City and County of San Francisco Thursday, January 24, 2013
>> good afternoon welcome to the government oversight audit committee.
My name is carmen chu.
with supervisors cohen and
campus. Mdm. Clerk we have
announcements?
>> clerk calonsag: turn off all electronic devices;
submit cards for any speakers. Each member will be allotted the same number of minutes to
speak in each item. Items will appear on the
February 5 supervisor meeting.
>> would you call item 1.
>> clerk calonsag: ordinance amending the san francisco administrative code by adding
sections 6.22 q and 6.42 f to require a public works contractors
to pay subcontractors.
>> chair: this is an item that we have been working on for
quite some time. Catie chang in my office among other folks
and contractors have been working on ways to improve the
way that we do business.
One of the areas is reducing withholdings to make sure we are not the bottleneck
for many of the local businesses and many small businesses and also what we can do to improve
the issue of prompt payment. Especially during the past few
years the idea of how it is
the city processes payment and get them back out to contractors
is an important issue for us. If you think about the prompt
an issue, you can think about it in three parts:
when it is that contractors
submit invoices, we hear a lot
about this; how long it takes for the city
to process an invoice and finally the issue of when it
is that contractors pass on payment to subcontractors after the receipt payment
from the city. Many recognize there is much to
do in the first two phases of prop favorite, with has to do with how we get
contractors to submit invoices
in a quicker way. We have created an online
system. The second portion with regard
to processing in time the city already has a certain requirements around how quickly we are
required to process payments for both construction contracts as well as professional services contract.
There is a lot work to be done to track how well the city does to standardize;
we count that time. And be able to report on that
and see how we do. There are opportunities in
those two faces.Finally in the
third area, with regards to how fast primary contractor space of contractors,
there are rules, a three-day
requirement already in place. This legislation does not
change that. Once upon contractor is paid by
the city, that they pass and pay contractors within seven days, it is a reasonable piece of legislation.
In the sense that if there is a
dispute those items can be- there is a separate process for
that. As long as they are not disputed items,
the payment should happen. There is an enforcement
component, a 2% enforcement are fine if the prime contractor does
not pay. Also private enforceable
action between contractors.
Part of the incentive of doing this third portion is really
to help to get us consistent
with some of the state laws already in place that helps
some of our contractors. That is what this legislation generally does, applicable to construction and professional services. There is a lot of work that we
can do and we will continue to
do with the task force.
I know that mindy -- is here.
making sure that we look at
every piece of the process.
I know that the city will continue to work for the mayors office as well with some of the executive directors.
And colleagues I hope for your support for this legislation. It is a fairly straightforward one and it helps improve
one part of the process. There is an amendment that I would request that we make
after public comment. I will read that into the record. This really seeks to clarify the enforcement component. All that we would be doing is
adding on page 1, line 22 I
believe --
and on page 2, line 9. They should read that this
subsection -- this is a part
of his new -- enforceable and
is not, and it goes back.
With that, if there are any questions I will be happy to
answer them.
We do have our city attorney here to help us if there are
any questions. -- who has been working with
us on this legislation. Other than that we will open
for public comment. Other members of the public who wish to speak in item
number one?
Off mic:
Off mic:
Off mic:
Off mic:
---
(Off mic) >> chair: I think you want to speak on item number
two.
>> I don't mean to be fresh.
I am being straightforward.
I'm true to this.
i'm here at city hall for 20
something years way before you all can hear. I don't know what you were
doing 20 years ago, but I am doing the same thing I was doing 20 years ago, trying to find out what is
going on at city hall. Every department here needs to go over their contracts.
for instance ttys signed contract that you don't know nothing about. There's a lot of things going
on, I'm going to be here to let you
know. I have been here starting city
hall for over 20 years. Specifically the last five years and the new administration.
Things -- and dwayne jones. Because of the african-american
outmigration. Every department of the city affects us,
african-americans. I know you don't want to hear that but somebody has to be up here and I will be
here at every opportunity I can until city hall opens up their eyes to realize
that the
african-american black negroes are in a state of emergency in san francisco. >> thank you.
next speaker.
