inventory management. the follow-up response actually has been completed. it is in the process of being routed to the cities service auditor. what i can discuss here is that the recommendation was a focus our entire utilization of the system to track and monitor all inventory items along with increased security and organization of inventory locations. what the wastewater enterprise has done today has been a maximal optimization that is in process. they are currently working on formal monitoring and logging process for all obsolete inventory items along with implementing a reorder point methodology included with the application itself. along with that, we are working with our information technology services department to increase and add value-added reporting along with implementing a bar code entry system at the

warehouse locations. in regards to security and organization, that is also in progress. they are currently exploring an electronic inventory issue process for the warehouses. they have implemented policies and procedures and also included increased monitored inventory counts for the warehouses. i am also joined here today by our real estate director. he joined us in july of this year. we had four audits, of which 3 are address here today. of those audits, we had a total of 105 recommendations that focus on five primary areas in our real estate sources division.

they are policies and procedures, lease agreement and terms, collection of acquired fees, lies and permit tracking, which is the application we are using currently to monitor and track our leases, and personal skills sets. of those 105 findings, we further delineated them into three key areas, which focus on lease agreements and collection of required fees under personal skill set. those are items to the leo, 3, and five on the chart you are looking at here. i am going to turn the recommendation over to roseanna, who is going to talk about what she has done since she joined the puc. supervisor campos: thank you for being here and welcome aboard. >> not only am i knew to the puc, but i am new to government, so i ask your patience this morning. i am an attorney of 22 years'

experience. this is what we have done to try to meet the audit findings recommendations. policies and procedures -- we collaborated with the city attorney's office and revamp our lease forms to specifically address the findings in each of the audits. we are presently rewriting our operations manual. we hope to have it presented to the commission in the upcoming two months. it addresses again the recommendations and policies. we just hired a consultant to assess our current operations and recommend best practices, standards in the industry. this consultant comes from operating a huge least apartment that was eventually acquired by equity office. lease administration -- with regard to our 14 hi revenue

tenants, iowa individually and with my colleagues have visited and am currently negotiating with management at the tenant sites. we also have instituted since july in collection of our security deposits and fees. we are almost done. i found my folks were essentially doing things by hand. everything is now in excel and in our lease administration software. getting to our lease administration software, when i arrived at real estate, i found out that our software was 6 upgrades behind. it is not just a process. it is a project to upgrade it.

our i.t. department has been patient. we have had a meeting after meeting. we hope to soon upgrade the software. it does not quite meet all of our needs. it does not meet the recommendations, so we have also currently look at new software databases. i have also -- yesterday, we went live with an online database that tracks our projects. we had a lot of moving pieces in our apartment. we were tracking things before in excel, and now we are online. the benefit is not only can our analysts look at the project, but the city attorney can look at them and collaborate. we have also looked at new performance plans. i found that our analysts, rather than be responsible for

portfolio of leases and permits, they would each look at a task like collection of security deposits or insurance if things fell through the cracks. now, they are each responsible for a set number of leases and permits from start to finish, and, hopefully, nothing will fall through the cracks. let's see. our activity, as i mentioned, on monday, our new consultant will come in to look at and review our procedures. we hope to finish her work in this quarter. in the next quarter, we hope to adopt either an upgraded project database or a new database. in the next quarter, we will adopt a new operations manual. in the fourth quarter, we will

be recruiting new analysts. also in the fourth quarter, we will conclude our software upgrade and many of limitation, if needed. so i am here to answer questions if you have them. supervisor campos: colleagues, any questions? i have a couple of brief follow- ups. first of all, thank you for being here again and for what you are trying to do. i think it is great that you are trying to implement better systems and to address some of the concerns that were raised. i had a couple of quick points. on the audit of the sunol valley golf and recreation company, i think that the suggestion that the least be amended so that any excess rent paid is not returned until the end of the year makes sense -- the suggestion that the lease be amended. that makes sure that the excess payment is only made if it is confirmed that the excess payment is correct. that to me seems the best way to

protect the interests of the city. so i am wondering why we would not do that. >> this tenant is behind in rent. they have requested a red reduction. so has our other golf course tenant. internally, we have hired a consultant to evaluate what the current state of the market is an approach this in a holistic fashion. as you know, this lease is of a magnitude that it requires approval from the board of supervisors. rather than go to the commission and then the board with one amendment and then go for a second, we have decided to approach this and get it all done at once, if that makes sense. supervisor campos: that makes sense. with respect to the hands and aggregates, -- hanson

