end of your question. there will be discussion in terms of the dixie in repairing and financing repairs. i think we will certainly mention the options that include state legislation for facilities plans with homeowners associations. i don't get the sense of advice the committee would support making earthquake insurance mandatory i think it was a better deal. if it was a better deal, there probably would be better support for it. but because it's such a bad deal at the present time, it's not. retrofitting is clearly the way to go. i recognize it's an out-of-pocket expense, the disruption that has all of these down sides to it. but it's so much better than these other alternatives like heightened insurance premiums. commissioner lee: if retrofitting is the way to go, has the insurance companies

given any indication that they would insure these buildings that have been retrofitted at a lower cost, perhaps? >> the earthquake insurance market is dominated by the california earthquake authority. it applies for buildings only to one and two-unit buildings. and by state law it provides a 5% premium break for retrofitting. that was just an arbitrary number that was reached, i guess, when the legislation was being passed. it doesn't reflect the actuarial changes that occur once being retrofitted that require state law to change that. personally, i think it should be changed. when it comes to other buildings, building owners can get earthquake insurance through private insurers. there are a couple of company that do only earthquake insurance. their policies are directly competitive. you can get different terms like lower premiums -- excuse

me. not lower premiums. lower deductible limits. when it comes to larger commercial buildings -- and i don't know where the breakoff is -- there is earthquake insurance. and it usually depends on having a thorough building evaluation and a requirement such as probable maximum loss of 20% or less before they'll write earthquake insurance. but we believe that that mechanism has worked for a large number of commercial buildings in san francisco because of owner -- excuse me, lender requirements and insurer requirements have caused work to be done on a large number of buildings in order to get the probable maximum loss to 20% or less, and have that coverage. so it's kind of a mixed bag. chairman murphy: commissioner hechanova? commissioner hechanova: under the finance and care has there been some discussion under the possibility where there are

higher at-risk zones, that there could be a pooling or an aggregate of insurance, insureability, of those property owners? and i don't have an answer nor is there one probably, but in the coverage issue there are those that are in the higher at-risk zones that it isn't sure that they will get damaged. so there should be some incentive for those property owners at those locations by which maybe there could be an aggregate insurance premium that the property owners can -- if for lack of a better description, almost intensely in common buy into a program. >> commissioner, it's a difficult question. i have not heard of a pooling

insurance for particular areas. i know one of the problems with any insurer is there tends to be adverse selection. those of us who live in dangerous places or have weak buildings go to insurance to cover, you know, our rifpblg in some cases. -- risk in some cases. and those with better buildings or better locations are long away from the fault will not necessarily buy it. so the exposure is highly concentrated. insurance is regulated by the state. the insurance commissioner really has two jobs. job number one is to make sure the insurance companies that are licensed within the state have adequate reserves to pay off their losses. and the second is to ensure that the premiums being charged have an actuarial basis for it. that latter requirement that there be an actuarial basis has strictly been a hang-up for insurance companies offering, you know, mitigation as incentive and dealing with some

of these issues. because it's so difficult to quantify the actuarial basis of these kinds of policies. whether or not insurance even works as a mechanism, there are other problems with federal law and taxation. i know the insurance industry if they were here, would be telling bus it. -- -- us about it. but after the earthquake there was a state program, sold statewide, for loans to help owners repair. and those were loans. and they were used. and they were paid back. just a few years later when the north ridge earthquake struck, california was in a worse economic condition then and the idea for bond measure failed and the state did not help with that recovery. but in that case the city of los angeles stepped in and had created a program to help owners of multi-owner buildings finance, make repairs and move ahead. i suspect the answers to a lot

of this will be after the fact and will require government intervention for funding. that's, again, not so much of our report. it is a good argument why retrofitting makes sense and is in the best interest of the owners as well as tenants. commissioner hechanova: thank you. commissioner lee: i was wondering if the committee has talked also about if there are tenants that are relocated, would there be some support for them? and i was thinking for a lot of wood frame buildings, especially the smaller ones in san francisco. not only residential tenants, but they toned have a lot of storefront, small business tenants. and with the discussion, any support for those small businesses or non-profits that might be relocated temporarily while the retrofit is happening? and also, is there a guarantee of some type of pass through that would limit the landlord from just totally turning over those types of businesses

