year, organizing and asking our office and the mayor's office to support keeping them in san francisco. and this is a win for the middle class families and residents. the supervisor also would like to thank the district for the democratic club for the advocacy and the support of the tenants during this time and finally to the mayor's office of housing or from me, and who have been working tirelessly over the last year with the property owner, they have developed, the creative ideas, and when the property owners acceptance, and the solution allows the city to save these units without a present ta cost. thank you very much for hearing this item. >> thank you very much. >> and the mayor's office of housing will speak as well. thank you, april for that good and thorough background on the project. most of you here this morning, are requesting for an approval and the agreement in the south beach, marina inc which is the current owner of the apartment and this agreement will preserve, 101 affordable units located on the property. and in the amount not-to-exceed, $60 million. this will prevent the placement of the existing and low and moderate income residents and create permanent afford bltd and the current rent for the existing units and the existing residents, and that 120 percent, ami, rent for the new residents. >> and in exchange for this permanent, affordability, most of you will propose this to proside up to 60 million in affordable housing, for the future projects to be developed by the current owner. and the value of this credit was established by an independent third party appraisal and that calculation is in the budget analyst report. i am joined by kate, excuse me, kate sorry. kate who is our deputy director, and sophia and our director of policy and legislative affairs. and heidi, and the city attorney and the sponsor from and the representative from the sponsor. and in addition, i would like to acknowledge the residents from the property who are here today and could you please stand? thank you, thanks to coming in today. and we are all here and happy to answer questions that you might have. >> okay, thank you very much. supervisor tang? >> thanks to everyone who provided the thorough information on this. and i am just wondering if you could state for the record, how the mayor's office of housing came to this type of an arrangement for this particular property? and i know that the budget analyst report, also calls out that there may be other projects which may be in a similar situation. and in the future, or the near future and i am just wondering how you came up with this idea of the credit basically this was our first time purchasing affordability. and so, i wanted to just see and if you could state for the record, how you arrived at this. >> good morning, supervisors, kate at deputy director's mayor's office of community development and this was really a clabive process. in the 1980s, when these buildings were financed, we didn't have the great income disparity that we have now. we had rents that middle income rents that were much closer to market. the people in the 80s and it was not so long ago, did not anticipate the affordability cries sis that we are facing now. so we, we worked very collaboratively with the owner. and they were very much desiring not to take any action that caused displacement. but they had financial obligations themselves to low income teachers, in florida that it is a pension fund to own a project and so it was really a process of coming together. of looking at our options of prioritizing non-displacement, and using every tool available that we had. which includes our inclusionary housing fee and the developer was uniquely situated and it is desire to continue work in san francisco. and so that gave us a great opportunity to preserve these units. we do, as you said, we do have other projects that are simply situated. and that, and some father out as fortunately and so that will give us some time to again, explore the particular circumstances that apply with respect to the unit camp. and the owners options, and we the market is at that time. but the number one goal, in our office is to prevent displacement of our low and moderate income families who are part of our community. >> okay. supervisor yee? >> thank you, just a quick question. and in regards to the extension of the affordable units. is this, permanent fix? or is this --. >> yes. >> thank you very much. and i personally appreciate the efforts of everybody to come up with a solution to this. >> thank you. >> okay. thank you very much. mr. rose, could you get a report please for item five? >> yes, mr. chairman and members of the committee on page, 11 of our report, we note that a valuation analysis, conducted in april of 2016, value be 101 affordable housing units. at the south beach marina apartments, 59 million, 300,000. on the bottom of page, 11 of our report, we made the proposed agreement between mlhcd and the south beach marina as supervisor tang has just stated is the first search agreement to offer the credits to the future inclusionary housing for obligations in order to retain, affordable housing when the requirement for the property owner to maintain affordable housing is to expire. the affordability, require ans will expire by three other housing projects in 2016, 17. and that is shown on page 12 of our report. on page 12, we also note that the proposed agreement retains, 101 housing units, that are affordable, to the households with the incomes at 80 percent and 120 percent of the area median income. and therefore, the proposed credit towards the inclusionary housing fee is $60 million will be allocated to the housing units that serve, households athe a higher income, than if the fee were collected from the future residential developments and deputied into the city wide, affordable housing fund. and finally on page, 13 our recommendation is that we recommend that you amend the proposed resolution to reduce td proposed credit towards the future housing obligations by $700,000 from 60 million to 59, and 1,000, based on the approval value that i just referenced and we can see the approval of the approval, being amended for the policy of the board of supervisors. >> thank you, colleagues, any questions for our budget analyst. >> okay we will open this up to public comment and i have a number of speakers for item five, if you would like up against the wall, everyone will have two minutes to speak at the microphone. and jordan miller, patrick, robert manz field, m maria, miquel, spencer onera. mitchel. please come up. >> my name is fits gerald and i represent the ownership of the south beach marina and i want to mention a few things, the owner of this project is the state pension fund that is in the state of florida and the obligation and to those pensioners. and however we have been able to work out an agreement over the last year. where we have not converted anything to market rate. and i would like to thank the mayor's office of housing and particularly, supervisor kim, and her office as well. to come up with a solution where i think that it serves all people involved. and we will not be displacing any residents at south beach, marina and the city is paying for these via credit rather than having to cash or cut a large check to the ownership and i believe that we safety our fiduciary obligation to the owners and the pensioners that own this project. one thing that i would like to keep in mind is theapraysal valuation is the difference in value that we will be taking in as a negative on this project. today that we signed this agreement. and however, the credits that the city is offering to pay for these risks will require us to spend years working with the city of san francisco. to find projects and to provide more housing supply. that being said, if the, if the agreement is going to be changed from 60 down to, 59.3 million, we will be willing to accept that and we look forward to working with the city in the future. we love san francisco. and we are happy to be here. and love being here, thank you. >> thank you, next speaker please? >> my mame is -- and i am a resident at south beach apartments for 17 years, including my parents at the present. and if we lost that opportunity to leave there we could not afford to live in san francisco and so my parents are in their mid 70s and seshl especially to live in the new place and to learn the way around and it will be very difficult. and also i am the owner of the small business. which is right across from the apartments in the south beach, and the marina, where i maintain the yachts and so if i have to move from that location, i cannot afford to live anywhere in the city and that will destroy my business as well. i and like to thank everyone who is putting in the effort to maintain our living conditions. good morning, i am one of the tell ants and i have been in the neighborhood over 30 years and i have lived in the neighborhood for 15 years. it is very important for us to maintain our community and our residents, and the affordable housing that is already in existence. it is, you see all of the people that are here. it is so important for us, and we really would like to thank, jane kim's office and the mayor's office of housing and the property owners for really bringing together what could be a really substantial deal for all of us. thank you for your time. >> thank you, next speaker, please? >> hi, my name is mans field and i lived in south beach to ten years and i was at delancy street ten years before that. and so this is an important issue for us. because, this is the safe, and the middle income and this is the city, and sorry. >> thank you, we appreciate you can here. next speaker? >> thank you. my name is reberta and i have been at the apartments for over ten years and i love the neighborhood. i want to thank everybody from the city, and also the owners that have created a wonderful place. and worked collaboratively so that we can continue to live there and i was a small business owner and i would not be able to continue living in san francisco if i do not have the housing agreement that i do. thank you very much. >> thank you. next speaker please? >> hi, my name is spencer and i represent a restaurant workers. and i have been in the city for 21 years, and i have lived at sbma for 14 years. and also i am a small business owner. and without the vmr program i would not be able to live in the city with the current rental rates. and i would too, like to thank everyone who has been involved in this trying to find a solution to this problem, thank you. >> next speaker, please? >> hi, my name is erin miller and i live with my husband, and my 4-year-old, son and my 2-year-old daughter. and i want to thank everybody, and especially supervisor kim for working with us. and trying to maintain our housing. and again, like many of the other residents, i would not be able to live there, continue to live in san francisco, if we lose this housing. this is our community and my son feels and my son and daughter, know you are one are the other speakers, robert and the other speaker and maria and i feel like those are part of theiry and this is our community and we want to stay. >> thank you. good morning, supervisors i am the vice president of the south beach, district six democratic club, along with the current vice president as well. a year ago the tenants came to us and we adopted a resolution, asking the city and the building owner to come together and to come up with a resolution and an agreement to keep these units permanently affordable. and the good news is that today, we are here before you, and the city and the building owners are before you with an agreement that does exactly that. and so we have achieved the goal so far. and so it is in your hands to push it forward. and we received, hundreds of signatures from around the community, and in a petition that we did send to the building owner and we also, received the city wide support from different organizations including the lions for jobs for growth, and the san francisco, and the san francisco housing action coalition, and the south beach business association and the labors local, 261, and the council of the housing organizations and partnership and the housing rights and eviction, free sf, jobs for justice, and the south beach, justice, democratic club and so you can see quite a broad spectrum of organizations that are here in support of this agreement, and to keep these units affordable. and as you, will review and approve this, going forward up to the board of supervisors, i think that you have heard the points that are critical. and the expired and the obligation that there is no longer there to keep them at below the market rates and the disagreement, does keep, 101, existing units and we don't have to build them and they exist today, at below market rates and to keep them at low and middle income family and individuals as you have heard from. this is the great news and there is no displacement that will happen and we ask you to support this agreement and send it forward to the board for approval. thank you very much. >> thank you. >> speaker cards and sarah, miller. and jen and sue, and reburta and nicole par sons. >> if they are not here, anybody else wish to comment before we close up the public comment. okay, seeing none, public comment is closed. supervisor yee, are you still on the roster? >> i have a quick question for the mayor's office of housing. a quick question is, if these were, subletting, if they were, or subletting, and you and the affordable housing, in 20, and ami? what are costs? >> well, if we have po purchase land and then build new, it will probably cost us in the neighborhood of anywhere from $650,000 to $850,000 per unit. and there, as you know, we talked about this a lot in our city. there are no federal or state subdies for middle income housing. the mayor's office of housing only over directly has only devoted 7 percent