Building Inspection Commission
BUILDING INSPECTION COMMISSION (BIC)
Department of Building Inspection (DBI)
Special Meeting
Wednesday, January 22, 2003
City Hall, 1 Dr. Carlton B. Goodlett Place, Room 408
Adopted February 11, 2003
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 Denise D’Anne, Commissioner
Bobbie Sue Hood, Vice-President Esther Marks, Commissioner
Roy Guinnane, Commissioner Rodrigo Santos, Commissioner
Matt Brown, Commissioner
Ann Aherne, Commission Secretary
D.B.I. REPRESENTATIVES:
Frank Chiu, Director
William Wong, Deputy Director
Sonya Harris, Secretary
1. Call to Order and Roll Call.
Roll call was taken and a quorum was established.
2. President’s Announcements.
President Fillon stated that he had no announcements.
3. Director’s Report. [Director Chiu]
a. Update on the status of construction costs for the building of 560 Mission Street.
Director Chiu said that Item #3a was concerning the construction cost valuation for the project located at 560 Mission Street. Director Chiu said that there was a certified, notarized statement from the project architect, the general contractor and the CPA certifying that there were twenty-one change orders for the construction. Director Chiu stated that this resulted in a valuation difference of $10M as originally the project came in at approximately $100M and the project sponsor came in and protested the valuation. Director Chiu said that at some point the Commission was involved and questioned the valuation so the project sponsor hired someone from Marshall & Swift to verify that the cost came down to $84M. Director Chiu reported that the Department went ahead and issued the permit with the valuation at $84M, but wrote a letter to the project sponsor that the Department reserved the right to look at all of the change orders and to verify the actual valuation. Director Chiu said that when the project sponsor asked for the TPO, the Department requested documentation as to the valuation and the difference came in at $10M. Director Chiu said that DBI staff calculated the difference in terms of the fees and that resulted in approximately $63,000 in terms of the revenue for DBI.
Commissioner Santos said that Commissioner Guinnane had suggested that the Department might want to go over the project sponsor’s books in terms of comparing what was ultimately spent on the project. Director Chiu said that Commissioner Guinnane did not ask for the Department to go over the books, but wanted a CPA to certify the actual cost; in the package received from the project sponsor a notarized statement was received from the project architect, the general contractor and a CPA certifying that data. Director Chiu said that in his opinion this information was sufficient.
Vice-President Hood asked who the architect and the contractor were. Director Chiu said that the contractor was Turner Construction, but stated that he did not know who the actual architect was. Vice-President Hood asked if the architect was with the Bureau of Architecture in the City. Director Chiu said that this was not a City building, but was a private building with a project manager and a project engineer assigned to oversee the entire project. Vice-President Hood asked if this was an addition. Director Chiu said that this was a brand new building that was constructed at 560 Mission Street. Vice-President Hood asked if this was the part that was going up in the parking lot. Director Chiu said that this was at Second and Mission. Vice-President Hood said that this issue had to do with the fee. Director Chiu said that was correct. Vice-President Hood said she wanted to point out, as an architect, that architects cannot certify costs because they don’t have any controls. Director Chiu stated that the project engineer was certifying that there was a total of twenty-one change orders. Director Chiu said that with large projects, a project engineer would be hired to monitor the total construction change orders and those types of things.
Commissioner Guinnane said that with this project the Director had spoken to the Commissioner about this outfit going and getting an outside estimator to look at the actual calculations with DBI because they had a contract with Turner Construction to build for a total cost of $84M. Commissioner Guinnane stated that the Department had rolled back the actual fee after the permit was issued and said that he was very concerned about that because it was setting a path for other contractors to come back in so the Commissioner asked the Director to follow up with a letter stating that at the end of the job the Department wanted a certified job cost. Commissioner Guinnane said that he was sure that there were going to be overruns on the job and this was how the Department happened to come up with another $63,000 or $64,000.
b. Report on the status of Training and Certification for Housing Inspectors.
President Fillon announced that the Commission would skip to Item 3c and come back to Item 3b as there were some members of the public that wanted to speak who were not yet present. The Commission agreed.
c. Report on the status of the California State Building Code adoption for future codes.
Director Chiu reported that this item was just to give the Commissioners heads up, as traditionally the State of California adopts the model code that is published and for many, many years the State had adopted the International Conference of Building Officials (ICBO) Code or UBC. Director Chiu said that in the last four or five years there has been a split off between the code writing bodies and IAPMO usually writes the plumbing and mechanical code, but have split with ICBO and went to court. Director Chiu said that ruling by the courts was that anyone could write any codes so as a result ICBO writes the mechanical and plumbing codes and IAPMO then formed their own group to write what they call a FBA5000 building code. Director Chiu said that now there are competing code writing bodies that are lobbying the State and local government officials to support certain codes. Director Chiu said that it is his understanding that there have been letters written by both code writing bodies and the organizations lobbying for these code-writing bodies. Director Chiu said that in his opinion this is a State issue and the State Building Standard Commission would decide and adopt the code that is best for California. Director Chiu stated that it is his recommendation that DBI stay out of this lobbying. Director Chiu said that he has received some letters from these code-writing bodies lobbying for his support, but felt that the Department should stay out of this State process.
d. Report on the status of Supervisor Jake McGoldrick’s proposed legislation regarding Unlawful Demolition/Major Exterior Alterations to residential buildings.
Director Chiu said that all of the Commissioners had a package in front of them amending the existing unlawful demolition and the legislation in now proposing to change the title to Major Exterior Alteration to a Residential Building. Director Chiu stated that it depended how a person looked at this proposal because there are a lot of mitigation issues that would involve potential DBI staff going out to verify the site before the project is approved. Director Chiu said that this would call for greater notification for the project because under the current code if there is a vertical or horizontal addition, Planning might require a notification process of 150 ft., but the Building Department is only required to notify the adjoining properties, the property that faces the building and any buildings that touch the properties. Director Chiu said that the new proposal would require that anything that falls into that definition would require DBI to do a 300 ft. radius notification. Director Chiu said that the designer is being asked to demonstrate more of the project that is being proposed. Director Chiu said that in his opinion in looking at the definition of what is a major alteration it is stated as being defined as the removal of 75% or more of the exterior walls or 50% or more of the front façade of the building. Director Chiu stated that in looking at that definition narrowly, in his opinion, a lot of the buildings that would be doing a horizontal or vertical addition would not trigger that because it will be labeled as existing. Director Chiu said that for a long time he has been talking with the committee members and recently with the people who are responsible for drafting this proposal because he thought that this definition would not trigger anything. Director Chiu stated that if someone wants to add two or three stories to an existing one-story building, in order not to trigger the notification the person would label it as existing. Director Chiu said that it would not matter that the person had to put in a brand new foundation. Director Chiu said that someone could add two or three stories by labeling it as existing and prop up the wall. Director Chiu stated that this is what happened with a lot of the projects that went up under the previous unlawful demolition definition. Director Chiu said this should not just talk about removal, but should include the final affect. Director Chiu said that if a project sponsor is going to build a one-story building or a two-story building over an existing building no one should lie or cheat about what is going to be done. Director Chiu said that in his opinion, if someone has to put a brand new foundation and just sort of prop the wall up, technically it is existing because the existing 2 x 4”s are being retained, but the Code would probably require another 2 x 6 to be scabbed to the existing 2 x 4 joist so there is still a loophole to beat the system. Director Chiu stated that if a project sponsor said that they were going to retain all of the existing exterior wall or the majority of that exterior wall, but simply just put on the application that they were doing a new foundation, when the inspector goes out the inspector would verify that a lot of the studs still remain. Director Chiu stated that he did not think that the real issue was being solved, as to people still trying to hide what they want to do. Director Chiu said that overall he felt that the proposal had some very detailed requirements for the designer to detail the project up front, but said that he thought that Major Exterior Alteration still needs to include what is being added. Director Chiu said that he did not know how a two or three story building could be added to an existing one-story building without major foundation work or major improvement to the exterior walls. Director Chiu stated that this was the only comment that he would have and said that he would urge the Commission to look at the proposed ordinance carefully. Director Chiu said that this was not on the agenda as an action item at this time, but stated that he wanted to point out some of the issues to be looked at carefully. Director Chiu said that the Code Advisory Committee met last week and unanimously endorsed this proposal with some comments that are forth coming. Director Chiu said that the CAC liked the proposal, but said that it should go further to define what is a Major Exterior Alteration.
Commissioner Marks said that she was sure that Director Chiu proposed this to Supervisor McGoldrick and asked what the Supervisor’s response was. Director Chiu said that for some reason the group seems to be stuck with the removal only and said that he was very frustrated with this, as he has gone before the Board several times. Director Chiu stated that if someone is going to build two additional stories over an existing one-story building the foundation would almost have to be replaced. Director Chiu said that if the foundation is replaced the wall is just hanging by itself and this is exactly where the Department gets into trouble with the neighbors because when the project sponsor is building the foundation, the wall may be sort of leaning on the ground and when the inspector goes out the wall is up again. Director Chiu said it depends on when the Department is called because by the time the inspector goes out the wall may be up, but when the neighbor called the wall could have been down. Director Chiu said that he does not want this problem repeated and said that if someone is going to do a vertical addition to an existing one-story structure everyone should just be honest and call it a Major Alteration so that everybody knows up front what the requirements are. Director Chiu said that otherwise people are still going to say that it is existing because they are not removing more than 75% of the exterior wall; therefore, this ordinance would not apply. Vice-President Hood said that this is a major loophole and said that it is so contradictory from what was heard in public testimony at the subcommittee meetings. Vice-President Hood said that this was incomprehensible and said that it was as though this was written by people who want to fool the public instead of people who want to make the designers and permits more honest by letting people know when there is going to be a significant change next to their homes so they can have an opportunity to participate in the review. Vice-President Hood said that she thought that there had to be a misunderstanding. Vice-President Hood said she wondered if it would be helpful, and if the Department would be willing, to do a comparison between the existing code, like a table on some of those major items. Vice-President Hood stated that she thought that the items that the public wanted to change and that they commented most about are not covered. Vice-President Hood said that she thought that the Director was exactly right about this. Director Chiu said that there was another major change in that the penalty clause has been stiffened, but again it depends on how this is looked at. Commissioner Santos asked if notification would be required for projects that do not ordinarily have to send out a 311 notification. Director Chiu said that if a project falls under this category automatically a 300-foot radius notification would be required similar to demolition requirements. Commissioner Santos said that this is slightly more stringent than what now exists. Director Chiu said that DBI staff would have to go out and verify existing conditions and stated that he would support that. Commissioner Santos said that this is what Vice-President Hood suggested because there has to be checks and balances and one of them would be to have the architect do a set of drawing that defines what is already there and get the City to confirm that. Commissioner Santos stated that everyone seemed to agree that this was step one. Vice-President Hood said that ethical people already do this, but there are people out there who don’t play by the rules or don’t play by ethics so there has to be rules to hold them in line. Director Chiu said that, all in all, he would have to admit that this proposal is trying to address a lot of the issues, but again said that he would recommend that the Commission expand the definition of Major Alteration as he previously stated. Director Chiu said that otherwise, the staff would be spinning its wheels, as it would make a difference when staff looked at a project to determine whether it would be a Major Alteration or not.
Vice-President Hood said that she thought that this was why Supervisor McGoldrick was only looking at demolition, but the complaints that came from the public were Major Alterations so the word “demolition” was what was misleading. Vice-President Hood said that this is maybe why the group did not look at adding the two stories, going out in back, or suddenly having the expanding stair tower which are all areas that the BIC have heard appealed by neighbors. Vice-President Hood said that she thought that this was a good place to include these things in order to get it cleaned up by being more specific about Major Alterations. Vice-President Hood said that the Major Alteration would trigger the 300 ft. notice.
Commissioner Marks asked what was the timeliness to wait to put this on the next agenda. Commissioner Marks asked if the Commission could ask the Director to write a letter on behalf of the Commission identifying this as a major problem. Director Chiu said that he supposed that he could do that. Director Chiu said that he had expressed his concern, but for some reason the group appears to agree with his concern and every draft version that he has seen has forgotten or left out this issue. Commissioner Marks said that she would like Director Chiu to write a letter on the Commission’s behalf. Commissioner Santos said that Director Chiu should show the group an example. Director Chiu said that every time he goes to a meeting he draws a plan and everyone appears to understand what he is talking about, but when he sees the written language for some reason that language is not included. Director Chiu said that he would be happy to write back to Supervisor Jake McGoldrick with the Commission’s concerns. Commissioner Marks said that she would like a copy of the letter.
Commissioner Marks said that she had other questions. Commissioner Marks referred to page one where demolition is defined as complete removal of a structure. Commissioner Marks said that she remembered a time when the Department would, if the studs remained in place even though the physical structure was totally gone, not define it as a demolition. Director Chiu said that this proposal is trying to address that situation by saying that demolition is a total removal. Director Chiu said that the group tried not to get involved with demolition because demolition is viewed as total demolition if someone applies for a demolition permit. Director Chiu said that someone could come in and show removal of so many walls and partitions and could call it a demolition, but technically speaking it would not be a demolition permit; it is an alteration permit. Director Chiu said that this proposal is saying that because this has been a problem in the past or currently, because it is very vague and from the public’s standpoint it is a demolition even though there may be ten or twenty feet of an exterior wall left. Director Chiu stated that the public feels that the majority of the walls are gone; therefore, a demolition permit is needed, but the Department’s definition is that a permit is needed, but not a demolition permit, as it could be done under an alteration permit. Director Chiu said that the intent of this proposed ordinance was to try and not get involved in that, but to say that when a demolition permit is required it means that the entire building would be demolished and anything short of that would be alteration or major alteration. Commissioner Marks said that this would mean that the physical structure was totally removed. Director Chiu said that was correct.
Commissioner Marks referred to page five, item two of the proposal, the addition that states that “a major exterior alteration to a residential building takes place without the issuance of a permit as required by this code or work exceeds the scope of an issued permit.” Commissioner Marks said that this was not clear to her because the intent was when work was done and the work exceeded the scope of the permit, which then created the basic major alteration, but the proposal looks like even if there was a major alteration permit taken out that if the scope of the work exceeded the original permit then they wouldn’t suffer any penalties. Commissioner Marks stated that this proposal does not deal with situations where it started off being a regular project and then the work exceeded the scope of the project and in turn became a major alteration. Director Chiu said that he thought that the language is still the same and it is saying that if the scope of the work is exceeded then the 2.1, 2.2. and 2.3 is enforced so the process is similar, but this just clarifies the process. Director Chiu said that in the past if this happened then the Department would be asked to hold an unlawful demolition hearing and this replaces that. Director Chiu said that he was glad that Commissioner Marks had looked at this carefully because, on one hand the penalty seems to be stiff, but actually it is not stiff because the project manager is asked to do the necessary corrective measurement only after they fail to comply with the first notice of violation and then the Department imposes the additional penalty. Director Chiu said that he felt that the Commission needed to look at this proposal more carefully. Director Chiu said that people always come in and comply with the first NOV, so the stiffer penalty should not wait until after the second NOV because people who exceed the scope of the work 100% of the time want to come back with another permit and in fact, usually want an over the counter permit. Director Chiu said that he agreed that the Department and the Commission need to look at this to see if people are being encouraged to do this by coming in after the first NOV and then they are let go more easily. Director Chiu stated that he had raised this issue with the committee. Commissioner Marks asked if this could be added to the letter.
Vice-President Hood said she felt that if the Department did a table as to what the code is now, and what is proposed, in a very simple matrix, and then in the third column put what the Department and the Commission think should be added to correct anything that is not working quite right. Vice-President Hood said that when this is given to the Supervisor, or whoever is going to be the new committee chair, it should be made available to the public and those people who have been very concerned about this in the past. Director Chiu said that he would be happy to do a draft table for the next meeting. Vice-President Hood said that she thought that the issues were much simpler then they seem when all of the text is read because the language and the context gets lost. Vice-President Hood said she felt that if one of the tables were done it would become clear and then a more convincing argument could be made to the Board of Supervisors.
Commissioner Marks referred to page seven and stated that the text of this proposal is for residential units and on page seven there is an exception that says that these requirements shall not apply to any mixed-use building which contains residential occupancy. Commissioner Marks said that on page ten, line four, it states that the notice shall specify the date and nature of the hearing and the following issues will be determined at the hearing, whether an unlawful demolition has taken place as described and if so the number of residential units that existed on the site, the proportion of residential to non-residential units that existed on the site. Commissioner Marks said that it seems that on page seven mixed-use buildings are exempt from this requirement and yet it seems as if mixed-use development is being included. Director Chiu said that in the past the Department was always talking about residential buildings and this was never applied to mixed-use, residential and commercial buildings. Director Chiu said that the language on page ten is existing language wand was included so that the Department could step back and see what the intent was. Director Chiu said that people would buy a small single-family dwelling and then increase the size or bulk of the building and then increase the number of dwelling units and change it from one to two or one to three. Director Chiu said that the intent of the law was to say if the building was purchased as a one-family dwelling and someone went and enlarged the building they would have to revert back to what the building was originally, which was one unit. Director Chiu said that this was sort of a penalty clause because the number of dwelling units could not be increased by violating the law. Commissioner Marks said that she realized what Director Chiu was saying, but said that it was still inconsistent and if the exception was specifically added that sentence should be deleted. Director Chiu asked if Commissioner Marks was referring to page ten. Commissioner Marks said that was correct. Director Chiu said that he thought that the intent, when this law was established back in 1987 or 1986, was that people were buying smaller buildings such as a single-family dwelling and tearing it down, not people buying mixed-use property and tearing it down to build larger buildings as this was never the issue. Director Chiu said that page seven is added to clarify that this proposal does not apply to mixed-use, but stated that page ten should be kept because the Department does not want to allow people to take a smaller residential building and then somehow increase the number of dwelling units. Director Chiu said that he thought that it was appropriate to keep the existing language and page seven is merely clarifying that mixed-use occupancy buildings are exempt from this ordinance. Director Chiu said that he did not believe that there was a conflict and said that this clarifies it more on page seven and this is what the Department is doing anyway. Director Chiu said that page ten is just saying that someone cannot exceed the dwelling units from what it was before and said that he did not think that there was any harm in keeping the language on both pages seven and ten. Director Chiu said that the Commission could ask that mixed-use buildings be included. Commissioner Marks stated that she did not think that the number of residential units that existed on the site should be removed, and asked Commissioner Brown, as a lawyer, if this sentence should be deleted just for technical clarity when on page seven it clarifies this ordinance would not apply to mixed-use buildings. Commissioner Marks said that she was not saying that the entire sentence should be deleted, just the reference to the mixed-use buildings. Commissioner Brown said that he would feel much more comfortable having another lawyer give an opinion and stated that perhaps the City Attorney should review that. Vice-President Hood said that this issue should be pointed out to the City Attorney who is in charge of the document because it looks like it was written over time by people with different objectives. Vice-President Hood said that when this is done it is a good idea to go back and read over the entire document to see if there are any conflicts and it appears that there are. Vice-President Hood suggested calling it to the attention of the committee and letting them deal with it. Director Chiu said that he would be happy to comment on that. President Fillon asked if there was going to be further discussion on this issue. Director Chiu said that the Commission wants staff to come back with a table to illustrate what the current ordinance is, what the differences are and what staff thinks should be recommended to the Board of Supervisors and then bring it back to the Commission. President Fillon asked when something would be coming before the Commission to take action on. Director Chiu stated that he would work with Deputy Director Wong and come back at the next meeting. Vice-President Hood said that if the Commission agrees on it then it could be forwarded over to the Board of Supervisors.
President Fillon asked for any public comment.
Mr. John Bardis said that he was very curious to understand how to define demolition and that the Department defines it as narrowly as trying to make a distinction between what is an alteration with an over the counter permit with what has been a demolition. Mr. Bardis said that now there is going to be a definition that if the entire building is wiped out it is going to be a demolition and now the problem is cleared up. Mr. Bardis said that somehow or other the proposal appears to be attacking this problem that is being defined very narrowly. Mr. Bardis stated that in some people’s view a demolition is something that goes beyond what the project manager is dealing with structurally, a change of a building. Mr. Bardis said that it goes down to the housing stock of the City and what has happened to the housing stock in the neighborhood, or its character. Mr. Bardis said that these kinds of considerations seem to be left aside and it seems that the Department is trying to address a very narrow problem. Mr. Bardis said that he thought that the main reason for the motivation of this legislation is that with an over the counter permit there is no need for notification, so people use the over the counter permit to do a defacto demolition. Mr. Bardis stated that in order to avoid that notification, it would trigger a much broader base of people being notified of what is happening at that site and would trigger a requirement that whoever is going to do that would have to have in place some kind of proposal as to what is going to go on that site when the demolition is completed. Mr. Bardis said that this is what is really being avoided by this alteration problem; it is not really whether there is an alteration or a demolition; it is the notification that is being subverted and is being done systematically. Mr. Bardis stated that demolition could be defined a little bit more broadly because if a person is looking for affordable housing even if a building is modified it would be more expensive for people to buy or occupy as renter affordability is lost. Mr. Bardis asked if this was the demolition of an affordable building that existed before and now it doesn’t exist. Mr. Bardis said that if a person converted a piece of property to commercial, again housing is lost and that is just as bad as if it were bulldozed. Mr. Bardis stated that he would urge the Commission to not only have a table that shows what is being proposed, but something that is probably a little bit longer that says what this legislation should be addressing these other issues, such as notification, housing affordability and the character of the neighborhood. Mr. Bardis thanked the Commission.
President Fillon said that the Commission would now return to item #3b.
c. Report on the status of Training and Certification for Housing Inspectors.
Director Chiu said that item #3b was to report to the Commission regarding a letter dated December 23, 2002 received from Local 21, The Housing Inspector’s Association as a result of the Commission’s action at the October 16, 2002 meeting. Director Chiu stated that at that meeting he suggested to the Commission that the Housing Inspectors be required to comply with some sort of certification and education. Director Chiu said that the good news was that the Association members unanimously support and want continuing education; however, there is one area where they want Director Chiu to convey to the Commission that the Housing Association want to amend the certification requirement for the building inspector. Director Chiu said that the Association had attached their reasons for this amendment and stated that he had given all of the Commissioners a copy. Director Chiu said that the main argument is that the Housing Inspectors, in their opinion, do not fall under the category of construction inspectors. Director Chiu said that his opinion is that since part of the Housing Inspectors duties are to go and call the deterioration of a stairway, or if they see a fire escape that is not proper, or a balcony that is deteriorated or other types of maintenance, that falls under the scope of a construction inspector. Director Chiu stated that he knew that several years ago a property owner came in front of the Commission because one of the Housing Inspectors made a poor judgment call on a particular item and this illustrated, in his opinion, that a Housing Inspector is required to inspect some construction components in a building. Director Chiu said that the Association is also arguing that there was a job announcement that was placed over four years ago mandating that Housing Inspectors be certified, but this was never enforced by the Department. Director Chiu said that the Association feels that it is not fair for those Housing Inspectors who have been hired since that time to now be required to go out and get certification. Director Chiu said that his position is when the job announcement was crafted, the Department was trying to impose some sort of certification, but in his opinion, at that time there was no classification that fit the Housing Inspectors’ needs. Director Chiu said that last year a classification came up by ICBO and another organization offering Housing Inspector/Property Maintenance certification. Director Chiu stated that he thought this fit what the Housing Inspectors do and said that is why he would recommend that this particular certification would be appropriate for the Housing Inspectors. Director Chiu said that he wanted to hear from the Commissioners regarding this issue.
Commissioner Guinnane said that the Commission has digested this and talked about it for a long time and everyone at the Commission was in agreement that the Director got a directive that these Inspectors had to be certified. Commissioner Guinnane stated that he did not know what the problem was and why a plan cannot be put forward to move on. Commissioner Guinnane said that there were many individuals from the Housing Division sitting at the meeting today, and there is a backlog out there and there is a lot of time being wasted. Commissioner Guinnane said that this item got continued from the last BIC meeting and these same individuals were present at that meeting too. Commissioner Guinnane said that there are people paying fees and their apartments are not even being inspected. Commissioner Guinnane stated that he did not know what the problem was, as certification is certification, and these people need to get certified.
Commissioner Brown said that he was not responding specifically to Commissioner Guinnane’s comments, but said that he did read the December 23, 2002 letter from Mr. David Herring of the Housing Inspector’s Association. Commissioner Brown said that unfortunately he was not present at the October 16th meeting when this resolution, or directive, was passed to the Director. Commissioner Brown said that what is said in the letter and the proposal that is outlined made a lot of sense to him. Commissioner Brown stated that it did not make a lot of sense to him to have Housing Inspectors Building Inspector certified if they are not inspecting new construction; it does make sense, in the future, to require continuing education for these Housing Inspectors and also to require ICBO Housing Inspection certification. Commissioner Brown said that he reviewed the minutes on this particular agenda item on October 16th and said that having someone Building Inspector certified solely based on their salary did not make sense; what makes sense is to have them certified based on their daily activities and their job requirements. Commissioner Brown said that he did not understand why the Commission would have a directive to the Director to have a certain division of thirty or more Inspectors in the Department be certified for duties that they don’t actually have any responsibility to enforce. Commissioner Brown said that the Building Code is a different Code than the Housing Code.
Commissioner Guinnane said that the certification was not tied into a salary and that was not the reason for the certification. Commissioner Guinnane stated that what prompted the certification with the Housing Inspectors was the simple reason that there were buildings with decks that had been inspected and reinspected over the years and then all of a sudden a deck completely collapsed. Commissioner Guinnane said that an Inspector had been out to the building one year before and never discovered any of the rot or fungus and then all of sudden someone had to die in order to get a shake up in the Housing Division. Commissioner Guinnane said that the Housing Inspectors are out there looking at these decks and fire escapes and they should be able to certify them. Commissioner Guinnane stated that he had spoken with the Housing Inspectors and apparently they had no problem with getting certified and doing courses, unless something had changed.
Vice-President Hood said that what she understood from the letter was that the difference is whether it is voluntary or required. Vice-President Hood said that one way of dealing with this and the concerns of Mr. Herring would be to have it be voluntary, but to have some sort of bonus system for those people that do undergo the training and that way the Department would not be dealing with a lot of legal issues, but would be getting the additional safety for the public. Vice-President Hood stated that she did not believe this was related to the salary, but said that she thought that this was sort of the first line of defense in making sure that housing that is occupied by, all the way, from poor to middle-class people, is safe as there have been problems that should have been notices and weren’t. Vice-President Hood said that the Commission was trying to find something that worked with job descriptions that would add a measure of security and further use the Housing Inspectors to ensure that property is safe. Vice-President Hood said that there are many items in the Housing Code which she didn’t know and said that she remembered a situation where a Housing Inspector went to a property and actually wrote something that was much more stringent and wrote a Notice of Violation on the building and then Commissioner Guinnane went out and looked at it and there was nothing at all wrong. Vice-President Hood stated that the Housing Inspector was saying that there was a leak and dry rot in the attic of a house and the property owner had a lot of problems and when Commissioner Guinnane went out there was nothing at all wrong with the framing in the attic. Vice-President Hood said that she would think of this issue as more of raising a level of awareness. Vice-President Hood stated that she did not think that the certification was as complicated as it might be and said that the Association suggested using the ICBO Property Maintenance and Housing Inspector certification. Vice-President Hood said that she did not know what that meant and asked if that would mean that the Housing Inspectors would get more money if they had certification. Vice-President Hood said that it might be that this classification, which she understands Mr. Herring has stated would be acceptable. Vice-President Hood said that she thought that the Commission should at least meet with the Association and go over some of these issues to establish a dialog rather than just giving them a mandate. Vice-President Hood stated that these issues should be worked out so that something could be implemented, as there are some concerns that need to be addressed. Commissioner Marks said that she would agree with that and stated that in reading the text of the letter when talking about the description of the deck, the Association is saying that the certification of the Building Inspector basically deals with approving construction plans and inspecting buildings during the construction process to see that buildings are actually built according to the plan and the Code. Commissioner Marks said that it does seem that the Property Maintenance/Housing Inspector certification from ICBO is more appropriate if the Commission is asking for certification. Commissioner Marks said that intent for asking that employees be certified was that the Department has some minimum level of expertise that the person possesses and it does seem that this particular certification is more appropriate for the Housing Inspector than the other one that was talked about previously. President Fillon said that there were a number of people present to provide public testimony and asked for any public comment.
Mr. Randy Shaw introduce himself as the Director of the Tenderloin Housing Clinic and said that he was not aware of this issue until Commissioner Brown asked if he were coming to the BIC hearing. Mr. Shaw said that five of the Commissioners were not on the BIC in 1995, and stated that this whole discussion took place about the difference between Housing and Building Inspectors. Mr. Shaw stated that there might even have been a task force and after much discussion there was a unanimous decision by the Commission that hiring from that point in the Housing Division would be of people who had a trade background so they would know how to do the construction stuff. Mr. Shaw said that he thought that this had been the case and said that virtually all Inspectors hired since 1995 have had a construction background. Mr. Shaw said that he did not have time in three minutes to tell the Commission all of the differences between Housing and Building Inspectors, but stated that there are tremendous differences particularly in the amount of written work involved. Mr. Shaw said that often these people have different kinds of skills and said that he did not think that it was clear that the State law doesn’t apply because these are not construction projects. Mr. Shaw stated that the number of inspections that deal with decks, and that deck issue and a lot of issues like that, is more a function of the Department’s system of complaints. Mr. Shaw said that unless the whole system is changed to say that whenever there is a complaint about anything in the building, the Inspector would need to go through and check decks and roofs and this is not how the Housing Inspectors have ever operated. Mr. Shaw said that if this were required the number of Inspectors would have to be doubled. Mr. Shaw stated that his point is that this is a more complicated issue than he thought some of the Commissioners realized. Mr. Shaw said that there was this whole discussion in 1995 and the Housing Inspectors have always said that they would have more training, but perhaps the Commission should have that discussion before rushing in to have people certified. Mr. Shaw stated that he was not even aware that there was so much criticism of the Housing Inspectors. Mr. Shaw stated that the case with the attic that Commissioner Guinnane went out to has been mentioned at about ten different Commission meetings and it is only one case. Mr. Shaw said that he was sure that Commissioner Guinnane could go out and find where a Building Inspector possibly did not do everything right and the Commission would hear about that case, but the same anecdote becomes used over and over again which shows that maybe the problem is not that widespread. Mr. Shaw said that if the Commission wanted to get into this whole issue, it should be part of a much broader discussion and not just call for certification as a solution.
Commissioner Guinnane said that through the Chair he had one question for the Director. Commissioner Guinnane said that Mr. Shaw indicated that since 1995 the majority of the new Housing Inspectors hired have construction experience. Commissioner Guinnane stated that he understood that most of the Inspectors that came on board came from the Public Health Department. Director Chiu said that he did not know if it was a majority or not, but recently the Department had more success in attracting more people from the construction trades. Director Chiu said that there were also a few people who transferred from the Health Department. Director Chiu said that he would have to go back and tally up since 1995 how many people came from the Health Department versus the outside, but said that it was probably 50/50. Commissioner Guinnane asked about the last Housing Inspectors that came on board and asked what qualifications were laid out in the job description even though there is talk now that the requirements were in place, but the Department never enforced it. Director Chiu said that with the job announcement back in 1999 a clause was inserted saying that State law required certification and that people should be certified as an Inspector. Director Chiu stated that, at that time, he did not know what was appropriate, but the law is the law. Director Chiu said that he knew that people were saying that the law was in place, or the policy was in place since 1999, but nobody enforced it or knew what it was so therefore it doesn’t apply. Director Chiu said that in his opinion the law is in place and just because somebody did not enforce it does not mean that the policy is not there. Commissioner Guinnane said that if it is a State law the Department is bound by the law and it is very simple. Director Chiu said that the intent of the resolution that was adopted by the Commission was not to retroactively apply to every Housing Inspector, but would only apply to those people who came in with that job announcement knowing that they would need to be certified by some Inspector certification. President Fillon asked if there was any other public comment on this item.
Mr. Joe O’Donoghue of the Residential Builders said that he would carry on with the issue that Randy Shaw spoke about and stated that in 1995 the Residential Builders, with the Tenderloin Housing Clinic, wanted to upgrade the qualifications of Housing Inspectors. Mr. O’Donoghue said that previous to the RBA’s involvement and the proposition that made this Commission a reality, there were a lot of complaints and the majority of the Housing Inspectors were coming from the Health Department and this had nothing to do with I.Q. or intellect, but had to do with practical knowledge. Mr. O’Donoghue said that there was a condition that the Department should be hiring from the building trades and it is a fact that with the Inspectors that were hired from the trades there was a vast change in the enforcement actions, not only in the downtown apartments, skid row housing areas, but also in places such as AIMCO and what is happening out there today. Mr. O’Donoghue said that it was decided to protect the employees who were already Housing Inspectors and all of those employees were grandfathered in because it would not be fair to take them and to set new standards for tests that someone would have needed to be an apprentice of some sort to pass. Mr. O’Donoghue said that he thought that the Commission should say that, as of now, all new people coming into the Department have to meet these new standards because under the last administration that was not being done, or if it was being done, it was done after pulling teeth. Mr. O’Donoghue said that with John Kerley, who no doubt is probably the most qualified and most knowledgeable Inspector, tooth extractions had to be done to get him hired into that Department. Mr. O’Donoghue stated that now AIMCO has filed a multi-million dollar lawsuit against the City and said that AIMCO will lose it because John Kerley has protected the 600 or more tenants out there in Bayview/Hunters Point District and has documented everything because he has that knowledge. Mr. O’Donoghue said that this was the kind of upgrading that the Department wanted to do and the idea was that these Housing Inspectors could then move onto Building Department Inspectors in case there was a shortage or a budget problem. Mr. O’Donoghue said that the system is working in the Department right now and there is no intent to impact any people with tenure, but from now on employees should have to meet whatever standards the Commission sets. Mr. O’Donoghue said that then hopefully, there would be a Department again that would eliminate a lot of the problems that existed when there was a push for the Building Department Commission to be created. Mr. O’Donoghue said that there is an excellent Department that is functioning well.
Commissioner Guinnane asked how many people were hired since 1999. Commissioner Guinnane said that he did not know if the Commission could come along and change the job qualifications if this is mandated by the State. Commissioner Guinnane said that he did not believe that the Department could waive that for these five individuals. Commissioner Brown said that he felt this was an issue where the Commission really needed City Attorney guidance. Commissioner Brown said that the Commission was being asked to interpret a State Assembly Bill that has been turned into a law, a statute in the Health & Safety Code and there is a discrepancy as to what is a Construction Inspector and what is a Housing Inspector. Commissioner Brown said that he wanted to see the Housing Inspector announcements from 1993, 1995, 1997 and 1999. President Fillon asked if the Commissioners could hold their comments until after public testimony.
Mr. David Herring introduced himself as President of the Housing Inspector’s Association, Local 21 and said that he wanted to explain the letter that the Commissioners all had copies of and the Association’s proposal. Mr. Herring stated that the Housing Inspectors are not opposed to training or certification. Mr. Herring said that the request for training lists the type of training that the Housing Inspectors are interested in which is a minimum of forty-five hours of education for every three-year period. Mr. Herring stated that this is similar to what the Building Inspectors, Plumbing Inspectors and Electrical Inspectors do. Mr. Herring said that in the Association’s proposal, based on concerns that have been heard from the Commission, the items listed are first of all, wood deterioration and pest control and all of the training is between one day and several days. Mr. Herring said that the second one is wood inspection/wood framing and then it goes on listing Code Enforcement Depositions and Testimony. Mr. Herring said that the first thing that the Association is asking for is training on wood deterioration, wood inspection and wood framing which are the issues that they have been hearing about regarding decks. Mr. Herring said that the Association is in favor of training and the position on certification is that the Association is happy to agree that newly hired Housing Inspectors be required to obtain a certification, but not as a Building Inspector because they do not feel that this is appropriate, but rather the ICBO training on Property Maintenance and Housing Inspection. Mr. Herring stated that the Building Inspector certification covers the Building Code and it covers all work that requires permits. Mr. Herring said that the Housing Inspectors do not inspect any work that requires permits. Mr. Herring stated that if a Housing Inspector goes out to a building and sees a maintenance issue that is wrong the Housing Inspector will require that it be fixed and if it needs a permit they require that a permit be obtained, but then the Building Inspector, Electrical Inspector, or Plumbing Inspector will look at the corrections to make sure they comply with the Building, Electrical or Plumbing Code and Housing Inspectors don’t do that. President Fillon asked Mr. Herring to wrap up his comments. Mr. Herring said that, as he explained in the letter, the Association does not feel that Assembly Bill 717 applies to Housing Inspectors because the first thing in the Bill is the definition of what a Construction Inspector is and it defines a Construction Inspector as somebody who inspects construction for structural seismic safety, fire and life safety and building system requirements. Mr. Herring said that this seems pretty clear to the Association that when it says a Construction Inspector is somebody who inspects construction they are talking about inspecting buildings. Mr. Herring stated that a whole lot of the Assembly and legislative digests where this bill was discussed, before it went into law, talks about making sure that buildings are built to Codes and before people enter the buildings that they are safe. Mr. Herring said that it makes no mention whatsoever of existing buildings and said that he felt that this was not the intent of this bill. Mr. Herring said that if the Commission does feel that the bill covers Housing Inspectors the Association feels that the Commission should speak to the City Attorney to get their opinion.
President Fillon reminded everyone that the standard for public comment is three minutes.
Mr. Bill Fiore introduced himself as a representative of the Building (sic) Inspectors from Local 21 and said that he would concur with Commissioner Brown and stated that he respected the Commissions’ attempt to try and create a certification process for these Housing Inspectors. Mr. Fiore said that a Building Inspector certification should not be the one that the Commission is going after for all of the reasons outlined very clearly in David’s letter. Mr. Fiore said that the Commission was asking someone to get a license to drive a jet when they are going to be a truck driver. Mr. Fiore said that these gentlemen fall under the ICBO Maintenance and Housing which is already a State certification, so it is already there. Mr. Fiore stated that the Union and the Commission or the Union and Department could work out a win-win situation where there is certification, proper certification, for the existing Building (sic) Inspectors that come forward from this point on. Mr. Fiore said that he told Commissioner Guinnane previously that the Union has no problem with that or no problem seeing people being better trained for the jobs that they do, but these are two different jobs with two different certifications that already exist. Mr. Fiore stated that the Union’s folks have no problem qualifying for the certification that they feel their job outlines and that is the Maintenance and Housing Inspector certification that is already within the ICBO with the State. Mr. Fiore said that, as far as the minimum qualifications in the job announcement, this has never been enforced since the day the job announcements were put out. Mr. Fiore stated that he looked over the job announcements and every one of them says that an ICBO certification is required and there is not one Housing Inspector out there that has had to have an ICBO qualification. Mr. Fiore said that in addition, the Supervisors are not required in their job MQs to have an ICBO qualification and if that is the criteria it seemed nonsensical to him that the Supes wouldn’t be required and the Housing Inspectors at the street level would. Mr. Fiore said that he thought there was the possibility of a win-win situation here as there already is a certification within State law that would qualify and fall into place with the Housing Inspectors. Mr. Fiore said that he wanted to work together with the Commission and the Department to formulate a method by which new Housing Inspectors go through this process and get this stuff off the table to make sure there is a safe and secure City.
Vice-President Hood said that she thought that the points that the public made were well taken, as well as the points from Mr. Herring’s letter. Vice-President Hood stated that she wanted to continue this item and get copies of the Property Maintenance and Housing Inspection description of what that requires and also see if something could be added to the job descriptions to say that a background in so and so is especially beneficial or something like that. Vice-President Hood said that this would not be an absolute requirement, but would be one of those things that could be taken into consideration. Vice-President Hood said that she agreed that the City Attorney should provide some input into this issue.
Commissioner Guinnane said that he had no problem tabling this item and stated that he wanted to put a call into Buck Delventhal to get an opinion from him on this Bill 717 and go from there. President Fillon asked if the contact with Buck Delventhal would be the extent of the Commission getting counsel from the City Attorney’s Office. Commissioner Guinnane said that the Commission could just get a written opinion. Vice-President Hood said that she thought that the Commission needs to know if the Housing Inspectors would be covered under AB717 and said that from the testimony heard at the meeting she thought it was clear that the Housing Inspectors do not go in and inspect construction. Vice-President Hood said that if the Commission got a copy of the Property Maintenance because that is really what the Department is talking about; what has been the wear and tear on a building. Vice-President Hood stated that this might cover it and said that she thought the Commission should take a look at that. Vice-President Hood said that she would also like to find out if it could be put into the job descriptions that are used to advertise the jobs that experience in construction is especially helpful or something to that effect. Vice-President Hood stated that she thought that this language would have to be approved by the City Attorney as well and would have to be discussed with Local 21 to make sure that they don’t disagree. Vice-President Hood said that she would support the idea of having people from the past grandfathered in, but to move forward to make sure that other people have better training. Vice-President Hood said that she thought that the proposal for training in the letter from Mr. Herring looked very good and asked if it would be possible to have that program implemented with the Department’s budget restrictions for the next year. Commissioner Guinnane asked for a comment from the Chief Housing Inspector.
Ms. Rosemary Bosque introduced herself as Chief Housing Inspector and said that in the budgets that the Division Chiefs propose for every fiscal year, for the current fiscal year there is training some of which includes what is on the list that is proposed by the Housing Inspector’s Chapter. Ms. Bosque said that in addition, for next fiscal year she actually met with David Herring to make sure that she included anything that the Association thought was appropriate. Ms. Bosque stated that she wanted to make the Commission aware that up until recently all of the Chiefs of the Department have basically been told that they could not spend any additional money on training unless it was related to certification under AB717 or the continuing education under AB717. Ms. Bosque said that up until this point, the Department really hasn’t said, except what the Commission has indicated on October 16th, whether or not AB717 does, in fact, apply to the Housing Inspectors. Ms. Bosque said that she had talked with Taras Madison of Administration and Finance and stated that there were provisions in the budget so that Housing could move ahead on any training, if and when, the Director and the Commission determines in what direction the Division should go. Commissioner Brown asked if that meant that it has to be pursuant to AB717 or can it be something that is ancillary. Ms. Bosque said that it could be whatever the Commission liked and said that she was just saying that because of the budget restraints, prior to the action taken by the Commission, the Chiefs were basically told that there was no additional training allowed unless it related to AB717. Commissioner Brown said that he did think that it was a good idea to implement, if not this particular training regiment, some training regiment that responds to the issues that have been brought up in Mr. Herring’s letter, in past BIC meetings and by the various members of the public and the Commissioners today that responds to for example, Commissioner Hood saying that there were concerns about decks and fire escapes. Commissioner Brown said that there should be training that responds to those specific issues if Housing Inspectors have that as their daily duties to cite those for violations. Commissioner Brown stated that he would reiterate that he personally is not opposed to certification, but would just like that certification to most closely resemble the daily duties and job requirements of the specific Inspectors be they Housing, Electrical, Plumbing or Building. Commissioner Brown said that he thought that it was really important that the Commission implement policy that really trains people to do what they are doing from 8:00 a.m. to 5:00 p.m. everyday. Commissioner Brown stated that it might be good to allow people in the Department, for mobility sake, as Mr. O’Donoghue mentioned, that if there was a shortage for example in Building Inspectors that Housing Inspectors could transfer over there and said that it would be good to at least allow people to obtain certification in other areas in case there is a need at some point in the future to have someone switched from one department to the other.
Ms. Bosque said that she had been approached by some of the Housing Inspectors who are interested, if the Department would offer it as an opportunity, to go through the ICBO training for Building Inspectors to get that certification. Commissioner Brown said that would make sense to him. Vice-President Hood stated that she thought that if this was done on a voluntary basis it would be excellent and said that everybody would be better off from it and would welcome the opportunity to have that additional knowledge. Commissioner Brown said it is like the Department is offering continuing education courses to be certified in areas so an employee could be mobile within the Department and that is always a good thing. Commissioner Brown stated that it is always a good thing to encourage people to stay within the Department in one fashion or another, especially if they are good employees and are satisfying all of their requirements.
Commissioner D’Anne asked if there was a different pay scale between Building and Housing Inspectors. Commissioner Guinnane said that there was not. Director Chiu said that it was his understanding that Building and Housing Inspectors were earning similar salaries and Electrical Inspectors make less than Housing Inspectors, but stated that he did not know by how much. President Fillon said that he thought that there was no way that the Department could give any kind of financial incentive for people to get certified. Director Chiu said that it would be up to the local union to request that. Director Chiu said that it was his understanding that four or five years ago, when the Department was asking the Building Inspectors to be certified according to AB717, the Building Inspectors’ Union wanted to do negotiations on this issue and it failed. Director Chiu said that with the current budget environment, he did not think that the City would be able to offer any kind of an incentive at this time. Director Chiu said that in his opinion the Department should always encourage employees to take more certification and to better themselves. Director Chiu said that he wanted to let Commissioner Brown know that several Housing Inspectors have transferred over to become Building Inspectors so the Department has already offered that kind of encouragement.
Ms. Bosque said that as another point of information, and wearing her Chief’s hat and not that of the twice Chapter President of the Housing Inspectors’ Chapter, the Commission might want to look at the current pay schedule for the Housing Inspectors, as it is a very good pay schedule. Ms. Bosque said that this is something that each bargaining unit negotiates with the City. Ms. Bosque said that the Commission was talking about two different things; one being education for certification and the other is the types of education that the Chapter would like to see as part of what is already in the MOU. Ms. Bosque stated that she had budgeted for education that is far more intensive over a two year period than what the Association has proposed because there are other things that have not been considered, that she as a Manager has to consider. Ms. Bosque stated that some of the staff have come into the Department after some courses have been made available about dealing with difficult situations or difficult people or dangerous situations. Ms. Bosque said that there was an Inspector that was robbed at gunpoint in what is a very violent area of the City, so she has asked for some additional training that has been made available through the Department of Human Resources.
Vice-President Hood said that she wanted to continue this and bring it up again when there is additional documentation available. President Fillon said that this was just an informational item and no action was necessary.
At this time the Commission took a break. The time was 2:20 p.m.
The Commission meeting resumed at 2:45 p.m.
4. 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.
5. Report, discussion and possible action on the proposed budget of the Department of Building Inspection for fiscal year 2003/2004. [Taras Madison, Administration and Finance Manager]
Taras Madison said that at the last BIC meeting the budget for DBI for fiscal year 2003/2004 was presented and there were a few questions. Ms. Madison said that she had included the answers to those questions in the Commission package.
Ms. Madison stated that there were some questions about the MIS requests that she extracted as a report and questions about MIS expenditures over the past two years. Ms. Madison said that there were questions about maintenance costs and said that she used what was received for this fiscal year to give the Commission an idea of how much DBI has spent per vehicle on maintenance costs. Ms. Madison said that she addressed questions about temporary salaries and premium pay. Ms. Madison said that all of this new information was at the back of the Commissioners package.
Commissioner Guinnane asked about credit fees. Ms. Madison said that at the last meeting she explained that DBI had suspended credit cards because the Department wanted the customer to actually pay for the credit card fees, however, the Department has to have a contract ahead of time with the credit card processing company and funds have to be budgeted for that contract. Ms. Madison said that once the Department collects the monies when someone uses a charge card that should be abated. Ms. Madison stated that $150,000 is budgeted because there has to be an appropriation to have a contract next fiscal year with this contractor and once the Department receives the money that will abate the cost. Vice-President Hood asked if the Department was going to charge those people who pay by credit card an additional amount to cover those credit card fees. Ms. Madison said that the Department could not charge a different amount, but what would happen is that there is a new permit processing fee of $20.00 and some of that money would be used to cover the credit card processing fees, but the Department cannot charge a customer that walks in to use a credit card. Ms. Madison said that the charge would have to be for an extra service and not for the same type of service. Commissioner Guinnane said that three or four months ago he was questioning the credit card issue because he was very concerned about the $775,000 that this Department had lost for the fees paid on credit cards for merchants. Commissioner Guinnane said that he went back and asked for a list of the top ten users to see who was benefiting from this. Commissioner Guinnane stated that initially he was told that this benefited small companies or individuals by keeping the office open on Saturdays and said that his observation was that there were two or three people benefiting from this service and one individual in particular had 99% of the charges. Commissioner Guinnane asked if there was any limit on the credit cards in place and asked if he wanted to pick up a permit for $5M could he pay for it by credit card. Ms. Madison answered that there is actually a limit now because the Department knows it does not have that much money for the budget, so the limit is $10,000 per permit. Commissioner Guinnane asked if that was the maximum. Ms. Madison said that was correct. Commissioner Guinnane asked how the Department arrived at the $10,000. Ms. Madison stated that she was not exactly sure, as she did not arrive at that number. Assistant Director Lee said that she and the Director spoke and thought that this amount was fairly representative of the many people that use credit cards, rather than unjustly benefiting just one sole person as the type of permits that were issued by the big permit expediters types were more than $10,000. Ms. Lee said that the ones who needed to do office and improvements on a regular basis, or the individual homeowners who did home remodels were mostly $5,000 - $10,000 and that is how that figure was decided. Commissioner Guinnane asked if the $10,000 was for the assessed value of the work, not the actual fee paid to DBI. Ms. Lee said that it is for the fee paid to DBI. Commissioner Guinnane said that he thought that it was for the actual cost and said that a person would not get much for $10,000. Commissioner Guinnane asked if this $10,000 would benefit a certain group. Ms. Lee said that she thought that it would benefit those users who really use it for the convenience for their company or an individual remodel versus someone who might be unjustly or unfairly benefiting. Ms. Lee stated that the Department spoke with BOMA who are really big time users, not just individuals but their group organization and they felt that this would be helpful for their users. Ms. Lee said that BOMA’s organization members really need this service for convenience because they send out staff out with checks and it is more convenient to give them a corporate business card.
Commissioner Guinnane asked about 0601, equipment and asked about three items, storage network area $80,000, backup discovery server $15,000 and web studio application developer $21,000. Commissioner Guinnane said that he knew that these items were related to MIS, but asked if each one could be explained. Ms. Madison called on the MIS Manager to answer the questions. Mr. Marcus Armstrong said that he serves as MIS Manager for the Department of Building Inspection. Mr. Armstrong referred to the storage area network and said that this piece of equipment would store all of the DBI databases in one spot and would give fail over and disaster recovery that the Department should have at this point in what the Department calls its road map for development over the next two years. Mr. Armstrong stated that the backup and discovery server is actually just a backup server because DBI is going to be moving over to a new platform, a UNIX platform, which requires a different backup device than the Department currently has in use. Mr. Armstrong said that this particular server would give the Department more disaster recovery and fail over. Mr. Armstrong reported that the studio application developer is actually more of a software or licensing issue for those servers to allow the applications to be accessed via the web. Mr. Armstrong said that he was not sure if this item should be listed under equipment. Commissioner D’Anne asked if these were one-time fees. Mr. Armstrong said that was correct, as these are equipment purchases.
Commissioner Guinnane referred to Attachment 5 and asked about PC workstations that showed desktop computers for DBI staff and public terminals in the amount of $37,5000. Ms. Madison said that was for twenty-five computers and stated that MIS orders all of the Department’s computers and although it shows MIS ordering twenty-five workstations those would be distributed to different divisions throughout the Department. Ms. Madison said that these were replacement computers at a cost of $1,500 each. Commissioner Guinnane asked who supplied the computers and if the Department put this item out for bid. Ms. Madison said that there is a City Store vendor and normally the Department goes through COIT, which is the City’s Committee On Information Technology and basically DTIS, the Controller’s Office and Purchasing already identify eligible contractors or vendors that the Department has to go through.
Commissioner Guinnane asked about the item for Title Reports and said that this issue came up at the Commission about two years ago. Commissioner Guinnane stated that he thought that this issue was resolved where the Department would have some kind of access through the Assessor’s Office and asked why the Department was paying $175.00 for title reports. Commissioner Guinnane said that there were amounts of $17,500, $43,750 and then there was another item for ten reports for $17,500 which is almost $100,000. Commissioner Guinnane asked why the Department was using a title company if DBI has access to the Assessor’s Office. Ms. Madison said that she would have to talk to the divisions that requested these items and said that she knew that the Department has been getting bills from a title company for title reports. Ms. Madison stated that most of the bills came from the Code Enforcement Program and said that she would talk to the Division Managers to see if they are aware of the access to the Assessor’s Office. Commissioner Guinnane said that perhaps Chief Bosque could speak to this issue, as this was an issue with the Housing Division. Assistant Director Lee said that there were issues with the title reports especially with the Access Appeals cases because the title reports are used for litigation purposes and the title reports need to be official reports on file, versus having staff do the research. Ms. Lee said that the Department orders these official reports to make sure that the search is thorough and stated that these are budgeted figures and the Department might not expend all of these funds. Commissioner Guinnane said that he was trying to figure out if the Department has access for the Housing why that can’t be used for the Access Appeals. Commissioner Guinnane said that the Department is not really into a litigation mode at that point. Ms. Lee said that the Department has to treat every case as if it were going to litigation especially with Mr. Olmholdt filing suit and said that she thought it is required under State law, under the Disability Access rules. Commissioner Guinnane asked that the Department watch this expenditure and stated that he was concerned about this amount.
Commissioner Guinnane asked about hand held devices for the Housing Department in the amount of $50,000 showing the vendor as unknown. Director Chiu said that this is a program that he introduced to the Commission where one day the Inspector could be doing their reporting and issuing the NOV out in the field. Director Chiu said that the Department has not yet chosen a contractor, but people are trying to work with staff to try to let the Department know if there is such a program. Director Chiu said that ultimately a vendor would have to go through the proper bidding and contracting process through COIT and DTIS. Director Chiu said that this is an amount that was put in just in case the Department is ready to move forward with this project. Director Chiu stated that he planned to discuss this program with the MIS Committee and the Commission. Commissioner Guinnane said that he remembered talking about this about four or five months ago to obtain a handheld device to get around some of the paperwork especially in the Housing Division. Commissioner Guinnane said that the Housing Inspectors were complaining about all of the paperwork and it was discussed about coming up with the handheld device or having some individuals help out with the paperwork when the Inspectors did the inspections and could possibly hand over a tape recording.
Commissioner Guinnane asked how the Department was doing with the Code Enforcement Outreach Program and the $300,000. Commissioner Guinnane said that in prior years the Department had a lot of money and wondered about budgeting $300,000 at this time. Ms. Madison said that this is the same budget as last fiscal year as the Department received the same, exact request. Ms. Madison said that this was included in next year’s proposed budget, she thought because one of the Department’s goals has been to do better with the community by providing better services. Ms. Madison stated that she thought that everyone in the Department agreed that this was a worthwhile program that should be continued.
Commissioner Guinnane asked about development of web-based application, existing forms and reports in the amount of $80,000 for MIS. Ms. Madison said that once again this would be a potential contract with a City Store vendor to do exactly that. Ms. Madison said that the Department was trying to get certain forms to be on the web so that customers could download them. Mr. Armstrong said that the Department’s current e-government portal is off-line right now and the Department is working with vendors to develop a new portal. Mr. Armstrong stated that the former vendor has left and is out of contract with the City. Mr. Armstrong said that a discussion came up with the new vendor on some of the nice creature features that the Department would like to have on that portal that the customers have been requesting things such as a permit status query, complaint tracking and those type of issues. Mr. Armstrong said that these features do not make any money for the vendor, as the vendor makes money off of transactions for permitting, so they are not going to go ahead and develop that for DBI. Mr. Armstrong said that the Department would have to develop those features and add those to the e-government portal. Commissioner Guinnane asked why this couldn’t be developed in-house instead of allocating $80,000. Mr. Armstrong said that the Department has developed a good portion of this already in-house and if DBI staff had not done this, the cost would be higher. Mr. Armstrong stated that now this has to be extended to a web hosting company and then linked into a merchant account feature where the Department would be switching over the current POS system internally to the proposed Oracle based merchant account system. Mr. Armstrong said all of this has to tie in.
Commissioner D’Anne asked about the copy machines and why the amount increased three times from fiscal year 2000/2001 to 2002/2003. Ms. Madison said that this was under MIS expenditures and said that the usage just went up at that time. Ms. Madison said that normally there is a contract for copiers throughout the Department and it goes by the number of ticks and each time AFD gets the number of ticks per division they reallocate the cost. Ms. Madison said that probably in the year 2001/2002 the use was spread out a little bit more for that fiscal year.
Commissioner D’Anne asked about Exempt Temp Positions and asked if these are people that are on call such as the Plumbing and Electrical Inspectors. Ms. Madison said that was correct. Commissioner D’Anne asked what these people did when they are not on call. Ms. Madison said that some of them are retired and they are called in during the summer when people are on vacation and they come in “as needed”. Ms. Madison stated that they are not full time DBI employees. Commissioner D’Anne asked if these people got benefits as well as salaries. Ms. Madison said that it is just salaries, but given the fact that most of them are retired from the City they are already getting benefits as a retiree. Assistant Director Lee said that much of DBI staff has been with the Department for many years so some people have up to a full month and a half for vacation, so it is critical to services to have someone cover for these people when they go on vacation. Ms. Lee said that it has been very productive for the Department to be able to call on these retirees who have experience at DBI. Commissioner D’Anne said that all of the salaries were consistent and asked if this was just a projection. Ms. Madison said that this was just a yearly cost, as the retirees are only allowed to work 960 hours. Ms. Madison said that most of the “as needed” do not come in for the maximum 960 hours, but they could so that is why the maximum is used.
Commissioner D’Anne said that she was curious about the Premium and Standby Pay and asked if the figures such as $416.00 and $1,264.00 were for the year or for certain periods. Ms. Madison said that this was for fiscal year 2001/2002 so for the entire year a person received $416.00 for longevity pay and these are yearly, actual numbers.
President Fillon referred to Attachment 5 and said that it was very helpful. President Fillon asked if $364,965 was the total for equipment. Ms. Madison said that was correct. President Fillon said that it seemed curious that a lot of the items would need to be replaced on an annual basis and asked if that was because of existing equipment that was being depreciated. Ms. Madison said that one reason the budget has gone up a lot is because of boots and other things and in looking at prior years there were not very many of those listed because for the most part when someone needed a new pair of boots the Department would just send them out, but would never budget for it. Ms. Madison said that boots have gone up from $89.00 to $150.00 and within a month the Department might receive four or five of those invoices which can add up, so Ms. Madison said that she asked the Division Managers to actually look at these types of expenditures this time and see what type of equipment would be needed for safety supplies. Ms. Madison stated that the Department no longer has the type of budget where when something comes up the Department can just find money for it. Ms. Madison said that items such as office supplies is just usage. President Fillon asked about four new 35m cameras and two new digital cameras and said that he thought that the Department would already have some of these items. Ms. Madison said that the Department does have cameras, but not all divisions have cameras. President Fillon asked if the Department was replacing a lot of things. Ms. Madison stated that this is the year when the Department is replacing some things and some things were budgeted for last fiscal year, but were put on hold. Ms. Madison said that with materials and supplies, the Department cannot ask for the monies to be carried forward so that is what is happening with these items. Ms. Madison said that in the case of the digital cameras these are being asked for in divisions that did not previously use digital cameras, but now because of different types of litigations a digital camera or other type of camera would be helpful. Ms. Madison said that in the past these divisions have been borrowing other divisions’ equipment. President Fillon asked who makes the decision on buying these items, for example, who made the decision to buy the flat screen computer monitors and was that an MIS decision. Ms. Madison said that MIS would make that type of decision because they would know what was needed. President Fillon asked if the Department shopped around for the wrenches or boots or is whatever the employee wants. Ms. Madison said that for those types of supplies the Department has to go through the City Store that does it and these are just estimates of the cost. President Fillon said that materials and supplies is not a huge amount compared to some of the other budgeted items, but a lot of these kinds of things tend to walk away. President Fillon stated that this was a good list and said that the Department could use it for next year to make sure that it is not buying things that don’t need to be replaced.
Vice-President Hood asked if there was any kind of tracking system for the cameras and things and asked how the Department knew these things were not walking off. President Fillon asked if they were given a tag. Ms. Madison said that the items go to the divisions so if AFD had two digital cameras and a request would again be received for two more digital cameras she would ask for a justification. Vice-President Hood asked if anyone went to the divisions to check on the equipment. Ms. Madison said that this has not been done because, for the most part, the Department knows where the digital cameras exist and normally if something goes directly to an employee, such as a cell phone or a pager when that employee leaves the item is returned. Ms. Madison stated that because there are so few of the digital cameras the Department knows who has them and no one has come and said that they have been lost or that they need a replacement. Ms. Madison said that the Department could do a spreadsheet and check periodically to ask for the status of the digital cameras. Ms. Madison said that there have not been any problems with people walking off with digital cameras or those sorts of things, as people have been very responsible. President Fillon said that he did not have any problem with spending more money to get a little nicer piece of equipment because it is good for morale and it is good for morale to have supplies when they are needed, but said that the Department should keep track of these items. Ms. Madison said that in the beginning with the digital cameras it was a little bit “willy nilly” and people would order different kinds of cameras, but now there is a standard so there is no fluctuation in prices. President Fillon said that the Department would also have to purchase the hardware and support items.
Commissioner D’Anne asked about the cost of toner cartridges at $215.00 each with a total cost of $15,000. Ms. Madison said that these were just toners for all of the printers throughout the Department. Commissioner D’Anne asked if the toner cartridges were for printers or copy machines. Ms. Madison said that it was actually for printers and the copy machines were separate. Ms. Madison stated that these were the printers for the computers, so when she printed the budget she actually printed it through the AFD printer and then made copies at the copy machine. Commissioner D’Anne asked if these toner cartridges were refillable or do they just get dumped. Mr. Armstrong reported that the toner cartridges are for the Department’s network printers. Mr. Armstrong said that there are warranty issues with the manufactures of the printers, who in some cases will not recommend refillable cartridges and would even void the warranty if a refurbished cartridge is used because they have a tendency to open and bust on the equipment and the manufacturer does not want to be reliable for that. Mr. Armstrong said that the manufacturer recommends using new toner cartridges. Mr. Armstrong stated that the Department does use some refurbished toner cartridges on the older network printers, but on the newer printers with warranties, the Department uses new toner cartridges. Commissioner D’Anne asked if the Department could use refurbished cartridges prior to buying this new stuff. Mr. Armstrong said that the Department has had some pretty nasty incidents with refillables because they failed and opened up and ruined the network printers that can cost up to $4,000.
Commissioner Marks said that going back to the Controller’s Office and the audit that it did on the Department, the Controller’s Office had pointed out that the Department should have a strategic plan. Commissioner Marks asked what the status of that strategic plan was. Assistant Director Lee said that the Department is still working on the strategic plan and stated that she had met with all of the Managers and was working with the Deputy Directors to come up with new performance measures, particularly with the Code Enforcement Divisions. Ms. Lee said that the Department wanted to come up with performance measurers that were more reflective of the Department’s services and stated that the plan is still a work in progress. Ms. Lee said that several months ago she provided a draft to the Commission. Commissioner Marks said that actually it was quite a while ago and said that the budget should be connected to the performance of the Department, and because there is no strategic plan or specific goals and accomplishments, the Commission is funding an operation without knowing what is being done. Commissioner Marks said that this is kind of a reminder that the Department should have some end date for that and should even, at the next meeting go over the status of the items that were recommended in that audit. Commissioner Marks said that Mr. Chiu did respond to the audit with actions that were in the process to address the recommendations, but stated that it has been quite a while so the Commission should have an update on that and there should be some sort of timeline on the strategic plan. Commissioner Marks said that she found a copy of the draft on the back of the audit action plan and it was dated July 18, 2001, so quite a bit of time has passed. Ms. Lee said that she believed that was when the audit just came out. Commissioner Marks said that was correct and the Department did identify what actions would be taken, but included was the strategic plan that was to be implemented within 180 days. Ms. Lee said that even though the Department has not had a final write up of a pretty document saying that it is the strategic plan, this Department has made sure that this budget is consistent with DBI’s goals in terms of quality control and Taras wrote up some of the primary goals that this budget is based on. Ms. Lee stated that when Management was directed to put forth recommendations they were given these guidelines of the goals in terms of changing performance goals.
Ms. Madison said that she understood that the Department needed to work on the strategic plan and stated that the Director and Assistant Director are working on that, but said that she did not believe that the budget is not based on anything other than operations because performance measures were provided with the budget. Ms. Madison said that in addition to that, the Department actually funds things that are consistent with the goals. Ms. Madison said that she wouldn’t agree with the broad statement that DBI does not have any goals because the Department does have goals and issues that it is still working on and one of them is something that the Commission brought to the attention of the Department and that is that the Commission wanted the Department to work more with the community and coordinate more with the community to improve public access to the Department. Ms. Madison stated that the way the budget has been addressing this, not in just next fiscal year, but over past fiscal years, is to fund things such as the Brown Bag Lunches and the Code Enforcement Outreach Program. Ms. Madison said that the Department has budgeted things such as having on-line permitting so there should be this one cohesive document, but in the interim it isn’t as if the Department has not tried to look at some broad general things that the Commission, staff and the customers have said that the Department needs to do and those have been addressed in the budget. Commissioner Marks said that it is not that the Department doesn’t have goals because obviously there are goals, but it is that this way it is more of a shotgun approach rather than a strategic approach in budgeting and performance. Ms. Madison said that Commissioner Marks’ original remark was that the Department had no goals or no issues and are just doing operations. Ms. Madison stated that her response to that is that although the Department does not have a strategic plan, there are some goals and some issues that the Department is trying to adjust. Ms. Madison said that this does not mean that the Department should not do a strategic plan; it should. Ms. Madison said that she was going to speak for herself because she puts the budget together and said that she would hope that the Department is doing something more than a shotgun approach and are looking at some of the things that the Commission would bring to the Department in the interim before the strategic plan is done. Ms. Madison stated that she was not saying that the Department does not need to do a strategic plan because one is needed, but the Department is hoping to merge those two things together and although the strategic plan isn’t done the Department is not just going to say “willy nilly” let’s just do this; management does try to come up with things that are important to the Department, this Commission, the staff and the customers and in some kind of cohesive way, fund those sorts of things. Ms. Madison said that everyone agreed that AB717 is something that the Department wants to implement in order to have trained, skilled employees, not only for AB717, but in this year’s training budget it is increased because there are new things that are coming up with Disability Access. Ms. Madison said that the Department is addressing mold and lead and stated that it is the Housing Inspectors that are actually working on the mold and lead issues and although they don’t have to be AB717 certified, of course the Department wants to make sure they are qualified, because mold and lead are such high profile issues. Ms. Madison stated that the Department wants to make sure that everyone is trained correctly and even with a strategic plan, one of the goals would be that the Department has trained, skilled Inspectors and staff in general and the budget has done that consistently even when the Department is in this downtime there is still a focus on keeping people trained. Ms. Madison said that she understood Commissioner Marks’ concern about the Department needing a strategic plan, but said that personally, she would not categorize the budget as just a shot in the dark and not having any focus. Ms. Lee said that the Department was actually aiming for July 1st for the strategic plan final draft and stated that most departments have the luxury of hiring outside consultants, but DBI had to do this internally. Ms. Lee said that most departments who do have outside consultants allow for a two year process and DBI is doing this internally with staff, so certainly it is going to take time especially to do the research that she is writing, but this budget does speak to the strategic plan and the goals and performance measures and also responds to the audit report. Ms. Lee said that one of the main things in the audit report was compliance with AB717, making sure that quality control was done, and whether the Department was effectively providing services and certainly training and spot checks address those issues. Ms. Lee said that she did apologize that the Commission does not have a formal, final draft of the strategic plan, but said that it would be coming shortly. Ms. Lee stated that she wanted to give the Commission confidence that this Department is working on a skeletal strategic plan that has some issues and some generic goals and performance measures, and stated that the Department is working to finalize that. Ms. Lee said that she would agree with Ms. Madison that the budget is based on those strategic plans and performance measures and goals. Ms. Lee said that the strategic plan could be agendize for a future meeting. Commissioner Guinnane said that he wanted to thank Taras and Amy for the great job that they have done with the budget.
Ms. Madison said that there was another meeting scheduled for the budget and stated that she is now receiving some of the work order requests from other departments because that was the one wildcard that she mentioned before. Ms. Madison said that normally the Department spends over $2M with other City agencies to provide services for DBI and said that she was starting to get those now. Ms. Madison said that at the next meeting she would be able to provide an update on some of those and asked the Commission Secretary if another meeting would be needed after next week’s meeting. Secretary Aherne said that it would depend on the Commission, but stated that now the budget has been heard twice. Secretary Aherne said that she did reserve Room 416 at City Hall for January 29, 2003 if another budget meeting was needed or the budget could be finalized at the February 5, 2003 meeting. Secretary Aherne said that this was up to the Commission to decide. President Fillon said that he thought that it should be done next week. Vice-President Hood asked if President Fillon wanted to have a special meeting next week. President Fillon said that next week would be the regular meeting. Secretary Aherne said that next week would have to be a special meeting as she had reserved rooms for January 22nd and 29th, but the next regularly scheduled BIC meeting would be on February 5, 2003, which is the first Wednesday of the month. Commissioner Brown said that he thought that February 5th would be fine. Vice-President Hood said that she would agree as long as it would meet the Mayor’s schedule for the budget because she thought that there had been a very thorough review of the budget today. Ms. Madison thanked the Commissioners. President Fillon said that he would not mind getting the budget over with. Commissioner Brown said that he would rather not have another meeting next week, as it would be three meetings in a row and said that he did not have time in his schedule. Director Chiu said that there could be the January 29th meeting and cancel the February 5th meeting. Secretary Aherne said that the February 5th meeting could not be cancelled because there is an appeal that is coming up at the February 5th meeting unless the appeal is cancelled and everyone is notified. Secretary Aherne said that the appeal was already rescheduled from the January 15th meeting. President Fillon said that the next meeting would be on February 5th.
6. Update on Litigation Committee Meetings. [Commissioners Brown, Guinnane & Santos]
Commissioner Santos said that he thought that this week was a very active week in terms of litigation as the City Attorney’s are currently in trial with some very large cases. Commissioner Santos stated that he thought that there would be a great deal to report at future meetings regarding the results of litigation. Secretary Aherne called attention to attachments about a $500,000 fee that was awarded and also reassignment of staff to help out with the DAD cases.
Commissioner Brown said that the Litigation Committee discussed the $500,000 fine at the last meeting and said that the Commissioners had that in their packet and said that the Department was awarded this money for Sheila Chuy Tsang’s apartment complex. Commissioner Brown said that the other item that Ms. Aherne was talking about was the Disability Access Division at DBI and said that the Litigation Committee was working with Deputy Director Wong on this issue and said that the Committee would just come back to the Commission with updates as they become available. Vice-President Hood said that she would like to congratulate the Commissioners on whatever role that had in getting the $500,000.
7. Update on DBI Management Information Systems PTS Sub-Committee. [President Fillon & Commissioner Guinnane]
a. Discussion and possible action regarding past, current and future MIS expenditures and contracts.
Commissioner Guinnane said that he had several questions on this issue and said that since the MIS Manager was present he would like to get some answers about where the Department is going with MIS, as there are a lot of problems. Commissioner Guinnane stated that there have been problems for years and said that he wanted to get a handle on this once and for all and put it to rest. Commissioner Guinnane asked what was the status of MIS projects because he thought that the team that was working together on a new design was going to resolve many of the Department’s issues. Marcus Armstrong said that the current status of MIS development projects is that it is in a hold state. Mr. Armstrong stated that he and his team believe that until there is a confirmed commitment from the Executive Management Team that DBI should not go forward with any further development. Mr. Armstrong said that what he meant by that, is that until DBI commits totally to moving the organization flow in conjunction with the automated system flow any project that is released would be perceived as a failure. Mr. Armstrong stated that until DBI changed its organization to reflect automated systems and vice versa the Department would not have a product that folks would use. Mr. Armstrong said that the MIS team has had many successes in the past and only had those successes after browbeating people to actually use the system. Mr. Armstrong stated that there are many areas of the system that have been highlighted that still need work and proposals have been put in two fiscal year’s budgets now to get those problems remedied. Mr. Armstrong said that these projects have not been able to get off the ground because there is no commitment to move people to change the flow.
Commissioner Guinnane asked what was being done to address the defaulting vendor issues that DBI is having. Mr. Armstrong said that he understood that the City Attorney’s Office is investigating as many as eight subcontractors who were working under a City Store vendor prime contractor who defaulted and went bankrupt with the City. Mr. Armstrong said that those eight subcontractors are seeking relief from the City. Mr. Armstrong said that with this particular vendor it affected as many as nine City departments and DBI is included in that. Mr. Armstrong stated that he brought it to the attention of other City agencies that this was going to happen about six weeks prior to it happening. Mr. Armstrong said that as a result of that there was an article in the newspaper over the weekend that kind of thanked him for it. Commissioner Guinnane asked what was Mr. Armstrong’s position on the actual claims from the subcontractors and asked if Mr. Armstrong felt that the City was on the hook or off the hook. Commissioner Guinnane said that his position was that he believed that the City is on the hook. Mr. Armstrong said that he was no attorney, but said that, as he understood it, in the construction world if the general doesn’t pay a sub, the sub could hold that project hostage and in lieu of a performance bond regarding IT projects in the City, that is kind of scary that the City is operating without a net. Mr. Armstrong stated that there were a lot of projects in the multi-million dollar range and companies out there aren’t releasing financial fitness reports and don’t have performance bonds and so on and are operating and sometimes failing in the City system. Mr. Armstrong said that these companies are leaving departments and subcontractors stranded. Mr. Armstrong stated that in DBI’s case the general contactor failed to pay their subs and the subs took the deliverables of DBI’s codes and left and basically are still holding DBI hostage until they receive payment. Commissioner Brown asked if the company that this Department paid was completely disbanded. Mr. Armstrong said they were, as he understood the situation. Commissioner D’Anne asked if it were normal procedure to require performance bonds on all contracts. Mr. Armstrong said that he did not administer the City’s IT contracts, as there are other City agencies that control that. Mr. Armstrong stated that he did not know what their process is and said that, in other cities and other big companies that he worked for, a performance bond was definitely a requirement prior to doing business with that city. Commissioner D’Anne asked if DBI contracted with this company. Mr. Armstrong said that DBI contracts for IT products and services through the COIT City Store vendor program where COIT, has pre-approved about six vendors. Mr. Armstrong said that City departments do not have to go out for RFP because these vendors supposedly have met the requirements regarding products and services that they can provide for City departments and this was to alleviate the RFP process and streamline project timelines to get things done and processed quicker than they were in the past. Commissioner D’Anne asked who pays invoices from these contractors. Mr. Armstrong said that how the process works is that DBI generally has a strategy session with MIS development teams, himself, users of the systems in various areas, whether that be CPB that needed the development or some other division; the Department then puts together a project scope and submits a project scope out to vendors in the City Store program to invite them to come in and give the Department a proposal on that particular scope. Mr. Armstrong said that then the City Store will present a project proposal and if the Department agrees to go with it, that particular proposal is then submitted to COIT for approval and if it is approved Purchasing then issues a PO#. Mr. Armstrong stated that the Department then proceeds with the project after the PO# is issued and the vendor then invoices at either various deliverable phases or at the end of the complete project for the work done or product delivered. Mr. Armstrong said, on his part, he receives that invoice and signs off on it for payment processing through the Administration and Finance Division. Mr. Armstrong said that Admin then takes a look at it, makes an entry into the FAMIS system against the PO and processes it through Purchasing. Commissioner D’Anne referred to a document that said that the City issued a $300,000 check to GCSI on June 20th and asked what it meant by the City. Mr. Armstrong asked what Commissioner D’Anne was referring to. Vice-President Hood said that it was on the audit. Assistant Director Lee said that when it says the City issues a check, it is because the Department of Building Inspection does not have the ability to write a check, but the Department requests checks to be written or payments made and this is requested through FAMIS which is the Financial Analyst and Management Information System which the Controller’s Office will review and approve and then the Controller’s Office issues the check. Ms. Lee said that when it refers to the City it means that the Department of Building Inspection pays the check along with the Controller’s Office, but DBI does not have the ability to write its own checks. Commissioner D’Anne asked who writes the check. Ms. Lee stated that it was the Controller’s Office. Commissioner D’Anne said that since the Controller’s Office writes the checks, don’t they scrutinize why this happened because they are complaining that DBI spent all this money and didn’t get the services and asked what is the Controller’s Office responsibility to make sure that these services have been performed before they even write the checks. Mr. Armstrong said that there are three other City agencies that are involved with the payment process and the contract administration for the City Store program and are accountable for the oversight of the vendor program. Mr. Armstrong said that there was the Committee on Information Technology (COIT), the City Purchasing Department and the Controller, which those two agencies are under. Mr. Armstrong said that in this case, DBI authorized the process for payment based on deliverables. Mr. Armstrong said that the Department received either goods or services and validated that it was received as the Department specified and then processed that payment through FAMIS. Mr. Armstrong said that along with that DBI paid, usually for professional services, a 1.8 or 1.9% markup on professional services for COIT services to supposedly oversee these vendors.
Vice-President Hood said that in the report the COIT person said that the subs had not been approved by COIT and so they were unaware. Vice-President Hood read from the Controller’s audit saying that the “COIT’s Director indicated that the Department’s subcontractors for this project did not receive COIT’s approval and that she was not aware of the subcontractors, although GCSI was responsible to notify COIT about the subcontractors, the Department could also notify COIT.” Vice-President Hood stated that she could see that Mr. Armstrong would just assume that COIT knew about the vendors. Mr. Armstrong said that DBI’s relationship is strictly with the prime and DBI’s relationship is not directly with the subcontractors because the Department can only do business with the prime. Mr. Armstrong stated that whoever the prime subcontracts to is out of DBI’s hands. Vice-President Hood asked if COIT approved the prime. Mr. Armstrong said that was correct. Vice-President Hood asked Mr. Armstrong if that at the time he approved payment, did he believe that all of the work had been performed. Mr. Armstrong stated that, not only did he believe it, but he validated it, saw it, tested it and the Department had the Code, all of that and in addition to that there were users, including members of Executive Management who utilized the bar code system at a demo. Mr. Armstrong said that Executive Management also saw the new screens and did some of the testing and stated that along with that the Department did some user acceptance testing. Mr. Armstrong said that in addition to that, there were phases of the project that weren’t mentioned in that article, as it is a six-phase project of which the sixth and final phase is the implementation phase where all of these previous five phases would come together. Mr. Armstrong said that these modules have to be built individually and then they are implemented at the sixth phase. Vice-President Hood asked if Mr. Armstrong had copies of all of this material. Mr. Armstrong said absolutely and said that he had submitted those also. Vice-President Hood asked if Mr. Armstrong still had copies. Mr. Armstrong said absolutely. Vice-President Hood asked why the Department could not just use it. Mr. Armstrong said that he has used it and said that the audit was based on an interview with one sub where that particular sub indicated that they completed 35% of the project, but the failure was in understanding that there are three additional subs, along with that sub and that sub’s 35% contribution made up for 100% of what they were contracted for. Mr. Armstrong stated that the confusion was in that the Department only got 35% of the project and that is understandable if only one sub was interviewed, as there are three other subs that were never contacted. Mr. Armstrong stated that he found that fact interesting. Vice-President Hood said that if the Department got 100% of the work, why couldn’t it be used. Mr. Armstrong said it could not be used because the Department never got to the sixth and final phase, which is the implementation phase where all of this coding is brought into production at DBI. Mr. Armstrong said that implementation was scheduled and that was suppose to happen between the months of July and December because that is a high holiday and three day weekend period, so a lot of people are out of the office and there is not as much user downtime. Mr. Armstrong stated that all of this was strategized and planned out and it didn’t happen because the prime didn’t pay. Vice-President Hood asked if only the subs could implement it, and now that this debacle has occurred what steps could be taken to deal with it so DBI does not lose the 80% that was already bought. Mr. Armstrong said that the issue is strictly with the subs and receiving payment and that is where the subs are. Vice-President Hood said that Mr. Armstrong told her that he had all of the codes and everything so it is not the sort of intellectual product that is the problem; it’s making sure that everyone is using it on their computer. Vice-President Hood asked Mr. Armstrong if he could make copies of what he had. Mr. Armstrong said that he wanted to correct that particular issue. Mr. Armstrong explained that the subs took their codes and left after not receiving payment of a three week hold period after communications with the City Purchaser and others who were looking into this issue. Mr. Armstrong stated that the subs became fed up and left; took the product and went away. Vice-President Hood asked if the Department had a backup copy of it. Mr. Armstrong said that he had a backup and portions of that code are in use and being utilized with the Department of City Planning right now. Mr. Armstrong said that the Department utilizes a portion of it with the on-line program. Vice-President Hood asked if about 90% of it was taken by the subs. Mr. Armstrong said that he would not say 90%, but stated that they took a good portion that handles the address validation system and everything that is done at DBI pertains to an address; this is a key portion. Mr. Armstrong stated that there are other portions of it that DBI did not receive, however the Department did receive other deliverables from other phases of the project that DBI did not ever receive invoicing on. Mr. Armstrong said that the Department did get something for free, if you will, out of it and some of those products are in use at DBI such as the Inspection Scheduling System and some other systems that are in place from that development.
Vice-President Hood asked what was the plan right now to get the stuff that they took away that had been paid for. Mr. Armstrong said that he was not sure he was the person to pursue going after a sub, as there are some legal issues and a payment issue. Vice-President Hood said she was asking about the strategy. Mr. Armstrong said that his strategy, initially, was to alert the City agencies that serve as oversight groups. Vice-President Hood asked if that was COIT. Mr. Armstrong said that it was COIT and City Purchasing and said that after a fifteen month or so investigation, and the interviewing of one sub-contactor, the Controller’s Office finds that DBI is guilty of a prepayment. Mr. Armstrong said that in this case, DBI announced to them that the Chief Financial Officer of that particular company and their Project Manager told Mr. Armstrong that DBI had better do something on a particular Saturday because the company was going to be locking their doors on Monday morning and employees would not be allowed to come into the building because they were going under and these people advised Mr. Armstrong to tell the City to pull out. Mr. Armstrong stated that he announced that and gave a document to the appropriate people from that particular Project Manager that highlighted those things and said that there were intimations made that this affected the highest office in the land as far as how this particular company came to be. Mr. Armstrong said that he was considered dangerous because he had information that could hurt someone when he was doing nothing more than pursuing the code. Mr. Armstrong said that he also alerted DBI Executive Management about this issue.
Director Chiu said that he wanted to respond to Vice-President Hood’s question about the Department’s intent. Director Chiu said that when this was brought to his attention, actually Amy and he met with the Controller’s Office to figure out how to recoup the damage. Director Chiu said that the Department paid for the development and now needed to figure out how to recapture the work product to move on. Director Chiu stated that he was sad that it took so long and the Department was still not able to get anything that it wanted. Director Chiu said that DBI continues to push the Controller’s Office because the Department still wants to complete the project, as this was a product that the Department wanted. Director Chiu said that the Department was told to hold off because the Controller’s Office was going to have the City Attorney’s Office go after them, but after over a year nothing happened. Director Chiu said that he thought that the Department needs to move forward with the program because that is what the Department and the Commission wanted. Vice-President Hood said that it seemed that only a small part of the subs had the goods right now. Vice-President Hood asked if it were just one sub and asked if the Department had to pay off all of the subs. Mr. Armstrong stated that there were four subs and they are all involved. Vice-President Hood asked what was the total amount of money that the subs were claiming. Mr. Armstrong said that the amount in question, which was inflated in the newspaper article, is about $300,000, which is in question. Vice-President Hood asked if that was on the subs “lien”. Commissioner Santos said that the Department is being held hostage for $300,000. Director Chiu said that was correct and the Department would have to decide whether to go back and deal with the sub and pay those monies that they deserve so that DBI gets the code back to get the program moving. Mr. Armstrong said that the Department could not do that. Ms. Lee said that the Department could not even hire someone else to duplicate the services because it is a legal matter. Ms. Lee said that suppose the Department just wanted to waste some money and pay them again to get the product back, but stated that this is illegal for the Department to do. President Fillon asked if the work that was done is completely useless and asked if this were the situation. Mr. Armstrong said that the Department could use that, but the Department just can’t pay twice. Vice-President Hood asked if someone was negotiating with these subs and said that if they were not going to get anything, maybe they would take 10 cents on the dollar. Mr. Armstrong said that he would love that. Commissioner Guinnane said that the subs would wind up getting the money. Mr. Armstrong stated that the issue is that this is not isolated to DBI, which is something that he wanted to emphasize. Mr. Armstrong said that he is responsible for the success and failures of an internal DBI IS project, but not responsible for the success and failures of a company, which is very important and keeps being missed. Mr. Armstrong stated that he is not responsible for a company that went under and whatever actions they took with other City departments. Mr. Armstrong said that he was responsible for alerting and doing due diligence to the appropriate City agencies when he found out this information, which again he was greatly rewarded for in the Sunday paper.
Commissioner Santos said that Assistant Director Amy Lee mentioned that legally the Department cannot pay twice for the same service, but asked if there was a way, such as Commissioner Hood was suggesting, having some sort of an understanding and an agreement of potentially reclassifying the work that they have performed. Vice-President Hood asked if Mr. Armstrong could hack into their system. Ms. Lee said that the Department found this out and Marcus alerted everybody and asked where the Department goes from here because the Department cannot pay for the same thing twice. Commissioner Santos said to call it something different. Ms. Lee stated that the Department needs this software and needs this development because it is critical to everything else, and the Department can’t do the hand helds and all the wonderful things DBI would like to do without the two major portions that got stuck. Ms. Lee said that these two portions were the application merge project and the database merge project. Ms. Lee stated that the initial product was scheduled to be developed on an MT platform so the Department could now develop it again, but on a different platform, a UNIX platform that Marcus could speak about in more detail. Ms. Lee stated that the Department was not doing the exact same thing and said that the Department is getting there. Mr. Armstrong said that the Department fully captured the database merge and about 60% of the applications merge so the Department was able to, for lack of a better word, steal the code and a lot of the code is in use and production right now. Mr. Armstrong stated that there was still about 40% left and said that it was very important to mention that this is a project that was a little over $1M and DBI withheld about $477,000 in funds. Mr. Armstrong said that if the project is six phases, three phases are in question and how could that constitute prepayment especially when funds have been withheld. Mr. Armstrong said that it is very confusing, but said that strategy-wise to get the project up, the Department just completed a new user study and that development and design that DBI took on back then has altered somewhat. Mr. Armstrong stated that now the Department could put forth a bid or a proposal to do a project that would remedy the past situations and new developments that the Department has discovered in the recent user studies. Mr. Armstrong said that it would be called something different and DBI could get this project off the ground, but Mr. Armstrong stated that he would not go there without a commitment from Executive Management.
Commissioner Guinnane asked Mr. Armstrong if he ever authorized payment for work not yet done or completed. Mr. Armstrong stated that he has never paid a vendor a retainer or made any type of prepayment. Commissioner Guinnane said that back in December 2000, there was $260,000 paid to Cobra Solutions for work that was never done and asked Mr. Armstrong to explain that to him. Mr. Armstrong said that he did not authorize that payment for processing. Commissioner Guinnane asked how it got paid if Mr. Armstrong did not authorize it as Manager of that division. Mr. Armstrong stated, that as he understood it, Director Chiu made the decision to move forward with payment to that vendor. Mr. Armstrong said that he alerted everyone verbally and with a written report that he would not pay that particular vendor because the goods and services that they were invoicing did not reflect a PO#, and more importantly, those goods and services were never requested by DBI. Mr. Armstrong said that it seemed weird to him that DBI would get billing of this sort and stated that the Department had past billing issues with this particular company where the Department got double billings and actually got Department of Public Health billings. Mr. Armstrong said that there were a lot of weird things going on with Cobra’s account. Commissioner Guinnane asked Mr. Armstrong, if when he refused payment of $260,000 how did it get to Director Chiu’s office and how was that he decided, or whoever decided, to pay out the $260,000 for work never done. Mr. Armstrong stated that he did not decide that and said he did not know how it was decided. Mr. Armstrong said that there was a meeting arranged where he was to meet with the Mayor’s Chief of MBE/WBE Contracts (Minority Business Enterprise and Women’s Business Enterprise), and stated that he thought that her name was Johnnie Robinson. Mr. Armstrong said that he met to try to reach an agreement and the meeting was to take place with DBI representatives including himself and that particular person to insist on not paying that issue. Mr. Armstrong said that he did not know how that meeting was arranged, who orchestrated it, and why or what they intended the outcome to be, but his issue was to not pay these folks and he was going to voice his opinion to this person whom he thought would be making the decision, whether or not DBI would do that. Commissioner Guinnane asked Mr. Armstrong if he voiced his opinion to Director Chiu not to pay this and then Director Chiu overrode Mr. Armstrong and authorized payment. Commissioner Guinnane asked if this is what Mr. Armstrong was telling him. Commissioner Guinnane asked who authorized the payment. Mr. Armstrong said that, as he understood it, Director Chiu authorized the payment and said he did not understand why. Commissioner Guinnane asked Director Chiu to tell him about this issue. Director Chiu said that he did not recall the exact details, but said that he did recall receiving several calls from DTIS, COIT and the Mayor’s Office, and at that time Steve Young was DBI’s Project Manager for overseeing a lot of the projects. Director Chiu stated that he met with Steve Young and told him that these people were asking for a meeting and instructed him to go to the meeting to try to resolve the issue. Director Chiu said that was the end of it. Commissioner Guinnane asked who authorized the payment, was it Steve Young now. Director Chiu said that this was the extent of the conversation that he had with Steve Young. Commissioner Guinnane said that he really had a hard time buying off on this thing and said that it really irks the hell out of him because right away again Steve Young is in between Director Chiu and Marcus. Commissioner Guinnane said Director Chiu said that he did not know anything about this and all of a sudden there is a problem about not paying out the $260,000 and Director Chiu wants to pay it, so he gives it to Steve Young to pay. Commissioner Guinnane stated that now Director Chiu does not know anything about what happened. Director Chiu said that Commissioner Guinnane was asking him exactly what happened and Director Chiu said he was telling the Commissioner exactly what happened and stated that he did not recall meeting anybody from the Mayor’s Office. Commissioner Guinnane asked what qualifications did Steve Young have regarding MIS, as Commissioner Guinnane said that he knew Steve Young as running the Electrical Department and now all of a sudden he is in with the MIS. Commissioner Guinnane asked where were the qualifications that put Steve Young in that slot. Director Chiu said that Steve Young was the Project Manager for the Oracle transition from the permit data processing to the permit tracking. Director Chiu said that if Commissioner Guinnane was asking him what happened, that is what happened. Commissioner Guinnane asked if Director Chiu did not find the time to go over with Steve Young himself to meet with these people, and did Director Chiu not have time to resolve the issue. Director Chiu said that he did not understand what the issue was as there was some correspondence back and forth and the Director said he told Steve Young that these people were asking for a meeting so he told Steve Young to go over and find out what the meeting was about. Commissioner Guinnane stated that at the next meeting he wanted a complete history on this $260,000; what transpired, what meetings took place and who signed authorizing that money. Director Chiu said that he would be happy to respond back.
Vice-President Hood asked who were the principals of this GCSI. Mr. Armstrong said that GCSI was the prime contractor and asked if that was her question. Vice-President Hood said that those were the people who went out of business. Mr. Armstrong said that was correct. Vice-President Hood asked who were the principals of GCSI. Mr. Armstrong stated that the person that was the CO there was Robert Fowler. Vice-President Hood asked if this was a minority, or woman owned firm. Mr. Armstrong said, not to his knowledge. Commissioner Guinnane said that he had one other question regarding the $260,000 with Cobra and asked Mr. Armstrong if he had any letter or e-mail that he sent to Director Chiu explaining why he did not want to authorize payment of this $260,000. Mr. Armstrong stated that he furnished Director Chiu with a report that would outline the expenditures up until that time period that DBI had with Cobra, and also the PO’s that were authorized for doing business with Cobra based on a project that the Department had planned out with them. Mr. Armstrong said that he also submitted what he considered undocumented invoices; invoices that Cobra submitted to DBI that did not have a PO attached or a request from DBI to perform the services or deliver the goods. Commissioner Guinnane asked Mr. Armstrong to work with Director Chiu to get any kind of a contract that was in place with Cobra, copies of the invoices and a detail of what Cobra was to do, if they were to do anything at all. Commissioner Guinnane said that he also wanted the POs for this next meeting to get a handle on this $260,000. Commissioner Guinnane said that the $260,000 was paid and DBI got no service, so what happened to the $260,000 and asked if anybody had gone back after the $260,000 or has it just flown out the window again. Mr. Armstrong said that he did not know, as he would not participate in that particular invoicing or payment process. Commissioner Guinnane said that to back up for a minute, Mr. Armstrong was the Manager of that Division and said that if he (Commissioner Guinnane) were the Manager of the Division and Director Chiu told him to pay something and he didn’t pay it, he would send Director Chiu a letter. Commissioner Guinnane said that if the bill gets paid out Mr. Armstrong has a responsibility to come to the Commission and voice his opposition to that payment because eventually it would fall back on Mr. Armstrong like it is falling back on him right now. Vice-President Hood said that, with all due respect, the Commission could not expect an employee or somebody at DBI to be expected to bring something to the Commission that is a problem with the Director. Commissioner Guinnane asked where the whistle blower would come in then if that doesn’t work. Vice-President Hood said that she thought that the most the Commission could expect is that somebody would keep records of it and have a written record of how it happened. Vice-President Hood said that if Mr. Armstrong had written records he would be in much better shape on this. President Fillon said that the whistle blower protections are there for someone that wants to do that and that is a whole other thing, as that is not within the employee’s normal duties. President Fillon stated that this is a totally separate thing. Commissioner Guinnane said that if he were in Mr. Armstrong’s seat and he doesn’t say anything, he is condoning the action and is in the same conspiracy. Vice-President Hood said that she felt that Commissioner Guinnane was making this too strong because there are a lot of issues about whistle blowing that are very complicated and very often it means the end of someone’s career. Vice-President Hood said that she thought that the Commission could think that it is a really good idea if somebody does that, but said that she did not think that the Commission should judge an individual without knowing everything that was involved. Commissioner Guinnane said that in looking at the end of a career, in looking at the audit, which is now made public, the Controller wants to remove Mr. Armstrong. Commissioner Guinnane said that he would like some straight answers to his questions with backup on the issue. Director Chiu said that he would be happy to report back to the Commission.
Vice-President Hood said that she agreed with what Roy was saying, but said that she also wanted this to finally happen. Vice-President Hood stated that she has been asking for this bar code system for years and said that she knew that it was used in other jurisdictions and is very commonplace now. Vice-President Hood said that it could practically be bought at Office Depot right off the shelf. Vice-President Hood said that she wanted to look at this freshly and see if there is not some simple way of doing it. Vice-President Hood said that she finds this is often true of highly technical stuff, that there is one system that can do all of these bells and whistles, and when you really think about it you don’t need the whistles and you can go to an off the shelf thing and get the bells. Vice-President Hood said that the difference is like a factor of 100 in the cost so it really is a lot of difference. Vice-President said that this could be thrown away in a few years if the Department didn’t like it and just use it until something better comes along because technology is changing so rapidly. Vice-President Hood stated that she files all of her files with a bar code system and it costs her $220 per month and the company can bring her the files the next day. Vice-President Hood said that it did not have to be this complicated. Mr. Armstrong said that whether it is bell, or bells and whistles, a penny or $1M for this thing, it doesn’t mean anything unless people use it and there is a process to back it up. Mr. Armstrong said that is what he was saying here; the Department has the design and technically it is not a difficult thing to develop, but the issue is changing the organization to use that bar code, to change that process flow to track a document properly and to want it to be tracked. Mr. Armstrong stated that those are the issues before the Department as the cost and technology are not the issue. Mr. Armstrong said that this was actually developed, tested and used within DBI’s production environment. Vice-President Hood said that right now it is the issue and there may be a problem with implementation at the highest levels and said that she agreed that needs to be done, but said that right now DBI does not have the stuff to do it with, so there is nothing to implement. Vice-President Hood said that the first step would be to have the system in-house and operable. Mr. Armstrong stated that this was very frustrating for him and his team. Vice-President Hood said that then this Commission could ask the Department to implement it and go into another phase. Vice-President Hood stated that the Commission would stand behind Mr. Armstrong because the Commission has made it very clear that it wants to do these things for the public. Vice-President Hood said that in many tiny jurisdictions like Santa Cruz and Napa, if a person wants a building application they fax it to you. Vice-President Hood said that a customer just has to call up and type in a phone number or fax number and you get the information right back. Vice-President Hood stated that she knew that Auto Desk is coming up with all of this equipment that is going to be lingua franka very soon to do all of this stuff electronically and San Francisco is so far behind. Mr. Armstrong said that he used to work for Auto Desk and recently went to their event for the building department about two weeks ago. Vice-President Hood said that she was also there. Mr. Armstrong stated that this stuff is great and technically it is available, the cost is reasonable and smaller municipalities have it. Mr. Armstrong said that some of these smaller municipalities have the luxury of starting from Genesis and they don’t have anything so it is easy to come in with an off the shelf product. Mr. Armstrong said that, in the case of DBI, someone needs to make the decision to put the brake on the current system, move into a new one, archive the old one and make it retrievable, and go forward. Mr. Armstrong said that to continue to piecemeal things and then when the Department piecemeals there is no collective movement of the organizational team there are going to be perceived failures all over the place and along with that costs are going to be going out the window. President Fillon said that this is the most reasonable thing that he heard since all of this discussion started, is to start new with something of a more manageable scope. President Fillon said that he did not want to open this discussion at this point. Mr. Armstrong said that over the past three fiscal years, each fiscal year the MIS budgets have gone down especially in the areas of professional services. Mr. Armstrong said that this was the development end of the business and was seen recently in the materials and supplies, as MIS only has four or five equipment items in the budget. Mr. Armstrong said that this shows that over the years MIS has budgeted and planned properly, but said where the MIS is still hanging is with the development end of the business, because DBI is about two years off of its road map as to where the Department should be as far as what he and his team have planned for DBI. Mr. Armstrong stated that Commissioner Marks spoke earlier about a strategic plan and said that some of the things that the MIS Division does equipment wise are generic, but MIS plans for where the Department is now and where the Department is going to be in two or three years. Mr. Armstrong stated that he does gap management and allows for growth and buys equipment to fit that. Mr. Armstrong said that the last time DBI had large equipment purchases was approximately three years ago, so the Department is right on its attrition schedule to replace some of those things, but DBI has been stagnant on the development projects. Mr. Armstrong said that he thought that the Department should remain in the state of hold until the Department and the Commission commits to move with technology and do things differently, if that is truly what the Department wants to accomplish.
Commissioner Brown said that he had one last question on the GCSI contract and said that it was an open question for Frank or Marcus or anyone else involved in this. Commissioner Brown said that hopefully he was not soliciting an open ended answer, but as briefly as possible he wanted someone to tell him what went wrong with this, and how could the Department safeguard against this in the future. Commissioner Brown asked if it was in the contact phase, in terms of what was expected at what time and what was delivered at different times, or was it in the purchase order phase or authorization phase. Commissioner Brown said that he thought there had been some good answers given today regarding this particular contract, but said that he wanted to know how to safeguard against this in the future. Mr. Armstrong said that he would answer the two parts of that question, the first being what went wrong. Mr. Armstrong stated that he has been with the Department for about five years now and has used the process that is being criticized in that report for five years and only in two areas has it been questioned, the GCSI incident and Commissioner Guinnane bringing up the Cobra incident. Mr. Armstrong said that the common denominator is a company that is having trouble, so in lieu of a Citywide standard process which indicates that funds are supposed to be released based on a particular deliverable at a certain time and so on; it is hard to say that someone did something wrong. Mr. Armstrong said that this was Citywide practice and said that, as he understands it, it is Citywide practice to make prepayments and in some instances vendors that are subcontracted under City Store will not wait for the net sixty-five days of the City. Mr. Armstrong said that those vendors need to be paid a retainer of sorts and some City departments participate in that, but they are not being targeted in this issue. Mr. Armstrong stated that where he thought the breakdown happened and where everything went wrong was when acting as a messenger and doing due diligence to alert the appropriate City departments, he thought that working with a particular project manager from that firm who had silver bullets, got reflected on Mr. Armstrong like he was out to embarrass someone or hurt someone’s career. Mr. Armstrong said that he was doing nothing more than alerting his Executive Management Team and the appropriate City agencies that he was aware that a company was going under and DBI had a project where the code was in jeopardy of not being released because the subcontractors had been crying for three months. Mr. Armstrong said that what he participated in to try to alleviate some of that grief was what is called an accelerated payment. Mr. Armstrong said that when DBI got payment from the Controller’s Office, the check, because the prime was telling the subcontractors that DBI wasn’t making payment so therefore the prime couldn’t pay the subs, Mr. Armstrong had a meeting arranged where the prime and the sub were there and he hand delivered the check. Mr. Armstrong said that he made the prime sign the check and he signed it in front of the subcontractor to let them know that DBI was paying the prime contractor and it was up to them to work out their problems. Mr. Armstrong said that he guessed that this was considered part of a prepayment too, even though DBI had validated the goods and deliverables being received to DBI’s specifications. Vice-President Hood said that there is a way to deal with this sort of situation in private business because this happens very often with contractors that have subs. Vice-President Hood said that the general or the bank or whoever is dispersing could insist on two things; one is double signatures on the endorsement so the general can’t hold the money and the other way is to have the check written by the general, at that meeting, made out to the sub and the customer does not hand over his check until the other check goes to the sub. Vice-President Hood stated that there are lots of ways of dealing with that and said that she would encourage Mr. Armstrong to learn more about it so that he would not get stuck in this terrible situation again. Mr. Armstrong stated that he was not sure, within the City’s process, if DBI could even participate in anything like that as DBI does not administer the contract, nor are they attorneys and know how that would work. Mr. Armstrong stated that he would be very reluctant to require a prime to write a check before he would hand over DBI’s check and said that he was very uncomfortable handling a check for $114,000. President Fillon said that from what he understands Mr. Armstrong did not even have anything to do with negotiating the contract in the first place and did not even have a copy of the contract during the process. Assistant Director Lee said that DBI was working under the system that the City has created, and the City had negotiated with these City Store vendors, with the prime and with the subs. Ms. Lee stated that Mr. Armstrong did not have a choice in the matter of which contractor to use and when to give them a check and how to ensure that they would in turn make payment to the subcontractors. Vice-President Hood asked why the Controller’s report did not say that and asked if someone was going to write a letter to the Controller.. President Fillon said that the Department did send the Controller a letter and it was sent back. Director Chiu said that initially when he reviewed the comments from Marcus he had a problem with the number of 35% versus 80% and said that in his opinion DBI definitely received at least 80% for all three projects. Director Chiu said that he wrote back to say that there appeared to be a difference in the interpretation of what was complete because if Marcus himself just verified the delivered product that would be one thing, but Director Chiu said that he was assured that Marcus’ team members also looked at the delivered product. Director Chiu said that other people looked to verify the product so there was more than one set of eyes looking at the product and DBI believed that the project was pretty much complete. Director Chiu said that he sort of wrote a response, but the Controller was not pleased at all. Director Chiu said that the Controller wrote a second letter in which he was harshly critical of Director Chiu because the Controller thought that Director Chiu was not serious enough regarding the Controller’s findings. Director Chiu said that he was still troubled by what the Controller meant by 35% complete.
Commissioner Guinnane said that he had two questions to ask Director Chiu. Commissioner Guinnane said that there was a subcommittee meeting that took place on December 10, 2002 and Director Chiu opened the meeting up to discuss the draft audit. Commissioner Guinnane stated that Director Chiu discussed and talked about interpretation, yet in reading the minutes Steve Young comes along and says that there are some very, very serious allegations made. Commissioner Guinnane said that it was like two different people in two different rooms at two different meetings and two different documents because Director Chiu thought that everything was okay and it was not too bad, but it was just a matter of dotting the i’s and crossing the t’s. Commissioner Guinnane said that Director Chiu talked about a vendor that he had been working closely with for the last five or six months and Commissioner D’Anne asked a very simple question about what was the name of the vendor and Director Chiu said that he couldn’t remember. Commissioner Guinnane asked if Director Chiu could tell him the name of the vendor since he had been working with that vendor for six months. Director Chiu stated that the vendor was Build Folio and said that this is the vendor that has been working with Rosemary Bosque’s staff. Director Chiu said that everyday his office is approached with new products and new ideas and sometimes as a courtesy he has a vendor come in to meet with him or has Marcus meet with them and then whatever works, works. Commissioner Guinnane asked what that vendor was trying to supply to DBI. Director Chiu said that it was a hand held computer that HIS is working with Build Folio on. Director Chiu said this was a hand held system that HIS wants to do. Director Chiu said that Build Folio was made aware that even though the Department likes their product, this company needs to be concerned about the contract process and need to be able to make sure that they are able to come in with a City contract. Director Chiu stated that there are a lot of vendors that come in daily to DBI, but they are not able to get through the City contract process. Director Chiu said that last week there was another vendor that wanted to talk to him about an on-line permitting system and said that he informed that company that before they spend a lot of energy and time they would need to talk with the Purchasing Department, COIT and settle all of these things.
Commissioner Guinnane asked Director Chiu what his position was today concerning the draft audit and asked if Director Chiu still thought that it was an interpretation issue or did he actually believe that there are some serious problems in the Department. Commissioner Guinnane stated that he read the letter that Director Chiu had written that the Controller kicked back and said that he told Director Chiu he wouldn’t put his name to it because basically it didn’t say anything. Commissioner Guinnane said that it just said that the Committee formed an MIS subcommittee whereas Commissioner Guinnane said that he told Director Chiu that if he was going to send a letter back to Harrington, he should talk about the draft and talk about every one of the line items and explain how the Department was going to resolve the issues. Director Chiu said that the draft response went back and forth with the Controller’s Office for quite some time, as there were several versions of the draft. Director Chiu said that Amy had drafted a couple of versions initially supporting what the Department still believes about Marcus’ staff having some validity in verifying the product and the Controller’s Office would not budge. Director Chiu said that the Commission would have to look at the facts and said that he encouraged the Committee to look at the facts that Marcus presented to Director Chiu and Assistant Director Lee and they would have to decide what they believe. Commissioner Guinnane said that the Commission did not have the facts and the facts are given to Director Chiu as the Director of the Department. Commissioner Guinnane said that Director Chiu is the one that has to tell the Commission what is going on. Director Chiu said that he still believed that the Controller’s Office number is questionable. Director Chiu said that the Commission heard from Marcus today that the Controller’s Office just talked to one sub and 35% is only one sub and maybe it is true that this is 100%. Vice-President Hood said that she thought that there were a lot of semantics going on here. Commissioner Guinnane asked Director Chiu if he had thought about going over to the Controller’s Office and meeting face to face with Harrington to go through the issues. Director Chiu stated that before he responded back to the second draft, Amy and he had asked for a meeting. Commissioner Guinnane asked what Amy’s role was in the MIS. Director Chiu said that as he stated earlier, Amy is the direct Supervisor of the MIS Manager so anytime there is an issue or something, he did not want to pass the chain of command and Amy has been working with the Department and working with the Controller’s Office. Commissioner Guinnane asked if Ms. Lee was responsible for this problem now. Director Chiu said that he reports to the Commission and any time there is a failure or a success it is up to him, so Director Chiu said that he was talking full responsibility for anything that happened including MIS. Director Chiu stated that just because he brought Amy Lee’s name up that doesn’t mean that he is shying away from his responsibility and said that he was reporting that Amy does help him in working with the Controller’s Office staff in dealing with a lot of the issues including MIS and budgetary issues. Director Chiu said that when he asked for a meeting Ed Harrington was very upset, refused to have a meeting and was very upset because Director Chiu was questioning the audit. Director Chiu said that the newspaper article was the result of him questioning the audit.
Commissioner Guinnane said that at the last meeting of the Commission there was one thing that was resolved between himself and some of the individual Commissioners regarding the bureaucracy and the layers of individuals. Commissioner Guinnane said that he requested that Marcus, as the MIS Manager, would report directly to Director Chiu, not to Amy, not to William Wong or to Jim, but right to Director Chiu. Commissioner Guinnane stated that Director Chiu would be totally responsible. Director Chiu said that he opened a dialogue with his Deputy Directors, but Deputy Director Jim Hutchinson was not present so the discussion was continued as to how to reorganize the entire Department. Director Chiu said that he looked forward to working with the Commissioners to do what the Commissioners would think was the right organization. President Fillon said that there was another Committee meeting coming up and Commissioner Guinnane said that he wanted all of the answers to his questions about Cobra to be ready for that meeting.
Vice-President Hood said that she knew that this was the latest problem, but said that there had been problems in the past and asked if it was possible to hire someone to work in MIS who would be capable of doing all of the software end of these things and then just send out an RFP to get the hardware. Vice-President Hood said that this would be paying for the services in-house through a very skilled, highly paid employee so there would always be a backup for all of the codes. Mr. Armstrong said that over the last year MIS had acquired two high-end developers in-house. Vice-President Hood asked if those were people who could actually write programs. Mr. Armstrong said that was correct and the Department is doing that currently as it is part of the daily requests. Mr. Armstrong said that application forms and reports were being added daily and there is an internal development team that helped him to validate that the goods were there. Mr. Armstrong stated that those resources are onboard, but the Commission would have to understand that retention is a problem with these folks because they were previously $300+ per hour developer types and since there is a downturn in the IT field they landed a job with the City and DBI is fortunate to have them. Mr. Armstrong said that if things change the Department might not be as fortunate. Mr. Armstrong stated that he had mentioned earlier that MIS is doing internal development and that is why the website or the web application development is only $80,000 because the Department now has that in-house expertise to augment some of the cost. Vice-President Hood said that from what she is reading about dot coms the Department would have these people for a while. Vice-President Hood said that if the Department could just get these things going so DBI is just going out there for hardware that would be another way to approach this. Vice-President Hood said that she did not know the answer to this, as it is complicated. Mr. Armstrong stated that his team would love to develop everything in-house, but MIS is not a website hosting company and there are still other professional services that the Department has to rely on. Mr. Armstrong said that again he wanted the Commissioners to review the last three year’s professional services expenditures because the budget requests have gone way down, due to the fact that a lot of this activity is being done in-house and the Department is relying less on hardware other than the usual replacements, such as desktops and the flat screen monitors. Mr. Armstrong said that the Department was buying the flat screen monitors to unify all of the counters because it is bulky with the big computers in the way of customers. Vice-President Hood said that the Commission was not questioning any of that and stated that she did not even care if the costs go up if the Department gets what it is trying to implement. Mr. Armstrong said that DBI is about two fiscal years budget behind and said that there is about $1.8M in the MIS budget that has not been spent. Mr. Armstrong stated that his team is anxious to get going, but said that he would recommend not going there without a commitment and that is the issue. Mr. Armstrong said that DBI has the money and the resources, internally and externally, but it is the issue of a commitment.
There was no public comment on this item.
8. 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.
a. Letter dated January 7, 2003 from Deborah Muccino of the Board of Supervisors to BIC Secretary regarding current membership of the Building Inspection Commission (members appointed by the Board President) and dates of appointment.
b. Memorandum dated December 31, 2002 from Director Frank Chiu to Marisa Moret, Managing Attorney, Office of the City Attorney regarding City Attorney Reports.
c. Thank you letters received from the public commending DBI employees and Director Chiu’s response letters to the public.
There were no comments on this item.
9. Review and approval of the minutes of the November 20, 2002 BIC meeting.
Commissioner Guinnane made a motion, seconded by Commissioner D’Anne that the minutes be approved. The motion carried unanimously.
RESOLUTION NO. BIC
10. Review and approval of the minutes of the December 18, 2002 BIC meeting.
Commissioner D’Anne made a motion, seconded by Commissioner Guinnane that the minutes be approved. The motion carried unanimously.
RESOLUTION NO. BIC
11. Review Commissioner’s 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 Guinnane asked where the Department was at with the security at 1660 Mission Street and said that now that there is problem with the money coming in he wanted to see about eliminating security. Director Chiu said that a few months ago some employees brought it to his attention that any deviation in the service of security in the building would become a meet and confer issue. Director Chiu said that he took the opportunity to let staff know that there was a chance to renew the contract for security and since times are tough the Department is looking at ways to save costs and one of the things would be to save money on security. Vice-President Hood asked if this was talking about the gentleman who sits downstairs at the front door. Director Chiu said yes, it is security. Vice-President Hood said that this person answers a lot of questions for people who are wandering around. Director Chiu said that he brought this issue up to the Planning staff and Planning staff has voiced similar concerns to the Planning Director. Director Chiu said that he told them that in the next month or so he wanted to give Planning and Fire one last chance to come back and decide about security. Commissioner Guinnane said that he was trying to figure out how the amount of the monthly payment was split between DBI, Planning and the Fire Department because the Fire Department was paying by far the least amount of money. Director Chiu said that he thought that it was reported that the amount was determined by square footage. Director Chiu stated that in the next week or so he would be meeting with the Union Reps for each organization, as at DBI there are seven different labor Unions represented. Commissioner Guinnane asked where in the Union contracts it would say that the Department has to supply security. Director Chiu said that it is any change that would affect working conditions so as such anything that would be reduced or make a change to the working condition, would become a meet and confer issue. Vice-President Hood said that this was very important because a lot of office buildings lock all of the restrooms and it is not anything to be dealt with without going through all of the proper channels. Commissioner Guinnane stated that what brought this to his attention was initially when an individual was stabbed downstairs, the guard did absolutely nothing and someone had to scream at the guard to call 911. Vice-President Hood expressed surprise that somebody had been stabbed at DBI. Director Chiu said that as soon as he meets with everyone and gets some information he would get back to the Commission.
President Fillon said that there were many issues discussed at today’s meeting that would carry over to the next meeting.
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.
13. Adjournment.
Commissioner Brown made a motion, seconded by Commissioner D’Anne, that the meeting be adjourned. The motion carried unanimously.
RESOLUTION NO. BIC 002-03
The meeting was adjourned at 4:25 p.m.
_______________________
Ann Marie Aherne
Commission Secretary
Department is to do a table showing existing ordinance/proposed ordinance/and issues for Unlawful Demolition/Major Alteration. Item to be agendized for future meeting. – Vice-President Hood and Commissioner Marks Pages 5 – 9
Director Chiu to write a letter to the Board Of Supervisors (Supervisor McGoldrick) regarding issues for Unlawful Demolition/Major Alteration. – Commissioner Marks Page 5 – 9
Commissioner Guinnane to contact Buck Deventhal of the City Attorney’s Office for an opinion on AB717 as it pertains to Housing Inspectors. Pages 10 - 17
Copies of Housing Inspector job announcements from 1993, 1995, 1997 and 1999 – Commissioner Brown Page 13
Copies of ICBO class descriptions for Housing Inspector/Property Maintenance and Building Inspector. Item to be agendized at a later date. – Vice-President Hood Page 15
Department to work on strategic plan as outlined in the Controller’s audit of DBI in July 2001. – Commissioner Marks Page 23
Department to history of $260,000 paid to Cobra Solutions. – Commissioner Guinnane Page 32-33
Director to work with MIS subcommittee on MIS issues. – Vice-President Hood and Commissioner Guinnane Pages 34-39