>> can you hear me? Good afternoon supervisors my
name is george shank (Sounds
like)-speaking as vice President Of the asian-american
contractors associations. We brought this legislation and discussed that among our membership and the board. This is a straightforward piece of legislation a supervisor
chu mentioned. It will have in our view a very positive impact on the
contracting community, providing certainty and predictability with regards to
cash flow, with the seven-day
component. There is also a mechanism for
self enforcement which is positive, namely the 2% prompt payment penalty.
For existing or upcoming sf projects, don't think that there will be an adverse transition to these
requirements. These requirements have
been going on
since January 1 of last year.
When jerry brown passes into
law as of January 1 last year, for about a year prime contractors and subcontractors have been dealing with these requirements
and successfully adhering to these requirements outside the
city.Transition to this
legislation should be smooth. >> good afternoon my name is
lloyd -- small business
consultant. Also an lbe and
serve on the lbe committee. We have been talking a lot
about your legislation. Everybody I talk to agrees that it is a wonderful first step in this will alleviate a lot of suffering
are some of the smaller outfits that have not been paid in literally years
from their contracts. So having said that,
congratulations.
Very good. We still have a lot of nagging
problems
with our lbe program. What I am hoping that you would understand and if you need more clarification we are available at the
committee 87% of the lbes
other micro-lbes, the smallest. Since we are tweaking some of
these ordinances it looks like we might have the
mindset to realize some of the
advantages to having work go
to our local business enterprises especially our
smallest ones which by the way
comprise only micro, 87%, but
most of the micros are minority and women owned
businesses. You can go further than that and say that historically because of some
institutional setbacks in our
society, women and minorities
have a harder time getting credit. It goes on and on. They remain small.
I urge you to take this opportunity of this mindset
and try to figure out a way to bring more work to the
smallest, the micros, more
set-asides and possibly some
changing of the thresholds.
>> chair: thank you very much. Are there other members of the public who wish to speak on item number one. Seeing none public comment is closed.
Gavel: Though I have a motion to amend the legislation as read in the record?
>> so moved.
>> seconded and we can do that
without objection. This helps
to address from component of the prompt payment process;
other areas where we do think
that we have room to move, we have room to look at what we
require prime contractors to
do with regards to submission, once they receive an invoice
from a subcontractor. We have a lot more work to do around transparency
and how the city can make sure
all parties involved have transparency with where we are
in terms of processing payments. Finally I think the city has
room to move in terms of figuring out how to standardized reporting and tracking payments and how it is that we do reporting. These are some of the areas of
that forward to continuing to work on with the contractor community and with the city departments. Do we have a motion to send the item forward with recommendations as amended?
>> yes, Madam Chair. It is good to be back on
government audits and oversight, and looking forward to working with this committee. I want to say that this is a very sound piece of legislation.
It makes a great deal of sense. I like the fact that we are
among the things conforming
with state laws; it makes a great deal of sense to also
provide certainty and clarity
for the subcontractors that
are impacted by this issue. and I would like to ask that
my name be added as a cosponsor.
>> chair: thank you very much
supervisor. I would like to say that the small business commission has also acted to support this
legislation as well. >> I make a motion to move this forward, the process of
recommendation.
>> chair: we can do that without objection. Item 2.
>> chair: this is brought by a number of supervisors.
Supervisor campos, do you have
opening comments?
>> supervisor campos: I will be
brief in my comments. Since I was elected supervisor
four years ago,
we have heard from time to time from a number of residents from the public housing developments about issues involving living conditions and the housing authority
developments. It is something that we have been hearing more about in the last few weeks.
I actually have three housing authority developments in my
district, -- dwellings, holly
Sounds like: .
There are other supervisors, and other members of his body that also have housing authority developments in their districts. I know that all of us on this board are committed to making sure
that the needs of these residents are addressed. It is in that spirit that I wanted to bring
us item forward simply to
provide
the city and county of san
francisco that clear picture of how the needs of these
residents are being met and we are
mindful of the fact that we are talking about an agency subject to the jurisdiction of the federal government. We know that the department of
housing and urban development, hud, is conducting a nodded to see if the housing authority is comply with housing standards among other things.
We know that a city we invest resources in
redevelopment for instance housing authority property.
One of the objectives of this review is simply to ensure that our partner, the housing authority, is in a strong
financial position. And that the investments that the city is making
a properly managed. The kind of review
that I have in mind
is a review that is consistent
with how we as a board
deal with the management and operations of various agencies.
We as a board under our rules actually have a point of calling for different types of audits from time to time,
including a management audit which under our rules as opposed to happen
every eight years or so. And when we look at the issue of when the last time the housing authority has been audited
by the city, we discovered
that the last time was in
1993, about 10 years ago. The item that you have before you %
I want to thank my colleagues who have sponsored this item,
supervisors avalos, kim and mar, basically it's an item asking
the budget and legislative analyst to conduct a performance review of this agency, and the kinds of things that performance review would
include would be
compliance with all applicable
federal, state and local laws, including different practices and procedures that the city has in place.
The effectiveness of the agency's governance as well as
financial controls,
recommendations made by hud and other entities that have
audited this agency. The audit would also look at the management of public housing resources
including housing provided by section 8 vouchers,
as well as looking at housing authority mass public housing and housing managed by third parties including
nonprofit corporations. The audit would also as a matter of practice
look at the management
of the agency including looking at the management
staff and other resources;
and other jurisdictions. One thing that we want to be
very careful about is we are mindful of the fact
that the federal government,
through hud,
is auditing the agency and in thinking about
the scope of this audit, we have asked the budget and
legislative analysts to focus
on those areas where there is intersection
between what the housing authority is doing in terms of fulfilling its mandate and the city,
county of san francisco. We want to make sure there is
no duplication of the review being conducted by hud.
At some point, once we hear from other colleagues on the
committee, I will ask our budget and
legislative analyst to come up and speak
in greater detail
about this process, and about the potential items that would be included in the scope. The last thing that I would say
is that, and management audit and a performance audit is essentially about simply providing a picture for what
is happening in terms of the way which an agency is serving the needs of its constituents, its residents. It is an opportunity to see the positive,
to see the negative, to see the areas where there has been improvement, areas where improvement could be made if that is the case.
I look forward to my colleagues on the committee supporting
this item, and any input that you have in terms of what the scope of this should be.
Thank you very much.
>> chair: thank you supervisor
campos. I look forward to hearing for the budget analyst,
flushing out how they would see this audit unfolding. Did you want to bring the
budget analyst up?
>> supervisor campos: if we can
ask Ms. Campbell?
I just wanted to give my colleagues the opportunity to say anything.
>> good afternoon chair chur
and members of the committee.
Supervisor campos did actually go over the scope that we have introduced in the motion.
It's a very broad scope.
At the scope that would be like any initiative
of any audit.
We conduct a risk assessment, where we would carefully define the scope and narrow it to what we consider
the most critical areas. A couple of points about this audit.
This is a hud-funded agency,
not funded by the city. We have met with the government relations officer from the housing authority and discuss
our working relationship.
he did provide us with a copy of the information request provided by hud. We talked about what the hud
scope would be so we would be able to work
cooperatively and make sure we are making the best use of resources in terms of conducting the
audit. We have already begun that
discussion, although abortion is not the
best.
>> supervisor campos: Ms.
Campbell forgot to brought this,
and glad that you brought it up.
Housing authority staff has
been very helpful and willing to work with the budget and legislative analyst. I want to thank them for their
willingness to do that. >> they have been very helpful up until now even though emotions not been adopted yet.
In terms of defining the audit,
how differs from the hud audit,
hud has their criteria, rules, compliance procedures that they will look at.
They will be looking at financial and governance of the agency. Nonetheless we would go in and
look at where the city has
interest.
this is part of the cities stock, city residents and housing.
We hope that sf, with future
plans of development of public
housing, -- we believe that because of the
departments of public health
and human resources provide a lot of services to residents
of this housing, the city has
an interest.
We also have a prior audit.
We did an audit last year in response to complaints of
there were problems, referral to city properties etc. There is a relationship.
We focus on -- we know that hud would look at things within a certain level of criteria. I believe that there will still be areas in terms of the financial performance, financial policies, strategic
planning, procurement --
there are many areas where we
believe that there are benefits of looking more strategically
at some of these areas.
Financial policies, we do have
experience of conducting a similar audit of the last couple of months of the los angeles city
housing authority, looking at their financial condition. That was looking beyond what hud would look at.
We have that as a model. If there are other questions?
Or requests or comments?
>> chair: supervisor cohen?
>> supervisor cohen: thank you for the presentation. I'm going to thank you and the front side for your thoughtful --
the amount of energy that is going to carry through this
management audit.
Thank you very much for raising to our attention the
importance of the responsibility that we have to ensure
that we are providing
safe, and habitable housing for people
in san francisco, and a supervisor that
represents four other cities
largest public housing development I know well the challenges the housing authority and
residents face.
I left an hour and a half meeting with residents over at
alice griffith; we deal with many of the challenges on a daily basis.
Not a day goes by when my staff or I are contacted or
personally affected -- when I
consider that I have family members that stay in
these developments, or when I received complaints about maintenance,
and on a positive note, good news when we receive grants from the federal
government to help with the sf
rebuild.
Two weeks ago I attended a ribbon-cutting ceremony when
the mayor, I am whole community
got the opportunity to tour a
4-unit building.
We are progressing and moving in the right direction, departing from the way we have been conducting business as it
relates to our housing. It is no surprise that the housing authority has struggle with the more than
200 million unfunded
maintenance liability, and
decreasing resources from hud.
I appreciate the budget analyst's presentation and willingness to work with the board on this particular issue. However there are a number of realities that I want this audit to recognize and incorporate into its framework and I'm going to go down quickly, and circle back and provide you
with detailed documentation. Just to help shape the conversation.
I think it is essential that the audit be done in
tandem with hud, currently conducting nodded of the agency.
Both of you have stated that. It is my understanding that hud
will be issuing a corrective
plan sometime in March about how the agency can improve.
Therefore I believe that the audit should be informed by
this corrective plan.
And corrective action plans. Any recommendation that hud
makes because -- ultimately they are the funders of the agency.
Additionally when the budget analyst look at the finances of the agency, it is important to keep in mind the number of programs and public policy decisions we make to improve the lives of our residents. This includes such things as
the housing authority funds a
weekend garbage pickup service. Something my office and the
mayors office led the effort of trying to organize garbage pickup.
Believe it or not they don't have garbage pickup service on
the weekend.
It was expensive to solve the problem, more than a million
dollars in police services. We have an unbelievable crime problem.
how like analysts to look at
the current level of recollection at the properties and make recommendations about how to improve the effort to increase.
the resources within the agency.
To make it plain, they are people not paying the
rent.
You are an analyst, you can appreciate this.
When it revenue.
I am looking for suggestions a humane way to address this
discrepancy. I would like to budget analyst
to take a look at the cost the agency incurs when moving tenants from a different property largely due to the public safety
concern. It is an exorbitant amount of
cost.
Getting units up and ready. It will be helpful for the
budget analyst to look at other housing authorities in california. Supervisor campos mentioned
this. Very fortuitous.
Or other states.
Urban properties, section 8
program.
my understanding is that we could better administer
our section 8 program. I would like to hear ideas that
you come up with. I want to hear creative
solutions and recommendations
that are informed about the
work that hud is doing so that we board members can provide policy direction to the
authority and also support our public housing residents and begin to address our house and challenges
which is no secret. We are facing serious challenges. I can provide you with documents that would be to everything for you.
and I appreciate you, in the task that you are going to be
undertaking. I do believe this is in the best interest of all of san francisco,
not just our housing residents.
I'm glad that you researched,
1993 is a long time. I think I was a sophomore in high school.
Here we are today dealing with
it in 2013.
I am optimistic and full of hope that we will get some tangible answers and suggestions
that we can begin to implement.
>> chair: thank you. Important suggestions and things we will follow through.
The follow-up question for you.
In terms of the question before us, it is brought in terms of the categories for the audit.
Abc to f. Anyone alone can be a
significant and large audit. I would like for you to explain
how you will get it to a place
where it is manageable. This is an important topic,
and other audits that will be
bringing back his priorities. I will like for you to narrow
down the focus and in terms of timing, how much time will be
dedicated, how many hours. What does that mean for the entire portfolio for the audits that we have on-site
for the 2013 year? >> I like to answer all of that
but the scope recommended in the motion is broad so that we could make the assessment and determine
what are the highest priorities.
What will benefit the city?
what can have a real impact? That will frame the questions
we ask as to how we conduct our
risk assessment.
In terms of the logistics,
and we would develop a much more
refined work plan based on that, we would want to complete this by May, before the budget review in
june. There is no benefit to dragging it longer than that. I am assuming that this will go to the board on tuesday, the following tuesday.
We will be prepared to begin
as soon as it is approved. We are already reviewing other documents. In terms of the overall audit
program,
we have to present to the gao
shortly a work plan for 2013.
I believe it will look similar
to the work plan in 2012, allocating 5000 out of the 17,000 or contract to special
projects in audit.
some of that a special
requests from the supervisors;
also perhaps 3000 hours, -- we
would bring that shortly. This is one audit to be conducted during the course of the year.
In terms of where we are now, we are completing today the final draft on the public safety realignment audit,
submitting that to departments
to get written comments.We hope to present up to the board of
supervisors next week. We have an outstanding audit on the redevelopment agency that we want to discuss with this committee.
Our goal is to -- the amendment
is looking at 12-1500, we
cannot do all of it by May.
We want to discuss with you what are your priorities and help you decide what some of the highest cost and risk issues are.
In terms of the work both
supervisor campus and cohen talk about working in tandem
with the hud audit, in some of the findings to
inform this process as opposed
to duplicating this. I imagine it going to this risk assessment that we could narrow the focus with intention not to duplicate some of the work
done by hud, correct?
>> correct.
>> chair: supervisor campos?
>> supervisor campos: thank you
for your comments supervisor
cohen. It is important to take all
those points into consideration. We welcome any additional feedback not only for members of this committee but also from members of the board.
Other members of the board.
I wanted to get a better sense sort of what it means
to work in tandem
with hud for instance. one of the items that we have
this compliance
with applicable laws,
federal, state, local.
I imagine that would mean that hud is focusing on how federal law is
being followed. And that for you to focus would be more than what is happening with local compliance.
Is that how it would work?
>> anything specific to hud,
the governing agency, we would
leave to them.
but I say that sort of
looking over not just laws,
legal compliance,
might be in hud's purview.
we would take much more of a
focus on the city's priorities. I do know-
especially when we talk about policies % there are many city policies
and priorities that are different from what
hud wants. We would look at that and how it fits together. I say that because I think that there are things about
that are important to the city that maybe hud has a different
point of view on. >> supervisor campos:
supervisor cohen mentioned the
issuing of grants, purchasing,
contracting. i assume policies around those issues would be things included in your review.
>> that is correct. Part of the government accountability office auditing standards are
to consider what
other audits have revealed. To some extent it is just
an efficiency issue. they will be coming up with findings in March. We will be completing I work until probably . Sometime after that we can look at some of their issues and say
they are addressing it or,
there is a city perspective on this and we want to take a
step further. I had a discussion with Mr. Peterson from the housing authority about the fact that
the housing authority said they are not meeting their asset management
program.
How hud has dealt with that is to say that we are going to reduce your allocation;
this is a punitive action because you have not met the strict area. He described some of the issues about them not meeting
their asset management program makes me think that the
commission and the city they want to say that this is the way that you should be meeting it and you could be meeting it
and go a step further with that. I don't know all of the conditions. I know what he said to us
about some of the failures. Those are things the city could address quite easily. Those are some of the areas
where we might take what they do and then move a
step further with it.
>> supervisor campos: last thing I want to say, and I hope that you will also
look at, not only sort of the
performance of the agency. But I think it would also be
appropriate, and I think it is very timely
given the housing audit that you did last year,
how the city can also better
support the agency itself because there is an interconnection between what they are doing and what we are
doing. I am certainly interested in that piece as well.
>> okay.
Thank you and final piece.
my colleagues mentioned some great areas to focus on from their perspective. One area I think just to flush out that I think is interesting to me as well that would be informative is
what the housing authority's financial planning processes look like, whether following best practices with regards to find, budgeting, these are things that to the extent they are successful in that arena
they are able to deal with a lot more the issues that people care about,
day-to-day,
how our units maintain, are repairs done in a timely
way. Those of things that can be strengthened
if they have a firm financial
planning and footing. There is a place we can look at as well.
Thank you.
>> supervisor campos: I forgot
to add, wondering if have any thoughts on this. A lot of information we get not only comes from the agency itself but we also hear from the residence. I don't know if there is any opportunity at times to hear from
some of the folks that May be impacted by it
in a more direct way.
>> they are already calling us. There are advisory committees
established by hud.
One for the voucher payment program; one for the housing program.
We including any work plan no matter what the risk assessment
focus group meetings, talking
to the residents, because they can inform us about how effective the management is of the properties
themselves.
>> thank you supervisors.
>> supervisor cohen: I also
was going to highlight that
each property
has a tenant association and there is a large
association, the public housing tenants
association which has representative from all across the city.
They have a citywide perspective and meet on a regular basis. This is outside of the commission that I'm talking
about. What you are talking about is having
feedback from the tenant, those persons on the ground receiving these benefits.
I find it most helpful to
attend the tenants' meeting on
a fairly regular basis.
>> we would do that.
We did the audit of the communities we did meet with a tenant association. We have already that
connection.
>> chair: thank you very much. Without any other questions why do we open this
for public comment. Are there members of the public
who wish to speaks? >> I am requesting to speak more than 2 minutes.
I am an authority. You check your records, and you
will see ace washington.
you're looking at someone that has authority and knows exactly about housing authority,
knows what the tenants want. The scope back to what we were
talking about this history here.
It is no secret that number one, public safety is what the most important thing of
the tenants there. They don't have the money to do
it. Hud cut off their money.
I appreciate campos what you
are doing here, but I'm ready
to get to the quick. 10 years ago, we had a public hearing. The tenants marched down to
have hearings here. I know the rules.
What I'm seeing now, I want someone to pay close attention
to what I'm saying.
I'm not new to this; I am true to this.
you go through your process.
Myself, ace washington, I'm
going to do my own independent. With the social media here hud knows that they are in trouble
but they are doing the right thing by cutting off the
funding. The mayor has to get rid of the of ministration,
we all know that.
have to get rid of alvarez. Let him sleep out there with the tenants.
Right now the bottom line is
the tenants.
This audit will show that they
are out of compliance; it
would show that there are total violations and it is going to show the reason why I'm going to file an injunction, I'm
going to hire angela alioto the stopple procedures in the city and county that relates to
african-american tenants; you are playing around here like we
are playing games. Those tenants are the one suffering. The authority is out of compliance.
>> chair: thank you. >> I will come back of another
chance.
>> chair: any of the speakers for item 2. Seeing none public comment is closed.
Gavel:
We have a motion on the motion? >> I make a motion to move this item
with a positive recommendation.
>> chair: supervisor cohen do
you want to say a few words? We have a motion to set the item forward with
recommendations, narrowing down the focus of
this item, many members of this board whether on the committee or elsewhere will be feeding
information to the analyst. We can move this forward without objection?