of total housing resources to middle income units. because of that lack of leveraging and that is why one reason why this transaction is so great. because we can preserve these middle income units athe a lower cost than it would take to build new. >> i want to confirm the mayor's housing office is in support of the amendment. >> yes. >> by the budget analyst. >> yes, absolutely. >> thanks very much. >> colleagues, so we have this item in front of us. i want to thank you for working on this. and obviously we have a number of these projects coming up over the in next few years and i think that it is an innovative to do it and the structure to learn about and creative and we don't want to be losing the affordable units in the city at all. and so we want to thank as well the tenants for coming out and speaking on behalf and it is much appreciated. but it is something that we want to support. speak for myself, and my colleagues as well. with that, any entertain a motion? >> i would like to make a motion then to approve item # 5 as amended and send it forward as amended with the positive recommendation for the full board. >> all right, pick up the amendment and then move the item forward. and seconded by yee and we can take that without objection. >> thank you, everyone. all right. with that, madam clerk would you call, item six? >> resolution, authorizing the contr controller to enter the ninth amendment of the software mant nens agreement with the cogsdale corporation. >> okay, thank you. >> could we have the overhead projector please? >> good morning, supervisors. you should also have a hand out in front of you, which is, i think that it is a different. >> no, something is showing something different on the screen, there you go. >> there we go. and good morning, supervisors, and my name is joyce, and i am the contract manager for the kroler's office, and i would like to request your approval for the amendment number nine, contract that exceeds, 10 years and the board of supervisors approval. since july of 2006, steet has been in contract with cogsdale to provide, software mant nens services which runs the city's accounting and financial management system. amended eight times, and number one, is needed to extend the support services, for up to an additional three years. the city negotiated a three-year contract. emphasis in the tloo percent annual increase. that is a little bit different than what we negotiated previously, which was in increments. we also intentionally structured the contracts with that it would overlap with the new financial system, which is going to be schedule for it, in 2017. >> and the board of the cogsdale structured and it has the contract, with an option to extend, 6 months, however, we have the conducting with the city attorney's office and we can cancel the contract at any time within the three years. i am available for questions. and su for your consideration. >> okay. >> thank you very much. >> i can't believe that we are talking about this here. okay. with that, we will move on mr. rose, could we go to your report, please? >> yes, mr. chairman, and members of the committee on bottom of page 16, we note that according to the data provided by the kroler's office, it has been spent to date on the contract. and we request an increase to exceed of 452,662 as in table two, on page 7 of our report and it will allow for an annual increase, to the three percent and we recommend that you approve this resolution. >> okay, thank you very much, mr. rose, colleagues any questions? >> okay, move on to public comment, on item six? wish to comment? >> seeing none, public comment is closed. colleagues, >> we could move, for the positive recommendation. >> thank you, motion by supervisor yee, and seconded by tang and we can take that without objection. >> madam clerk, would you call 7 and 8 together? >> resolution to approve the domestic terminals one and three, automated teller machines, with the bank of america, for 365,000. and item eight, resolution, approving international terminal automated teller machines, lease by bank of america and the city with the minimum guarantee of $270,000 for the first year and of the lease and 5 year term to commence following board approval. >> okay. thank you very much. >> good morning, cathy, with the san francisco international airport. the two items before you are the new lease agreements with the bank of america to provide, atms throughout the airport terminals and in the long term parking garage. the first one lease should be for the atm in the domestic and the second is for atms through the international terminal. these proposed new five year leases to provide atms, each have two, one year options to extend and it will be in addition to the existing leases that we have with wells fargo and jp morgan chase bank to provide similar services to passengers. those agreements carry a guarantee or 70 percent of the gross revenue rent and an estimated payments based on it to be paid to the airport over the lease terms is $3.1 million. so, the lease before you are the result of the competitive request the bid process, although bank of america was the only bidder. recommend approval and i would happy to recommend any questions that you might have. >> thank you very much. >> colleagues any questions? >> okay. mr. rose, could we get a report on these items? >> yes, mr. chairman and members of the committee, on page, 20 of our report we show table two, which shows that excluding the cpr adjustments the estimated minimum guarantee rent to be paid bank of america in the five year term is $3,175,000. and we also know that on page 21 of our report, that under the proposed new lease, between the airport, and the bank of america, for the atm locations in the international terminal, and the bank of america will pay, $270,000. which is 138,000, or 104.7 percent more than the 2015, write up of 131, 184 and we we can mend that you approve this resolution. >> thank you. >> colleagues any questions? >> okay. moving on to public comment? all right, 7 and 8? do you wish to comment? >> seeing none, public comment is closed. >> colleagues, any questions. >> motions? >> no. >> make a motion to move forward item 7 and 8. with positive recommendation to the full board. >> okay. >> motion by supervisor tang. and seconded by supervisor yee and we can take it without objection. madam clerk, would you call nine, please? >> resolution retroactively approving the authorizing the execution of the facility lease agreement between china airlines and the city for the estimate represent of approximately, $5.8 million for the three year term to commence, april 9, 2016, to april, 8, 2019, with one year options to extend. >> thank you very much. welcome back. >> thank you, chair farrell, cathy with the international airport. this item seeks your approval for a new lease with china airlines for 38,000 square feet of cargo space and building, 648 of the airport, the proposed lease is for an initial rent, excuse me an initial lease term of three years, and for the option to extend. and has an estimated rent of 5.8 billion dollars to the airport over the 6-year period. and the legislation does require an amendment to reflect in the adjusted rental amount over the six year term from the stated 5 million, 740,000. to the correct amount of 5,851,076. this adjustment was made to accurately reflect the higher rent amount. when an increase in cargo facilities per square footage takes place at the end of this fiscal year. the budget analyst also recommends approval and i would be happy to answer any questions. >> thank you. and colleagues any questions? >> okay, mr. rose, could we go to your report on item nine? >> yes, mr. chairman, members of the committee on page, 24 of our report we note the rent to be paid by china airlines, over the six year term of the lease amount and that includes the three year term and the one clee year option is 5 million. and that is shown in table two on page 24. and based on in that based on estimated increases in the rate of 2.5, percent per year and as miss wagner noted with he have a recommendation to amend the resolution to state that the correct estimated rent is 5 million. and we recommend that you approve this resolution. as amended. >> thank you, mr. rose. >> colleagues ne questions for the budget analyst? >> okay, move on to public comment. anyone wish to comment? >> seeing none, public comment is closed. colleagues we have a budget analyst recommendation. >> i move that we attend and propose and send it with a positive recommendation to the full board. >> motioned by yee and supervisored by tang. and would you call ten? >> item ten, ordinance appropriate ating $4.1 million, revenues deappropriating, 20.1 million from permanent salaries. fringe benefit and expenses and non-personnel services. and appropriate ating, 24.7 million to over time, in the sheriff's department. department of emergency management, and fire department, and public health department, public utilities commission, and the police department. operating budgets in order to support the department's projected increases in over time. >> okay, thank you very much. we are the mayor's budget director to speak on this item. >> thank you. and the mayor's budget office and i am here to talk to you about the over time for the six departments, fire and department of emergency management public health, the police department and the utility's commission and the sheriff's department, need the over time supply mentals this year and this is according to the section, 3.17 and so this is just moving money from one place to another. and none of these departments are over spending in the budgets. and we have representatives from all of these departments here today to talk to you, if you have any specific questions. >> and of course, i am also happy to take the questions. >> okay, thank you very much. >> colleagues any questions? >> supervisor tang? >> well, thank you very much. i just one thing that i had wanted to ask of the department of emergency management. so i had just seen in the budget analyst report that there is mention of 18 perm it staff and seven trainees that had resigned and i want to understand the situation and what is being done to address that. >> my name is robert, and i am the deputy director for the department of emergency management. i think that the trainees that have left is explained by the fact that ve about been hiring to address the staffing shortage, the full time employees, the 18 is due to a number of factors, each of those but a lot of them were due to and due to the age and service, and we have just the nature of when we hired in the passed. we had the significant number of people come up, that were eligible for retirement in the last, two or three years, actually this is a sustained increase in retirements and as best as we can determine, it is mainly due to just the nature of our workforce. >> okay. >> and then, you have a hiring plan coming up then to make sure that we are able to address all of the call volumes for the call center? >> absolutely. and we have been, very pleased with the support that we have gotten from the mayor's budget office and the board of supervisors and we have 18 trainees currently and we have plans to continue to have adequate staff so that we don't need to spend this much over time. >> great, thank you. >> mr. rose --. >> the terms in of your explanation of your trainees and you are saying that some of them, and you have left because you are hiring them early before you finished the training? >> we usually lose about a third of the trainees in the process, and our training process is 9 months after hire. and before, and that is, and that is a little over two months, and that is the classroom and then a little over the six months of being paired with a trainer on the floor. and just the nature of the job, how difficult it is, and how unique the job is, we see about a third of the trainees wash out during that period or determine that the job is not for them. >> and so we will see, when we are hiring the trainees when we have the 18 right now, that means that we have lost a number who have either washed out or determined that the job is not best for them. >> okay. and i probably misheard you and i thought that you said that you, and they were in training and you know, the reason that they left was because you hired them. >> oh. >> no, no, that is, the reason is that when we are hiring a lot of trainees, because we have trainees that wash out. we will see the trainees. >> i got it, thank you. >> okay. colleagues, any further questions? >> okay, mr. rose, could we get a report for item ten? >> yes, mr. chairman, and members of the committee on page, 26 we report that we have an attachment to this report. and that is on page 31, and that attachment summarizes the proposed appropriation of 24 million, 682, 824 to pay for the over time costs. the sources and uses for each department and the reasons for the projected over time shortfalls are explained on pages 27 to 30, of our report. and we do recommend that you approve this legislation. >> okay. thank you very much. >> mr. rose. colleagues, any further questions for the budget analyst? >> okay, we will open this up to public comment and anybody wish to comment on item ten? >> g morning, budget and finance submitty. and supervisors. ♪ thank you. anyone wish to comment on item ten? see none, public comment is closed. >> i want to thank you for coming and for living in our budget and something that i would support and colleagues any motions or further questions? >> i would make a motion to send forward the item ten with a positive recommendation to the full board. >> motioned by tang and yee, and we can take it without objection. >> all right. we have one left and then item one still, but we will continue to hold over until supervisor weiner will get here and so with that, clerk will be call. >> before you do that, could i ask that we resind the item for