Department of Building Inspection

Building Inspection Commission

BUILDING INSPECTION COMMISSION (BIC)

Regular Meeting

REGULAR MEETING

Wednesday, May 17, 2000 at 1:00 p.m.

City Hall, 1 Dr. Carlton B. Goodlett Place, Room 408

Adopted June 21, 2000

MINUTES

The meeting of the Building Inspection Commission was called to order at 1:10 p.m. by President Fillon.

1. Roll Call - Roll call was taken and a quorum was certified.

COMMISSION MEMBERS PRESENT:

Alfonso Fillon, President Bobbie Sue Hood, Vice-President

Roy Guinnane, Commissioner Mark Sanchez, Commissioner

Rodrigo Santos, Commissioner Debra Walker, Commissioner

Esther Marks, Commissioner - excused

D.B.I. REPRESENTATIVES:

Frank Chiu, Director

James Hutchinson, Deputy Director

William Wong, Deputy Director

Laurence Kornfield, Manager Technical Services

Ann Aherne, Interim Secretary

Tuti Suardana, Secretary

CITY ATTORNEY’S REPRESENTATIVE:

Judy Boyajian, Deputy City Attorney

2. President’s Announcements.

President Fillon stated that he did not have any announcements and moved onto Agenda Item #3, the Director’s Report.

3. Director’s Report. [Director Chiu]

a. Update on Credit Card Point of Sales System, training and implementation.

Director Chiu reported the Department has been working hard to get the Credit Card Point of Sales System up and running for quite some time and as of last week, training for staff on the system and procedures was implemented. Director Chiu stated that this project has been very successful and in the first week of operation the Department has processed over $.5M of permit valuation with this credit card system. Director Chiu said that he was pleased that this system was finally in place and that this project is just part of the services the Department is implementing. Director Chiu said that on line permitting would follow. Director Chiu stated that the goal is always to make the permit process easier for the customer. Director Chiu reported that 40-50 staff members have been trained on this system. A customer may apply for a permit, make a request for inspection, or pay for any services with a credit card. Director Chiu called on Administration and Finance Manager Amy Lee to report further on this issue. Director Chiu thanked Ms. Lee, her staff and Steve Young of Special Projects Division for their hard work in coordinating with the City Attorney’s Office to get this credit card system up and running.

Ms. Lee stated that it took a while to get this contract approved as the vendor had to file for all of the City processes. The contract was finally approved and training began about two weeks ago. Ms. Lee said that over 50 staff people have been trained. The system is not only computerizing the credit card abilities, but also the input of cash and checks. Ms. Lee said at the end of the day the Department is able to get a report of the money that was received in checks and cash and how many transactions occurred. The system shows what the busiest time of the day is and Ms. Lee said that once the Department starts fully utilizing the system, it would be a great management tool in terms of data and staffing abilities. Ms. Lee stated that at first the staff was somewhat afraid of the new computer system, but as staff have become more familiar with the system, new stations have been requested. Ms. Lee said that the Department is purchasing an additional station for the first floor. There will be three stations in the CPB area, one in One-Stop and one on each of the other floors. Ms. Lee said the ultimate goal in the next two years is for each person to have a station at their desk. Ms. Lee stated that this is a great system and right now over $430,000 worth of credit card transactions have been utilized. Ms. Lee stated that this system will help when the Department goes online with permitting and fax online. Customers will be able to use a credit card for their transactions. Ms. Lee said that it is an added bonus for customers that they will be able to obtain frequent flyer miles for their credit card transactions. Ms. Lee said that it is a great system and will be announced for everyone’s use on Thursday.

There were no comments or questions from the Commissioners or the public.

b. Status of job announcement for BIC Secretary.

Director Chiu stated that the job announcement for the BIC Secretary is out. The job has been announced in the newspaper this past weekend and will also appear in next weekend’s newspaper. Director Chiu said that the closing date for this position is June 2, 2000. Director Chiu said hopefully there will be adequate applicants to choose from and asked the Commission if they had anyone interested in the position to let know that the deadline is June 2^nd.

At this time, Director Chiu asked if Item #9, which is after the Closed Session for the Director’s Pay for Performance Evaluation, could be moved up or to just switch Agenda Item #8 and #9 to accommodate the public. President Fillon asked if any of the Commissioners had an objection to this. Since there were no objections items #8 and #9 were switched.

Director Chiu thanked the Commission. President Fillon asked for any public comment on Item #3b. There was no public comment.

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

Mr. Peter Bogatsky introduced himself as the owner of 2000 Ulloa Street. Mr. Bogatsky stated that he had appeared before the Commission on April 19, 2000 discussing the progress on his project at 2000 Ulloa Street. Mr. Bogatsky said that he was pretty much on schedule for the work he said he would do. However, Mr. Bogatsky said that he would need one more extension to complete the job. Mr. Bogatsky said that on May 16, 2000 he hand delivered a detailed letter to Director Chiu, Deputy Director William Wong and Chief Building Inspector Wing Lau explaining where the projects stands as to percentage complete and forecasted schedule of what it will take to finish the job. Mr. Bogatsky presented pictures to the Commission showing the status of his job. Mr. Bogatsky stated that his understanding when he left the April 19^th meeting was that on the 17^th the Commission wanted to see where the project was. Mr. Bogatsky stated that the building was still exposed on the roof because there is a membrane on, but the tile shingles still need to be installed in order for the roof to be watertight and the chimneys need to be finished.

