bring this hearing back. its last appeared on september 25 in the city operations and neighborhood services committee. we provided this committee out of convenience, and i appreciate their work of the office of economic and workforce development, our labor and community allies, the laborers, carpenters, and we have had some good developments in our discussions around the new work force and small business inclusion plan. that will be discussed today. i appreciate that movement. just yesterday, we were talking about how we can move forward on prevailing wages and local hire. the office of economic workforce development in the event authority were able to come to some concessions and some real benefits that i think are

important to note. that is the payment of prevailing wage. subcontractors also be bound by these wage provisions. and there will be a lot of work in bringing the premises of into line as well. i think it is great progress. i want to say that that movement is very well-appreciated. i think it is going to have really great benefits for residents here in the bay area and locally. i think there is more to go. i believe that our local hire ordinance that we passed in 2010, that was a great partnership between contractors, laborers, and community groups and the city to put together this policy as something that i think can be extended to the private side. right now, the local hire ordinance is extended to -- where there is a city contract for construction, and i think the spirit of the ordinance makes a lot of sense for the

america's cup. especially that when we know when the america's cup first came to us in late summer of 2010, while we were talking about about local hire ordinance, there was a great deal of talk about san franciscans getting jobs in the america's cup rollup and as it was going on as well. that was significant to me. i think that everyone felt that this was going to be an event that was going to be beneficial to so many parts of san francisco and so many communities, from the business community, sailing committee, arts community, construction workers, folks from all different neighborhoods as well. so this hearing is really to get a sense of where we can still get to. to also acknowledged the movement that has happened. i know we have mike martin from the office of economic and workforce development, and i

know there is a presentation today. before we start, i know one of the last remaining things that we talked about is extending the spirit of the local hire ordinance to this event. another has been a great deal of talk about what we have, a goal of hiring local residents, and we have steps to get there. but the goal has been -- it resembles very much our first source program, based on good faith efforts. and the big movement that we had to get to the local hire ordinance was out of the experiment -- experience of filling that the good faith efforts were not something that worked. and if you want to discuss, you know, a program that resembled good-faith efforts and died of is -- when i use the word good- faith effort, i want to move from that to another level.

it is about a requirement or looking at h a lookingire ordinance. -- looking at a local hire gordon is. not setting a maximum. i am not sure we can resolve that today, but we also have the dba coming up before us, and we can discuss that further. we will hear from many people here. the committee has concerns. they want to helping the event authority to be successful in putting on the best event we can. i think that that dialogue can help strengthen the event that is going to happen. mr. martin, are you up first? >> good afternoon, supervisors. mike martin, america's cup director from the oewd. thank you, supervisor avalos. that was agreed description of where we have come to at this point. in the hearing back in september, i sort of had a fairly lengthy presentation about the economic opportunity

about the event in san francisco being unique in a lot of ways. i think part of that presentation focused on the the way that the jobs and small business opportunities are really going to come from a lot of different places. not only from the construction projects, but i think you are referring to the local hi ordinancere , but also to other opportunities in the construction program. yesterday we had the -- another milestone in the cruise ship terminal project, which is a public aspect of this project, and that is moving forward with all of this city contracting provisions as part of it. we are excited to see that go forward. i also sort of take time to appreciate the efforts the event authority has moved forward in terms of really talking about all the other strategies to bring home these economic benefits to san franciscans, not only from their individual spending, which he might see in a larger real-estate development

projects, like in a treasure island in candlestick, but in other things like the sponsors that are coming to san francisco and the events they are putting on, all of the spectators coming to san francisco to see this great spectacle on the day. i think the opportunities that we see and making sure those people see what is great about san francisco and grade about the neighborhoods, the event authority has been a great partner. one of the great things that underscores this is changing the workforce development plan to the workforce development and small business inclusion plan. i've been they have seen the real benefit, not only in their own conduct and with small businesses, but also in having an america's cup connect web site where they can share information about local businesses willing to provide services and connect them with people they are connected with that are coming to san francisco. we look forward to continuing those efforts in a way that will deliver on the economic benefits, the thousands of jobs. it is not going to come at the stroke of a pen.

