Building Inspection Commission (BIC)

Regular Meeting

Wednesday, December 16, 1998, at 1:00 p.m.

Adopted on January 6, 1999

War Memorial Building, 401 Van Ness Avenue, 4th Floor, Room 428

MINUTES

The meeting of the Building Inspection Commission was called to order at 1:15 p.m. by President Hood.

1.	ROLL CALL - Roll call was taken and a quorum was certified.

COMMISSION MEMBERS/STAFF PRESENT:

Bobbie Sue Hood, President	Armand Vasquez, Vice President

Mona Cereghino, Commissioner	Alfonso K. Fillon, Commissioner

Sigmund A. Freeman, Commissioner	Roy Guinnane, Commissioner

Sharon Mark, Commissioner

COMMISSION STAFF PRESENT:

Maria Banico, Commission Secretary

Carolina Vera, Recording Secretary

D.B.I. REPRESENTATIVES:

Frank Chiu, Director

William Wong, Deputy Director for Inspection Services

Jim Hutchinson, Deputy Director for Permit Services

CITY ATTORNEY'S REPRESENTATIVE:

Judy Boyajian, Deputy City Attorney

2.	President's Report.

a.	Discussion on the effects of the December 8, 1998 power outage on the operations of the Department of Building Inspection. The Commission may take action to direct the Department to carry out tasks that will enhance the use of the emergency generator, including but not limited to its ability to provide uninterrupted power for computer operations.

President Hood said that there was a power outage on December 8, 1998 which affected the operations of the department. She said that the computer systems were down throughout the power outage. She directed that the department look into keeping the computer systems working so that there is no interruption in the provision of services.

Director Chiu thanked Mr. Steve Young who supervised the transfer of the power source to the DBI generator. He said that the current back up electrical system was chosen given the limited money available at the time.

Mr. Young said that the building has an uninterrupted power system (UPS) in place. However, the systems are dated and he does not recommend using the systems that have been installed. The current UPS in the building allows about an hour for soft shut down of the computer systems.

Mr. Marcus Armstrong, MIS, agreed and said that the back up power system would allow for shut down of the computers at a pace that would protect the data.

President Hood said that this was not a question on whether a UPS was installed. She turned to Commissioner Freeman and asked if he knew about uninterrupted power systems in buildings.

Commissioner Freeman said that such systems are widely available.

Director Chiu said that the department could do some research and bring more detailed information to the commission at some future date.

President Hood said that such a system should be put in place in the building.

Mr. Young said that when the generator was installed, there were time and engineering constraints that were considered. The building was not classified as an essential facility. The installation of an uninterrupted power system will cost more than $100,000 and will require revamping of the whole electrical system of the building.

President Hood said that the UPS was not an option presented at the time when the Commission decided on the installation of the generator. A $100,000 expenditure for such a system is not prohibitive. It is critical to have an uninterrupted power source. The department has a surplus. She also clarified that this is not a MIS issue.

Director Chiu said that the department staff will come back with more detailed information on the costs of such a system. He also said that it may be necessary to also look at the generator's capacity.

Commissioner Freeman said that when the generator was installed it was for purposes of providing power during an earthquake. The provision of an uninterrupted power system is a separate issue.

Vice-President Vasquez said that the discussion at that time was in case of an earthquake, there should be a central control area. Staff and the Commission never discussed a battery back up system. He agreed with Commission Freeman that what is being discussed is a different issue and he wanted to analyze the information before making the decision.

President Hood said that computers will be needed in the central control area.

Vice-President Vasquez requested a summary of what is available and what can be put in place.

President Hood said that such technology is not cutting edge but is rather common place.

The generator will be able to provide power for five-ten hour working days. The problem during the power outage was a timing problem. PG&E said that the power would be back up early in the afternoon. Because of this information, Mr. Young decided not to power up the computer systems trying to avoid having to power down again while the source was switched back from the generator to PG&E.

Commission Freeman asked how long it took to start up the generator. He asked if it would have been different had staff known that the PG&E power would not be back in place as anticipated.

Mr. Young said that the decision not to power up the computers was his decision and it proved to be a mistake. Had he known that PG&E power would not be up again quickly, he would have allowed powering up the computers using power from the generator.

President Hood asked what are the game plan was if the power was lost at midnight.

Mr. Young said that admittedly this was a cross-your-finger type situation. The department and the building have some level of insurance but there may still be problems.

Mr. Bruce Bonnacker, NARI, said that he heard that DBI's building is not classified as an essential facility. If so, there is a need to look at the building. This building was built as speculative office space. This means that the building does not meet the seismic requirements for essential facilities. Although a power source may be available, the building may not be habitable in the event of an earthquake.

Commissioner Freeman asked if back-ups of the computer data were sent to other locations.

Mr. Marcus Armstrong said that the department has a disaster recovery plan. The software kicks into shut down the system once the power source is cut off. Back-ups of data are sent to Nevada. It takes three to five days to retrieve the data from this other location. The back-ups are done on a weekly, daily, and intermittent bases.

Commissioner Freeman asked if there was a possibility of an offsite location that provided a shorter turn around.

Mr. Armstrong said that there are some companies that will provide access to data at real time. He said that MIS staff is looking at this as an option.

b.	Report and discussion on the proceedings at the Public Advisory Committee Meeting of December 9, 1998. The Commission may take action to direct the Department to follow through on suggestions of members of the public to improve the operations of the department, including but not limited to assessing strategies on automated plans tracking and circulation.

President Hood said that she was at the recent public advisory committee. She commended Mr. Laurence Kornfield on the success of the event. There was a marked contrast between DPW managers and DBI managers' response to input from the public. She said that DBI personnel welcomed input from the people who came forward and were trying to be helpful to the department. She thanked management and it's responsiveness to the public, and expressed the Commission support.

3.	Director's Report.

a.	Report, discussion and possible action to approve conceptual proposals by the Department aimed at improving the operations of the department and the efficiency of processing permits and inspections, including but not limited to seeking additional appropriations through supplemental budget requests for MIS, additional staff, etc. The Commission may also take action to direct the department to finalize the conceptual proposals for Commission action or refer proposals to BIC Committees such as the BIC Budget and Organization Committee.

Director Chiu said that the department was proposing a supplemental budget request for upgrading the MIS technology of the department. He said that this was a conceptual proposal before the Commission. The deadline for filing a supplemental budget is coming up and he did not want to wait until the 1999 budget cycle. He said that the department has received a favorable response from the Committee on Information Technology (COIT). The estimated cost of this supplemental MIS appropriation would be $1.5 million. Director Chiu said that he wanted to work with the members BIC Budget Committee to finalize the supplemental budget request.

Commissioner Cereghino said that the information before the Commission was very vague.

Director Chiu said that his intent today was to get conceptual approval from the Commission to start the ball rolling.

Commissioner Cereghino said that there is still a great deal of confusion on MIS issues that need to be spelled out before any further spending is allowed.

Director Chiu said that he did not want to miss the drop dead deadline for filing supplemental budgets. He did not want to wait and he did not know how long an audit would take.

President Hood said that maybe the Commission could approve a supplemental budget request with the caveat that the monies be put on hold and be subject to Commission review before release.

Director Chiu said that any releases, even of appropriated funds, will still have to go through COIT approval.

Ms. Deborah Vincent-James, Executive Director of COIT, said that their Committee had stepped in on DBI's MIS program on May 7, 1998. At that time, the Committee thought that there were serious problems with DBI's Information Technology programs. She said that the project has stabilized under Mr. Steve Young. She said that COIT can provide an audit and be an independent consultant to the Commission at no cost.

Commissioner Cereghino asked when COIT stepped in. She also asked Ms. Vincent-James to elaborate, if she could, on the department's current contract with REACH.

Ms. Vincent-James said that REACH was brought in by DBI. COIT did not review the contract and had nothing to do with hiring REACH. She said that maybe Mr. Roan Michaels, previous Manager of MIS, had brought REACH in.

Commissioner Cereghino said that Mr. Michaels was not clear on who was responsible for contracting with REACH.

President Hood said that she was delighted to have Ms. Vincent-James at the meeting and welcomed her input.

Ms. Vincent-James spoke about COIT and said that this was a citywide oversight committee on information technologies. She said that COIT has the authority to come in and take over IT projects that were failing. She said that her preference is not to come in as a regulatory body but to work collaboratively with the Commission and the Department.

President Hood said that the Commission is very frustrated. The BIC was told that the Motorola had been replaced. Subsequently, that the Motorola has not yet been replaced. The Commission feels that the department is a long way from where it has to be or wants to be. She said that she was glad to hear from Ms. Vincent-James that the MIS issues in DBI are very important. The department has a surplus and has the resources to support MIS. The question is how one should go about moving the MIS forward. President Hood said that she appreciated what Mr. Steve Young has done to date. He has stepped into a difficult situation and has tried to turn things around. The Commission wants the MIS to move forward.

Ms. Vincent-James said that there was a meeting on May 7th. At that meeting she had expressed strong concerns over DBI's progress. She said that there were many angry people at that meeting. She wants to continue the improvements brought about by Mr. Steve Young and Mr. Marcus Armstrong. In addition, the department needs to adopt a strategic plan for future MIS endeavors.

Commissioner Cereghino asked about the state of the permit tracking system. She said that an analogy had been made that the database was in one old filing cabinet and what has been done to this point is to build up a new shiny filing cabinet to transfer the data. The PTS is still only at the query stage.

Ms. Vincent-James agreed. She said that COIT had advised DBI that the bells and whistles had to stop. DBI had to concentrate on the permit tracking system. Ms. Vincent-James suggested that the Commission form a steering committee composed of members of the Commission, DBI management and COIT. This committee should meet every other week with COIT and the information technology staff of the department. There has to be ownership of this problem.

Commissioner Cereghino asked if hiring an independent project management company or team would be a viable alternative.

Ms. Vincent-James said that it could be, but it could also be a waste of money. The executive steering committee should not micro-manage. However, it should have a hands-on approach. In the past, part of the problem was that the Commission and the DBI management were absent. She felt that an executive steering committee was necessary.

Commissioner Cereghino asked about the qualifications of available information technology staff. She inquired if the necessary skills and abilities are available in the department.

Ms. Vincent-James said that her committee has been proactive in defining the minimum qualifications and job descriptions of information technology staff. COIT has also urged the department to hire an MIS manager with adequate skills and background for the job.

President Hood asked if the issue of DBI's MIS problems have been on the table for a while.

Ms. Vincent-James said that it has been since May when the meeting she described earlier occurred. She said that COIT is upset with the Commission and the Department management. COIT is composed of members who are at high levels in the City has the authority to come in and take over the DBI MIS project.

President Hood asked why the Commission had not been informed about the concerns raised by COIT.

Ms. Vincent-James said that DBI staff had not reported to the Commission. Perhaps it was because COIT was breathing down on their necks.

Deputy City Attorney Boyajian said that the steering committee needs to meet in public if it is supposed to be a committee of the Commission.

President Hood inquired who among the BIC members should be in the steering committee.

Commissioner Guinnane recommended Commission Cereghino for the steering committee.

President Hood appointed Commissioner Cereghino to the steering committee.

Commissioner Cereghino asked for more details on the consultant, REACH.

Deborah Vincent-James said that she has heard that REACH is disbanding and reorganizing as Data Mind.

Commissioner Cereghino addressed Director Chiu and asked for more information on REACH.

Director Chiu said that REACH is a subcontractor working through CIBER. REACH is currently working with the department.

Ms. Vincent-James said that REACH/CIBER is being phased out. She had been informed that the department may be going back to Sierra Cybernetics.

Commissioner Cereghino said that she had been informed that REACH was providing free hardware to the department. She asked if the hardware that was provided will also go away with the subcontractors.

Ms. Vincent-James said she had no information on this matter.

Commission Mark said that before any conclusions are made about REACH, the Commission needs to see what progress REACH has made to date. The Commission needs to work on parallel tracks on continuing the MIS progress while looking at auditing what has happened in the past.

Director Chiu said that since REACH came on board, there has been progress in MIS. He said that he was responsible for what has happened. He had catered to bells and whistles, requests from division managers. In December 1997, he had to make the hard decision to break off from Sierra Cybernetics. He agreed with Commissioners Mark that there has to be an assessment of the progress of REACH to date.

President Hood said that the same people have been working on the MIS issues since she was a member of the Commission in 1995.

Commissioner Mark said that the Commission should also take into consideration that if new people are brought in, there will be some delay. There is a learning curve in taking over the MIS project.

Ms. Vincent-James said that the steering committee can come in to do an assessment of the MIS progress to date.

President Hood asked if COIT has done this assessment already.

Ms. Vincent-James said that COIT has not done any assessment. What COIT has prepared is a planning document. She said that COIT is a relatively new entity and its first assessment of DBI's information technology progress was made in the spring of 1998.

Commission Fillon asked why the structure should be steering committee and not a Building Inspection Commission Committee.

President Hood said that there may be some issues that need to be discussed away from public meetings. There are management issues that need to be threshed out.

Commission Fillon asked how this steering committee would communicate to the full Commission.

Commission Cereghino said that she could report to Commission every meeting.

Commission Fillon solicited a summary of what needs to be done.

Ms. Vincent-James said that the department should continue with the project while reviewing, if the Commission wishes, what has happened in the past.

Commissioner Guinnane asked when COIT made the recommendation to stop the project.

Ms. Vincent-James that this occurred in the May 7, 1998 meeting. She said that she would send minutes of the meeting to the Commission.

President Hood said that the Commission has been asking for additional staffing and getting people on board with the proper expertise.

Ms. Vincent-James said that this is not a COIT issue, it is a DHR issue. She said that she has backed up the department on the request for an MIS Manager and has some influence in the job requirements and filling the vacancy.

President Hood said that the MIS problem seem to be one of implementation not planning. She said she looks forward to the steering committee hammering out the implementation process and moving this project forward.

Deputy Director Jim Hutchinson offered secretarial support to the executive steering committee.

Mr. David Statner, electrical contractor, said he was involved in the City's 911 project. That program had problems similar to what is happening at DBI's MIS division. He said that a steering committee was established structured similar to what Ms. Vincent-James is recommending. He said that this committee was able to resolve problems quickly within six months.

Mr. Bruce Bonnacker, NARI, said that the discussion centered on MIS. He said that the agenda mentioned the possibility of discussion on getting additional staff for DBI. He said that there is a need for additional staff to deal with the permit process.

Director Chiu agreed. He said that his proposal was conceptual in nature and that he would come up with a more detailed proposal for a supplemental budget request for Budget Committee review.

President Hood said that the lines in the department are too long. DBI needs more staff and she said that she is looking forward to reviewing the proposal from Director Chiu.

Mr. Michael Hamman, NARI, agreed with Ms. Vincent-James and said that there is a need for an overall plan. The department has been putting out fires. The Commission needs to recognize that there are antiquated processes in the department that need to be updated and a plan is needed.

4.	Public Comment.

Ms. Mia Lord, resident of 174 Majestic Avenue, addressed the Commission and reiterated her previous testimony on the code violations at her residence. She requested that this item be agendized and said that she would continue to appear before the Commission at future meetings.

The Commission took a break at this point in the proceedings, from 2:45 p.m. to 3:10 p.m.

5.	Report on DBI's Surplus and Prepaid Inspection Fund covering the period from FY 1995-
1996 to present. The Commission has requested that the department prepare a report accounting for the sources of and past expenditures from this fund. The Commission has also requested that the department identify alternatives future uses of these funds, including but not limited to, reduction in fees and its relationship to increases in fees based on the Marshall & Swift Valuation, building expansion of 1660 Mission Street, and possible improvements in services.

Director Chiu referred to his written report which was part of the meeting packet and said that to date, he has not been able to meet with the Controller and still does not have the breakdown of the surplus in terms of what is considered a reserve.

Commissioner Guinnane asked if it would be a violation of the code if the department does not adjust fees based on Marshall & Swift.

Director Chiu said that there would be a need to change the code.

Commission Guinnane said that in the past he had expressed a desire not to raise permit fees at this time. However, he said that he has had a change of heart. Maybe the department should adjust the fees until it can determine how much it would cost to fix the MIS problem.

Director Chiu also said that it is not yet clear how much of the surplus is available for appropriation. He said that there was a formula used by the department in the past for calculating the reserves. This formula was complicated and cumbersome. Department staff is working with the Controller's Office to come up with the formula for calculating the reserves. Until that is done, there is no point in making decisions on the surplus and fees until the Commission knows how much is available for appropriation.

Commissioner Freeman referred to the cash flow statements showing the build up of the surplus. He asked if there were changes in procedures between 1993 and 1994. He cited for example that the overhead expenses had a major change.

Director Chiu said that there was a change in the organization at that time and work orders from other departments was moved to this line item.

Vice-President Vasquez referred back to the discussion on adjusting the permit fees based on Marshall & Swift. He asked what options are available to the Commission on adjusting fees and what the process is for changing code.

Director Chiu said that he would not recommend the removal of the code provisions that required permit fees to be adjusted based on Marshall & Swift. An alternative would be to freeze the rate increase for a temporary period of time. He said that he would work with the City Attorney's Office for legal language to allow this to be done.

President Hood said that now that there is a Commission over the Department of Building Inspection, maybe the code provisions on adjusting permit fees should be deleted and the Commission can make decisions on permit fees.

Deputy City Attorney Boyajian said that there has to be a way to figure out the fees. There is no legal requirement to use Marshall & Swift. However, there has to be a basis for setting fees.

Commissioner Freeman said that there are two components of fee calculations. He said permit fees are based on a rate and the valuation of the project. He said that maybe the Commission should adjust the rate but not the valuation of the project.

Director Chiu said that this may not be a good strategy. He said that the Marshall & Swift valuations could go down.

Commissioner Guinnane said that the Marshall & Swift valuation of buildings has never gone down.

Deputy City Attorney Boyajian said that there are some criticisms to basing permit fees on the value of the construction. In some southern California cities, the fees are based on other costs.

President Hood said that valuation increases, not because there is an increase in the cost of the construction, but because the value of money has been decreasing at a rate higher than inflation.

Director Chiu addressed Deputy City Attorney Boyajian and asked if it would be possible to introduce an ordinance that would allow the Commission to set permit fees or fee increases during times when there is a surplus.

Deputy City Attorney Boyajian said that code language could be proposed to provide flexibility built into the code.

President Hood asked for public comment.

Mr. Michael Hamman, NARI, said that using the current surplus to reduce fees would be a mistake. Everyone wants to see services increase. No one has ever asked for a decrease in fees. He urged the Commission not to take action at this point but to go ahead and request a study on the alternative ways of calculating permit fees. One alternative is the cost of processing the permit.

Commissioner Freeman said that, as discussed by Director Chiu, this would negatively impact the smaller projects that would have to pay the full cost of processing their permits. Using the current system, there are some projects with low valuations and permit fees. However, these projects take a lot of processing time.

Mr. Hamman said that this issue could be addressed by establishing thresholds for calculating fees based on processing time.

7.	Report, discussion and possible action regarding the September 1998 billing and expenditure for City Attorney's Office services to the Building Inspection Commission and the Department of Building Inspection.

Ms. Paulette Hooey, Manager of Administrative Services, presented the October and corrected September 1998 City Attorney's billing reports. She noted that the actual expenditures for the month of October were $72,000.00 less than what was projected or budgeted.

Commissioner Guinnane asked for clarification on why the code enforcement amount showed a big differential between the original amount reported by the City Attorney's Office and the adjusted amount.

Ms. Hooey explained that the original column represented the numbers submitted by the City Attorney's Office. These amounts were then forwarded to the managers for their review. On this particular item, the manager's response resulted in moving some of the HIS and litigation billing to code enforcement.

Commissioner Guinnane asked if any funds were recovered for October.

Ms. Hooey said that there were no credits this month.

Commissioner Guinnane asked if the separate account has been set up in the Controller's Office as discussed in previous meetings.

Ms. Hooey said that $135,644.00 has been moved to account 61165 which is a new sub-object. She also said that the month of November, they moved all those funds to 61168 which is for Code Enforcement/ City Attorney's Litigation.

Commissioner Guinnane asked if future reports could show the breakdown of monies in this account and additional credits to this account.

Ms. Hooey said that she would show this breakdown in future monthly revenue report.

Commissioner Guinnane asked if the City Attorney's Office forwarded communication to Ms. Hooey on the breakdown of settlements and judgments.

Ms. Hooey said that the fiscal year starts on July 1st and the cumulative column represents the total of billings since July 1st.

There was no public comment received on this agenda item.

8.	Discussion on the role and composition of various BIC Committees and task forces.

a.	The Commission may take action to reconstitute or abolish the BIC Committee on Audits.

President Hood said that the members of the Committee on Audits are Commissioner Cereghino and Commissioner Mark. She said that she would like these two commissioners to keep active on these issues.

Commissioner Cereghino asked Commissioner Secretary Banico to explain what difficulties that they experienced.

Commissioner Secretary Banico said that Commission action on the audit issue was to form a committee. The committee organization falls under the Brown Act and the Sunshine Ordinance. A committee of two or three precluded any of the commissioners from discussing or comparing notes, because two constituted a quorum.

Deputy City Attorney Boyajian said that the issue is of having a committee created that has to do all its business in public versus having one commissioner appointed to liaison with the department, gather facts, and report back to the Commission. That committee member could then interact with other Commission members who they want to consult with as long as they did not speak with more than two members of the Commission. She also said that she had a discussion with Commission Secretary Banico regarding this issue. Instead of appointing two or three members to form a committee, President Hood could appoint just one person to take charge of an issue and that commissioner could work with other members of the Commission.

Commissioner Cereghino moved, seconded by Commissioner Guinnane, to abolish the BIC Committee on Audits.

President Hood said that she thinks that this is a good idea because some of the audit issues that they are discussing are not ready for release to the public yet.

The motion passed unanimously. [Resolution No. BIC-106.98]

President Hood also said that what she would like to do next is to have a volunteer from the Commission willing to be a liaison on the audit on the Department. She appointed Commissioner Mark to be the liaison on the audit of the Department after Commissioner Mark signified her interest.

Deputy City Attorney Boyajian addressed Commissioner Mark and advised her that she could not speak with more than two commissioners.

b.	The Commission may also take action to clarify the composition and role of the task force on the MIS/computer related issues.

President Hood appointed Commissioner Cereghino to be the liaison on the MIS/computer issues.

9.	Discussion and possible action to formulate and/or adopt annual (1999) goals and objectives of the Building Inspection Commission. Pursuant to the draft goals shown in the memorandum from the Commission Secretary dated December 11, 1998 (a copy of which is available at the Commission Office), the Commission may also consider the following proposed objectives:

Commissioner Cereghino said that she approved of the proposed goals as drafted. She also said that she would like to add a goal that the Commission analyze the function of the Commission Secretary, do some comparative investigation and set standards. She said that Commission Secretary Banico will now always not be with the BIC. If this happens, it may not possible to get somebody with the same qualifications. She also would like to propose amendment to increase inter-departmental relations with other departments, that the BIC become closer to the DPW, Water Department, etc.

President Hood said that she would like to see the BIC could implement some of these goals.

Vice-President Vasquez said that the goals are not just BIC goals. They also reflect items that the department has either shown interest in or has made part of their objectives. He said he did not know what the timing is. He asked if there was any reason for having them approved

Commissioner Secretary Banico said that the timing would be at the Commission's pleasure. The Commission may want to continue this item for further discussion. One consideration is that the budget review cycle is forthcoming.

Vice-President Vasquez said that he would like to make sure that Commissioners have input into any items that they are interested in. He also wanted to look at other methods to make sure that these goals and objectives will be achieved.

President Hood said that the department should map out a timeline and assign a staff person who would be the key liaison between the Department and the Commission for each one of the items. Commissioner Cereghino asked if they could adopt the goals and objectives in general and put in the line items as they go along.

President Hood agreed.

Commissioner Cereghino moved, seconded by Commissioner Guinnane to adopt the goals & objectives as drafted with the addition of two goals: defining the role & qualifications of the Commission Secretary & improving inter-departmental relationships..

President Hood thanked Commissioner Secretary Banico for doing all the work on the BIC's goals and objectives.

The motion passed unanimously. [Resolution No. BIC-107.98]

a.	Objective: Set up a reliable and timely financial reporting system to keep the Commission fully informed of the financial status of DBI. The Commission may take action to direct the department to provide the BIC with such financial reports, the timing and contents of which will be determined at this meeting.

Commissioner Cereghino said that she spoke with Director Chiu on this matter. She said that what she wanted was a simple financial report that was Commission-friendly once a month. She would like to see a column that gives the percent of variance, showing if something is over budget or under budget.

Director Chiu said that the department has a quarterly report.

Ms. Hooey said that DBI has a format similar to the Controller's Office that was approved by BIC in the past. She said that she can add one more column and this report can be done on a monthly basis.

Commissioner Cereghino asked Ms. Hooey what non-personnel services meant.

Ms. Hooey said that non-personnel services included all the professional services contracts.

There was no public comment received on this agenda item.

b.	Objective: Assess the management and performance of the department as a whole and/or of pivotal divisions (e.g., MIS) that affect the performance of other divisions in the department. The Commission will discuss alternative assessment strategies and may take action to approve the strategy in which such assessments will be carried out, including but not limited to hiring an outside consultant to carry out a management and performance audit of the department or of specific divisions.

Commissioner Guinnane said that over the last few months there has been a lot of discussions about the MIS. What he would like to do is to bring in an outside company to look at the MIS, look at the contract, look at the monies that have been spent for the last three years. He also said that he was looking to retain Harvey Rose's Office to do this. The audit would be strictly for the MIS and PTS only.

Commissioner Mark said that earlier Ms. Deborah Vincent-James of COIT said that they could provide an assessment of the MIS program at no cost to the department. She asked if the BIC should utilize that service and look at the whole situation before BIC spends more monies and gets an audit from an independent company.

Commissioner Guinnane said that Harvey Rose's Office would give BIC somebody that is independent who has never been involved with the department. Ms. James could go ahead and do the evaluation since it is at no cost to the department and the BIC can compare the two reports to see if they're both on line or different.

Commissioner Cereghino said that Harvey Rose's Office has also done au audit of the department in the past and the BIC would be able to compare Harvey Rose's audits as well. She also said that Commissioner Guinnane always talked about having a dual assessment as a natural check.

Commissioner Guinnane also said that he does not know how the rest of the Commissioners feel. He also said that the audit will only for the PTS and MIS.

Commissioner Mark expressed concern about an audit taking up staff time.

Director Chiu said that he does not have any objections to what Commissioner Guinnane proposing. He also said that all the expenditures for MIS have been explained and are public documents. He thanked Commissioner Mark for her concern but said that he did not think an audit would take too much time.

Commissioner Guinnane also said that what he trying to do is to get a handle on MIS. He felt that getting two outside consultants to look at the contracts and what monies were spent.

Director Chiu said that he doesn't have any objection to this proposal.

Commissioner Cereghino said that Harvey Rose, if directed, will give the BIC a long range plan as well. Also, the BIC can determine the scope of the audit.

Vice-President Vasquez said that he thinks that there seems to be several tracks that the BIC is following. The BIC should definitely continue working with COIT because the BIC's performance is being discussed with other sectors at the City level. He said that the BIC needs to respond to how COIT fits in with the City structure on technology. Vice-President Vasquez also said that if the BIC were looking for a comparison, there has been the same scope of work in order for the BIC to make sense of the findings. He said that he did not have any objections to having an audit but would like more time to review the information from the department which the Commission just received.

President Hood asked Vice-President Vasquez if he was suggesting that BIC should not do the audit.

Vice-President Vasquez said that he was not comfortable saying that the BIC needs another audit until they had sometime to look over the information.

Commissioner Guinnane said that the reason why he wants the audit is because he doesn't know how much money has been spent to date. He is trying to figure out where things went wrong in the past. The problems have not been properly identified. Now, Ms. James will be giving an assessment and he does not know how long she has been involved already.

President Hood said that Ms. James had been involved for a year and a half. She agreed with what Commissioner Guinnane and said that it disturbed her more than anything else that there was a person who was supposedly a watchdog who had been there for some period of time and the Commission had not been informed. She said the auditor must have the technical skills for the this specific kind of project.

Commissioner Cereghino said that Mr. Stan Jones from Harvey Rose's Office was in the audience. She said that Mr. Jones might give the BIC an idea of what's possible and what isn't.

President Hood addressed Mr. Jones and said that she was not personally concerned that funds have been improperly spent for services. She said that she felt, although she did not know this for a fact, that the funds spent had been well-intentioned. She was concerned that funds had been expended unproductively and the goals have not been reached. She said she thought that Commissioner Guinnane had a financial question and hers is a different issue.

Mr. Stan Jones, Budget Analyst, Harvey Rose Office, said that Ms. James' proposal is basically prospective in nature. He said that Harvey Rose Office is expert in performing operational management program audits. They would look at a program that was originally developed, the actual steps developed to achieved those objectives and where the dollars went.

Commissioner Cereghino asked if the audit could include an analysis of the skill level in the department to carry out the project. She said that she is concerned with COIT because there may be people there who have ties to the people in DBI's MIS. Mr. James Albert, who is now with COIT, was responsible for hiring some of the people in the MIS. She also said that she is not totally convinced that this people are not tied and have a common agenda.

President Hood said she shared Commissioner Cereghino's concerns.

Commissioner Guinnane asked Mr. Jones, if hired, if they could also assess the expertise of the consultants hired.

Mr. Jones said they would to the extent that they get the information which the contractors will be advised to provide.

President Hood said that she thinks that with the problems that have occurred, it would be critical for Harvey Rose's Office to have a computer expert in their audit team. She also said that from her own experience that the types of mistake that tend to be made are very technical in nature. She also thinks that it's even very hard to find an expert who can look at this particular set of problems because the combination of skills and equipment that they need to make the computer systems work well are unique does the permit processing. She said that the reason why BIC doing this, is not to be a watch bird over the department, but to be a kind of peer review. President Hood also said that what Commissioner Guinnane intends to do here is to have somebody working in parallel on same issues basically as Ms. James's team is, then the BIC will compare notes.

Commissioner Cereghino said that one of Director Chiu's concerns is that there is a critical time. Director Chiu does not want to stop the progress at this point. She asked what would be the time line if someone like Harvey Rose's was brought in.

Mr. Jones said that they can start whenever the money is available. He said that they have staff in Los Angeles and Santa Clara. They have computer people who are very knowledgeable in this technology. Based on what he heard about this project, they probably would be advised to immediately bring in computer experts.

Commissioner Fillon asked how long the audit may take and how much it will cost.

Mr. Stan Jones said that he needs to see the scope.

President Hood asked Mr. Jones if he can put together a draft scope for BIC to review and price it out.

Commissioner Fillon asked if they are going to stop the work on MIS projects to do this audit.

President Hood said no. This is a parallel track. The department will keep working and the BIC will keep doing all the things that Ms. James suggested today. President Hood also said that peer review will be one more set of professional opinions on what needs to be done.

Commissioner Cereghino said that there has been a recent audit by the Controller's Office. The results of that audit are not public yet but some of the work may already have been covered by this audit.

Mr. Jones said that they would be talk to the Controller before coming in. He also said that this audit needs to look at what happened in the past.

Deputy Director Hutchinson said that the department has already reviewed the past and asked what the advantage would be at this point. He said that the department had terminated a contract with a consultant. The problem was that the contract was not strong enough and software development was nebulous. He said that the department was already moving away from what happened in the past and know that it needs to basically look at consultants' services and have the checks and balances in place.

Mr. Jones said that that would be up to the Commission. There is an advantage to looking at previous mistakes to avoid those pitfalls in the future.

Commissioner Guinnane said that what he wanted to find out what contracts have been approved, what the dollar amount was, and was the function done.

Director Chiu said that whatever the scope of work on the contract that was signed, evidently the scope of work changed. The contractor was told to go various way. He said that he even told staff to work with the City Attorney"s Office to sue the consultant. However, the department could not sue because the department changed the scope of work. He also said that there was a mistake made by the management by catering to staff and not focusing on the PTS. Director Chiu said that he knew where they went wrong and the contract was terminated. This was one of the problems. The second problem was that the manager of the MIS was not really paying attention on the bill. He said he was already aware of the mistakes which will not be repeated.

Commissioner Guinnane asked what would guarantee that the same mistakes do not occur. He asked how much money was paid to last contractor that was fired.

Director Chiu said that all the monies paid out to consultants are shown on the Gantt Chart.

Commissioner Cereghino asked if the department has a signed written contract that the current consultants.

Director Chiu said that he did not know. This would have been worked out by Mr. Steve Young, Mr. Marcus Armstrong and Ms. Deborah Vincent-James.

Mr. Jones said that what he can do is to propose a scope which includes looking back and going forward. The Commission can then decide which part the BIC to concentrate on.

President Hood agreed. She asked Mr. Jones to have break out the scope of work into discrete parts so that the BIC can identify the parts of the audit that would be applicable.

Commissioner Fillon asked for a cost for each of the parts. He also said that he would like to review some of the information before voting on an audit.

President Hood agreed. She said that BIC will keep this going and Mr. Jones is going to review what they've got. She has a concern about not sending messages to the staff that the BIC is just beating a dead horse and taking up their time by having Mr. Jones go back and resurrect the past and try to reconstruct it. This is extraordinarily time consuming and they don't have that time to spend moving ahead. She also said that there are a lot of factors that BIC needs to balance. She also said that she like the overall idea of peer review and there is a value of this.

Commissioner Mark said that BIC should concentrate on the implementation. She said that right now, identifying the problem is an easy thing to do. Implementation, getting people to be involved, and having the managers and key people monitor the control procedures are the tougher of things to do. She said that assistance is need in this area.

President Hood agreed. She said that the implementation that Commissioner Mark pointed out has not happened.

President Hood thanked Mr. Jones for coming in.

There was no public comment received on this agenda item.

10.	Review and approval of the Minutes of the BIC Regular Meeting of October 21, 1998.

Commissioner Guinnane moved, seconded by Commissioner Cereghino to approve the Minutes of the October 21, 1998, as prepared.

The motion passed unanimously. [Resolution No. BIC-108.98]

11.	Review and approval of the Minutes of the BIC Regular Meeting of November 18, 1998.

Deputy City Attorney Boyajian said that she had one correction on the Minutes of the November 18, 1998, BIC Regular Meeting. On page 5, she said that she believed she said that the ordinance could be in the health code but could also be in the building code.

The motion passed unanimously. [Resolution No. BIC-109.98]

12.	Discussion and possible action with respect to those items that could be placed on the agenda of January 6, 1999 BIC Regular Meeting and other future meetings.

President Hood said that she thinks that t BIC will have the proposal coming back from Harvey Rose. She also said that Commissioner Cereghino may be having the first meeting with the Steering Committee, Commissioner Mark will continue on the audit.

Vice-President Vasquez said that a report from the Litigation Committee may be forthcoming on the next BIC meeting.

Commissioner Cereghino asked that there is some talk and she does not know how concrete it is, about the City trying to possibly convert surplus funds to the general fund.

Deputy City Attorney Boyajian said funds collected by DBI from permit fees cannot be taken and put into the general fund.

Vice-President Vasquez said that the other item that will be coming up is the budget. This is due sometime in the middle of February. Two public hearings will need to scheduled on the second week of January and the first week of February.

President Hood asked if they needed to reappoint members to the Budget Committee.

Commission Secretary Banico said this was not necessary since the Budge Committee was not dissolved.

There was no public comment received on this agenda item.

13.	Public Comment: The BIC will take public comment on matters within the Commission's jurisdiction that are not part of this agenda.

There was no public testimony received at this point in the proceedings.

14.	Adjournment.

There being no other business, and a motion made by Commissioner Fillon, seconded by Commissioner Cereghino, the meeting adjourned at 4:50 p.m.

The motion passed unanimously. [Resolution No. BIC-110.98]

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MARIA G. T. BANICO

Commission Secretary

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