Mr. Terry Milne asked about a house being constructed at 170 Brewster Street that started a week or two ago. Mr. Milne said that at the present time, the outer materials are being installed. Mr. Milne said that the plans that were approved by the Planning Department and shown to the neighborhood showed horizontal siding on the house. Mr. Milne stated that at present the front is being prepared to be stuccoed and the sides are being finished with T 111 plywood. Mr. Milne said that there was an impression created by the Department in years past that there was some coordinative ability between Building Inspection and Planning Department about this sort of alteration to the plans. Mr. Milne stated that it was his understanding that something this big, like replacing all of the finish materials on the exterior of four sides of a house or even large ministration changes actually were supposed to go back to the Planning Department. Mr. Milne said that he heard somebody in the Building Inspection Department say that and heard someone in the Planning Department say that in years past. Mr. Milne said he was wondering what happened in this case and was wondering what happens when the Building Inspector asks the builder and the builder says he owns the lots on either side so it doesn’t make a difference what is put on the side of the building. Mr. Milne said that the builder doesn’t own these lots, but is lying to the Building Inspector. Mr. Milne stated that the Building Inspector accepts the explanation and then explains, to Mr. Milne, for example that the builder may not have to change the sides back to something else as it may be too expensive and that sort of thing. Mr. Milne said he was wondering if it was the policy of the Building Inspection Department to coordinate an instance like this with the Planning Department. Mr. Milne asked if this was a big enough threshold that it should have gone back to the Planning Department if the builder is going to make changes like this and the explanation to Mr. Milne that the builder might not have to change it because it might cost the builder a lot of money if he had to put horizontal siding. Mr. Milne said he thought that the builder had to build according to his plans, not what he allegedly said he was going to do sometime in the future. Mr. Milne asked if there was any answer to his question and what could he has a neighbor do about this situation. President Fillon asked Director Chiu to address Mr. Milne’s questions.

Director Chiu said that routine policy is that any changes that deviate from the approved plans such as changes that Mr. Milne described, would be discussed with the Planning Department to make sure they do not have any concerns. Director Chiu said that he was not aware of this particular situation, but would be happy to look into it. Director Chiu said that the situation described would alarm the Department and the Planning Department to revisit the actual construction site. President Fillon said that when a builder changes the scope of a project, particularly the front of a building, the project would be referred back to City Planning. Director Chiu said that the builder would have to adhere to the plans. Vice-President Hood asked Mr. Milne if he had reported this situation to the Planning Department. Mr.Mil stated that he was going to report it at tomorrow’s Planning Department Commission meeting. Vice-President Hood informed Mr. Milne that he could just call the Planning Department. Mr. Milne said that sometimes it is easier to just show up and say something.

5. Review of Communication Items. At this time, the commission may discuss or take possible action to respond to communication items received since the last meeting. The following communication items are included:

a. Letter received from Mr. Ron Daley regarding 2535 - 25^th Avenue.

Commissioner Walker asked Director Chiu about communications received from Mr. Daley.

Commissioner Walker stated that Mr. Daley is basically claiming that a violation has been placed against his building. Director Chiu said that he had a copy of a May 16, 2000 letter that was sent to Mr. Ron Daley from the Department responding to his concerns. Director Chiu said that there is an active abatement action against this property since 1988 and the letter spells out what Mr. Daley needs to do to remove this abatement from the property. Director Chiu said that he would be happy look at the actual file himself, but there are quite a few issues that need to be resolved before the Department will lift the abatement action. Commissioner Walker asked if the property had been abated since 1988. Director Chiu said that there has been an active case since 1988. Commissioner Walker asked if there had been hearings. Director Chiu said yes, there has been a Director’s hearing since 1988 and to date there has been no response as to how to resolve these issues. Commissioner Guinnane asked for a copy of the letter that was sent to Mr. Daley. Director Chiu gave a copy of the letter to Commissioner Guinnane. Mr. Daley provided further copies for the Commissioners.

Mr. Daley said that he was present to ask the Department of Public Works to remove the Department of Public Works Order #147763 from his property at 2535 - 25^th Avenue. Mr. Daley stated that he was asking for this for several reasons. Mr. Daley said that Louise Kimbell, a Housing Inspector, issued the order as a result of an inspection on August 4, 1987. At the time of her inspection, Ms. Kimbell found that there was a structure that was in place in the garage, which she contended, did not have permits at the time. Mr. Daley said that this house is property that he owns, is a single-family dwelling and was rented out. Mr. Daley stated that there was a disgruntled tenant living in the property who called the Housing Inspection Department and this resulted in the inspection. Mr. Daley said that the partially completed structure was in place when he purchased the property and that there was no work in progress at the time of the inspection. Mr. Daley stated that he had several questions to ask. Mr. Daley asked what obligation he has to complete work once it was started. Mr. Daley said that he was fully aware that the code contends or states that any work that is done without permit is defacto a nuisance. Mr. Daley said that he is contending that this partially completed structure is not a nuisance. Mr. Daley said that about a month and one half ago he met an inspector at the Department and asked for a complete file with a copy of all of the papers on this property. Mr. Daley said that the inspector gave him some papers, but Mr. Daley stated that he did not believe it was a complete file. Mr. Daley said that he did have a copy of the Notice of Director’s Hearing where it states that the owner was represented at the hearing. Mr. Daley stated that he was not represented at the hearing. Mr. Daley said that the tenant may have shown up, but he did not show up at the hearing. Mr. Daley said that he spoke with Olga at the Department of Public Works on May 11, 2000. Mr. Daley said he believed Olga was the secretary at the Department of Public Works and used to be the secretary to Richard Evans. Mr. Daley said that Olga told him that the Department has no recording of this Director’s Hearing nor do they have any minutes from the meeting. Mr. Daley said that the Department of Public Works has no evidence that he was present at any hearing. Mr. Daley said that during the time he has owned this property, this partially completed space has not been occupied and has served as part of the garage. President Fillon asked Mr. Daley to wrap up his comments as public comment was for three minutes. Mr. Daley said that what he was asking is, Mr. Chiu had just stated, inaccurately, that there have been hearings on this. Mr. Daley said that Mr. Chiu was accurate in stating that this file had been dead since 1989 at the latest. Mr. Daley said that this started in 1987 and was dead by 1988, so for Director Chiu to represent that there have been hearings is a little, slightly disingenuous in that it leads one to believe that it is an active file. Mr. Daley said that his point was that if this was an emergency, a serious nuisance, or a health and safety standard matter, the City should have jumped in a couple of years ago. Mr. Daley said that the only reason the City is on it right now is because he brought it to the Department’s attention because he cannot get a reasonably priced loan. Mr. Daley stated that because of this lien he cannot get a lender to lend him money on his property in the market range. Mr. Daley said that he is now paying 13% interest on this property. Mr. Daley stated that there is nothing wrong with this property and said that he would provide the Commission with a structural engineer’s report that this is a partially completed structure that is not bothering anybody. Mr. Daley said that it is absolutely ludicrous. Once again President Fillon asked Mr. Daley to wrap up his comments. Mr. Daley said that he wanted to speak about one other factor. President Fillon said that he would have to cut Mr. Daley off, but if Mr. Daley wanted to, he could appeal the Department’s action. President Fillon said that there is a procedure for appeal. President Fillon said that this item would have to be on the agenda as an appeal item. Mr. Daley said that this was fine. President Fillon said that there would be procedures, such as a court reporter present, that would have to be set up for an appeal. Vice-President Hood said that the secretary could tell Mr. Daley what needed to be done to file an appeal. Commissioner Walker asked if an appeal would be timely. Director Chiu stated that the Department sent Mr. Daley a letter on May 16, 2000 and if he is not in agreement with the letter, then Director Chiu said he believed that Mr. Daley had the ten days to file an appeal. Commissioner Guinnane asked through the Chair if he could ask Mr. Daley a couple of questions. Commissioner Walker instructed Mr. Daley to speak with the Secretary after the meeting to find out about filing an appeal. Mr. Daley asked if it cost money to file an appeal. Vice-President Hood answered yes. Mr. Daley stated that he did not feel that he should be obligated to pay for this. President Fillon said that Commissioner Guinnane had some questions for Mr. Daley.