it will require work and efforts, accountability. the event authority has stepped forward. in the time since we met in september, i think the project has come to greater definition, both in terms of the bricks and nor are -- mortar at the port and what the events will look like on the water. that has helped the event authority build more detail about what they're trying to do. we will hear a lot more about that today. i want to extend my office's an appreciation for their efforts in engaging with the community, city staff, and with everyone that wants to see this event be a success. as you describe it, it upholds the spirit of the leila boroughs corporation -- local hire ordinates and despaired of their broad jobs plan. it is exciting, and want to see the america's cup be a way to kick this into high gear. i think this dialogue today will

help us do that. i will hand it over to laura luster. supervisor avalos: thank you. >> good afternoon, supervisors. my name is dr. laura luster, a consultant to the america's cup event authority. i have been assisting them with crafting the america's cup workforce development and small business inclusion planting. this plan was developed by the event authority in partnership with the office of economic and workforce development. the san francisco human rights commission and the office of small business and other city departments contributed as well. in addition, the event authority got input from communities, business, and labor organizations, all of which provided a very valuable

feedback. the entire process over the last several months has produced a solid outcome-driven plan that i believe will put san francisco residents to work and ensure contracting opportunities for local small businesses. this afternoon, i am going to provide you with a brief description of the main elements of the plan and i light -- review its strategy is and highlight outcomes. there are two primary components to the plan. the first is the small local business inclusion portion, and the second is the local resident hiring portion. speaking first about the small local business inclusion, the event authority worked with the san francisco human rights commission to establish a minimum goal of 25% participation for construction at subcontracting, and it established a 30% for all event

activities. all of the vendors and service providers and suppliers. the event authority is and will continue to complete very proactive steps to make sure that the san francisco business, in general, and small local businesses specifically know about, have access to, and actively participate in the event authorities contracting processes. the event authority is engaged in ongoing business outreach, and it is connecting with firms that reflect the entire makeup of the city. to date, they have met with over 40 different neighborhood merchants associations, the ethic -- ethnic chambers of commerce, stakeholders, and they have established an easy online portal, onto which over 800 businesses have already registered, so the event authority knows about them and their interest in working with

the america's cup event. and moving forward, they are creating a procurement planting that is going to identify all of the contacting opportunities, and i am particularly pleased we will include goals for minority and women-owned business participation. they will also be hosting a vendor fair in which small businesses are going to be able to find out about the opportunities and connect directly with authority staff. the office of small business and the san francisco human rights commission have been assisting the event authority in connecting with san francisco small local businesses. in addition to these steps, the event authority is going to be utilizing social enterprise agencies to involve community organizations in the vending and service opportunities. they are working with the san francisco department of the environment to promote the utilization of local green businesses, and they're working they'resfmay to really engage

san francisco's manufacturing sector in meeting america's cups needs -- working with sfmay. i believe the event authority is off to a very small -- a very positive start. as a contracting opportunity becomes more clearly defined and the procurement plan is finalized next month and as we get closer to the summer, there are two week-long events that will take place in august, these opportunities should begin flowing to local small san francisco businesses. supervisor avalos: if i may stop you for a second. just for clarity, when we say local business enterprise, we're talking about local san francisco business, correct? >> we are talking about local san francisco businesses. supervisor avalos: in the event authority sees it that way? >> yes, absolutely. in construction, their two pier projects, building a back wall

on pier 29, and repairing pier 32. the bid document is in process for the projects, requiring advertisement and outreach to lbe. this is certified san francisco human rights commission with the general contractor has been selected, power engineering. they completed all of the requirements and have committed to meeting or exceeding the 25% lbe goal. power engineering is working with the event authority. and the san francisco human rights commission is at the table. we will be hosting a pre-bid meeting in a couple weeks. we are actively of reaching to lbe contractors to engage them in the bidding, -- process and get them on board. the work on pier 30-32 will begin in april. the other work habits much later on, perhaps next year. now we get to accountability.

the event authority has put in place accountability provisions. the plan includes contractual obligations for small local business inclusion for vendors, service contractors, and suppliers, with contracts of $150,000 and more. for the construction contractors, $350,000 and more. these achievements will be monitored by the san francisco human rights commission. and the event authority will produce quarterly reports on progress. as importantly, the event -- as the entity that is going to be signing the checks, is pressing upon its vendors, suppliers, and all those who wish to do business with the event authority that local small- business inclusion is not optional. it is the way the event authority is doing business. it is the way the vendors and suppliers must also do business. supervisor avalos: and just a question on that.

perhaps you are getting to it next. if the authority does not meet its lbe goals, what is the consequence? does not meet the 25% lbe and the 30% threshold, what is the consequence? >> well, the consequences, of course, are that they are going to -- they are not going to succeed in delivering to the city and county of san francisco what they have promised to deliver. the work force component of the plan spells out the local resident hiring obligation that the event authority contract it the vendors and suppliers must meet. much of what is included in the work force component mirrors city practices and requirements. however, particularly for the construction work, the event authority, which is not bound by the public contacting code, is strategically leveraging its

role to exact some additional resident hiring benefits, and i will go over those in a moment. the majority of the hiring opportunities are going to cut from event authority contacted vendors, service providers, and concessionaires. the goal for these contracts of $150,000 and above is a at least 50% of all new entry-level hires roby san francisco residents. these firms are contractually obligated to fully and proactively participate in san francisco's first source hiring system and work with the oewd. in advance of hiring, they're expected to submit jobs projections of tohires, provide descriptions and announcements, and provide a single point of contact for oewd be there to oppose their jobs on hiresf and ac connect, and there to assist oewd to track their hires. the oewd will be conducting a

city-wide outreach to ensure that access to opportunities for residents from all san francisco neighborhoods have access and information about these jobs. oewd will also monitor the achievements in this area. supervisor avalos: a question. this 20% local hire -- we're talking about the spirit of our construction and local hire ordinance, that 20% is actually going to be rising to 25% starting in march. soak if we initiate -- so if we initiate the construction work, we could be lower than the actual 25% mark, which is going to start this year. >> i believe that the reason is that the 20% was set was because they understood, because the project went out to bid, like the san francisco city-sponsored

project that went out to bid in 2011, even if it begins in 2012, that the 2011 levels apply. however, i would say that the opportunities for pier 30/32, we estimate that it will generate a total of about 250 jobs, and that the local resident hiring goals better placed here are the minimum goals. in other words, at least 20% of the workers on a trade-by-trade bases will be san francisco residents that are economically disadvantaged, and san francisco residents with 25% being economically disadvantaged. supervisor avalos: i am holmby the authority is able to exceed these goals, but we're starting from a four this seems to be lower -- i am hoping the authority is able to exceed

these goals. i understand your argument about these bids. >> the event authority is looking at ways, already discovered ways that they are really going to be able to use their leverage as a private owner to really deliver additional benefits. for example, the 20% goals are going to apply across all trades, including those that would normally be exempt from the city-sponsored projects, such as the marine pile drivers. so that the contractor, power engineering, is expected to meet this goal. there will be no exemptions. the contractor has indicated that they will, indeed, meet these goals. and i would like to add that all of the work on the pier and all the construction work for event authority is being done by union contractors and will be done by union workers.

in addition, another way that the event authority has been able to leverage its role as the owner is that for all of the temporary installation work, such as setting up the bleachers, that the 20% local resident hiring will apply to this work as well. and this is something that, again, will extend opportunities to san francisco residence that would not be possible if this was a city-sponsored project. it should be noted that all of these jobs will be prevailing wage jobs. supervisor avalos: that is great to hear. that is a goal, but not necessarily a requirement. >> it is a requirement. supervisor avalos: so the consequences of not reaching that goal are the same as the local business enterprises that have not succeeded? >> actually, you provided me a

great said way into the next slide. to keep everybody on track and accountable. first, the contractors and subcontractors, these will be contractual obligations. they're also going to be required to participate in the submitting electronics certified payrolls, as they would on a city project. this work will be monitored, and there are penalties for the contractors for not meeting the goals. and the event authority will report on the achievements of this effort. supervisor avalos: i remember reading in the workforce plan that the penalties were applied for not meeting the steps of verse is not meeting the goal. is that different now? >> no, it is not different could you are correct. it is for not going through all the different steps and requirements that the contractor is required to make.

yes, you are correct. supervisor avalos: you could actually go through the steps but not hit the goal. in that case, if you go through these steps and do not hit the goal, there would not be a bounty. is that correct? >> i would say that i think it is unlikely that the contractors will go through these steps and not meet the goals. the america's cup workforce development of small business inclusion plan presents a clear path to ensuring the san francisco workers, including workers from economically disadvantaged communities and its small local businesses, will have access to the opportunities generated by the america's cup. this is a solid, outcome-driven plan with transparency and accountability built into its structure. and this basically concludes my

presentation. i would like to say, in moving forward, the event authority is committed to continuing to engage with community and local businesses to seek ways to maximize the jobs and local business participation. thank you. supervisor chu: thank you very much. supervisor avalos: thank you for your presentation. i really appreciate the movement that has happened over the past few days. i still believe there can be more movement. i think that we have a history of providing steps for small businesses and contractors to go through to meet our lbe and our local hire goals, and in the past, under the first source for local hiring, those steps were done but we did not necessarily achieve the goal that we wanted to achieve. it was 50%. much lower than that. so our history is that those

steps, even if they are requirements, they do not necessarily yield that outcome and we want to see. we will hear from people in the public who probably want to pressure more, and i probably want to push with them to see where else we can get to. i think this can be a great model if we have a requirement on the outcomes and not on the steps. we could actually have an event that will have the kind that the benefit that we had expected to come when this first came to us in 2010. supervisor chu: thank you. >> regina, director of the office of small business. starting in september 27, 2011, we kicked off the small business outreach, because we heard from the small business community, their interest in wanting to make sure that they had the opportunity to participate in the economic benefits of the

america's cup being here. so we work with the event authority to introduce them to the business organizations. our office, the commission, the human rights commission, we're really dedicated to ensuring that the event authority does meet its goals, and we will be monitoring that as well. i am very appreciative of the work they're doing in terms of engaging and simplifying the ability for businesses to be able to engage and get information on business opportunities. the other thing that i also wanted to make sure that you are aware of, when we did our presentations, we also led businesses know that there is going to be business-to-business opportunities that they are going to be able to partake in in regards to the america's cup being here, not just being able to engage in business with the event authority.

and understanding your commitment and desire for san franciscans to be hired, our presentations also conducted a presentation with the office of workforce development, asking for businesses -- since the city is bringing this economic opportunity to you, to also make a commitment to hire local san franciscans and to work with our workforce development department should they be expanding their work force as a result of america's cup. so i just wanted to let you know that that is a dual commitment and message coming from both our office in the event authority as well. supervisor avalos: thank you for your presentation. we can go into public comment. then we will probably have a few questions.

i am hoping that we can get to where we want to get to. and i think we have a lot of resources in the city. the city is putting forward a lot of resources to be able to develop our pipeline of workers. we have community and labor partners that can make this happen but i am hoping that we can be successful in that. supervisor chu: let me acknowledge supervisor kim. supervisor kim: thank you. i had a quick question. there has been some confusion i have been trying to figure out in terms of our use of ifd revenue for america's cup and the impact of that in terms of making this a public project. i know that the state did allow us to include pier 27 to the infrastructure financing district, and you can use past instruments to help us with the america's cup village in with the cruise terminal. is that the case?

are any of those dollars going to phase one, the america's cup village? >> actually, due to the timing of setting up the district, those dollars will not flow until after this initial phase of construction potentially, if approved, they will be used to reimburse some of those costs. supervisor kim: to potentially reverse some of those costs. with that qualified as a public project then? >> i think that is a legal question that i probably cannot answer. supervisor kim: i know that if this is a public project, my understanding is that the local hire ordinance would encompass that particular project. not sure if it would just cover pier 27 or the entire americas cup. >> thank you. i am from the city attorney's office. the determination of whether a project is covered or not by the local hire is made by whether or not the city contract requires

-- all of our contracts, a construction contracts, to incorporate local hire in a stepped-up increases depending on the day. but it does not cover private contracts. the issue of whether it is public orchis a separate question in prevailing wages, and this come from different sources. local 622 applies to contracts for construction been awarded by city and county of san francisco. supervisor kim: awarded by city and county of san francisco. even if public taxpayer dollars goes to the project, that is not the criteria for it to be covered by the local hire ordinance. >> not for to be covered by the x22g. supervisor kim: i'm sorry? >> no, that does not mean it is covered. it has to be awarded by the city and county of san francisco for 622g to