management system and centralizing where all of these over time cards are being processed. i am new to legal and i wanted to a knowledge of some of the work that has been done since this audit because we have been working very diligently to comply with all of these recommendations. some of the supervisor pick 4 may have done an outstanding job. i have an officer here who is a subject matter expert in court over time. she has taken over the responsibility of in putting every over time card for the department. it injures more accountability and making sure we are following all policies of our department. if you have any questions -- supervisor campos: no, thank you. i appreciate that the chief has

inherited this. it is unfortunate that we are where we are, but we need to focus on moving forward, making sure we have these systems in place. we are talking about premium pay, overtime pay. those are important issues. i think we need to make sure that we monitor it as closely as we can. thank you very much. i think that concludes the presentations, unless there is a department that i left out? why don't we now open it up to public comment is there anyone from the public that would like to comment on this item? >> good morning, supervisors. thomas picarello. there appears to be a disconnect with what is happening in the city and what is being presented

to you today. let me be specific. at laguna honda hospital, there were two doctors that blew the whistle on the patient gift fund. now, dph is coming before you and telling you that they should only report on a yearly basis, instead of a quarterly basis. two medical doctors lost their positions at laguna honda hospital for identifying fraud and abuse with a patient. secondly, the presenter from the comptroller's office -- i am sorry, i forgot her name. several days ago, she was referred to the district attorney's office, the ethics commission, and the mayor's

office, for willfully violating sunshine orders of the termination regarding lagoon on the hospital and the whistleblower program. i urge you to read the grand jury's report. the whistleblower program out of the controller's office. thank you. supervisor campos: thank you very much. next speaker please. >> good morning. i am walter. this city has the money shining like a silver plane the goddess of everything i know we want better change city, you have got it yes, city, you have got it. you are ready audit yes, city, you have got it

you are the audit you are the city pride and joy the goddess of the city changed and you know i want some better change and i am wanted now i see and you have got it. yes, city, you are the audit you are the city audit you are the god of change and you have got it, keep it green, i mean it yes, city, you have got it you are the city audit you are the city pride of joy supervisor campos: next speaker please. >> good morning, my name is douglas yepp, and i have lived

in san francisco for 59 years. i would like to thank the sponsor for this hearing. it is way overdue, and i would like to offer my own support for having the city services auditor working like a watchdog, rather than -- rather than a lap dog. i was happy to hear the gift fund come up for discussion. the reason why, i would like to recommend to everyone in this room read today's letter to the editor in "the examiner." the title is "sf should keep an eye on laguna honda gift funds." if there are any further hearings regarding laguna honda hospital, that one person should be invited who would have plenty of information to discuss this mr. patrick shaw. i was disappointed not to see

him today. i guess he is tied up or did not realize that it was going to be brought up. for the three members of this committee, i would like to say my standard speech on the three things that everyone should remember about city government. first, and obstruction of justice. second, dereliction of duty. third, abuse of power under the color of authority. if everybody would consider those, i think the city government of san francisco would be in far better shape. i think you again for having today's hearing. supervisor campos: thank you. next speaker please. >> good morning, supervisors. i am just going to briefly state and i concur with all of the speakers who came before me. section 67.1 in the sunshine

ordinance act states of the board of supervisors and the people of the city and county of san francisco find and declare government's duty is to serve the public reaching its decisions in full view of the public. keep the spotlight on everybody. thank you. supervisor campos: thank you. is there any other member of the public that would like to speak? seeing none, public comment is closed. with respect to the items discussed, with respect to the laguna honda gift fund, that remains an issue that we need to follow up on. i hope there are further discussions between the department and controller's office. i do think the more frequent reporting, the better. so we will bring that item back to make sure that we continue to monitor it.

again, this will be an ongoing item that we will bring forward to make sure there is follow-up on responses and compliance with the various audits that have been and will be conducted. colleagues, unless you have any comments, can we continue this to the call of the chair? motion by supervisor farrell. without objection. thank you to the comptroller's office and all the departments and members of the public who have come out. please call items 2 and 3 together. >> item 2. hearing on the recently published 2010-2011 civil grand jury report entitled "the parkmerced vision: government- by-developer." item 3. resolution responding to the presiding judge of the superior court on the findings and recommendations contained in the 2010-2011 civil grand jury report entitled "the parkmerced vision: government by developer" annual budget.