Commissioner Guinnane said that the violations occurred in 1987 and asked when the violations were brought to Mr. Daley’s attention. Commissioner Guinnane asked if Mr. Daley was at the property when it was cited. Mr. Daley said that he was not. Commissioner Guinnane asked when it was brought to Mr. Daley’s attention. Mr. Daley said that he spoke with Louise Kimbell within a month or so of the violation. Commissioner Guinnane stated that he was trying to figure out why Mr. Daley waited 13 years to resolve this issue. Mr. Daley said that he waited 13 years because he had no reason to bother with it. Mr. Daley said that at the time he originally intended to get permits to finish work that was started by someone else and he never got around to it or thought it was urgent. Mr. Daley said that the City never came back at him and he now wants the issue removed, as he cannot get a loan. Mr. Daley said that the City has encumbered his property and he considers this to be unjust.

Mr. Daley stated that he was told by Steven Young and said he also has testimony from Rafael Torres-Gil that the City regularly threw away permits, discarded permits. Mr. Daley said that he had a letter from Steven Young dated September 11, 1990 wherein he said he could not locate any permits for Mr. Daley that were over 5 years old. President Fillon asked if the Commission could move on. President Fillon thanked Mr. Daley for his comments.

b. Letters of commendation received from the public regarding DBI employees and Director Chiu’s letters of response to the public.

c. Commendation memorandum from Director Chiu to All DBI Staff regarding editorial published in the May 2^nd edition of the Independent Newspaper.

Vice-President Hood said it is a credit to the Department to get such a complimentary editorial and she thinks it’s true and that it is great to see some recognition. Vice-President Hood thanked DBI staff.

6. Discussion and possible action on proposed ordinance to amend the San Francisco Police Code regarding construction work at night.

Director Chiu stated that this item was brought before the Commission at the last meeting as a communication item and some of the Commissioners had issues with this proposal. It was then recommended that this proposed ordinance be agendized for further discussion. Director Chiu said that Vice-President Hood had concerns about further reducing certain work hours for the weekend. The item was agendized to give the Commissioners an opportunity to direct the Department in responding to this proposed ordinance.

Vice-President Hood asked if there was anyone present from the Mayor’s or Supervisor’s Offices who were proposing this ordinance to give a report. Commissioner Walker asked if the Supervisors had been notified of the meeting and said that the Board of Supervisors are the body that actually approve the change. Vice-President Hood stated that Supervisor Mark Leno and Supervisor Sue Bierman proposed the ordinance. Director Chiu said that he did not ask staff to request an aide to be present, but normally the Commissioners debate about this issue and discuss whether to support, oppose or modify the proposed ordinance. President Fillon asked what action the Commission could take. Vice-President Hood said that the Commission could forward their opinion or recommendation. The Commission cannot actually vote on the ordinance, but can send a letter providing input. Vice-President Hood stated that she would like to send a letter to the Supervisors because she said that it is important for people who only have the weekends to work on their homes, be allowed to do so. Vice-President Hood said that she has lived in San Francisco for 30 years and has almost never been next to anyone doing construction work and if there was work they always had a good reason for doing the work. Vice-President Hood said that it should be left up to neighbors to deal courteously with each other regarding construction noise on the weekends. Vice-President Hood said she did not think that the hours needed to be limited and that construction noise on weekends only bothers people who have more demanding needs than the typical population. Vice-President Hood stated that she wanted to leave the hours as they are. Vice-President Hood said that a number of construction workers start work early so they can get home earlier to their families and to avoid severe traffic on the freeways.

Commissioner Walker said that she would suggest that individuals could go and express their opinions and should at the Board of Supervisors, but unless this ordinance really affects the operation of the Department, she thought it inappropriate as a Commission to voice an opinion. President Fillon said that although this does not directly affect the building code, it does affect the building community. President Fillon said he would support Vice-President Hood in sending a letter, but only if the Commission as a whole could come to a consensus on the issue. Commissioner Rodrigo Santos stated that he would agree that construction hours should not be restricted or regulated and the noise issue should be dealt with on an individual basis. Commissioner Mark Sanchez said he would need more information on the subject to make a recommendation. Commissioner Sanchez stated that he is personally bothered by construction going on in his neighborhood, but agreed that he could ask the neighbors to start later. President Fillon stated that this ordinance also restricts construction during the weekdays. Director Chiu said that this proposal only addresses the weekend. Director Chiu said that at present the restriction starts on Friday afternoon at 8:00 p.m. to Saturday at 7:00 a.m. and during that time there is supposed to be no noise that exceeds the decibels as described in the code. What this law would do is to start the restriction at 6:00 p.m. on Friday until Saturday morning 9:00 a.m. This would reduce construction time by two hours on Friday evening and two hours on Saturday morning. Vice-President Hood said that Sunday is included so this ordinance would impact construction time by a total of 8 hours on the weekend, which is an entire day. Vice-President Hood said that there are a lot of other noises in the neighborhood that are part of urban living and this would be a hindrance to people who are trying to keep up their property. Vice-President Hood said that from her own experience construction noise has not been a problem. Vice-President Hood stated that Mayor Brown has been very good about getting Public Works to do building at more logical times and there is already a great deal of coordination going on between the construction industry and the City.

President Fillon stated that with the construction boom over the past few years it is difficult for people to get skilled workers to do construction. Builders are really stretched thin and reducing hours would make this situation more difficult for everyone. President Fillon said that 8 hours could make a lot of difference in a project. Commissioner Walker stated that she would support a communication that would spell out the concerns that have been raised noting consideration of both the builder and the neighbors. Commissioner Walker said that there are limited hours and a lot of construction going on; people need to get their projects done and this ordinance would take hours away from these projects. Commissioner Walker said that she would also like to address the issue of accommodating people’s complaints. Commissioner Walker said that if there is a way to write a letter that encourages the Board of Supervisors to take into account the impact and hardship it might impose on the construction community, as well as if there are going to be extra hours required from the Department, she would be in support of such a letter. President Fillon asked Vice-President Hood if she would be willing to compose such a letter. Vice-President Hood said she would compose a letter with the help of the Secretary. Commissioner Walker asked when this issue was going to be presented to the Board of Supervisors. Director Chiu said that this issue was tabled, but he would find out when Supervisor Leno would be reintroducing this ordinance. Director Chiu stated that while this ordinance would reduce hours, there is a clause that if the builder or homeowner finds this to be a hardship, they could file for a special permit demonstrating why they should be allowed to build at earlier or later hours. Director Chiu said that would initiate additional staff hours to investigate and process these permits. Vice-President Hood said that she believes the Commission needs to send a very clear message as the Board of Supervisors is thinking of enacting this legislation. Vice-President Hood said that the Commission should state that it is encouraging a process for people to work their problems out on another level and it is not that the Commission is saying no to the people who are expressing their complaints. Vice-President Hood asked President Fillon if the whole Commission needs to agree in order to send this letter. President Fillon said that the decision does not have to unanimous, but if action is to be taken the Commission will vote on it. Vice-President Hood made a motion that the Commission send a letter that says that the BIC is writing to the Board of Supervisors because it is involved in construction and it is a concern of the Commission that the hours should remain as they are at present because this enables people in the City to have more flexibility in doing work on their own homes and because it enables construction workers to have more hours to work during this very demanding time. Vice-President Hood stated that the Commission should recommend that they find another way to deal with the noise problem. Vice-President Hood said that perhaps there could be a flyer that could be distributed to the public that says if there is construction noise that is bothering you in your neighborhood, here is what you can do. Vice-President Hood said that very often just talking with people could solve these neighborhood problems. Vice-President Hood said that is what her motion is. President Fillon asked for a second on the motion. Commissioner Santos seconded the motion. President Fillon asked for public comment.

Joe O’Donoghue of Residential Builders Association stated that his members were not involved with this ordinance. Mr. O’Donoghue said that first of all he wanted to differentiate that this issue concerns contractors not builders. Mr. O’Donoghue said that there are approximately 50 builders in this City, but this ordinance would impact homeowners. Mr. O’Donoghue said that the impact of this on homeowners would be that their projects would be prolonged on weekdays and would certainly increase the cost of remodeling to homeowners. Residents already have to deal with the highest priced real estate in the nation. Mr. O’Donoghue stated that this ordinance does not differentiate between different levels of noise as there is a difference between pile driving and demolition, which generally does not happen on weekends. Mr. O’Donoghue stated that this ordinance was proposed by Supervisor Mark Leno who is running for reelection and that is the essence of this. Mr. O’Donoghue said that there is no building going on Telegraph Hill; Jerry Crowley’s group up there called in to Doug Wong at the Port and complained about the dirty looking ships coming through, oil tankers, under the Golden Gate Bridge. Mr. O’Donoghue said that they wanted them to be painted and it is small wonder that they talk about noise. Mr. O’Donoghue said that perhaps construction workers should get rubber hammers. Mr. O’Donoghue stated that this legislation is not well thought out whatsoever and this is the Commission that has to deal with these issues. Mr. O’Donoghue said that he had just left Local 22 of the Carpenter’s Union and they know nothing of this legislation. Mr. O’Donoghue said that various contractors’ groups also need to be notified. The Commission needs to get out to the public and let them know what is pending as to what he believes is a very bad proposal in substance. Mr. O’Donoghue stated that on the block where he lives there are four or five remodeling jobs in progress and most people do the noisy work on the weekdays and do plumbing or whatever on the weekends. Mr. O’Donoghue said that the decibel level is also an issue. The decibel level for trucks is 70 so this decibel level of 5 is like a whisper. Mr. O’Donoghue stated that this legislation has not been well thought out and the Commission is the body that needs to deal with it and needs to know that this legislation is politically motivated. Mr. O’Donoghue said that the record needs to know that Mark Leno is not his favorite Supervisor, but despite his difference with Supervisor Leno if it were a good legislation he would support it. As it is Mr. O’Donoghue said that this is a legislation that you could run holes through.

President Fillon asked for a vote on the motion as stated. The Commission voted 5 ayes to 1 no with Commissioner Walker voting no as stated.

Commissioner Walker asked for clarification of the motion. Commissioner Walker asked if the letter were coming back to the Commission. President Fillon answered yes, the letter would come back to the Commission for discussion.

[RESOLUTION NO. BIC-031-00]

7. Discussion and possible action on surcharge increase. Effective July 1, 2000, the surcharge will increase from 4½% to 6½%.

Amy Lee, Administration & Finance Manager, gave a presentation on this item. Ms. Lee stated that she prepared a one-page outline that would explain about the surcharge and the Department’s options. Copies of Ms. Lee’s report were distributed to the Commissioners and made available for the public. Ms. Lee stated that she would walk the Commissioners through the report.

Ms. Lee said that when the Department originally purchased the building several years ago at 1660 Mission Street it was done through debt service payments and the Real Estate Department, the Mayor’s Office and the Controller’s Office had set a schedule as to how much money was required for each payment. July 1^st requires an increase in payment and as a result in the San Francisco Code there was an increase in the surcharge to 6.5%. This 6.5% is needed to match the increase in payment that is going to be due on July 1^st. For the past four or five years the surcharge has been 4.5% and that is not a fee in terms of a building permit fee, but depending on the category, a 4.5% surcharge is charged to all customers and it is delineated out on their receipt as a surcharge. Ms. Lee said that July 1^st is when the surcharge will be increased to 6.5%, but there are several options to decide what to do with the increase.

Option #1 would be to charge the entire 6.5% to the customer. This would mean that the customer would see a 2% increase over what they are paying right now. This would allow for the $2.2M that needs to be paid.

Option #2 would utilize the surplus to pay for just the 2% increase so the customer would still see the 4.5% surcharge and there would be no change to the customers. The surplus would be used for the 2%. This surplus would equal about $700,000 per year for the surplus and by 2005-2006, which is the end of the debt service payment, it would have cost the surplus $3.5M.

Option #3 would be using the surplus to pay for the entire 6.5% so that the customer would see a reduction in their cost by 4.5% and the surplus would be used to pay for the entire amount. This would cost the Department about $2.2M per year and by the year 2005-2006 it would amount to $11M. This option assumes that the surplus will continue to grow. Ms. Lee said that she would discuss the surplus later on. This option also assumes that there is going to be no downturn in the economy and that the revenues will continue to be strong.

Option #4 would be to reduce the surcharge to 3.5% and use the surplus to pay the remaining 3% difference. This would mean that the customers would see a 1% reduction in the current fee and the surplus would be paying the 3%, which would mean about $1M per year on the surplus. By the year 2005-2006, the surplus would be reduced by $5M. Ms. Lee said that she felt this option was the best option out of the four, but it also contingent upon several factors. Ms. Lee said that if the Commission did choose to utilize this option, the Department would have to look at the overall financial status of the Department on a yearly basis; look at the surplus growth and usage, the construction trend and look to see if there are any unexpected fiscal needs for the surplus.

Ms. Lee stated that she set out several factors for the decision making in her report. The current balance of the surplus is $8.2M. In fiscal year 2001-2002, which will start, July 1^st about $2.1M will be utilized for various capital projects that have been approved in the budget. This will result in a balance of $6.1M. Ms. Lee said that she is projecting some revenue surplus’ as well as some savings from the Department’s expenditures, so it looks like the surplus will increase about $1M-$2M. Ms. Lee said that because of the surplus the Department enjoys a large interest income because the surplus is sitting in the bank. That interest income is running up to $800,000 per year. Ms. Lee said that these scenarios are assuming that the revenue collected would be about $33M. 6.5% of $33M is $2.2M which is sufficient to pay the debt service, but if construction stops completely in a couple of years and there are lower revenues, 6.5% of $25M would not get the Department to the debt service payment. Also, economists for the construction industry in State of California is projecting that the construction trend will continue to grow or continue to stay at the current rate for at least the next two or three years. Ms. Lee said that she and the Director had discussed the various options.

Vice-President Hood thanked Ms. Lee for her great report and for outlining all of the options. Vice-President Hood said that the report was very clear and helpful.

Director Chiu said that for the last couple of years the Department and the Commission has been talking about ways to ensure that the customer was not paying enormous fees while at the same time there has been a concern that the surplus keeps on growing. Director Chiu stated that the economy is also a factor in this case, but when the Department goes to the Board of Supervisors at budget time, the Board is always asking the Department to review the surplus. Director Chiu said that while he does not believe that the surplus is that great, at the same time the Board of Supervisors is asking the Department to make sure the surplus does not keep on growing. Director Chiu said that for that reason the Department needs to make sure that it is not charging the customer more than is really needed. Director Chiu said that in looking at all of the options, in order to achieve the goal in budget negotiations, he would recommend Option #4 to reduce the current surcharge of 4.5% by 1%. This would demonstrate that the Department is tapping into the surplus and giving something back to the customer. Director Chiu said that he would recommend Option #4 or staying at the 4.5% surplus charge, but not increasing the surplus to 6.5%. Director Chiu stated that the economy is looking pretty good and if the Department wanted to give something back to the customer, this is the year to do it as a one-time deal only. Director Chiu said that the issue would have to be revisited next year to make sure the economy is still strong. Director Chiu asked the Commission for input as to what they wanted to do.

Commissioner Guinnane asked, through the Chair, when the last time fees were actually raised in the Department and also hiked the Marshall and Swift index in place per foot. Director Chiu said that fees have not been increased for the last 7 or 8 years. Recently the Marshall and Swift index was increased slightly, but this is the time when the surplus is scheduled to be increased to 6.5%. Director Chiu stated that he was concerned because this would cost the customer 2% more than they are paying now. Commissioner Guinnane asked what the 2% was based on, 2% of the cost or the actual dollar amount of the permit. Ms. Lee said that most permits in the code are subject to the surcharge; building permits, electrical and plumbing permits are all included. Director Chiu said that any service is subject to the surcharge. Vice-President Hood said that she believed Commissioner Guinnane was asking if it was 2% of the construction cost or 2% of the permit fee. Director Chiu said that it is 2% of the permit fee. Vice-President Hood said that as she understood it, if someone were paying $100.00 they would be paying $102.00. Director Chiu said that the way it is right now it would be $104.50, but if the 6.5% surcharge is passed then the customer would be paying $106.50. Commissioner Walker stated that Option #2 takes a position of not increasing the surplus at all and the 2% would come out of the surplus. Option #4 actually reduces the surcharge by 1% and then goes into the surplus. Commissioner Santos said that the surplus could be reassessed in a year if the Commission chose to do so. Director Chiu said this is what he was recommending. President Fillon said that he was concerned about using money out of the surplus, as it is nice to have that cushion available. However, President Fillon said he would feel comfortable with Option #4 as long as it could be revisited next year. Ms. Lee said that if Option #4 were accepted, meaning that the surplus pays the 3%, in the terms of 2% versus 3%, it is only a $400,000 difference. Ms. Lee said that the Department could prepare a supplemental appropriation that would go before the Board of Supervisors and because the supplemental is a yearly thing, it is something that the Department initiates.

Commissioner Walker said that she would move to accept Option #4 based on the terms being spelled out that an annual review would take place to look at how the Department sits with regard to the surplus. Commissioner Santos seconded the motion. Vice-President Hood said that she would support the motion.

President Fillon asked for any public comment.