because they would want to after the retrofit rerent it to a much higher paying tenant? any discussion on those impacts or how that education could be done? >> these questions have come up, and there has been discussion. and i think issues that deal with residential rent control are ones that properly fall within the rent stabilization boards' per view. my understanding is that when an expense is mandatory, that the owners are allowed to pass through a certain percentage of that per year over a period of time. however, there's limits. in terms of how effective that really is. a very large number of buildings in san francisco are already at market. and so even if you're allowed to pass through an additional 10% that puts your rent over market. and then you can't rent those units, you know. with the supply in demand

controls over what the market sets, sometimes you're just in the room to charge more. so that affects probably more than half of the units. taking several weeks coulding the death mill for many businesses. finding ways to do that where it's not terribly expensive working at night and quietly, one of the suggestions is that the retrofitting of those buildings could be timed to the termination of leases so that when a lease is up and tenants are being changed that perhaps retrofitting would become mandatory at that time. that allows a natural break in that commercial process that is going on. i'm not sure how that's going to be addressed. and the legislation now pending before the city that deals with the five-unit buildings in greater. because a large number of those

buildings do have commercial tenants on the ground floor. you know, those issues are being dealt with by a variety of city agencies and interests outside. chairman murphy: commissioners? >> commissioners, thank you very much. chairman murphy: thank you. any public comments on this item? >> good morning, commissioners. luke o'brien. i've been involved in some of the meetings with the capss program for a while. it's something that will clearly have an impact on the city. there's a lot of work going into it. a couple of brief points.

one, i would like to suggest that the calculation gets somewhat simplified. can i -- i can tell you from experience that the process for estimating a capital pass through when you do an improvment to a rental building that is so complicated that on occasion if you would call the rent board and talk to someone on that department and ask them to calculate how much you're entitled to calculate the rent as a result of a new rent, new foundation, retrofitting, whatever you've done, sometimes they don't even take on the initiative to answer the question because they're afraid that they may give you the wrong answer. and i know for a fact that there's quite a few members of the landlord community who just don't it because the work involved is more than it's worth.

especially when you end up potentially leaving yourself open for getting the wrong amount. and then you can be sued or a claim can be made against you for those damages. the other is i've had experience doing retrofitting. not mixed use. i don't have direct experience of that. but for strictly residential. and interestingly enough, the one set of tenants that i lost actually was only because of the noise that was generated from the machines used for doing the steel work and the foundation during that period of the project. i didn't lose them prior to it. i didn't lose it afterwards. these people happened to be running a business. so they were there during the day. so you get a double whammy there. you try to hope you're doing the work during the day when everybody's not there because they're at the office or at their place of work. but it can be done. on the commercial one, the only way it's going to be possible

is if they can relocate the business. there's no way around it. we're dancing around that issue a long time. the only way to do it -- [tone] if we have an earthquake, then they will be out of business anyway because the building will fall down. so you can either do it under a controlled circumstances and anticipate as much as possible, control it, mitigate as much as possible. or you can wait until the big one, as they call it, comes and then the decisions will be made for you anyway. and it will be red tagged and they'll all be out of business. if we do it beforehand, they may be able to stay in business during that period. thank you very much. chairman murphy: thank you. further public comments? seeing none. >> we can move on to item number eight. discussion and possible action regarding request for extension of capps program. >> thank you.

deputy director. in your packet you have agenda number 8. on the second page of that is a little time frame. i just want to call your attention to the need to do a time extension, no cost extension to this contract. just to have it end up on the december 31 deadline that mr. tobin was talking about in the next steps part of his presentation. the contract says that they'll be done in the 24-month period. but we've already extended that because of the mayor's program. and now we need to just make sure that the contract properly reflects the reality of the additional few months. you can see on this schedule the timeline we started. this actual work in 1999. we started prepping for this i think in 1997. so we are pretty darn close to the end here. it being october now. this is a no fee extension, but i need the approval of the commission to officially do this as part of our contract revision.