supervisor campos: these are two items that are related. one is the discussion of the report. the second is the resolution that the companies that item -- a company that item. one of the important functions we play as the government and audit oversight committee is to hold hearings and have discussions and respond to the work of a civil grand jury. the civil grand jury plays an important role in the life of the city and county of san francisco i want to begin by thanking the members of the civil grand jury for their service to the people of the city and county of san francisco. with that, on this item, which involves the parkmerced event project, if i could call on the civil grand jury, who will make a brief presentation on their

report. again, thank you for being here. >> good morning, supervisors. my name is linda clarity. i am serving as the foreperson of the 2010-2011 san francisco civil grand jury. despite the supervisor's wonderful remarks about the work of the jury, i think there are a number of people who do not know exactly what we do. i thought i would give you a brief description of that. the california state constitution mandates that every county have a civil grand jury. therefore, there are 58 grand juries in california of varying sizes. the grand jury in san francisco is comprised of 19 members. i am pleased today that there are several members of the 2010-2011 grandeur with us, and i will ask those members to rise to be briefly recognized. thank you. [applause]

i agree. the members of the grand jury report regard for the citizens of san francisco. the purpose of the grand jury is to serve as oversight to the operation of city government. as such, we appoint investigative committees around various topics and then prepare reports each year. this year, we completed seven investigative reports, and in addition, five continuity reports, all of which will be hurt by this body over the next several months. today, we will present our initial report on "the parkmerced vision: government by developer." i would like to introduce to you now michael, who serves as the chair of that committee, who will present the report for the jury. thank you. supervisor campos: thank you.

again, thank you to all of the members of the civil grand jury for their service. >> good morning, supervisors. i hope the committee will indulge me. i could not find a babysitter. i do have some of my fellow jurors who will be helping. hopefully, he cannot be too much of a disruption. supervisor campos: very well behaved. >> michael galnick, chair of the committee that investigated the parkmerced development agreement. i want to start with a couple of overarching comments. the first would be to say, when you read this report, no where in the report does it say, do not develop. i cannot emphasize that enough. the report was written through the lens of a retired

schoolteacher, social worker, two lawyers, a journalist, and a businessman. essentially, a nice cross cut of society. i think when you read this report, you will find the essence of it in one paragraph. at the end of the summary -- and i will read that. the development agreement takes steps to insure continuity of protection for tenants in rent- controlled units, but it is aspirational and inconclusive. only a future court can provide the didn't -- the definitive conclusion. meanwhile, tenants will live under a cloud of uncertainty, possibly for years. what makes that so important is we could debate all day long about the rights and wrongs of what has been pointed out in this report. the point is, until a court

decides, it is all just talk, and that is what we point out. so with that, i will go to the findings of the report, and go buy them one by one. in particular, finding no. 1, no. 4, no. 5, are crucial to the discussion. by not explaining how to override and resolve potentially conflicting provisions of state law, a development agreement does not protect tenants against increases, as it claims. the second finding is there are no penalties or disincentives from the owner/developer in the agreement, should it choose to abandon the project before completion. it encourages short-term

investment and speculation over long-term collaborative development with the city. since the time this report was written, i understand there were some amendments put into the development agreement that creates some disincentives. the jury thinks that that is a step in the right direction. in as much as the city may not be able to legally force the developer to act on its promises, you can make it so that they do not want to renig on those. that is what the disincentives have done. the third finding, that the owner/developer fails to address the social and financial impact to the parkmerced city tenants, local businesses, and city users, who used the 19th avenue corridor. if, in particular, a developer

backs out of the project or sells the project, takes a long time to find another buyer or to resume development, we thought what would end up happening was this already gridlocked corridor would become congested for a longer period of time. we did not find anything in the developer agreement to that specifically mitigates that. the fourth finding is that the development agreement presumes demolition is necessary and does not offer any alternatives. rather than speak to this as an issue with the eir, we thought it related to the impact of the people living in the area. the fifth and final finding is that the development agreement

claims it can provide rent- control protection on newly constructed units under the city tenants stabilization -- rent stabilization ordinance, and that it is uncertain and could be unenforceable. this is the crux of the issue. state laws could override potentially any ordinance that is in place, or would be created. so it may not matter -- is the answer to that. we had one recommendation to the city, and that is to remove section 2.2 0.2, section h of the development agreement which presents -- prevents the city from making any changes or enacting any other ordnances for the next 30 years of the

development agreement. we thought while it solves the business development issue -- the city possible goals for business development, it does not protect the citizens of san francisco very well for the next 30 years. so we think that this would actually be an inhibitor to the city being able to protect its s -- its interests in the next 30 years over the course of development. that is the conclusion of our presentation. if there are questions, i can take them now. supervisor campos: colleagues, do we have any questions for the civil grand jury? no questions at this point. thank you. i see that our planning director is here, john ram of the plans department. thank you for being here. >> i will say that our response to the civil grand jury report

were worked in concert with the other city departments, city attorney's offices, so we have essentially the same response. i do not know if you wanted me to go over that in detail. supervisor campos: in terms of the planning department, director, i know that you have to respond within 90 days. >> actually, my understanding is that the department is required to respond within 60 days. i think we spent -- send our response to a couple of days late. the commission is defined as a public agency under the code, and is allowed 90 days. so the commission, in fact, has not developed its response yet. a ticket of at the hearing and voted to continue the matter to august 4, which would give them time to respond by august 15.