Joe O’Donoghue of the Residential Builders Association said that first of all everyone needs to understand the history of this surplus. Mr. O’Donoghue said that the surplus, which presently exists, is for permits. The permits are tied into hiring and new inspectors have been hired in the electrical, plumbing and building divisions. Mr. O’Donoghue said that if the Commission messes with that surplus, which is tied directly into the fees that are collected from the industry, this could impact employment when the downslide comes. Mr. O’Donoghue stated that the downslide will come and pointed out that the Federal Reserve has just raised interest and will probably raise it again, if anyone is studying the macro economic effect. Mr. O’Donoghue said that the Commission has to look at how the surcharge came about. Mr. O’Donoghue stated that he was opposed to the surcharge at the beginning, but went along with it because when the deal was made to lease Mission Street, it was done in a quid pro quo in moving all of the judicial system out of City Hall. The judicial system took the site that had previously housed the Building and Planning Departments. This land was given to the judicial system for zero dollars. Mr. O’Donoghue said at that time he told Rudy Nottenburg he was ripping off this City. Mr. O’Donoghue said that there was money at the State Legislative Body had the Administration taken the time to apply for it. Mr. O’Donoghue said that land was given away that had been appraised for $11M. Mr. O’Donoghue said it was then subsequently passed through the Board of Supervisors after builders had said it was a bad deal for the City and the City and the industry would be paying for this. Then a deal was cut to go into 1660 Mission Street. Mr. O’Donoghue stated that in the Board of Supervisors’ resolution members of 1660 Mission were to move back into City Hall to take the area that the judges had left. Mr. O’Donoghue said that he wasn’t arguing that they didn’t need new court facilities, but that the CAO negotiated a bad deal. Mr. O’Donoghue said that there was a certain amount for capital expenditures that the amortization of the building, which was bought for $12M, it took another $8M to remodel, $20M was not a good deal in a down sized economy. The $20M, which this Department is obligated to pay off, is amortized out to take into consideration this surplus. Mr. O’Donoghue said that if that balance was messed with the Department was not going to be fiscally responsible or not fiscally prudent. Mr. O’Donoghue stated that he believed more information was needed in terms of the amortization and the obligations for 1660 Mission. Mr. O’Donoghue said that he has always advocated that the Department buy its own building and again ran into the snafu of how can a City agency buy its own building. Mr. O’Donoghue said that enough rent is being paid to the City and this is a City agency paying rent to pay off the debt. Mr. O’Donoghue said if the building is bought, then fees will be reduced because the amortization will be down. Mr. O’Donoghue said it amazes him that no one sees the simple equation of this and it blows his mind. Mr. O’Donoghue stated that the surcharge should be left at 4.5% and don’t raise it to the 6.5%. Mr. O’Donoghue said that this would be prudent because it was based on the 4.5% years ago and the Department should continue what was mathematically discussed and that was what the CAO office advised at the time. Mr. O’Donoghue thanked the Commission.

Vice-President Hood said that she understood what Mr. O’Donoghue was saying, but stated that she has been involved when the Mayor is reviewing DBI’s budget and people look at the surplus. Vice-President Hood said that the Department has also been warned by the City Attorney’s Office, that if the Department continues to have this surplus, it is an implication that fees should be reduced because the State law requires that the fees just cover what the costs are. If money is accumulated then it is an implication, not that the fees are too high, but that DBI is too efficient. Vice-President Hood said that things tend to go up and down and that is a concern of everyone present. Vice-President Hood said that she would agree that this is the crest of the economy and there may be a downslide. Vice-President Hood said she would want the Commission to have the ability to revisit this issue any time that the Director of Finance, Amy Lee, thought that the Department was beginning to encounter problems. With that Vice-President Hood said that she would still be willing to vote for Option #4. Vice-President Hood stated that she is concerned that there is too much money in the surplus and if it continues she is afraid that someone will find a way to take it all away.

Ms. Lee said that when she came to DBI she had suggested that the Department purchase the building and pay off the debt and was told that the Code dictates that this cannot be done and the Department cannot do this even if they want to. Ms. Lee stated that it would provide an enormous amount of savings if this surplus were used to pay off the debt immediately, but when the deal was struck way back when, that was the deal that was struck in terms of the debt service payment. Ms. Lee said that this could certainly be looked at on a year-to-year basis as this is not going to be done automatically every year. Ms. Lee said that she would provide reports periodically about the surplus probably in month fourteen. Ms. Lee said that in August or September she will have a better idea of how the Department surplus is going to look for the next fiscal year as that is when all of the revenues come in and it is determined how much is actually spent. Interest from the income comes in at this time and she will report on the surplus at that time. President Fillon asked Ms. Lee about a credit that the Department has. Ms. Lee said that the Department has a deferred credit account in addition to the surplus account, which is about $2M or $3M. Ms. Lee said that all of these factors have to be considered in making any decisions. Ms. Lee said that the supplemental appropriation process takes at least a month, if lucky, and July 1^st is when the 6.5% would to into effect. Ms. Lee said that the Department could let the 6.5% go into effect and see if the citizens cry out about the increase. Ms. Lee said that she would recommend either Option #2 or #4, which would be good for the Department

Vice-President Hood said there was a motion on the floor. President Fillon asked if there was any further comment and stated that he thought Option #2 would be better.

A vote was taken on the motion to accept Option #4. The Commission voted 5 to 1 in favor of the motion, with Commissioner Guinnane voting nay.

[RESOLUTION NO. BIC-032-00]

President Fillon stated that the Commission had agreed to switch the order of Items #8 and #9.

9. Review and possible action on Administrative Bulletin No. AB-038 titled Penalties for Work Without Permits or Exceeding the Scope of Permits.

Director Chiu said that the purpose of Item #9 was to brief the Commission as to where the Department is regarding Administrative Bulletin No. AB-038 concerning penalties for work done without permit or for exceeding the scope of work. Director Chiu said that under the direction of the Commission, the Commission had asked the staff to further clarify the Code section involving work started without permits and also exceeding the scope of work. Director Chiu handed out a report that was drafted by Laurence Kornfield and his staff and said that the report was still under review and welcomed comments from the Commissioners. Director Chiu said that he wanted to see if the Commission had any further comments before the Administrative Bulletin was finalized. Director Chiu called on Mr. Kornfield, Chief Building Inspector, to give a brief commentary on what this Administrative Bulletin is about. Director Chiu stated that some time ago the Commission had asked him what penalties were involved for people who consistently violated the Code and said that this bulletin should address some of those concerns.

Mr. Laurence Kornfield, Chief Building Inspector with the Technical Services Division stated that the draft bulletin was prepared at the request of the Commission to try and provide guidance to the District Building Inspectors and their supervisors and the Department in general as to under what circumstances the Department should be charging penalties of different sorts. Mr. Kornfield said that the Code allows the Department to charge both 9X the permit penalties for certain works and 2X the penalty for other types of work. Mr. Kornfield stated that he has gone through the Code in as much detail as possible to see if he could get some guidance, and he roughly broke down the different kinds of cases into four distinct types. Mr. Kornfield stated that work done completely without permits typically demands the maximum penalty, the 9X penalty, also work which exceeds the scope of permit, but is incidental to that permit work as defined in the Building Code where it talks about additional permits required. Mr. Kornfield said that there is work done which substantially exceeds the scope of an issued permit, such as altering the exterior dimensions of a building more than six inches, altering the visual appearance through changes in exterior wall materials or windows, work done that changes the occupancy of a building, work which changes the construction type of a building, and work which creates an unusual condition which requires a permit procedure to protect the public. Mr. Kornfield said that the last condition is what can be used when all else fails. Mr. Kornfield said that there is also a condition where the cost of the work seems to exceed 20% of the value of the work as stated in the permit, or work that creates an unsafe condition. Mr. Kornfield stated that all of these conditions would warrant the 9X penalty rather than just 2X for a small change in the scope of the work. Mr. Kornfield said example number three is work done prior to the current building ownership and based on the Building Code when the work was done, providing it can established that it was work done by a prior owner, the Department is permitted to charge only a 2X penalty or investigation fee in this instance. Mr. Kornfield said that the Department asks for substantiating documents that go into the record of the building. The fourth case is work that was done prior to September 1, 1960 where there is no penalty at all based on some provisions of the Building Code. Mr. Kornfield stated that he was submitting a rough draft of how the Department might apply some of the penalties for the Commissioners information. From the Commission the document would go to the Code Advisory Committee, to one of their sub-committees for review, and it has already been submitted to staff for comments. Mr. Kornfield said that he has only received a few comments back.

Vice-President Hood said that one of the main issues in the minds of the public about this whole matter is when people do work that impacts their views or extends a building beyond the approved exterior envelope. Vice-President Hood said that this involves the Planning Code as well as the Building Code. Vice-President Hood stated that very often people would like the work that was not permitted, torn down immediately. Vice-President Hood said that the report does not address this issue, but is just about the penalties. Vice-President Hood said the question in her mind is that many people, given the cost of real estate in San Francisco, would look upon a penalty as a cost of doing business. For example, if someone gets a permit saying they are doing work and the permit fee is $2,000, 10X that is $20,000, but if they have done work that gives them a view of the Golden Gate Bridge, the property value has increased $200,000 or maybe $2,000,000. This might be considered a reasonable expense with a slap on the hand. Vice-President Hood asked what right the Commission has, as the enforcers of the Planning Code, to say chop off that floor that was added. Director Chiu stated that based on the current Code, the Commission does not have the authority to ask people to chop it down immediately. The Code allows the people to go through the process of legalization and go through the Planning process to seek approval. Until the Planning and Building Department state that the work that has been done without permit, or beyond the scope of a permit, is not approvable then the applicant will have to remove it, but this cannot be done immediately as it is not in the Code. Director Chiu said that the current Code does not give permission for the Department to ask someone to remove improvements immediately without allowing due process. Vice-President Hood said that the applicant builds up and then goes into the review process with the Planning Department and if the Planning Department issues a finding that the improvement violates conditional use or whatever Code then Planning would advise the Building Department. Director Chiu said that if Planning denies the permit of what is proposed, therefore that would allow the Building Department to say the improvement is not approvable and it would have to be removed. Vice-President Hood said that this just takes longer for due process and is probably fair. Vice-President Hood asked if Mr. Kornfield could explain how the 9X and 2X penalties were arrived at. Mr. Kornfield stated that these are numbers that the Department has been using over the years and are in the fee schedule of the Code. Mr. Kornfield said there has never been a written procedure of how the District Inspector applies one or the other. Mr. Kornfield said that this is the long-standing language of the Code. Vice-President Hood asked if the Department has ever applied the 10X fee on the additional work. Vice-President Hood stated that this fee does not seem to be terribly punitive. Vice-President Hood said it just depended on how much the fee was, but the fees have been very reasonable. Vice-President Hood said that fees have been held down so low and she just wants to make sure that this kind of behavior stops. Director Chiu said that the Department routinely applies the 9X penalty plus the permit fee. Director Chiu stated that most city jurisdictions charge only a 2X penalty fee and San Francisco is one of the highest for penalties. San Jose has a 5X penalty and Director Chiu said that the UBC only looks at 2X penalty. Director Chiu said it depends on the permit fee and sometimes the 9X penalty is a hefty fine. Vice-President Hood said she was concerned because the Commission heard a complaint about how difficult it was to enforce these penalties for a few people who do construction without permits over and over again. Vice-President Hood asked how the suggestions made by the Committee differ from the way this situation has operated in the past. Mr. Kornfield stated that there was little difference, except that this is firm guidance to the District Inspector, that he shall issue this notice with the designation of the penalty. Vice-President Hood said that this was more like retraining and Mr. Kornfield agreed. Mr. Kornfield thanked the Commission.

Mr. Joe O’Donoghue of the Residential Builders Association said that all of these fees are appealable to the Board of Permit Appeals and Mr. O’Donoghue said that he is generally in favor of them. However, Mr. O’Donoghue stated that there is clear inequity where people buy property and work has been done prior to them purchasing that property. People buy property and suddenly they get hit with a potential 9X penalty. Mr. O’Donoghue said that unless these people hire someone who is articulate or some experts to demonstrate that the work was there before, there is unfairness in that aspect of this Code. Mr. O’Donoghue said that in any building in this City work could be found at some stage because of the shocking process that existed years ago where work was done without permits prior to 1960. Mr. O’Donoghue said the Commission needs to address this situation or perhaps Mr. Kornfield could address that section because it is unfair. Mr. O’Donoghue said that this impacts none of the RBA members because they build new buildings, but Mr.O’Donoghue stated that he has sat through many hearings at the Board of Permit Appeals where he has felt sorry for people who have bought a home and they feel like they are being indicted. Mr. O’Donoghue said that he was not talking about a $100.00 penalty, but generally $2,000 or $4,000, and the Commission has been sensitive in reducing these fees, but Mr. O’Donoghue said that under previous Commissions of the Board of Permit Appeals when the sensitivity was not there to these homeowners. Mr. O’Donoghue thanked the Commission.

Commissioner Walker said that there is a Case #3 where it states that on written request to the Chief Inspector or DBI Manager providing information that the building was purchased with existing construction, then the fees are waived down to 2X. Mr. Kornfield said that was correct and this was a change to the Building Code in the July changes that were made based on the request from the Board of Permit Appeals.

President Fillon asked why someone should be charged for permit violations that were there from the previous owner. Vice-President Hood said that the rational for that is because when the previous owner sells the property they are supposed to disclose all of that information. Vice-President Hood said that people have gotten very good about disclosing things so there is a gray area about whether buyers know about work that has been done. Vice-President Hood said that a buyer can verify what has been permitted by going and looking at the Plans in the Building Department and realtors encourage buyers to do this. Vice-President Hood said that this way buyers could see what they are going to be on the hook for and there is a real burden on owners selling property to disclosure information. Vice-President Hood stated that ads often refer to unpermitted or unwarranted rooms. Commissioner Santos said that owners can obtain permits, but they don’t actually have to complete the permit. However, the City will have documents showing that permits have been issued and closed. Vice-President Hood said that in looking at Mr. Kornfield’s report she was previously unaware that if work is not done, an applicant may request a refund of the permit fee. Director Chiu said that there is a process for this situation and an applicant has a year to request a refund, less a processing fee, if they change their mind and don’t go forward with the work.

8. Review of Director’s performance goals adopted under the Pay for Performance Program. Set new goals for Director.

a. Public Comment on all matters pertaining to the Closed Session.

b. Possible action to convene a Closed Session.

c. CLOSED SESSION: Pursuant to Government Code Section 54957 and the San Francisco Administrative Code Section 67.10(b).

PUBLIC EMPLOYEE PERFORMANCE EVALUATION

Director of the Department of Building Inspection - Mr. Frank Chiu

d. Reconvene in Open Session to vote on whether to disclose any or all discussions held in Closed Session (Administrative Code Section 67.10(b).)

Commissioner Guinnane made a motion, seconded by Commissioner Santos that the Commission go into Closed Session.

The Commission voted 5 to 1 in favor of the motion with Commissioner Walker voting nay.

[RESOLUTION NO. BIC-033-00]

At this time the Commission took a five-minute break.

When the Commission reconvened at 3:20 p.m. none of the discussion that took place in the Closed Session was disclosed.

10. Review and approval of the Minutes of the BIC Regular Meeting of April 19, 2000.

Commissioner Santos made a motion, seconded by Commissioner Guinnane that the minutes be accepted. The motion carried unanimously.

[RESOLUTION NO. BIC-034-00]

11. Commissioners’ Questions and Matters.

a. Inquiries to Staff. At this time, Commissioners may make inquiries to staff regarding various documents, policies, practices, and procedures which are of interest to the Commission.

b. Future Meetings/Agendas. At this time, the Commission may discuss and take action to set the date of a Special Meeting and/or determine those items that could be placed on the agenda of the next meeting and other future meetings of the Building Inspection Commission.

Commissioner Walker said she would like to request a report from Director Frank Chiu about 500 Divisadero and what determination had been made within the Department on that property. Commissioner Santos stated that he had previously reported on this address. Commissioner Walker said that the owner was hiring someone to look into structural issues and there was something required by Planning, otherwise there were permit issues. Commissioner Santos said that the permit process was going to continue after he had made his report. Commissioner Guinnane said that the concern of the Commission was that there was a structural problem with the building and it was going to collapse. Commissioner Guinnane said that Commissioner Santos went out and made an inspection and felt that the building was safe at the time. Commissioner Santos said that was correct. Commissioner Santos said that was the end of the issue.

Vice-President Hood said she was wondering if there were enough items on the agenda that would require two meetings in June. Vice-President Hood said that the first of June is a very busy time and since the President knows what is on the agenda she was asking about the first meeting of June 7. President Fillon said if there is a shortage of items, he will deal with the issue as the meeting date approaches.

Mr. Joe O’Donoghue said that he lives in the area of Divisadero Street and has found out that the complainant stopped the project from going on and then once the project was stopped complained about the condition of the building. Mr. O’Donoghue stated that he was at a hearing the previous day about Poppy Lane where a legality opinion took a year and a half in the City Attorney’s Office to come out and clear title. Everyone knew from the beginning that a complaint was filed by the neighbors and now that a decision has been made the neighbors are saying that was not due diligence and that means there is something wrong with the process. Mr. O’Donoghue said that the neighbors then think that the owner who wanted to clear title must be doing something corrupt. Mr. O’Donoghue said that the Commissioners need to balance out, when people come to a meeting and complain, about the real merits of the legitimacy of the complaint. Mr. O’Donoghue said that neighbors are getting ticked off about people who are setting themselves up as spokespersons from neighborhood organizations and the neighborhood organizations are flim-flams with only one to five people in these organizations. Mr. O’Donoghue said he did not get involved in 500 Divisadero as he knows the owner, and does not like the guy, but believes the owner got flim-flamed on this project. Mr. O’Donoghue stated that he thought it was stupid for the owner to put in a burger place that was going to go belly up anyhow. Mr. O’Donoghue said that Patricia Vaughey is a good friend of his, but you can’t have your cake and eat it too, and she was wrong on this one.

12. 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 comment at this time.

13. Adjournment.

Since there was no further business to be discussed, Commissioner Guinnane made a motion, seconded by Commissioner Walker, that the meeting be adjourned. The motion carried unanimously.

[RESOLUTION NO. BIC-035-00]

The meeting was adjourned at 3:40 p.m.

_______________________

Ann Marie Aherne

Interim Commission Secretary

SUMMARY OF REQUESTS BY COMMISSIONERS
Check with Planning Department regarding 170 Brewster Street and change of materials on exterior of building. - President Fillon	Page 3
Letter of recommendation regarding proposed ordinance to amend the San Francisco Police Code regarding construction work at night.	Page 8

Prepared by: Ann Aherne

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