chairman murphy: how much of an extension are you looking for? >> this would be from the official termination of the contract which is the beginning of this month through the end of september till december 31. chairman murphy: 2019? >> 2010. this very year. thank you. chairman murphy: any questions, commissioners? seeing none. >> i'd appreciate an action on part of the commission to do that. thank you. chairman murphy: do we have a motion? >> we need to take public comment first. if there's any public comment on the extension of the capps. seeing none. oh we do go ahead. >> luke o'brien again, coalition of responsible growth. if i may, it would be nice to hear just because we have the

opportunity that saves us the time of having to read the document which can take a lot more. if we could get a brief summary of what remains to be done and how we may achieve that in the months between now and the end of the year so that it's realistic and we're all comfortable that we can achieve what it is that we're doing the extension for. i would appreciate if it was possible, to just get some feedback on that. then i think you can make a more informed decision on a vote to extend it or not. thank you. chairman murphy: thank you. further public comments? commissioner lee? commissioner lee: i just have one question. is it possible to shorten the timeline? i mean, instead of going all the way to december, could we possibly finish it in november? i'm just -- you know, the december month we have furlough

days coming, holidays. could we possibly move it up to like right before thanksgiving perhaps? finish it up? >> i wish that were possible. i don't believe so. i want to make absolutely certain that the department has the time that we need to review the material that we can bring it to committee and commissions. it's hard, already tightly crunched to make that schedule. but mr. tobin, he went over the deliverables from the time, the reason we're asking for the extension already. i don't think we reasonably could squeeze it anywhere. commissioner lee: i know we extended it once before. >> right. commissioner lee: i think we're all very anxious to have this project completed. >> right. commissioner lee: i don't know how the others feel about it, but i'd like to see this finished. >> i would, too. believe me. it's been many years. chairman murphy: commissioner hechanova? commissioner hechanova: i have a question for counsel. at the point of where this

determination is to occur this month, is there the possibility of voting on it or tabling it to the next meeting? >> i'm not sure exactly when the contract expires on its own terms. [tone] there is a possibility -- chairman murphy: mr. cornfield will answer that question. >> yeah. the contract was for a 24-month period from the date of the notice to proceed. and then adding to that the previous extension would have required it to determinate, i believe, on september 30. but that only terminates upon our action. it doesn't automatically terminate. and we have not taken action to terminate the contract. obviously we're trying to finish the work. >> the technicality of the date

certain was end of september? >> end of september. that's right. chairman murphy: a motion, commissioners? commissioner hechanova: motion to hear -- >> motion to support the department's extension of the contract through december 31 of this year. chairman murphy: can i make a motion? commissioner hechanova: sure. chairman murphy: i make a motion that we table it until the november meeting. commissioner hechanova: second. commissioner lee: i think -- if we do that, what happens to the project? >> deputy city attorney. i just want to weigh in for a moment. there is a reasonable window within which you can act. the further we go from the time in which the contract would expire would be more limited

your actions would become. chairman murphy: what is the reasonable window? >> well, i think in this case it's been a 10-year process, so it's probably fairly long. chairman murphy: so november would be ok? >> probably. chairman murphy: november 17? sorry. commissioner? >> i'm not sure. since it's been such a long process, i'm not sure why we wouldn't just vote to extent the contract until december 31. it seems a little bit a waste of time to postpone it until november 17 which would then allow the staff only a month time. chairman murphy: well, let's extend it -- let me restate my motion. let's extend it until our october, meeting. commissioner lee: this is our october meeting. chairman murphy: no. we have a regular meeting, i believe, ann? >> we have a regular meeting

scheduled for the 20th. but you'd need -- depending on what items we have. chairman murphy: commissioners? >> president murphy and commissioners, i just want to weigh in. i received a bit more information about the way in which the contract is structured and the payment. one thing to take into consideration is that in order for the contractor to receive ongoing payment for their invoices and the deliverables going forward, they would need to have a contract extension. so during the interim period, could you table the extension but it would, in effect, be the commission's ability to pay for the service that are being provided. chairman murphy: well, there's one motion on the table.

do we have another motion? commissioner lee: i would like to move that we just grant the extension. for the capps until december 31. chairman murphy: ok. >> we don't have a second on either motion. chairman murphy: can we vote on the first? do i have a second on the first motion? >> you don't have a second on either motion. commissioner hechanova: knox i seconded the first. >> could you repeat the first? chairman murphy: table it until our regular november meeting. which i believe is on the 17th. >> and a second by commissioner hechanova? commissioner hechanova: yes. >> ok. we'll take a roll call vote. [roll call]

the motion carries on a vote of 4-1. so this item is tabled until our meeting on november 17. ok. we can now go back to item number 5, which is update and discussion on how the department of building inspection and the department of public works are working to improve communications around the permit process. chairman murphy: director? director day: i'm not quite sure what you want to hear on this. i work with all the department heads from all the departments on the permit process. and we are working as we put the r.f.p. together for the permit tracking system to better consolidate the permit

process to be all inclusive at d.b.i. in other words, move even some of the function that are being performed at 875 stevenson street, by the department of public works to d.b.i. and incorporate more of the actual permitting process that are required, such as street encroachments, things like that, into the d.b.i. process. and to be able to issue them through the d.p.w. people at d.b.i. so that's ongoing. we're also working to improve the actual way that lot line adjustments and condominium maps are processed to make sure that everything is addressed up front rather than at the end or when permits are required. and that was part of my addressing memo, that when a new lot is created, the address must be assigned at the time it's created so that when someone comes in and does pull

a building permit for a new parcel, that we have the lot in our system and not have to go find it in d.p.w.'s system. so we are working towards that. that's also a coordination effort with the assessor's office. due to the recording of the final maps and the lot line adjustments. we're kind of streamlining that process a little bit. chairman murphy: what's the average time now for p.u.c. turnaround? director day: p.u.c. turnaround on plans? chairman murphy: yeah. director day: actually, now, since july 1, we're actually sending out all of the plans to all of the departments within the first -- at the time they're submitted. that's one of the reasons for requiring the eight sets of plans. so we're getting back the responses from p.u.c. within the first 30 days if it's not over the counter. so everyone is responding back to us within 30 days. chairman murphy: does p.u.c. have staff on the fifth floor? do they have a desk there?

>> yes. they have two desks there. they actually have staff. they're actually located -- their working area is on the fourth floor. so there are two full-time p.u.c. staff members at d.b.i. and have been for years now. it's just, you know, -- they're also on the same position we are. they are the furlough days they have to consider. and one is normally stationed at the fifth floor. or can be available at the fifth floor if they're working in their office. they have a way to call them. chairman murphy: right. commissioner hechanova? commissioner hechanova: have any of the standing m.o.u.'s with the respective departments, will there be an amendment to those m.o.u.'s and will there be a structure of how the billables for administrative services that d.b.i. will be rendering relative to the r.f. -- how the system works? that's basically what i'm

asking. director day: right. we have work orders established with all of these departments except d.p.w. that reside at d.b.i. and we are looking into passing on all of the costs that d.b.i. has technically and historically absorbed internally. and we will be looking into that and dealing with the departments directly on the m.o.u.'s at the end of this year. commissioner hechanova: and similarly, the cost of the software? is that just fully d.b.i.'s out-of-pocket costs? director day: no. actually the general fund is contributing to the implementation of the software for the other city departments. we are contributing the hardware and the ongoing maintenance. however, the ongoing maintenance is also paid by committees by the department for the technology fee. and that's a charge that was implemented a couple of years ago by this commission so that we could actually pay for the ongoing maintenance and.-- and

the enterprise lies yens for the software. -- license for the software. -- license for the software. commissioner hechanova: thank you. chairman murphy: my question is probably on the same lines as commissioner hechanova. when we get the online system, will it speed up the time with the department of building, with the department of public works? will we be able to go from 30 days to 15 day? director day: we're hoping that the electronic plan check will do that, where we can send out plans to all the departments electronically at one time. that's a project that will be going out for r.f.p. in january. that will be tied into the permit tracking system. however, that is a system that can be implemented now rather than waiting for the permit tracking system. so the electric plan check will help and aid in the communication between the

departments on the actual plan sets, and it will reduce the paper cost. it's a greenway to go with new technology. and d.p.w., all of the plan checking and all of the plan review departments, we're making this software available to them to expedite processing. and anyone that has a process that relates to permit, we are offering this system to, such as d.p.w. for lot lines. it's critical for some of our plan checks. if the lot line doesn't go through and it's on hold, then we can't approve the permit. that's just the way it is. so we're held up. the customer is held up until that lot line adjustment goes through. or partial map, or whatever it might be. but there's a way to combine forces. and we're looking into that. and now d.p.w. does have a new manager for that division which we will be working with very closely on this.

chairman murphy: ok. thank you. public comments on item 5? three minutes. >> john, from san francisco coalition for responsible growth. president, commissioners, director, i'd like to bring to your attention, commissioners, a recent application for an electrical permit. last monday an electrical contractor got his electrical permit online, and it went really very smoothly as it always does now with the online system. he paid his fee. and then a short time later