supervisor campos: and the department itself, the same response as other entities? >> that is correct. and if i may, our reading of the report, it largely calls into question some of the legal enforceability provisions of the fa. it does not call into any actions of the department or commission either. that is why we relied on a joint response. it is a series of legal questions about the enforceability of the development agreement itself. supervisor campos: if we could hear from jennifer mats, head of the mayor's office of economic workforce development. >> thank you. i would also like to thank the members of the civil grand jury

for their work on this report. i have a series of comments that i think contextualized our response. i am also happy to read the response. i agree with director ram, the questions and comments raised by the civil grand jury are largely around the legality and enforcement provisions around the d.a. to the extent there are questions about those legal issues, i would refer to the city attorney's office. but i would be happy to provide some context and to also read through our relatively brief responses to the findings. we believe, as we read the grand jury's report, the stated purpose is to recommend the city and county of san francisco take action to protect the rights and interests of parkmerced tenants before entering into the agreement. we question whether the city can control the red-provision

controls of the d.a. the grand jury gives a number of conclusions or opinions about complex legal matters, and we believe respectfully, fails to understand certain aspects of the d.a. the city attorney gave testimony over the rent control provisions of the d.a., and the bears think the city included to bolster enforceability. as you know, this is a complex legal document, negotiated over a long period of time. numerous drafts were placed on the planning department's website. the process started with the final trinity plaza d.a. and then changes for the protection of tenants. the planning department and my department worked with stakeholders and solicited input of many. everyone involved was most

concerned about the tenant relocation provisions and the rent-control provisions and numerous clarifications and revisions were made between the time the draft was reviewed by the grand jury and the date of the report, as well as the grandeur report but before supervisor approval. this is one of the more important point. the grand jury, by the nature of its existence, the work it does, really takes a snapshot. they were provided with a draft of the d.a. which significant change over time, and many of the changes were addressed subsequent to the report being issued. item that margin in the d.a. not included in the draft include requirement that each tenant lease the rent control protections creating a direct contractual connection between each owner. it includes provisions that each tenant be given the express right to enforce the rent control provision directly against the landlord and owner.

the requirement that the city be a signatory to the assignment and creating a contractual relationship between the city and each successor owner and developer. this additional requirement -- there are additional remedies, including the termination for reneging development owner. the city has the right to suspend any legal proceedings. there are additional rights to tenants affected by construction impact. there are improved moving benefits for tenants. additional appeal rights at the san francisco board. in addition to the attendant benefits. there is also the additional tenant protections against passthroughs associated with project cost. you heard these when the d.a. came before you. the primary recommendation of the grand jury report is that

the city about legislation that would mandate application of the city's rent ordinance to replace an units built on property within five years following in the demolition of rent-control units on the property. similar to legislation that the grand jury found in l.a. city attorney has confirmed at that language existed before the issuance of the grandeur report and references the san francisco ordinance was already included, although not included in the earlier draft that the grantor reviewed. the grand jury also questioned the general waiver of the cost of the act. without acknowledging the other provisions. the rent control provisions were premised on the non- applicability of the cost. this of allies on two express exemptions and not the general waivers. lastly, the lf fact deals with the landlord business. with the development agreement,

they have a contract wherein the developer owner agrees not to use the ellis act with any and all rights under the ellis act, and the city has made clear it will not permit the residents of units to be kondo mapped. without this, individual units cannot be sold for ownership. the city has made it clear it would not be willing to enter into the d.a. without these protections. we believe more tenants have alice act protection. with that, i am happy to read through this particular finding. i have copies of those comments if your interested. with regard to the first finding, we disagree with the finding. we do not believe the dea reports to override state law. the grandeur does not specify what the potential provisions of state law that the d.a. must override. in the grand jury is referring to 4.3 of the california

government code popular known as the cost to hawkins act. contrary to statements found in finding one, section 4.1, 4.2, 4.3, third explain harvard dental pension will be enforced consistent with state law for any new replacement units provided to any relocated tendon on the project site. we are not going to restate those sections in its entirety but respectfully request that the sovereign jury review the language and da we also agree with finding number two. we believe the d.a. provide bounties and disincentives in the event that a future owner developer does not fulfil their obligations to the city. i heard the committee had a grand jury report acknowledged -- some of these provisions were added subsequent to the version that was reviewed by the civil grand jury. do you want me to read through the full responses?

supervisor campos: if you could summarize them. >> we also disagree with the third finding. the requirements of the da are not requested -- affected pai- hua parkmerced. this is because it iwe disagree. we do not believe the da did not resume demolition is necessary. it simply proposes a scope of development on the project site that allows the increment of replacement and demolition of up to1580 apartments. we also disagree in part with finding five. we believe this is a real question and that the city attorney gave extensive

testimony on the enforceability of provisions and and by the supervisors of all of the reasons why the d.a.'s brent provision control should be enforceable. the city also went through the details and remedies that are included to bolster its enforceability and provide tenant protections, even in the unlikely event that tenet provision were deemed unenforceable by these protections. [no audio] deputy city attorney charles sullivan to add anything. supervisor campos: we have the deputy attorney. did you want to add anything? >> good afternoon. charles sullivan. i thing the department pretty much summarized it correctly. i have nothing to add, unless you have questions for me. supervisor cs: