Department of Building Inspection

BUILDING INSPECTION COMMISSION (BIC)

Department of Building Inspection (DBI)

Tuesday, February 11, 2003 (Special Meeting)

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

Adopted March 19, 2003

MINUTES

The special meeting of the Building Inspection Commission was called to order at 1:45 p.m. by President Fillon.

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

COMMISSION MEMBERS PRESENT:

Alfonso Fillon, President Denise D'Anne, Commissioner, excused

Bobbie Sue Hood, Vice-President Esther Marks, Commissioner, excused

Roy Guinnane, Commissioner Rodrigo Santos, Commissioner

Matt Brown, Commissioner, excused

Ann Aherne, Commission Secretary

D.B.I. REPRESENTATIVES:

Frank Chiu, Director

Taras Madison, Administration & Finance Manager

Sonya Harris, Secretary

2. 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.

3. Report, discussion and possible action on the proposed budget of the Department of Building Inspection for fiscal year 2003/2004.

Taras Madison, Administration & Finance Manager stated that this would be the final discussion on DBI's budget for fiscal year 2003/2004 and said that basically the information that was sent to the Commission the previous week was a couple of additions to the budget. Ms. Madison said that she had highlighted any major additions or deletions in the budget since the January BIC meetings. Ms. Madison said that the fist item she wanted to bring to the attention of the BIC was permit salaries; in the original submittal four positions had been deleted for some salary savings. Ms. Madison said that the Department went back and looked at the vacancy report and deleted an additional eight positions, so the total amount of salaries including fringe benefits and permanent salaries is about $852,000. Ms. Madison stated that this was important because as a result of deleting those twelve positions the additional items that were in increased in the budget ended up having no net effect. Ms. Madison said that had these positions not been deleted, the Department would be looking at almost a $1M increase from some of things that had been included in the budget since the last time the BIC met.

Ms. Madison stated that the second major increase in the budget was $655,000 to the City's overhead. Ms. Madison referred to the second page of her report which showed indirect costs reimbursement and said that this item went up to $909,000. Ms. Madison said that this is money that is paid to the Controller to cover General Fund supported activities for services to DBI that are not included in work orders. Ms. Madison said that the major reason that this number increased so much is because this number is usually a two year lag and back in fiscal year 2000/2001 there were several Controller's audits and a lot of auditing going on in the Department. Ms. Madison reported that now the Controller's Office is recapturing those costs because DBI did not budget for those things in the following fiscal year.

Ms. Madison said that, in addition, there is another $80,000 in professional services because the Department has been discussing with the Commission about doing a Comprehensive Fee Study. Ms. Madison stated that DBI wanted to get some outside help to do that fee study because DBI has not increased the fees since 1991, so some fees were allocated to professional services in order to be able to do that. Vice-President Hood said that she did not think that the Department needed to do this right now when the Department is looking very carefully at all costs and said that it seemed to her that there are materials that are readily available that would enable the Department to increase fees without having to spend $80,000 to figure out how to do it. Vice-President Hood said that the Department could use the construction indices that shows the inflation in construction costs and asked who the $80,000 was for. Ms. Madison said that there has not been a contractor identified, but this money is just an estimate of how much the Department would have to pay on an RFP in order to get someone from the outside to come in and help DBI do a Comprehensive Fee Study. Vice-President Hood said that she thought that the Commission and the Department should think twice about having this amount included in the budget. Vice-President Hood said that she thought that the Department could look at the fees by looking at how much the consumer and the construction indexes have increased and said that it would be just a calculation and should not have to be so complex.

Director Chiu said that he agreed with Vice-President Hood about the inflationary index and whatnot, but the key to success in trying to get a fee increase is that the Department has to demonstrate the actual cost of doing business. Director Chiu said that this would mean that somebody would have to study services area by area, and division by division, as to what kind of service the Department is delivering and what it costs the Department. Director Chiu stated this would have to include some of the adjustments that were discussed, but in other words the Department cannot just use the raw data to go ahead and increase the fees because of inflation by 4% or whatnot. Director Chiu said that in the past, anytime the Department has talked about increasing or decreasing fees, the Board of Supervisor's Budget Analyst wanted to know what was the actual cost, meaning that the Department had to do a detailed study. Director Chiu said that this would almost be line item by line item to demonstrate the actual cost of each increase. Director Chiu stated that when this came up before the BIC previously, Amy Lee brought it to the Commissioner's attention that if the Department wanted to be successful in getting the fee increase, it would be wiser to pay somebody to do a professionally detailed report to explain why a particular fee increase would be necessary.

Vice-President Hood said that she thought that the Department already has very detailed budget information and excellent people working in the budget department and said that the Commission itself is empowered to set fees, so the Commission could recommend that fee increases be adopted in the Code. Vice-President Hood stated that she forgot exactly how the Commission did this, but said that she thought that the Commission should put this on the agenda and get a list of all of the fees that are currently charged, as this is organized in the budget by categories in sufficient detail. Vice-President Hood said that when an economist comes into a Department to study something, they collect an enormous amount of information, each piece of which has a percentage of error and when they are added all together there is this tremendous percentage of error possible for the figures. Vice-President Hood said that through trial and error the Department has been doing the very same thing over a very long period of time and should be able to relate the cost to the size of the permit. Vice-President Hood said that another thing is that the way the State law is written it doesn't say that each tiny little thing has to be exact, but has to say that the overall fees represent the overall costs. Vice-President Hood said that if the Department got into each tiny little thing, she thought that the Department might end up hurting some of the services that are being provided for the public in a somewhat subsidized manner, and having other things that can be done more efficiently because they are done in larger amounts and could be less expensive. Vice-President Hood said that it seemed to her that this year, with the deficits that the Department has and looking at the economy this is really an unnecessary expense at this time. Vice-President Hood stated that she remembered Amy Lee talking about this, but it seemed to her that it was months and months before the BIC became aware of how big the shortfall is.

Director Chiu said that he agreed with Vice-President Hood that State law does not specify that each service has to recoup the actual cost, but said that he wanted to remind the BIC that the Commission does not have the authority in setting a fee increase; the Commission does have the authority to propose a fee increase, but any fee increase or decrease ultimately has to be approved by the Board of Supervisors and the Mayor. Director Chiu stated that in the past there was some talk from the Board of Supervisors and the Mayor that the Department needed to do a better job in justifying any increases and that was the reason why the Department thought that it was necessary to do this Comprehensive Fee Study, but said that if the Commission agreed that the Department should do this, then it is up to the BIC.

President Fillon said that the way he understood this issue from Amy Lee's previous reports was that this is a pretty hot issue and the reason for getting a consultant was to build consensus and get support and this needed to be done through some kind of professional, impartial third party. Vice-President Hood said that she thought that this was the Commission's job because the Department already has all of the staff that could do this. Vice-President Hood said that if this were a private company doing business, they would not spend $80,000 right now to find out how much to charge for services, but would find a more effective way of doing that. Vice-President Hood said that she thought that the Department could develop data that could be sold to the Board of Supervisors and the Mayor and said that she did not see that as a problem. Vice-President Hood stated that no one would be suggesting outrageous fees, as this is not what the Department is talking about, but just going up somewhat on a number of fees to cover costs. Vice-President Hood said that DBI has thrown so much money at consultants and not gotten anything for the money and said that to her this is just another potential area for a problem. Vice-President Hood said that she would rather have this done by DBI's clerical people, or accounting people, to bring a proposal to the BIC and have the BIC look at it and if this doesn't work, then the Department could go back and go to other people. Vice-President Hood said that she did not think that this would be the case, as she thought that it would be very clear from information that the Department has that some parts of the Department are not pulling their weight and others are and that the Department could go from there to get an idea as to how to balance things out. President Fillon said that he thought this would be politicized without a third party and if staff comes up with the numbers, the Commission is not seen by the Board of Supervisors as an a-political body and stated that he thought that the third party is a good idea. President Fillon said that $80,000 seems like a lot of money and perhaps this could be less.

Ms. Madison said that the $80,000 is just an estimate, but no RFPs or bids had been submitted and hopefully it would be a lot less than that, but the Department wanted to make sure that there was enough money budgeted. Ms. Madison said that just recently the Department increased four fees in December; a new CPB fee and some minor increases in the hourly fees. Ms. Madison said during that time it was very difficult to get those things through the Board simply because DBI has a deferred credit account, and from the outside, it looks like the Department has a lot of money. Ms. Madison stated that this is money that is set aside because the Department earns money ahead of time so the Board of Supervisors are going to ask how the Department can justify that. Ms. Madison said that this was one of the reasons why it was decided to go with a third party to get something that would be more comprehensive and would make sense. Ms. Madison said that, in addition to that, in doing the initial fee study for just those four items, it is obvious that the Department is lacking some historical information from DPW because many times the Department is asked how it came up with the initial fee and there really is no documentation to start. Vice-President Hood said that this would not make any difference, as it is whether in the last five or ten years since the Department has not been under DPW, DBI has been collecting fees for certain things and during that period of time the Department either has more each year than needed or less. Vice-President Hood said that the Department would just start out with a global picture and then look at each component of that, but said that DBI would not have to go back to the beginning of time. Vice-President Hood said that if the Department had some reasonable explanation she did not think that it would be so difficult to do, and said that if the increases were sent over with no explanation she could see how the Board could say it was not documented. Vice-President Hood said that she did not even see how this would be that political. Ms. Madison said that she was not addressing anything political. Vice-President Hood said that the Department was just talking about the first increase since 1991. Vice-President Hood said that what she thought was more political would be a newspaper headline that says that DBI just spent $80,000 with so and so who's somebody's friend to find out what they should be charging for a service that they have been providing since blah, blah, blah. Vice-President Hood said that she thought that when things are going to be politicized they would be no matter what. Vice-President Hood stated she thought that one of the audit issues dealt with this subject and said that DBI did not think often enough about how to do something themselves. Vice-President Hood said that the example that Ms. Madison gave about the Department not being able to go back to how the fees were originally set doesn't make any difference, as going back five years should be plenty of time.

Ms. Madison said that it does make a difference, and said that she did not know if a consultant would even be able to recapture those things, but stated that she was trying to explain the difficulty in recreating documentation and then bringing this documentation forward. Ms. Madison said that if the Commission thought that DBI should try this in house first, then of course DBI could do that. Vice-President Hood stated that she saw the Department's accounting staff as being very skillful and have been excellent on evaluating other things and said that the Commission was not asking for the Department to say what the fee should be, as that would be up to the Commission. Vice-President Hood said that she was looking at what fees have been brought in over a period of time and how much of the cost of the Department has been covered by those fees. Vice-President Hood said that there are four or five things that could be tracked such as penalties, building permits, etc. Vice-President Hood said that there are not that many of them and said that Ms. Madison hit the nail on the head when she said that she was not sure that even an outside consultant could find the way the original fees were determined. Vice-President Hood said that she did not think that they would. Vice-President Hood said that it seemed to her in this period of hard times that if something could be done in house and get a long way there, then the Department might find that it needs a consultant to go a little bit of the way and maybe that would only be a $10,000 fee. Vice-President Hood said that she felt that the Department and the Commission could do a great deal in this direction and perhaps do it all. Vice-President Hood stated that she would much rather see that approach and not allocating this $80,000, as that is a lot of money, and said that she, personally did not want to see this in the newspaper.

Ms. Madison said that this was understandable and it was up to the Commission to decide, but said that once again she was going to give the Commission the background of why this was included. Ms. Madison said that in just doing the four fee increases, the Department had to come up with an overhead or a direct cost. Ms. Madison said that DTIS recently had a consultant do this because they are a service department and it is hard to come up with costs so it shouldn't be in the paper that DBI is spending, $10,000, $15,000 or even $20,000 because the Department would get someone reputable and this isn't something that is unusual in the City. Ms. Madison stated that the Department could take a stab at it, but said that she was giving the Commission the rationale as to why the Department felt that it would be better to hire an outside consultant. Vice-President Hood said that she thought this was a very reasonable thing to propose, especially at the time it came up, but said that the BIC had to look back at all of the budget items, and there are very few that the Commission have any option about. President Fillon said that he totally disagreed and said that he supports what the Department originally wanted to do, but said that he thought that the money was too much. President Fillon stated that he thought the Department could get a consultant to do this for a lot less, as there are pieces of the work that the Department could do. President Fillon said that $80,000 was a lot of money for a consultant to do this kind of study. Ms. Madison asked President Fillon what figure he thought would be reasonable. President Fillon said that he would suggest $40,000. Vice-President Hood said that once a consultant gets on board and they don't get to where they are going at $40,000 pretty soon the Department is looking at $300,000. President Fillon said that if they know there is $80,000 in the budget, they are going to charge $80,000. Ms. Madison said that the Commission would have to come to an agreement as to whether this item should be out of the budget or just reduced.

Vice-President Hood made a motion to eliminate this item from the budget and ask DBI staff to propose fees as they did with the last fee increases for remaining charges and then have a couple of people from the Commission sit down with staff for review. Commissioner Guinnane seconded the motion.

The Commission voted as follows:

Commissioner Santos Yes

President Fillon No

Vice-President Hood Yes

Commissioner Guinnane Yes

The motion carried with a vote of 3-1.

RESOLUTION NO. BIC 008-03

Ms. Madison stated that this item would be eliminated from the budget.

Ms. Madison reported that the next increase was $13,000 in materials and supplies for the Emergency Preparedness and Response Team. Ms. Madison said that basically the Department was getting geared up and had been doing this for a while, in case of an emergency such as an earthquake. Ms. Madison said that there are several key areas where the Department has to make sure that there are enough materials and supplies, such as computers, lap tops and the emergency van. Ms. Madison stated that 1660 Mission Street is kind of a ground zero station and these are just supplies to keep that going.

Commissioner Guinnane asked if the Department actually needed the mobile van and said that he had seen it one evening out near the Main Post Office on Evans Street coming out of some area over there. Ms. Madison said that the Department parks it over there so that someone could go and start it every day. Ms. Madison said that this van was purchased maybe two or three fiscal years ago and the Department spent a lot of money on it, so it is there if there was any kind of disaster. Ms. Madison said that the van could be driven to problem areas and would be sort of a mobile ground zero. Vice-President Hood asked if there was an up-to-date communication system in the van. Director Chiu said that originally DBI thought that an agreement could be entered into with the Fire Department that would be a win-win situation for everybody. Director Chiu stated that the Department had no place to park this vehicle where security could be provided and stated that he had a discussion with an Assistant Fire Chief asking him to see if DBI could store this vehicle at one of the Fire Stations. Director Chiu said that the Department does not use this vehicle very often, but wanted it to be available when needed and wanted it outfitted with communication equipment. Director Chiu said that the Department was hoping that the Fire Department would take care of installing a first rate communication's system, and in return, if the Fire Department had a need to use the vehicle it would be available to them, but if there was an event where DBI needed the vehicle, it still belonged to DBI. Director Chiu said that due to personnel changes and that Chief no longer being with the Fire Department that deal feel through. Director Chiu stated that the van is still parked at the Fire Department for DBI's use, but the equipment was never installed. Director Chiu stated that now the Department is back to square one and the Department has to use money to install the needed equipment. Director Chiu said that in response to Commissioner Guinnane's question as to whether the Department needed an emergency van, the emergency van is not needed until there is a disaster and when there is a disaster such as a major earthquake then the Department would need it. Director Chiu said that he could not predict when an earthquake or disaster was going to happen, so the van needs to be ready. Vice-President Hood asked if there was a computer on the van that could call up plans and whatever when needed. Director Chiu said that at this point the van does not have this equipment and is just a vehicle, but the Department needs to equip it in case of a real emergency. Vice-President Hood said that her concern is that the Department has this really good thing, but if it is not fully equipped and the Department does not use it enough to know how to use it, then when the emergency happens everyone is going to be running out into the field and nobody is going to take time to learn how to use this emergency van. Commissioner Santos asked what the van did have. Director Chiu said that right now it does not have any equipment, but just has a space for DBI staff to work so it needs to be equipped with a radio and some automation. Commissioner Guinnane asked what was the initial cost of the van. Director Chiu said that it was approximately $130,000 and since DBI purchased it, the Fire Department and another agency looked at the vehicle and also brought a similar vehicle. Director Chiu stated that DBI looked at a Police Department vehicle first and went for a better model, then the Police Department upgraded and purchased a couple of vehicles similar to DBI's. Director Chiu said that the Police Department has a larger budget and more need for these types of vehicles. Director Chiu said that the Department would like to be able to equip this vehicle.

Vice-President Hood asked if $13,000 would equip this vehicle. Ms. Madison stated that the $13,000 was to equip the van and some other things such as lap top computers, regular computers and emergency supplies like water, office supplies and a variety of things. President Fillon said that since the Commission took out the $80,000, he did not see what the big thing was with keeping the $13,000. Vice-President Hood said she had no problem with that, but said that if this van is really going to be functional would $13,000 be enough. Ms. Madison said that the vehicle works now and is drivable, but this is just for things to put into it. Vice-President Hood asked if it had tables and chairs. Director Chiu said that there was a table and chairs, but it was just that there was no equipment in it to work with in case of an emergency. Director Chiu stated that if there was an emergency the Department would have to take the time to assemble emergency equipment and time would be lost and ideally the van should be self-equipped already. President Fillon asked if this was not already in place. Director Chiu said that the Department did not have this in place right now and said that last year the Department was going to equip the van, but then the Fire Department entered into the picture and then it fell through. Commissioner Santos said that the van was at 1660 Mission Street after 911 and asked what was inside at that time. Director Chiu said that there were desks and chairs and that was about it, but the idea was to have people working off site, if needed. Director Chiu said that the goal is that in the event of a major earthquake, 1660 Mission Street may or may not be there, so the vehicle would become the command center. Vice-President Hood stated that the van should have a big screen TV and other communication tools. Director Chiu said that one piece of equipment that would be requested would be a TV with an antenna so staff could keep track of CNN news and this budget item is part of that. Vice-President Hood mentioned a battery or a generator for backup. Vice-President Hood stated that sometimes people cannot communicate within the earthquake area and could only get signals from outside through aerial photographs and things. President Fillon asked if $13,000 would be enough to get all of this equipment. Director Chiu said that this was the Department's goal. President Fillon said that this sounded like an awful lot of equipment. Ms. Madison said that a computer is only $1,300 so the Department might buy three laptops for the vehicle and said that once again this was focusing on a DBI emergency command, but this item if for three separate stations; the operation system at 1660 Mission, a mutual aid operation center at the Hilton or the Hyatt, and the vehicle. Ms. Madison said that this was just to have some extra supplies and the Department has some things stored at Moscone Center. Ms. Madison said that the reason that the Department is focusing on this is because all departments in the City are focusing more on emergency preparedness and in April there is going to be a test for emergency response. Ms. Madison stated that DBI was going to be purchasing some of the basic stuff this year. Vice-President Hood said that once again her question was if this was going to be enough money for the Department to be up and running if there is no electricity. Ms. Madison said that this item was only for materials and supplies, but there were some other things that are covered in general through a work order with DTIS for them to do other things, but this item is separate and apart from that.

Director Chiu said that this vehicle already came with an emergency generator and the goal was for this vehicle to be self contained in the event of an emergency so that DBI could mobilize staff. Vice-President Hood said that she expected that in another ten years is that there would be a disc with all of the buildings in the City. Director Chiu said that ultimately DBI's goal is to be able to wire link into the mainframe because occasionally the Fire and Police Departments call DBI for the full plans of a building and right now the Department does this manually. Director Chiu stated that the goal is that the Department should be able to tap into the permit history and search the plans. Director Chiu said that this is stage one and obviously at some point the Department would be linking with the radio wireless remote once the mainframe system is in operation. President Fillon asked if the mainframe was housed in 1660. Director Chiu said that was correct.

Ms. Madison said that the final increase was for approximately $153,000 for Workmen's Compensation costs. Ms. Madison reported that this year there are more claims and this is something that is out of DBI's control because it isn't as if a department is charging DBI for administration and this is actually the cost of Workmen's Compensation. Ms. Madison said that estimating on what was spent this year, the Department would need about $300,000, which is a big increase because this year the Department only budgeted $148,000.

Ms. Madison said that at the last meeting Commissioner Guinnane had asked about the Title Reports and why the Department had to get 250 Title Reports at about $175 for a total of approximately $44,000. Ms. Madison said that she checked this out with the division and was told that the Department is not using this Title Report Company that much, but are using the Assessor and some other sources so that has been reduced down to about 15 Title Reports and that contract is being reduced by about $40,000. Commissioner Guinnane said that there were actually three items on the budget for Title Reports and stated that it was closer to $100,000 and that was what he was making inquiries about. Ms. Madison said that the Code Enforcement one that was $43,000 could be reduced down to about $2,300, however, the bulk of the money is for Disability Access for 100 reports at $150 each and at the last meeting both the Chief of Housing and Assistant Director Amy Lee said that it had to do with going to trial and having to pull those Title Reports. Ms. Madison stated that she had checked into the legislation and those title Reports are required so the Department cannot just use he Assessor's Title Reports, so that amount has to stay in the budget. Ms. Madison said that this is the reason it is only going down by, the $40,000 that was budgeted for Code Enforcement. Ms. Madison said that the total amount for Title Reports would have been about $70,000.

Commissioner Guinnane asked if Ms. Madison could explain about Indirect Cost Reimbursement and why it went from $253,930 to $909, 403. Ms. Madison said that this was the second item that was discussed about the increase of $655,000 in City overhead. Ms. Madison said that basically this is for money that has to be sent to the Controller's Office for things that are provided to the Department by General Fund departments, but DBI does not have a direct work order for those services. Ms. Madison said that an example would be that DBI has a work order with Central Shops to cover them providing labor and materials; DBI does not have a work order with the Budget Analyst's Office when they do different kinds of work on DBI's behalf or checking into DBI. Ms. Madison said that DBI does not have a separate work order for the Controller's Office normally and this number is a little confusing because it is reflecting what DBI's actual cost was in fiscal year 2000/2001 and there is always a two-year lag. Ms. Madison said that during that year there were several audits going on, a performance audit and others. Ms. Madison stated that the total cost of those people being at DBI for such a long period of time was about $355,000 and that amount was not budgeted for back then, so now the Controller's Office is just catching up to recapture their cost for this fiscal year. Ms. Madison said that this was just one object, but there were some other departments where DBI did not budget a work order for them and the General Fund paid it and now they are just taking their money back.

Commissioner Guinnane asked about equipment and the amount being $12,390 for 2003 and then it jumps up to $241,000. Ms. Madison said that this included the five vehicles at $25,000 for a total of $125,000 and also included a variety of MIS related things. Commissioner Guinnane asked if the MIS could be broken out and kept as a separate line item because it is confusing to talk about vehicles and MIS as both being equipment. Ms. Madison stated the equipment for MIS was a storage area network for $80,000; a backup server for $15,000 and three web studio application developers for $21,000. Vice-President Hood asked what the storage area network is. Ms. Madison said that at the last meeting the MIS Manager went over these items and from what she could gather Department has a certain amount of memory in the storage room for all of the information that is stored on DBI's computers and the Department is running out, so this is a device that would help all of the programs work more quickly and save all of the information. Ms. Madison stated that it is not a computer that one person would be using, but is kind of the brain for all of the computers. Ms. Madison said not to quote her on this, as she is not a great MIS person. President Fillon said that it was actual physical hardware that acts to support the serves and stores information so the server is not tied up. Vice-President Hood asked if this cost $80,000 and said that this sounded like a lot because services have dropped so much in price and said that this would be an enormous amount of capacity. Ms. Madison said that with the vehicles the Department receives a guide from the Controller's Office as to how much the Department should budget for each vehicle, so an average CNG vehicle costs about $25,000. Ms. Madison stated that for these items the Department gets an estimation from the MIS Manager and what happens is that the Department budgets this amount, but then gets quotes and when the Department gets the actual quote, only then would DBI move forward with purchasing this item. Ms. Madison said that she would check with MIS to see if there were any quotes received on this. Vice-President Hood asked for Ms. Madison to check this because she thought that the cost seemed high to her.

Commissioner Guinnane asked about the amount allocated to the Department of the Environment last year and asked if that amount had been used. Commissioner Guinnane referred to account number 081EV. Ms. Madison stated that last fiscal year the $100,000 was used and this fiscal year the Department of the Environment had probably already charged about half of the amount because the City is half through this fiscal year. Commissioner Guinnane asked what DBI was getting for this service. Director Chiu said that at the last meeting there was a representative from the Department of the Environment that came in and asked not for $100,000 or $140,000, but for $350,000. Director Chiu reminded the Commission that last year DBI did not budget for this money, but it was taken from DBI through the Mayor's Office even after a letter was sent denying this amount. Director Chiu said that he had sent another letter denying the request for the $350,000 and even though the Department of the Environment sent a letter stating why they needed the money, Director Chiu said that he totally disagreed with their reasoning. Commissioner Guinnane asked if DBI had any control of where the money goes, as the Department is not tied into the General Fund. Commissioner Guinnane stated that he could not understand how the Mayor's Office or whoever it is, could just tap in and take whatever they want when they get a no from this Department. Vice-President Hood said that what they will do is take out something that DBI has to have until the Department agrees to put it back in. Commissioner Guinnane clarified that there was no money allocated to the Department of the Environment for fiscal year 2002/2003 because it was already paid. Director Chiu said that what he was saying was that DBI did not initially budget for any money for the Department of the Environment, but at some point between the Board of Supervisors and the Mayor's Office there was $150,000 budgeted for that and they used that amount. Commissioner Guinnane said that again he wanted to clarify that there was nothing budgeted for the Department of the Environment for 2003/2004. Ms. Madison said that was correct because last year the Commission told the Department not to put it in. Director Chiu said that once again this year the Department is not putting anything in the budget. Vice-President Hood said that it could still be put back in.

President Fillon asked Commissioner Guinnane about the City Attorney's billings. Commissioner Guinnane said that DBI has two large cases going on right now with the AIMCO case and Jimmy Jen case. Commissioner Guinnane said that the charges in the AIMCO case have probably exceeded $600,000 without even trying it and the Jimmy Jen case has been tried, but no resolution has been put forward yet. Commissioner Guinnane stated that this case was probably another $600,000, but the Department budgeted approximately $954,000 for the year, but the way the Department was going after only two quarters, over $600,000 had been used. Commissioner Guinnane said that it might be mute at this point to approve more money for the City Attorney's Office because in meeting with City Attorney's Office there was further discussion. Commissioner Guinnane said that there was $400,000+ being held since April of last year that has not been transferred over to DBI's funds, so that money was going to be allocated over the City Attorney's Office in terms of increasing the budget. Commissioner Guinnane said that there was another issue that has been going on for a couple of years, which was the musical room issue, where the City Attorney's Office took $250,000 of DBI's money without approval. Commissioner Guinnane stated that he wanted that amount credited back to DBI so that would bring the amount due DBI to about $700,000. Commissioner Guinnane stated that DBI would move forward to get approval for $1M in the event that the Department could not settle the AIMCO case. Commissioner Guinnane said that it looks like the AIMCO case did not settle last week and there are a lot of ADA cases that are going to have to be referred over if the Department can't resolve them. Commissioner Guinnane stated that there was really no way to close up on that expense. Commissioner Guinnane said that the Department had been told by the City Attorney's Office that another $600,000 or $700,000 had been settled in three cases. Commissioner Guinnane said that there were some comments in the Litigation Committee meeting where the City Attorney's Office said that for every dollar DBI is spending the Department is getting back $.50. Commissioner Guinnane said that the Department is not getting back dollar for dollar and if it were he would not be so concerned about the City Attorney's bills. Commissioner Guinnane said that the Committee is trying to keep the spending down and said that there is a possibility that the AIMCO case could settle down the road.

Commissioner Guinnane referred to an item, 081M2 in the amount of $35,200 for Youth Works and asked what that was about. Ms. Madison said that this is Youth Internship Program that is sponsored by the Children, Youth and the Families and said that basically, it is high school students that work year round and departments sponsor them to the tune of $3,000 or $3,500 per year. Ms. Madison said that DBI actually has interns that come to the Department and work in different divisions. President Fillon said that when he was at Redevelopment he had several of those interns working with him and stated that it was a really good program. Commissioner Guinnane asked if this was more like an Outreach Program. Director Chiu said that it was more like a mentorship program and said that he personally thought that the Department should keep this program. Commissioner Guinnane said that was fine.

Commissioner Guinnane asked about the DPW building repair order and said that the Department had been budgeting $40,000 and asked if DBI was losing any money or if the Department was recapturing this money through liens. Ms. Madison said the money was being recaptured. Commissioner Guinnane asked about DPW's General Administration and said that $25,000 was budgeted for this item. Ms. Madison said that was for another program called the PULL program and is separate program of students, but this item also included some money because DPW has some "as needed" contracts that are readily available. Ms. Madison said that she had not yet received a work order from DPW and said that this item may be revised somewhat because DBI plans on doing its own in house "as needed" contracts. Ms. Madison said that if there is a landslide or some other emergency DBI did not go through the City process to have its own two or three contractors that could work with the Department to do repairs, so DBI actually sends money over to DPW to tag onto theirs and DPW also gets indirect costs. Commissioner Guinnane asked why DBI could not just come along and adopt DPW's list of sub-contractors if they are already approved for DPW. Ms. Madison said that this could not be done because these contractors are approved on a contract that was specifically with DPW, but DBI has budgeted money in permit services and are going to issue an RFP so that DBI could have its owns "as needed" contractors. Ms. Madison said that it takes a little while to issue an RFP and stated that DBI has been accustomed to doing things with DPW because DBI was a part of DPW. Ms. Madison stated that DBI was paying DPW to do the environmental testing for DBI so some of these things have been in the budget for a while and now the Department is starting to take over a lot of those activities. Ms. Madison said that this is just a plugged figure that may go down given that DBI is going to be more of these things on its own. Commissioner Guinnane asked about an item for $15,000 to DPW for Environmental Regulation, 081WB. Ms. Madison said that previously DBI was paying $75,000 for a full time person at DPW to do all sorts of things and they did anything that was safety related to DBI, for example, they would inform DBI when it was time for an employee to have their biannual hearing test because certain classifications require certain types of testing so they were the keepers of all of that information. Ms. Madison said that DBI has its own Safety Officer so that person can do most of what was being done by DPW so that is why this is being reduced to $15,000, Ms. Madison stated that there are a few things that DBI's Safety Office is not qualified to do, particularly Worker's Comp. Ms. Madison said that opposed to $75,000 this is now going down to $15,000. Ms. Madison stated that once again she wanted to caution the Commission that DBI is waiting for confirmation from DPW on this item, but it would be considerably less than the $75,000 that was being paid for a full time person.

Commissioner Guinnane asked about the revenue transferred to the Real Estate Department and said that there was a big jump in this amount. Ms. Madison said this is what is actually paid to the Real Estate Department for managing 1660 Mission Street so that would include the Operations Department, Security, Maintenance and anything that is operational for keeping 1660 running. Commissioner Guinnane asked how come there was a jump of almost $100,000 and asked what was the status on the Security that he has been asking for. Ms. Madison said that she could address the jump in the $100,000 because since the Department started, DBI has only been paying about $308,000 and that really has not been covering the cost so this year it is predicted that there will be a deficit and this would cover the $87,000 from this fiscal year and get the Department up to speed. Ms. Madison said that this was just DBI's portion and stated that Planning pays the Department a considerably less amount because they occupy less of the building and Fire pays too. Ms. Madison said that all of the costs of running the building have gone up, but the Department of Real Estate never charged DBI for this. Ms. Madison said that previously DBI collected more from the surcharge so DRE was not concerned that DBI could not cover the cost to run the building, but now that doesn't happen any more so they are playing catch up. President Fillon said that this sounded kind of fishy to him and asked how DRE could charge for something just because they didn't charge for it before. Ms. Madison said that DBI has sort of done this too, because that is what is going to happen when the fees go up; the Department has been supplementing the fees up to this point and when the Department does do a fee increase people are going to ask why the Department is doing a fee increase now when the cost of doing business has actually gone up every year. President Fillon said that the fees would not be increase by so much as to make up for all of the money that the Department hasn't earned. Commissioner Guinnane said that when DBI does a fee increase it is not retroactive and this is what the President is saying. Commissioner Guinnane said that if the DRE bills out so much money and all of a sudden they make a mistake or something they just catch up, but when they bill out it should be over and done. Ms. Madison said that the DRE has a running tab so every year they have been able to use the savings from something else to cover and this year they can't, so because they are going to have an actual deficit of $87,000 they are going to cover the deficit for next year. Ms. Madison said that she had a conversation with them that DBI would just pay its portion of the $87,0000 deficit this current fiscal year and then budget the right amount, however the other two departments do not have the money where they can actually go and pay back for it so they will have to pay for both of those fiscal years next year. Ms. Madison said that it would be cleaner for the DRE to have DBI follow suit and do the same thing. Ms. Madison said that for instance, if this is going to be an $87,000 deficit and DBI makes up $80,000 of it, DBI could pay the $80,000 by the end of this year so they wouldn't have a deficit, however Fire and Planning will not be able to.

Director Chiu said that he would respond to Commissioner Guinnane's inquiry about the status of the Security issue. Vice-President Hood asked what this was about and were there people breaking into the building. Director Chiu said that this was regarding the Security service that is provided at 1660 Mission Street. Director Chiu stated that DBI pays the largest portion of the Security service, and the building does have 24/7 security service and this was brought up about eight or nine months ago because there was an incident at the building. Director Chiu said that Commissioner Guinnane raised the issue of DBI paying so much for security and asking what kind of service was being provided. Director Chiu said that as a result of that he was asked to talk with Real Estate to see what DBI could do to determine if that 24/7 service should be continued or could it be trimmed somewhere. Director Chiu said that when that issue came up, the Planning and Fire Department staffs' unions raised the issue as a meet and confer issue because they are invoking this as a change to working conditions. Director Chiu said that as a result of that he has to meet with the union members and stated that there are seven different union groups at DBI. Director Chiu said that not everybody agrees on what type of security the building wants, but the catch is that Planning Department wants more security in view of what happened with the last incident. Vice-President Hood asked if somebody attacked or mugged somebody. Director Chiu said that somebody got stabbed during the daytime and one of the customers got stabbed by another customer. President Fillon said that this could be agendized for another meeting. Director Chiu said that since the employees invoked a meet and confer issue this has become a big issue and DBI cannot just say that service is going to be cut, and the sad thing is that the Planning Department wants a higher level of security. Director Chiu said that he saw a memo from one of the union members requesting that they want some kind of security from the Sheriff's Department so they are starting at that level. Director Chiu stated that Commissioner Guinnane was looking to see what the Department could do to cut the cost down. Director Chiu stated that he has met with staff already and now was trying to meet with union leadership to find out exactly what they want in order to start negotiations. Director Chiu said that he knew Commissioner Guinnane was frustrated, but when there is a meet and confer issue then the Department has to sit down with each of the unions. Commissioner Santos asked about the sharing of the costs. Director Chiu said that Planning was paying proportionately based on square footage, but said that it is a frustrating process because the BIC is looking at ways to keep the cost low, but some other union organizations want more security. Vice-President Hood said that security is a very complex issue and stated that she knew that the Commission could not get into the whole thing here, but said that there is incredible security in the court house she designed and the Sheriff's Office does provide the security there; Vice-President Hood said that this is a very complex subject going all the way from what areas are more exposed. President Fillon said that it is a little bit different because there are criminals going in and out of there and there are people in custody and that is not happening at DBI. Director Chiu stated that when employees raise the issue about their welfare and safety the Department and the Commission want to make sure that they do what they can to work with the employees. Director Chiu said that eventually the Department would have to decide between DBI, Planning and Fire and the various union groups what would be best.

Commissioner Guinnane said that the Department would have to get very serious about cost cutting because in looking back at some of the things that were floating across this Commission, such as doing the big addition at 1660 Mission, if the Department had moved forward today with that DBI would be in some serious trouble. Director Chiu said that he agreed with that. Commissioner Guinnane stated that the Department had to start watching these numbers and said that he was very, very concerned about this because he does not see a rebound in the economy at all and it seems to be getting worse. Commissioner Guinnane said that DBI has closed some of the positions and left some vacant, but there is a lot of overhead in the Department and with the permits and the revenue down some action needs to be taken to close up some of the loop holes. Director Chiu said that he agreed and said that he would be the first one to admit that the Department needs to do a better job. Director Chiu stated that he is concerned about the next fiscal year, and the one after that so certainly fee increases are something that the Department is going to talk about and also about ways to run the Department more efficiently. Director Chiu said that if the Commission wanted to talk about streamlining the organization he would be happy to work with the BIC. Commissioner Guinnane said that a fee increase for this Department, San Francisco or the State California is an easy way out, but said that his approach would be to start looking at laying some people off. Commissioner Guinnane said that there were all kinds of people at DBI and said that he did not know what they were all doing if the permit structure is way down because obviously these people are not busy. Commissioner Guinnane said that he was not saying to not raise the fees, but said it was the last thing that he would want to do. Commissioner Guinnane said that the Department needed to start chopping and DBI had to start being cruel to be kind. President Fillon said that there would be no fee increases this year because there is no consultant to do the work. President Fillon said that Jake McGoldrick would end up doing the work for DBI. Commissioner Guinnane said that President Fillon could do it on a pro-bono basis as a consultant. Vice-President Hood said that DBI had an excellent staff that would get the work done.

Ms. Madison said that one thing she wanted the Commission to know about the revenue transfer was that the Department was actually going to be getting $88,000 back, so for this fiscal year DBI has only budgeted $396,000, but the deficit is based on the fact that DBI was going to be giving DRE $308,000, so the $87,000 that DBI is getting back will just go toward the increase of $472,000. Vice-President Hood said that the security issue should come up as a future agenda item because it is very complex. Director Chiu said that if one of the Commissioners was volunteering to deal with the unions to resolve this issue he would be happy to have them do that. Vice-President Hood said that the Commission was happy that the Director was doing that.

Commissioner Guinnane said that the number one goal that needs to be worked on right now is the MIS issue as this is a very serious problem. Commissioner Guinnane stated that this has been a problem for years, but said that the Department needs to really start working on it to get a handle on it because money is just flowing out the door and it seems like it is an endless pit. Director Chiu said that he was looking forward to meeting with the Commissioners on Friday at 2:00 p.m. President Fillon said that there had to be a better way.

President Fillon thanked Ms. Madison for her presentation. Vice-President Hood said that it was a great presentation and thanked Ms. Madison for being so well informed and for being so patient with all of the Commissioner's questions.

Commissioner Santos made a motion, seconded by Vice-President Hood that the budget be approved with the recommendations made today and sent onto the Board of Supervisors. The motion carried unanimously.

RESOLUTION NO. BIC 009-03

President Fillon asked if there was any public comment. There was no public comment.

4. Review and approval of the minutes of the January 22, 2003 BIC Special Meeting.

Vice President Hood made a motion, seconded by Commissioner Guinnane that the minutes be approved. The motion carried unanimously.

RESOLUTION NO. BIC 010-03

5. Discussion and possible 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.

President Fillon stated if the commissioners have any other agenda items that they should just forward them to the Commission Secretary. Vice President Hood stated that she would like to talk about the issue that Commissioner Guinnane just mentioned, security, and she would like to get a more detailed understanding of the security issue. Vice President Hood also said that President Fillon mentioned that he was going to be talking with the committee about the MIS, and she would like the commission to get a report on that. President Fillon acknowledged Vice President Hood's request. President Fillon asked if there were any other items to be placed on the agenda of the next meeting. There were none.

6. Adjournment.

Commissioner Santos made a motion, seconded by Commissioner Santos, that the meeting be adjourned. The motion carried unanimously.

RESOLUTION NO. BIC 011-03

The meeting was adjourned at 3:15p.m.

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Ann Marie Aherne Commission Secretary