one? >> we didn't call anything. >> no, we going to hold that until supervisor weiner gets here. >> okay. >> so with that, would you call eleven? >> item eleven, hearing on the economic impacts of super bowl 50 and requesting the kroler's office to report. >> thank you, madam clerk, and this is an item that i had called for a while ago and anticipation of the controller's office, finalizing this report on the economic impact of the super bowl here in san francisco. and i know that there were differences on this board for sum per bowl, 50, and to provide the services for public safety and the transportation, during the events. and the budget chair for the past three years now on the fourth year, and i think that i do, as well as all of us take the expenditures extremely seriously, and i always want to make sure that we extend our resources for the best use of our taxpayers, and now that the super bowl 50 is over, and we know that it is one of the most attended viewed super bowls in history and the estimated 1.1, million people that visited supervisor for the events leading up to the game. >> given that the proposal of the impact, super bowl 50, i want to be sure that we have a discussion with the kroler's office about the benefit and hosting the game. and now the control's report is out and we are able to have that discussion. >> and before i ask them to come up, and i want to issue the facts about the super bowl, in terms of numbers. and in terms of giving back it was the number one most giving super bowl in history, 13 million to 141, bay area non-profits across 12 counties, 537 youth and families living in low income families were positively impacted through the 50 fund, and in terms of our local economy, and 8.2, million in hotel taxes generated for the city of san francisco. and 6 million was on the other hand by the local minority women, owned and lgbt owned businesses through the committee and the nfl reports. and in terms of the fan experience, 1.9 million, bay area residents attended a super bowl, 50 event, and there were 64, free performances presented on the city stage. and 85 percent of the event attend ees gave the super bowl a high performance, and in addition over, 20,000 of the wine were served believe it or not. and in terms of transportation, 3.4, million people rode bart, and 69,000 people rode the ferry during the week and 81 percent increase from the period a year before. and 1.2 million people traveled through sfo during the super bowl week. and then in the news, there were ov5500 accredited media in the bay area for the super bowl week, and 4.3, billion of super bowl, content, on twitter, and 141 million fans on facebook, and fan interactions on instagram, personally, and speaking on behalf of my family, i thought that it was, and although there were inconveniences in terms of traffic, i thought that it was an amazing week, and my children loved attending the free events, that were down both, and the nfl fan experience as well. i do want to thank, everyone that was involved in putting this on and i think that the hearing today is to make sure that we have a discussion around the numbers and i do want to thank the controller's office for putting the effort into this and i know that it took a bit of time and it was a lot of pressure to get it done. so, i am with that, and i would like to invite the controller's office to speak on their report. >> good morning, deputy controller and thank you for the opportunity to share with the information that we learned. and i have a few slides here, to walk through. and then, in addition to that, i have extra topes her copies fore public. >> the report and scope and methodology, the mayor's office, as well as members of the board, have requested that the controller's office conduct a post event analysis of the city revenues and also expenditures for super bowl, 50, in preparation for this, our office, communicated the instructions to all city departments and how they should attract their additional revenue and expenditures for super bowl, 50 and the impact on the city budget, and also, and the additional costs related to sb 50, above and beyond what is already in the nine billion dollar budget. all of the reported numbers were reviewed by the controller's office, 19 departments reported, supervisor related revenues or costs and or costs. ten of those 19 departments, reported net impacts that exceeded 100,000, and for example, costs exceeding, 100,000, or revenues of 116,000. those, and the largest impacts, are hotel tax revenues, as well as sales tax revenues for general taxes. and what we did, and in the estimating these revenues was to look at visitor survey data. occupancy rates at hotels. visitor estimates. bart, rider ship, and passenger, tra of course and planements out of sfo and we looked week over week, month over month, and year over year to attest and to be able to ascertain, what was the impact, to isolate that, that for the super bowl, 50 in particular. >> the departments were instructed as i mentioned to tract, the revenue and the extend penned turs that were related to the super bowl and those that were additional. what is included in the report, are the original, city revenues, including the hotels sales, permit, license, rents, and parking and etc. as well as additional expenses everything from over time to comp time to equipment, and materials, used, and contractor labor. and what is not included in the report, are costs that are outside of the city's budget. and our focus was the city's budget incremental impact. >> and to the number of the staff assigned to super bowl, 50 related activities and events, we did not count up all of the staff or the star hours, we counted the additional or the over time. and also, the total amount of resources, some of the base budget is already serving the san francisco in our visitors 24-7 and so the base budget, that 9d billion dollars number was not considered for the base level, observers and just the service for super bowl, 50 and then, also what we did not consider was the opportunity costs and until, so for example, some departments, to prudently live within their budget, they would redeploy the staff and the example of that was the department of public works and that planned, and planned their street sweeping. and in order to meet the needs of the event as well as neighborhoods. the other impacts again, not included are the other governments so the additional rider ship that bart, or the additional work of non-city agencies. and non-city governments is also not included. >> so what we found, and what the impact was for the super bowl, on the city's budget, was that total city revenue's benefited by about 11.6 million dollars. total city expenses were 9.6 million dollars. and for a net total surplus across all city departments, of 2 million dollars. these are numbers roughly double the previous estimates that were conveyed in the budget analyst report. based upon what the departments then thinking was for the level of effort for the event. to that end, there were larger crowds, and there was additional police over time effort and in particular, and as well as some additional costs that we are happy to highlight. because of the event was so large and so releva well attend. and well the net surplus is about 2 million dollars, over all, the general fund will feel a surplus that is discretionary after the base line and the charter mandated the charter base lines of about 1.2 million dollars. and why is this? it is because of the key attendance. and those in the additional revenues in particular, the hotel tax and was a single largest >> and as mentioned by chair farrell, earlier, about 1.1 million fans, attended. and some residents and some visitors. the sfo airport, passenger traffic over those nine days was up over 12 percent. the bart system rider ship, system wide over those nine days was up 23 percent. for the downtown stations alone, the rider ship was up over 35 percent. and so this did provide a lot of additional activity. and the department that had net positive impacts were the airport with the deplanements and related to the landing fee, and the charges and concessions. and the convention facilities did very well with the rental out and the port had additional rents. and as did the recreation and park department. with the renting out and having sponsoring having various events at the rec facilities and the fields. the neglective impacts were mainly felt by the police department with additional over time. and then the municipal transportation agency with serving a lot more customers in particular, and additional transit costs as well as additional parking and traffic. and to make sure that pedestrian safety was insured. other smaller costs to public health, for example, for the centers and the fire department to assist with some ambulance work. the other department having minor impacts are listed for you on the right there, including public works. and i am happy to answer any questions on those at any time. >> the, the summary slide as i mentioned showed the two million dollars, surplus or 1.2, million dollars, discretion surplus after the voters are telling us toal locate, certain things for the charter mandated base lines. but these costs here are reflective of what the costs are for the discreet event, in addition to that, we identified other costs that were enkured by the city but have longer lasting benefit. and much like when we replaced the roof on our homes, for example, you may have a cash out lay, but you benefit from that cash out lay for several years after the event. and but nevertheless, to have your house ready to go and look good, it takes an up front cash. and the expend spend turs like that include, the 25,000 from the wifi improvements that occurred, and 550,000 for the radio improvements that are long lasting and are going to benefit san franciscans for years to come. and as well as over 600,000 dollars for installation for additional mta over the headlines, which is that provides for the transit coordination between the market and the mission corridors and additionally the expenditures are at the old mint, occur to the tune of 120,000. and so, those were allowed to be rent credits for the permit, but, essentially still like the direct costs in the collection of the lower rent. and so, taking those into account, you could say that the net general fund, surplus would fill something less than 800,000 if you were also to include those. and so for the full transparency, we wanted to show you both the cash basis as well as those that include, the longer term costs that are benefiting the super bowl, attendees as well as everybody else and us every day for several years to come. and happy to answer any questions, that you may have. thank you. >> thank you to the kroler's office, colleagues, any questions or questions? >> okay. thank you, for compiling this report. and again, i think that now, it is fair to have this conversation. and i also note this morning, i saw an article that santa clara itself, although, it did make some money, it actually netted in close to a 900,000 loss on the super bowl event itself. and at some point in time, the people are touting what a great deal that they had struck and that city ended up losing money and san francisco made the monday j i think that is something that we should take note of. >> supervisors, some departments are here if you do have the department questions and i also want to call out, and acknowledge mark, in our office, our manager who was principal author, so thank you, mark. >> colleagues any questions or comments right now? >> okay, with that we will go on to the public comment on item 11. and i will have the closing xhepts, but anyone wish to comment on item eleven? >> you can see it as bell well. >> thank you. >> thank you, next speaker please? >> we are proud to have helped the city with the host with the super bowl, 50, and as we said all along, this was going to be a net positive impact for san francisco and the region. and this shot from the controller's office, while positive, on the bottom line, i think that really will, the numbers will grow, as revenues come in. and as we see the payroll tax returns, and the gross receipts tax returns and see the impacts of the effect of tens of millions of dollars being spent, just as an example, the sales tax example of 550,000 net to the general fund that is based on the 1 percent of the sales tax that the general fund directly receives. we all know our sale tax is 8 and a half percent, and in fact, the sales tax numbers are closer to 50 million, additional sales tax that goes to the state of california and to bart and to the san francisco, county transportation authority. and to the other agencies and that number, also reflects, huge spending. one time spending, in the community. that will multiply, by the traditional 1 and a half to two times throughout the san francisco economy. and so we will look forward to working with the board of supervisors and the mayor's office, and the san francisco travel on the next bid for the next super bowl, this is a positive impact. just as positive as the 1984, 85, super bowl was on san francisco thanks a lot. >> and anybody else wish to comment on this item. >> okay, seeing none, public comment is closed. >> supervisor yee? >> yeah. i just want to also, thank the controller's office, for this report. i think, it is great that we have, and you know, we had a net positive. hopefully, we will, as jim was saying, maybe net positive will grow. and i also wanted to thank the super bowl, host committee and the super bowl, fund or whatever it is called that actually as the chair, mentioned, raised funds, and actually contributed to the non-profit world and in the bay area, and i think that the total amount was for the whole bay area, and so that was a good thing and hopefully, in san francisco, we did receive a good chunk of that particular funding. and so, thank you very much. >> supervisor tang? >> thank you, and i just wanted to thank the controller's office for this report and so i appreciate how you were transparent for how it was presented and we certainly could make it look even rosier but i think that it was an honest effort to show after all of the additional expenditures ta we need to make and so forth, what really was the net benefit to the city. >> and thank you, supervisor tang and i want to echo that as well. thank you for the hard work and from my perspective, not only was san francisco able to shine on the international spot light, once again, but hundreds of thousands of bay area, residents and actually close to two million were able to participate in a number of the free civic events that we had in san francisco and now we have an additional amount, in our budget, to put towards things such as parks and homelessness, and public safety. and you know, supervisor yee, highlighted and touched on again, these numbers do not even, reflect the 13 million that we have to continue to remind ourselves went into the local non-profits that we will have a lasting impact on family and children for years to come. the free market exposure that the city received, it is impossible to replicate. to have, the cameras pan, just as it did during the american has got the pan across the golden gate bridge and our bay during the super bowl and downtown in the trans-america building, it is something that other cities will clamor for and now that we are able to do this and have a positive impact. and from my perspective this is something that i think that we should be seeking to do as a city. and this is hosting super bowl what the world class cities do and in my opinion, our city is right up there and we should continue to be put on the international spot light, because we can put on events like this and shine once again. and so i want to thank everyone who has been involved in it. and thank you again, with the controller's office. and with that, colleagues, we would love to entertain a motion to table item number 11. >> so moved. >> okay, motion by supervisor tang, seconded by yee, and we will take that without objection. >> okay, so with that, we still have item one in front of us. and this sponsor is not here, so what we are going to do is we are going to go into recess. and i will communicate with the staff, about when we will come back from recess, it will be at 11:30, or perhaps right in front of our budget meeting, and so we will work on the timing and be back in a >> great, okay. all right, everybody, welcome back from the recess, and for our regular, schedule budget and finance subcommittee meeting for wednesday, may eleventh. please call item one. >> ordinance amending the administrative code to allow the departments authorized to perform public work to procure the public work contracts through a best value process as selects the contractors and using a combination of price and qualifications. with bid discounts applicable to price. >> and okay, thank you very much. madam clerk, this item was sponsored by supervisor weiner and so i will turn it over to him. >> thank you very much, mr. chairman. for scheduling of today, and thank you for your flexibility in terms of the timing of this hearing. colleagues, today before us, is legislation to reform and modernize our public works contracting process to move away from the pure low bid. system to a more comprehensive best value system. and to make sure that in terms of the actual results of a project, that the tax payers are getting the best value. and not simply the lowest bid which could end or may or may not be the best value for the tax payers, depending on how the job is performed. and we are of really in a period right now, unprecedented infrastructure investment in our city. and we have now, rehab tated or we have every library and gradually renovating every park and recreation alprecreational, we are road surfacing and we are replacing our entire suer system and much of our water system and rebuilding all of the health facilities and we are just doing unprecedented infrastructure work in the city. which is terrific. and over the coming decades, we are going to engage in tens of billions of dollars of infrastructure, and that will make the city a great place, and we want to make it cost effective and get it right and now is the time to take a look at the public works contracting procedures, and in my view, we should be following a trend that los angeles is following, as well as the uc system of really employing the best value approach to public contracting. the best value, highlights and rewards contractors who reliably do good work for the city. and the work that is on time, on budget, and that is adequate hi staffed. and the legislation maintains the ten percent lde discount for the bid price so that we can continue our strong support for our local businesses. the legislation does not micromachine the departments but it requires the departments to establish objective criteria, to finding the best value for a project, and requires that this criteria be established before any rfp goes out, and so everybody knows what the rules are, and ahead of time and that those rules come out of a public process with all of the stake holders at the table. and today's contracting process, and i want to be very clear, most of our contracts in this city do a terrific job for the city, this is not in any way, insin you ating that all or most contracts perform poorly. >> most do an amazing job and deliver terrific work product for the city on time and on budget. but there are some contractors who don't. and we have seen the recent examples of that for example, on hate street, where a contractor caused huge problems and was fired from a job and has been hired on to another project in san francisco. the low bid system provides too incentive, and many perform well simply because they are proud of the work that they do. but we need to provide stronger incentives for the small number of contractors that don't do that. we have too many situations where a contractor is awarded based on the low bid and the contractor either engages in accessive change orders, inadequately staffs the job, because they bid on too many projects and they are spread thin and does not complete the job on time. or it delivers work product that needs to be fixed and even though they have the lowest bid and the long run, it ends up being more expensive for the tax payers. and both the civilgrand jury and the controller's office have audited the city public work contracting process and have come to the same conclusion that we should move towards a best value contracting process. and that is what we are doing here today. and i want to thank, president breed, and supervisor, tang and supervisor yee for their co-sponsor ship. i do have some amendments that i have distributed, we have had a number of conversations with contractors, and i want to thank the contracting community, for its feedback. and i know that there is always going to be some nervousness in terms of what it means when you move away from a system that has been in place for a long time, we want and i want to be very, very clear, and the intention of this legislation, is not in any way to make it harder for good contractors to get work. including amazing lbe community and we are not in any way attempting to make it harder for lbes to get work and i do not believe that this legislation will do that. when you think about some of the major problems that we have had with contractors in san francisco, the ones that i am aware of at least, overwhelmingly, it is larger contractors. it is not our lbes. and so i don't think that this legislation will prejudice our lbes and i think that it will be a level playing field. the amendments, the first amendment which is on page, 2, line 16, clarifies only referred to the management staffing. and we are talking about the specific projects proposed now. and not the over all capacity of the contractor outside of that staff. and because a larger contractor over all is always going to have more management staffing. and we are talking about the proposed staffing for that particular project. and on page, 3, line 21. an amendment to clarify that the current ten percent lbe bid discount will still apply, to the cost person of the bid and i actually don't think that this amendment is really necessary. and i don't think that is the legislation, makes it change to that ten percent and but there was some concern and so we decided to really, strengthen and clarify the line which will make it crystal clear, on page 4 line six and we changed the contractor valuation and the implementation date from september first of this year to march 31st of 2017 to give the extra time. and page 4 line eight and the legislation adds a mandatory hearing, at the board of supervisors to the board can exercise the oversight over the public process. and in terms of how the departments are implementing the program. and including the stake holders, like the contracting community and the contract monitoring, division. and we want to make sure that our departments are moving forward. not just in the letter of the law but in the spirit of the law. so, it is inclusion of the public comment, i will offer those amendments. we before we get to the department mental presentations and nick las came from dpw is going to carry a lot of the water for the city departments. and i think that we will be addressing some of the concerns that have been raised by the contractor community. and some of the concerns that they are actually about practices that already exist. and so we will hear about that. but i do want to johnson and president breed's office is here to speak for president breed and i want to give him the opportunity to speak. >> thank you, sperp weiner, legislative aid to the board president, london breed and in your remarks, supervisor weiner you made reference to what happened on hate street and i want to tell that story in some detail because this issue is personal for supervisor breed and for the community if for district five. and you were right in my face. >> last year urngd v under the city of public work, began an infrastructure project to install new water mains and replace sewers and repave the street. starting in april of 2015, the crews ruptured gas lines on five separate occasions. adding insult to injury, we also experienced two sink holes in the same area. five gas line breaks and two sink holes. we are thankful and surprised that no one was seriously hurt, but these failures disrupted and endangered the out reach community for months and that type of unsafe work should not be allowed to continue. you can imagine how frightening and disruptive this was to residents and merchants on hate street, the street was completely closed for hours at a time. stores were forced to close, and disrupting their business. and the smell of leaking gas over powered entire blocks and oun occasion, someone ran into a store and told everyone to evacuate only to be followed by someone else running in to tell everyone to stay inside. on another occasion, in july, workers dangled a foreman, head first into a manhole and there are actually pictures of that episode. some of this would be comical if it was not so dangerous and irresponsible, president breed had enough, in september she asked the department of public works to suspend the work on the project, and a few weeks later she held a press conference, with the leaders from the neighborhood council and the merchant association and panhandle residents, organization and north of panhandle neighborhood association. public works requested the prime contractor to remove the subcontractor synergy, and they appealed and it went to an administrative hearing before an innocent hearing officer, giloti supported them during that process, they blamed, pg& e alleging to the gas line maps are inaccurate and on and on it went, the hearing officer, finally issued a decision in january, up holding our position that synergy's safety violations were inex-excusable, it was removed and public works began to look for a new subcontractor. but the take away, the operative question now is, how did all of this happen? is the city evaluating contractor safety records or passed quality of work, before awarding them bids? are there safe guards to insure that the companies with repeated past safety violations are not able to continue to work in our nardz, synergy came in 1 million below and we were left holding the bag, the price is not everything, long before i was low level, political burr krat, i was an auto mechanic and there used to be a saying that there is no such thing as a cheap mercedes price is not everything, and that is why the legislation is important it allows us to move away from the low bid criteria and take the system, and safety, and passed performance into consideration, this is responsible, best practices legislation, and hate street is the prime example of why we need it. president breed is proud to have worked on this with supervisor weiner, and thank you, and it is thankful for nick las, at dpw and all of the stake holders who have helped to crack this balanced approach, sffs deserve, it from the government and the companies that the government hires, and this legislation will help to make that happen. on president breed's behave i would ask for your support. >> thank you, mr. johnson. >> and so, mr. chairman, if there are no other members that would like to make comments, i would like to invite mr. king up to speak on behalf of dpw. >> >> good morning, everyone, i work at public works. and just wanted to acknowledge right off the bat that there are a lot of other people present. the city services auditor and public works and recreation and parks and a lot of contractors are present here in case there are questions at the end. before we get into the details i just want to give you a brief overview of where we have been and where we are and where we are going. >> as you probably know by now, it has been almost two years exactly since the city services au iter completed an audit on the construction practices and policies. and in short, the recommendations were to make san francisco do a better job of evaluating the construction project and do a better job of considering past performance and future awards. mark, here in the city services, he wrote that audit. and it was, nationwide, award, winning audit and it has been one of our guiding templates for trying to move forward from there. but really, the big ideas that we want to put on the table, before we get into the weeds, are number one, is that supervisor weiner and supervisor breed have touched on it so far. is that we get what we paid for. the way that the system is now, it does have some bad incentives attached to the low bid contracting. number two, passed performance issued and an indicator and not the only, indicator but it is one indicator of future performance and it is current and relevant, then we should weigh it, if we could do it in a fair way. instead of asking, what contractors have done in the past, we should also be asking, how well they have done it. and, last as you said, supervisor weiner we are going to be spending about 30 or 32 billion in the next ten years as part of the capitol plan and a lot of construction. and it, seems like common sense and good government to evaluate how that spending goes. and that we owe it to the public. and to ourselves. to do a good job of accounting for it. >> so, my role in this has been to work with contractors, and all of the chapter six departments chapter six is the chapter six of the administrative code and the departments who are permitted to do contracting and so the airport and mta and the parks department and the poor, puc and public works. and we have been working really hard on this in earnest for over a year and a half and our principle goal in evaluating performance is to learn the useful information, to help to deliver, products of greater equality and efficiency, and this is that we need to do a better job of assessing risk and with our level of confidence, that the outset of a project, that we are going to get what we want in terms of quality, and schedule and cost. and all of the other things that you might measure a project on. and the legislation before you, or that you proposed, is definitely, going to help us do that. it just to restate it for everybody. and because sometimes it can get confusing. it does two things, and they are separate things, and it requires evaluation of all of our construction jobs number one, and two, it adds the best value option to the code and so the low bid, contracting is not disappearing. we hope that there is always going to be a need for that. and it is sometimes, there is situations when a best value contract is appropriate and we can get into that. and what that looks like later if you like. you guys covered a lot of the ground in terms of cataloging the problems with the current system and i might be repetitive, but in short the way that things are now we have set up the incentives and we hope that the evaluations and best value contracting will help to address those. right now, the city often prepares plans, for a job and puts them out for bid. and we take more or less, the lowest bidder and you are meelting certain, qualifications and there is an incentive there that we set up for someone to look at the plans and find fault with them and whether it is legitimate or not, and recognize that there is some money to be made there, after the job is won. and it creates a situation that leads to perhaps, the change orders on the job. and it creates an adversarial environment, if the person who wants it has promised to come in at a certain point, and not being realistic, and it, it does not set a good tone for the group of people who need to come together to solve a problem. so, one of the things that we are hoping to change and this is a multiyear project, to change the culture of how we do things at all of these different departments is to have everyone, and when i say everyone, and i don't mean, just contractors and i mean from the city side as well to be asking questions about how can we solve this problem? instead of, how can he make sure that we make money on this particular job? as you mentioned, it will be contracting is now out of line with the best practices. and the state, and municipalities around the country. and the current evaluation system that we have, hardly call it a system, really, the public works does evaluate the jobs but it is lacking. and importantly, one way, system, we don't benefit from the contractors having any comment on the evaluations of how the job has gone or any combhent comment on the public works or city processes and so one of the things that we hope to do is to move in more of a 360, evaluation process, where we are learning from contractors as well, and hearing what they have to say, about how we or how well we do things and sometimes we don't. >> in addition, this effort is exciting because we do have six departments and probably at least, 6 different cultures of how we do construction, and we are or having been criticized for being followed and so we are hoping to have a standard uniform evaluation tool that we can use across the departments to learn from each other and so that at your level and the levels of the city services are and the controller, and the commissions and they also have the better tools to analyze. and how we are doing, and that is the short version. there is a lot of detail behind any of that. which i am happy to go into, but i don't want to take you down that road if you don't want to go. >> i just want to ask a few questions and i, and we did, we have met with the lbe community and we received a letter yesterday, from the united contractors raising some questions and concerns. and i just want to raise a few issues with you to get your feedback. the first is have you had a contractor that you raised this about potential like lack of uniformity among the departments? and of course, this legislation we aring trying not to and we don't want to micromanage the departments, and this allows the department to go through a process, to come up with a good, subjective criteria, moving beyond and including low bid, but moving beyond to other important factors such as the passed safety record and the quality of work. and so you just mentioned that the departments are working together, in order to have some uniformity and if you would just elaborate on that and the context of this concern. that every department could be widely different and that could cause the challenges. >> okay, i think that i understand the question. and i think that there are separate answers depending on whether or not we are seeking the best value contracting or talking about evaluations. so, for best value procurements, the way that the best value works is that it is a project by project procurement process. so if there is a particular project that has something special about it, or unique, or something notably unforeseen, that is the best value is appropriate. and i should start by saying that this is not a new way to do procurement and that is kind of the good news, because san francisco and being behind some of the other jurisdictions we can go to them and learn how they do it. and learn from their mistakes locally. we have ucsf right next door, and they started doing best value ten years ago. and in fact we have been to visit them to learn more about how they do things. and so, the criteria for award would be determined per project, and in a balancing of the factors that she mentioned. and so that is number one on the evaluation side. one of the things that we have worked on, is creating this little piece of paper which will not be paper in the end, it will be an on-line evaluation system that is shareable and accessible to everyone. and which is very different from the system that we have now, where it is actually a paper evaluati evaluation. and i think that the short answer to your question is, that we want to communicate, early and often to contractors, on a particular job, what is important to us. and as the city, and let them know that safety is important, or management effectiveness, or quality control of some particular aspect of the project. >> thank you. >> great. >> so, another question that i think has been raised is about financial capacity. in terms of some of the smaller contractors, being concerned about the big contractors tend to have more capacity and more money in the bank to back things up that that might work to their disadvantage that they are going to be viewed as risky and there will be a tendency to go to the big contractors. can you just address that? >> it is hard to predict how much that it will be used five or ten years from now. one thing that we can look to locally is the experience of ucsf since it is in our backyard and they have done a lot of reporting on it. so in the last ten years, they have done about four billion dollars worth of contracting and only, 13 percent of that turned out to be the best value. and it is is more work for the city to do best value. it is a default of the position is still likely to be, is should this contract be low bid. and you would look for reasons to deviate from that, with the other particular contracting tools. and so, in short, the pie is still big enough for everyone to get a piece of it. and when you combine the best value tool, with our required evaluations we hope, for the first time, regardless of job size, we hope the way that we are setting it up, that contractors would have an opportunity to get positive evaluations on a standardized form. that they could then use later to get other work. so they could use it to help them. but we could not use it to hurt them as the direction were going. and it provided the performances above a certain minimum threshold. does that make sense? so that, if you are doing 100,000 or a million dollar job, you are graded on quality and performance and management and compliance and labor standards and safety. and the same way that they are graded on the billion dollar hospital. and so, that it is kind of like getting a credit history when you are 18, with a $250 kred ilt limit, it allows you to build up your reputation and some positive reviews, which is stronger than a reference, or stronger than you are reporting that you have done a good job in other city jobs. >> so, with 32 billion dollars, there is no way that is all transitioning into the best value contracted. >> all right. and then, there is also a concern raised about the financial privacy. that the disclosure of the financial information. and can you comment on that in terms of what that would? >> yeah, sure, my understanding i don't know, if the city attorney is prepared to give a better answer or a conflicting one. but my understanding is that there is certain information that we take from bidders that is not a public record including certain financials. >> okay. my understanding, and now, do you anticipate that changing in terms of the financial information that they provide? >> no. i don't think so. i can, and i will let you know if i am wrong, or let anyone else know. but there are certain private information of the company that is not part of the public records act. >> yeah. >> and then, we have heard from some of the lbes, that are concerned that if in terms of looking at passed performance or experience, that you know, we want to encourage and especially our smaller contractors and our lbes, that we want them to succeed, and to expand, and to maybe, go in to venture into the new kinds of contracts where they gain the experience there and they are able to grow the local business, doing that. we don't want the people just to be trapped in a box in terms of what they are doing right now. everyone and every contractor in existence, starts out from being new and working on one thing and expanding on other things and they can do that successfully. and so the concern that they wou would, that because there might be other contractors, that did have experience in this other area, and they have less experience, that it would somehow hinder them from expanding, i don't think that that is the case. but i wanted to just get your take on that. >> let me see, that is a difficult question to answer in the abstract without it in front of us. and it touches on a lot of other issues that don't necessarily relate to this. and all that i can, and the best thing that i can say is that, public works and other departments still have our local business enterprise goals and to them often in exceed them. we are still committed to technical, assistance, and we are are to prompt pavement and like all of these things are at the heart of their concerns but are not necessarily related to this. and, it is not just like something that comes, from the top down, or something on. and it comes out of the second of the city hall, it is a real thing that we care about at public works making sure that with all of the city contracts outed there, that they are spread around. and i think that that is we back that up with these statistics. and again, i would go back to a couple of things, for the first time, we are making this evaluation two ways. and so for the first time, ever, we are going to be hearing about our problems. and in an organized structured way. and on jobs, and what small immedia medium and large businesses are concerned about, and so hopefully that is a conduit for the positive thing and again i will go back to the point about evaluating jobs, and having the opportunity to have written documentation for a small business that they did well on let's say a small city project. and being able to have the recognition of that later by putting their name in a hat for a future job and saying, look, even you, the city, said that i would do well. so i am prepared to do this job. for a different department or a different contract. >> okay. and then, finally, one of the deductions that we hear to moving away, and the advantage of low bid, is that it is incredibly, objective. the bid is what it is. and the discount is what it is. and it is just a formula and a calculation and no one can really dispute it, except in putting in the atypical circumstances. and whereas, if you add up the criteria and one could see a situation where someone tries to play favorites and we, you know, and i am glad that this is one to strike the balance, because we know that even though the low bid is extremely objective and it also, can be gained, and it does not always, produce the best value for the tax payer. we don't want to go to the other extreme, where everything is so loosy goosy and subjective that it ends up having the favoritism and so we just talk and give me, we are not the first to do this. and uc does it and other jurisdictions do it. how do they, and how do we make sure that we are still being objective and fair? because again, favoritism, is not only unfair for the contractors, it is also unfair for the tax payers as well. because you may get someone who is actually not going to do the best job and so could you just comment on that? >> sure. so, kind of an unseen part of the process, now, and i think that unseen by everyone or most people elected officials in this room and the public, is the insensitives that we have right now. and so for example, every week i go to a meeting to review up coming reports and the way that it is now, with the system of the low bid wins. the number two, bidder, and sometimes, number three, if it is close. has a big incentive to figure out the way to knock out the number one bidder. and culturally, it is a very defensive way of operating on our part. and someone submits a bid and then we spend days and often weeks and sometimes months whether they are not qualified, whether it is true. because these are property rights that we are dealing with and it can easily get into litigation. and so, we are sitting across the street that go on and on and whether or not the bidder is qualified or the allegations of bidder two are true. and it adds a lot of time to the process. i don't think that anyone has quantified that loss of time and if you thifrpg about once you or whether or not the number one bid, or number two, wins, and that does to the way that starts. number two in terms of fairness, we have a lot of these, processes, and i guess that i should start by saying what the process is for the best value, and the few qualifications process that is very objective and transparent, followed by scoring, by a panel of qualified department staff, or other experts. and there is a lot of people and procedures in the process to make sure that it is done, fairly. and before we use it, we will make sure that everyone in the contracting community and on the public works side or any other department, knows what they are doing. and before ucsf gets the first contract, they had 17 out reach meetings to the contractors. and because, it can get complex and there is a lot of questions and is there a lot of fear, and so if they have 17, we will probably have at least that many. and last, or two more things, actually. we also do some similar processes now, with the design bill and contracts or with the cmg, contracts where we do have an interview portion. and these interviews are very subjective. and we do evaluate and we do score the rfps and so there is some competence locally in doing these processes for other contract types. and i guess that the last thing that is useful to know for us and makes us feel good is that ucsf, they weren't implementing this to have some of the outcomes that they did, but, they are very happy to report that since they have had zero litigation on either of the best value project and zero claims and which is unusual, and so, that is one bill object dollars of contracting that they have done without those problems and so we hope if we do this right that we will be able to replicate that. >> okay. i think that tang has a question. >> through the chair, thank you. thank you, supervisor weiner asked many of the questions that i was also going to raise as well. and i wanted to drill down a little bit more on the selection criteria on page 2 of the ordinance and i know that it is not a comprehensive list and i guess that it is just a guideline for supervisor weiner has put forth for the department. but two of those criteria, for example, financial condition, involved with the experience and i wanted to ask you about. so, jumping to relevant experience and i know that you have had said to supervisor, weiner that there is a poe ten shale to evaluate, say a smaller, lbe on their past performance in you know, smaller contract or something else. if they didn't have asame type of experience for whatever their bidding on at the moment. >> however, in this language here it does say, relevant experience means experience competency, and capability and the capacity to timely compete the projects of similar size scope or complexity. and so again, just addressing the concerns from the lbe community, how would a department treat td experience of the smaller companies to bid on something that is bigger or a slightly different scope? >> so, let me see if i can -- so sfgtv folks could you turn on the powerpoint? >> the way that i think of it is, on a particular job we would want to consider what is in the bl you, that is kind of the relevant vapt, past performance information. and the difference between this and the low bid is, and the low bid all that you are looking at is price, and with the past performance and consideration, you are able to have a relative relative, weighing and so if someone has an excellent safety record, for example, and that was prioritized in the point distribution and then you might be able to acknowledge that. and the other circles that might go into that are awards that they have received. and the violations, and the past evaluations of the city work. and the references or the surveys of other customers, and what they sell for port on that particular job. and the ra enthat some of those things are out of the blue circle is, is because we only want to consider what is relevant and current. so, this gives an opportunity i mean the idea here is to expand the pool and not -- and so we are trying to make the people who don't normally bid on san francisco work bid on it so that there is increase competition, so that we get better value and there are people out there who don't bid on the city work and we want them to do it and perhaps they stayed away because they don't have the low bid. from the lbe perspective, you can see that it is what we are talking about, the best value contracts, or the low bids, contracts. and it is tricky to talk about this in the projects in front of us. but, the idea is that, on the best value for the treatment, there is a prequalification stage any way. for all firms, right? and anyone who passes that prequalification stage, the technically should be indifferent to which person they get because we have qualified them and now we are just just seeing if there is a preum that we can extract based on that firm's experience. so, i am not sure if that completely answers your question. but >> and the prequalification requirements those are all the same. they are not changing. this is --. >> it would be projects, by the project. i mean this legislation does not change the. >> no. not at all. >> the qualification, and the criteria, i guess what i was trying to get at is to just to make sure that the smaller companies, especially the lbes are able to or should i say, would not lose out because they might not have had that relevant experience. >> we hope not and there is no reason to believe, and there no evidence to believe that that is true. and in fact there is evidence to believe the opposite and the important thing that we have not talked about yet is subcontracting. and so, an lbe might be a subcontractor on a job, and we have not determined what the flesh hold is. so we are not going to be evaluating the contractor, right? we are going to have to do some evaluation of the contractor above a threshold and we have to figure out what that is. we have been tossing around the idea of 20, if there is a million dollar job, and then there will be a separate evaluation, and so, if there were a small firm let's say whose is used to doing, subcontracting work, and or smaller jobs, again, it goes back to the idea of them getting the experience, and not just the experience, on the job. we did a good job and we know that we are ready to be the crime contractor on this. if i were a contractor i would think that that would be useful. >> that is something that the subcontractor don't get, that sort of evaluation that they can use for the future? >> not from us. >> just knowing that our economy operates in cycles and so forth or at any given time, a snapshot of the financial resources of the company may not be the most accurate, i suppose. you know, you may have they may be providing a snapshot of the bad times in their company, or a very good time. how do you, anticipate addressing this criteria? >> that might be an edgar question, because some of that, adgar, the deputy director of public works has built a lot more things than i have. and some of that is relying on the bonding companies or the other parties to assess. so do you have anything to add? >> good morning, supervisors thank you for your questions. the way that we normally do it is that we ask for the average of the past thee years, we recognize that the contractor may have been financially stretched at one point. and so we don't focus on the single year, but we look back, and we in what we say that we do is the way that we do it on the other project and we also, before we did something, and someone did not qualify, we give them the opportunity to submit additional information and if they don't have a line of credit and or if they don't have the bank reserves to meet the payroll, all of the things to be able to do to do the work. >> so a look back at the average three years. >> okay. >> could i add to the previous questions regarding the whether a firms that the experience, we tend to focus on the individuals, because we recognize that a firm may be new and they have not done a remodel of a particular type. so we asked for the rest of the individuals because most likely, they will have past experience and that is an easier way to help them meet the qualifications. >> would these evaluations moving forward be on the individuals or the company. >> well your question speci was about relevance, what if the lbe was not doing the work, would they be prevented from doing it. >> and make sure that we don't create at situation, where only the people who have done the same work is bid again, we ask to focus on the qualifications of the staff. >> okay, i see. >> okay. i mean, that i, you know, i had spoken with some folks, who i think had expressed some concerns over this legislation. and really trying to make sure that we are encouraging opportunities for lbes and that is something that i support and i know that our city does too and i want to make sure that that is happening at the end of the day, i think that for me, my top priority is about safety and fairness, for this process, and for projects, and so, you know, i would really be interested in seeing the follow up hearing a year after this is been implemented. just to make sure that there are not any of the fears are not being realized. because if there are, we want to address them. >> so. with that, i guess, our chair is out, but supervisor weiner do you have anything to add. >> i don't. >> at this point. but i would like to open up the public comment. >> all right, so we will open for public comment. >> cards? >> and i will read the cards that i have. juilana summer, jim lazaras, rubin and hansen lee, and kelley, mikwuchlt el, and lina tan, and michael summers. >> >> supervisors, tang, and yee and weiner, my name is juliana summer and i am the president of the graphics and a small, micro-lbe here in san francisco and i also sit on the board of directors for the contractor association as well as the lbe advisory committee for the city. i want to put a finer point on the issues that supervisor weiner had brought up, the lbes, are quite a bit nervous that this ordinance will put us at a disadvantage. when it potentially in the future we are going to be compared against the larger contractors. you know, we are in an up turn economy right now, whatever goes up, must come down. it was not too long ago that you know, in 2008, we were competing against the contractors in the you know, the very high range that were competing against us for the million dollar contracts. and you know, these big companies can weather those down turn economies. they have full time marketing teams. they have full time cfos. we don't have those teams, we have part time bookkeepers. and we are just never going to be able to compete against them on that level. during the down turned economy and so we just want to make sure that we are keeping that in mind, whatever goes up will come down, thank you. >> thank you very much. >> next speaker? good afternoon, and my name is kelley from the united contractors. we are a union affiliated construction trade association representing the contractors in northern california. then the letter addressing our concerns, but we want to foremost say that we support the supervisor weiner's proposal in promoting construction projects, and costly effective and in the timely manner. and so, you have mentioned a few concerns that we state in the letter to you. and mailed to you yesterday. one thing that lbes since we have been talking about it and the big discount, that is applied to the best value. the best value includes, prices and other factors. and how this discount of 10 percent for lbes will effect the over all evaluation. and also, we would like to see the language on more of the criteria of how the best value is, how a project will be determined to be considered best value. thank you. >> thank you, and just, to be clear, if i did read your letter. the intent of this legislation is not to make any changes to the lbe discount. your up or down. but it sounds like what you are asking is, because the low bid will now be one component it sounds like you are asking how the discount will play into that? >> correct. >> that is done with the public comment, i am going to ask the department to comment on that. and specifically. >> okay. >> thank you. >> thank you. >> good morning, ladies and gentlemen. my name is nina tan and i am the president and owner of the (inaudible) my company does heavy industrial construction and my company is a san francisco based company that mdlb and sbe certificated by the cmb and the member of asian, american contractors association, and aaca. and i am also a member of the board of the directors of the aaca. and i am here to extend to you, the board of supervisors, my opposition to the new proposed audience. trying to create an exclusive and a (inaudible) so-called the approve it and that is why you have the approvement in the members. create this exclusive and that is the cut will be destroyed all mall and lbe contractors have been faithfully served in the city and county of san francisco and our citizens for the following reasons. first, when the contractors will seek his and her license of the california, contractors state license board, the license indicated that it has the minimum of eight years of experience and requires the knowledge in the particular (inaudible) and contractor is capable of pro-he vieding the required labor and funds, as kalted in the contractor has demonstrated to the best and the founding under the -- that he or she has a financial capability and was to perform that particular project. and also number two, the procedure is based on suggestive criteria, and the systems and. these alths will be monitored for the -- and this is the -- >> thank you. >> okay. thank you. we will put that in the record. >> next speaker? >> yes. i am miguel, engineering. and thank you for the opportunity if i sorry after being 30 years in construction, my hearing is bad. i was not sure what the amendment was on specifically the bid discount, but i am going to hope that it was in line for my thoughts and that was specifically, to the point of the supervisor's regarding the leaving the lbes behind chl the bid discount has supplied to the technical approach and to price, and since the beginning of the ordinance since 1984, san francisco has gone to the 9th circuit court of appeals not once but twice to defend the bid preference. and spending hundreds of thousands of dla rz to defend the right to insure that contractors get equal benefit for the burdens to do business with san francisco. we understand the rules of engagement, healthcare, and family leave, and local hire, and sick leave, and those are the rules of engagement if you are going to do business in san francisco. all that we ask is that we in turn, continue to keep and hold on to, the precious parts that we have fought for, for the past 30 years and hope untilly, if the amendment is looking for that, i welcome that opportunity to see that in writing. thank you so much. >> thank you. >> next speaker >> my name is hansen lee and i am a previous association president and i also have the hansen electrical contractor with the local, 94124 company and the zip code. and this is the best value sounded a lot like the rest day of the right to work ordinance. we the city for the very hard to again the pop you la igs 201. and we have a very detailed full team d. to help us with at small, local, company. and anything attempt to water this down. and a lump that the big company, with the small company, is doing nothing but throw back to the big old boys network. and i would like to remind supervisors. that statistics could show us there are some bad contractors that city could, and very well can be exercised and then to do the work. and you should, and out to have a statistics to tell us why, or who is the one not doing their job? maybe the city part. maybe the contracts. and maybe the contract license, but those folks are or should or liable to do this work and i am surprised to hear that history, incidents, and i know that those companies are being operated in this city for many, many years. and why they are not in the single out in the first place that is get the data and a variable to study it before we create anything more to ward it out for the 14 b. thank you. >> supervisors michael, san francisco, building and construction trades council, we are conceptually very supportive of this approach and as you were able to hear in the earlier exchanges there is a real challenge in making sure that the approach is objective. and a real, important to making sure that it is objective. and we would hope that those standards, clearly include safety. and payment of correct wages and use of apprentices, and they are after all, the opportunity that the city provides through the contracting to the residents of san francisco. to achieve the careers in the trades. we, we note that however, it is been possible over the years to gain the low bid process as well. i can think of one prominent contractor that is infamous in the industry for low balling the bids and multiplying the change orders and making sure that the change orders get paid. and we are also supportive of small businesses. and their growth in san francisco. we don't believe that this is an attempt to water down 14 b. and i would, i don't know if it has been considered, or it is part of the process already. but it would certainly be important, to consider the performance of the contractors in the private s private sector one, private sector is after all, more robust than the public, in san francisco and we will provide a real opportunity for approving ground for the small contractors to aestablish themselves and then, seeking the work from the city. again, we want to see the bid preference to continue and we do not see this as an attempt to water ta down and we are supportive of the approach, thank you. >> thank you. >> next speaker? >> good afternoon, my name is alan and i am a partner with the anvil builders in san francisco, and we are an lbe contractor. we have been fortunate enough to work on many high profile city projects in short, we support the best value contracting and that can add a lot of value to the tax payers and a couple of things that we would like to see that needs to be more defined in the program and the sport card, and i think that it should be defined in what percentage of points going to safety as weighted to price and the past performance of the management on the job and i think that the individual department can define the characteristics of the job and there should be a formula set in to go in there to come up with the point system. and i didn't see anything, in the legislation, about the subcontractor, evaluation was brought up earlier. and i think that is very important. nothing, in here that i saw would have prevented the subcontractor, that being terminated from that job is moving on to a different city job and i think that is very important, and everyone in the proposal. and sunshine, ordinance, also concerns me. i believe that financials can be sunshined after the order of the contract. and also. the proposal. so the federal government, has the best value but they don't have a sunshine ordinance. so we support it and we would like to see it better defined. >> could you repeat what is the first item that you mentioned i didn't catch that. >> we were talking about the best value, and there is going to be some sort of a score card and to define is price number one or safety number one, safety 50 percent of the points and then passed performance and then your management and then your experience and then cost? you know >> how does that weigh out? then you can define the priorities of the city going on. >> and on that particular one, we are the departments through the public process, we will come up with what the exact, scoring is going to be, and we don't want to micromanage that at the board. and the on other two, after the public comment i am going to ask for the city attorney and the departments to comment on that. >> thanks. >> mike summer, and we have been contracting in the city for 20 years. and earlier, nick las mentioned that there is a pie big enough for everyone to get a piece of it but this legislation seems like it is just going to just reduce the number of participants that is just going to be a very select few of contractors that get the majority of the work and leave the lbes to get the scraps. also, he talked about trying to avoid claims. and in doing so, one would have to look internally, and there are three parties, seek and one of them being a contractor and one is a designer and one is a client's representative. and the contractor can be reviewed and you guys are trying to go forward with that, but the architecture should be reviewed and the client's representative should be reviewed. and there are many that hurt it as it does, and it, there is no repercussions for it. he wants to increase the pool and, this is going to decrease and, this is going to make it so that only a select few prequalified contractors can bit bid and then in addition to this, it just seems that like there a minute to the legislation and so we would like to continue this for a month so that we have the time to review this new amendment that is coming out. thank you. >> thank you. >> good afternoon, supervisors. thank you for the opportunity to present today. my name is cliff, ber ch, president of empire engineering construction, we have been in business for eleven years, as an lbe contractor and it is finally our turn to show up and be aible to form our talents out there on the grid iron and in the world in of construction today. we are now performing a project high profile, water project and in the financial district. we have not hit any gas lines, we have not hit any water ruptures or a, fiber optics and that is the worst place and so we understand the mishaps and those things should not have happened and i don't understand how we can do the best value because it will not benefit any of the lbes that are here today. we will be pushed out, and supervisor weiner you mentioned of the tens and billions of dollars coming forth in the future, which is a great thing for the city but we will not be able to cap callize on this. i think that if this issue passed or ordinance passes it will be an injustice and the disservice to the 14 b. and it is not even a skrchlt mb issue as a human rights issue. and therefore, because there is all minorities in here and it is formally of the human rights, hrc and i think ta we need to really look at this and to see, who, and all, and who and what people in all of the companies that is impacts, before you make this decision. >> because you will have these contractors, from la, up here, bringing, and buying goods from la. and instead of spending the money here in san francisco. >> so i think that we should really consider the whole, all of our views, and opinions here today. before we make a drastic discussion on doing this best value thing. it is no the in the best interest of the current lbe. thank you for your time. >> danny campbell, local union four, i respectfully disagree with the previous, speaker, i don't see how it shuts out the lbe, we have the contractors that are certificated lbes if anything, it will mean that the tax payers of the city and county of san francisco will have the most responsible, lowest bid contractors performing work, bidding and performing work on city contractors. that is a great thing. and i think that think of it as your own home and you p ut it out to bid, okay? and you want, and you want a new plumbing system in your home. and you just going to go with the lowest bid because they just gave you a real low price? and then come back, and it is really refreshing supervisor weiner that you are asking the departments to look at passed performance. and that you said, safety, violations, and that is great. and i would encourage you to go further. and how they had the previous public works violations that were identified by lse, or the state of california department of industrial relations? such as under payment of per veiling wages? and not using state registered apprentices. and the misclassifying worksers that is often, how the contractors were able to low bid, they will not bid at the direct classification, if it is plumbing work they will not bid it at the bumbing wage or the sheet metal wage they will bid it out on the lower, classification just in order to get the about i had and i think that this is really a step in the right direction, and thank you, and i applaud you for bringing this, and i think that like i said it is a great thing for the tax payers, and for the city and county of san francisco. and having the lowest responsible bidders performing work. thank you. >> and thank you. >> and any at dishal public on this item? >> and i see none, mr. chairman, may we close public comment? >> great. and so just, a few questions for, it could be for the state attorney or the department. one is, just to really clarify how the lbe ten percent have a discount will be applied here. and how there have been comments about the 14 b and how it might change or water it down. which i don't think is the case. can i, get some clarification on that for the public? >> right now the city of san francisco gives the bid discounts to local business enterprises and i don't pretend to understand all of the ins and outs of the system, in a nutshell, there is a certification process, where a certain amount of the business has to be done here in san francisco. and a lot of the people you just heard from have gone through that process, and are located here and as they mentioned there is a lot of requirements that we have, and a lot of high cost, obviously of operating in san francisco. and so, one of the benefits that they get, and historically is related to trying to also expand the opportunity, and it is a big discount and so on the low bid contract, not all, contracts but on some depending on the threshold a bid of 3 million will be reduced by two percent and so that becomes, 2.7 million dollars. and so it is really black and white, and it is easy to understand. how that would work, so the best value, is the different math. and there is a numbn numerator dow nominator and that is what is going to vary, project by project. and on one project, the finishing the schedule might be more important and on another project, relevant experience doing a particular kind of construction might be important. and or, there might be an important tool that they use in the construction job and there are a lot of ways to do it. and the point is that it gives the city an ability to say, legally, and con stracontractua this is what is important to us and, if you want the examples it might be easier to talk about. the way that the legislation is written now, it says, that the applicable, bid discount will apply to price, and so that means that the numerator and so basically what i interpret is saying, is that the status quo is intact and there is not an additional bonus for the technical score. so if there is some number assigned to safety, or project approach or personnel that there are not extra points for that. and that is how it works, does that make sense? >> do you have anything to add? >> deputy city attorney, no, that basically that the bid discount will apply and so it will not change and the denominator just as mr. king explained. >> so this is the discount disremain fully intact in >> yes. >> all right. >> okay. and kind of related to the cost of the bid. >> it is applied to the -- so, some people use the word discount and some people use the word bonus, it is easier to think of it as what you heard, and a couple of people say is that they thought that there should be a bonus applied to the non-cost of the score as well as a bid discount, and whether you put the discount on physical therapy top or you put the ten percent in the result and it is the same mathematically and it does provide a bid discount on i believe that the threshold is up to $10 million up to the project in ten million in value. >> you are saying that whether you apply to it or you come up with the final score and apply it there, it is the same? >> yeah. >> that is just the math thing. but it is, it is written as applying to the cost. >> right. >> okay. did you want to say something? great. and thank you. and in terms of the issue of subcontractors. can you just talk about how the best value would apply in the subcontractor? context? >> presumably, if the subcontractor were part of the larger bid, the best value would be able to ascertain whether the subs have had problems. so, correct me if i say this wrong. and i kind of hate to go near specific examples in the past but i will try. if that job had been structured in the best value way, what i think, that the process could have been is, that one entity could have bid on it and it may have been a part of that. >> does ma make sense? >> my question is does the best value get that issue of the problematic? >> does the best value get the issue of the problematic subs? >> it is the bidder's responsibility to put together the bid. does that make sense? and so if we are evaluating or if one of the criteria that we are putting out is your project team or your firm an experience or whatever personnel your taxes are reaching out that is something that will be evaluated during the prequalification and scoring process. and so, all relevance and current experience will be on the table. and so, if someone and an entity walked in the room and said that this is our estimator and this is our so and o, and this is our project, team. and that is what the city will be evaluating. >> okay. and then in terms of the subsnchlt >> that is part of the project team. so we are talking in the abstract, and maybe it is easier if we are talking. >> no, let's talk about, and i mean that it is what it is. >> right. >> so he walks in and he does no the bid and how would the -- let's say, that the they had just had a terrible track record for years, and let's say that even, you know, in the future, when let's say, for example, synergy is part of a bid packet and how does the subs passed performance, whether it could be great or horrible, and factor in to the best value for that over all bid package? >> the question would be, it is a process question, more than anything else. is their experience relevant and current? for better or for worse? and there are certain things that they might be able to volunteer themselves. and there are things that we might know it and from --. >> and so, when you are doing the bid evaluation and awarding the contract, would that come up? that last year, this contractor did this terrible thing? and the subcontractor excuse me. or the subcontractor, you know, abandoned the child or this contractor, you know, blew something up? would that come up in terms of the scoring under the best value for award of the contract? >> it could provide it that the prequalification questions and the evaluation questions were written in such a way that made it come up. so, you would, for example, i mean that i would, here when supervisor breed had the hearing on this. and i don't remember, pg& e spoke or the pg& e and the state public utility's commission but there are documents that i believe were issued and documenting the certain violations that happened in those jobs. and if there are questions about have you had the violations yes or no, and that is something that would potentially prequalify or disqualify someone from a job. but it still project specific. unless we are talking about something happening below a certain threshold and our vision that would make is harder for an entity that under performs in such a serious way, that it should impact any job they apply for. >> and that mighting more of the important. >> but in terms of structuring the process, and the scoring process, that can include evaluation of the or the sub, and looking at the subcontractors and their performance, and so it is not just how did the prime contractor do in the past? but they are working with xy and z. subcontractors, how did they do in the past as well? >> right, we are trying, and when we think of it is --. >> is that a yes? >> that is a yes. and we are trying to focus our metrics on the job. one of the obstacles that we have run into is the people thinking that we are trying to brand people as bad contractors. or that something that happens for some ridiculous reason, or a long time ago in a long place ago is going to come up again. and so we are trying to talk about what is in front of us, and is it relevant to the job in front of us? and so in answer to your question, if a company that had a lot of accidents, in recent times, were applying for a job, that might involve similar work, then, we should structure as a city, it is our responsibility to structure the process in a way that gets that on the record so that we can do a fair process of assessing whether or not they are qualified. really it is on us, and that is more of a city question than a contractor question, i think. because our challenge always is to write a so listation that is general enough to get the people to bid on it, but specific enough to keep out risky behavior and risky actors. so in your example, yes, we could provided there is some documented >> assuming, of course. but if you anticipate that being the case, and then we heard someone in the public contract, the contractor, lbe, say that this will not get at the subcontractor issue. we have a bad subcontractor who has a bad history and you are saying that you disagree with that. ? eyes. in eand then to clarify the issue of financials and in the sunshine ordinance. can, i got it --. >> yeah, we checked on that, and we don't have have to disclose the financials. >> deputy city attorney, and so the financials are sometimes protected as trade secrets. and when they are trade secrets it is that does not have to be disclosed under the sunshine ordinance or the public records act and it tends to be a case by case situation. >> do they have to provide the information about the financials? >> yes. and currently today? >> yes. and how would that change, if at all in the future on their best value? >> what do they have to provide for today. >> it varys by project. >> i would like to know that. >> currently in the low bid, contracts the information they have to provide is that they can get a bond. a payment and performance bond. and we can penetrate even more to the questions and depending on the complexity of the proj t project. and at a minimum, they have to obtain a bid bond. >> and have you gotten the sunshine are requests for that? >> yes, we have and on the advice of the city attorney's office we have withheld, the information. and how much you are having in the backlog and often times we will ask about that, and you are bidding to the million dollar project and how many do you have on the portfolio and how many are you committed in the next year or six months. >> i appreciate it. >> thank you. >> supervisor yee? >> no. >> oh. >> and i will just, and if i just may, and thank you, and i want dpw, and for all of the information and the members of the public, for participating, not just today, but the contract r contractors and for the feedback and for the weeks and the months leading up to this hearing. and we have tried to be sensitive, to the needs of our contracting community and understanding and reiterating what i said at the beginning is that, on most of our public works contractors, we do a really good job, and this is not about broad brushing or demonizing contractors, and it is just the fact that there are situations where there are problems. and there is nothing more frustrating i will tell you, than, the few things that are more frustrating, than when you know, i work with the community, and the community works to move forward, whether it is the parks project, or the street scape projector whatever the case may be. and work for years and years and years, and we put together the funding and we get to the design done, and the project goes out to bid, and then, the department head calls me up and says, hey, your project was awarded. and this contractor routinely under staffs a job and they ever done on time and ends up costing more and so i am sorry. but we had to go with this contractor because they were the low bidder. that is bad government. and the fact that we can't even or cannot even take that into account is bad government. i don't think that it is going to under mind our lbe and we are going to do the tens of billions of dollars of work and there is plenty of work. and to do the good work in terms of the people gaining the low bid system. that is equal opportunity and that is the small contract or you can get it from the big contractor and we have seen it many times from the big contractors and so i understand that, the nervousness about moving to a new system, and we are not the first to do this. and this is not going to prejudice, the small contractors but it is going to be good for the city. and it is going to reward, the good contractors, and the many good contractors, large and small, and who do the good work for the city. and so, i do and i just scribe these amendments in the beginning i would ask that the committee would adopt them and to forward this item with the positive recommendation. >> supervisor yee? >> thank you. >> first of all, i also want to thank the public for coming out. and thank you for supervisor weiner for putting this forward and i am happy to as you mentioned join you as a co-sponsor. >> on this and i think we're right this is really the much of this will be on the shoulder of city staff to figure out the languages so that that is going to be effective when we're talking about the subcontractors i felt like in the contractor can continues to keep on using the same bad subcontractors will be reflective how you'll rate them for me advertised - i'm not looking for the city to go after a after a contractor that made with an mistake but as the pattern the supervisor is describing those are the ones we need to weed out in terms of those that are giving us low, low bids and snavntd not doing things correctly and costing us time and money i will be thoroughly supporting the amendments open this and this whole thing to move forward. >> okay. thank you supervisor y yee. >> and then i'll move to move forward i move we send it to the full board with a positive recommendation most by madam clerk, is there any other business before this body? >> no, mr. chair. >> thank you very much we're adjourned all right. good after welcome to the board of supervisors budget & finance subcommittee for may monday, may 2, 2016, here we go again apparently okay. now good afternoon. welcome to the board of supervisors budget & finance committee my name is mark farrell joined by supervisor tang and supervisor yee and supervisor wiener want to thank clerk victor young and march and derrick from sfgovtv for covering this meeting mr. clerk, any announcements? >> yes. electronic devices. completed speaker cards and documents to be included should be submitted to the clerk. items acted upon today will appear on the may 17, 2016, agenda board of supervisors agenda unless otherwise stated okay. thank you very much so two budget department hearings we want to get through them and i wanted to call up we'll take them

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