aggregates, i do worry that there has been no six-month response. let me give you just an example -- one of the points raised by the controller is that the calculation and royalties -- there are questions about the appropriateness of a payment of $260,000. that is a lot of money, and that is just what we know. when that kind of money is involved and there has been no response, that is a concern. >> i prepared a response early on, and our general manager deemed it inadequate. i prepared a second response to go over it. some look -- we have hired another consultant experienced in money matters. i have negotiated over 1000 leases over the course of my career, and these core leases

are a universe in themselves. the required expertise beyond anyone at the -- they require expertise beyond anyone at the puc, frankly. we need to have this consultant on board, and we will issue a response, certainly, to the c sa, but know that we are working to meet not only that recommendation, but all the recommendations in the hands and -- hanson audits. supervisor campos: i think that is excellent, and it leans into detail. i think if it requires hire another person, i think that person in the and pays for themselves. another example is the crystal springs golf partners were there was a finding that there was an overpayment, that there was actually a failure to collect late charges of $72,000. you could probably hire someone

for that amount. >> actually, we do not need to hire someone. i have been on the phone with crystal springs every couple of weeks, and you have to pay. we just received a letter citing legal authority when they do not have to pay, and that matters with the city attorney's office. -- that letter is with the city attorney's office. supervisor campos: thank you. i just want to make sure we're not leaving anything on the table. finally, with respect to wastewater enterprise, there was a report that came out october of this year on hanson aggregates. there was a report that cannot in july of this year. i am wondering what happened and what the plan is for going forward.

>> we ensure that the auditing division is aware of the follow- up requirement, and we work closely with them, i would say the moment we receive the request, to get a response within a few weeks. at times, there is a lot of discussion about some of the responses. what i can assure you today is that for the wastewater enterprise, the response, we have it ready. it is in the process of being approved prior to being distributed, so i want to make sure that they receive this tomorrow. supervisor campos: thank you. maybe it is the lawyer in me, but i think if there is a deadline, the deadline should be met. >> i understand, and i agree with you. supervisor campos: colleagues, any questions? great. thank you again. thank you to all the departments that came out for this item, and thank you again to the controller's office.

we will continue to go through the process to make sure not only do we have hearings on those audits, but once those audits and hearings are completed that we come back to each department to make sure they are following through on the recommendations that were made. with that, why don't we open it up to public comment? is there any member of the public would like to speak on this item? you each have two minutes. >> supervisors, my name is francisco da costa. anybody who has heard what was said today in the report will notice that there are two many items. -- there are too many items. it may satisfy you that you get an overall picture of some of the things that can be done, some of the things that were not done.

for somebody who has been following, say, the sfpuc and some other entities for a long time, the process is still very convoluted. let's get to this case of the hands and aggregates -- hanson aggregates. they were fined by the state of california for illegal mining. the location is pier 96. while this company owes sfpuc a lot of money, what has been happening in the interim is that aggregate operations create a lot of pollution in the southeast sector. so it is not that the hanson management is just going money to -- owing money to sfpuc, but

it has adversely impacted the constituents of the southeast sector. i hope, finally, in the few seconds that i have, that this report is posted somewhere so that we can follow off on it. thank you very much. supervisor campos: thank you very much. before we continue, let me apologize -- i forgot to ask the office of citizen complaints to come up. my apologies. a number of us were pretty late this morning with occupy san francisco. but we have the executive director who was also joined by the executive director of the police commission. i wanted to make sure i give you an opportunity to respond to what was said. >> thank you very much, and good morning. i am the director of the office of citizen complaints.

this is a position i have held since november 2007. when i was hired as director of the occ, my challenge was to address 45 audit recommendations in the controller's highly critical january 24, 2007, audit of the occ. i believe we have met all recommendations and discussed all but three of them. the three and met challenges have been identified as contested recommendations. i do not contest these recommendations. -- the three unmet challenges. i would like to meet these, but they would require additional budgetary resources. the first one is audit recommendation two, and that addresses completing occ investigations within nine or 10 months. the occ has been historically understaffed, and the controller even pointed this out

in its 2007 audit. they said best practices for investigators is 16 cases for investigators, when occ investigators have 30 cases. even though last year we only completed 76% of our investigations within nine months, we did complete 100% of the investigations that contains sustained allegations within statutory time limits, which are generally under government code section 341 year unless told -- under government section 34, one year unless told. in order to bring down the caseload to 20, the occ would need four additional journey

level investigators. the second recommendation is a little more attainable with additional budgetary resources. that is that the occ has not implemented an automated ticklish system in its database. it would cost us $12,000. unfortunately, the occ's $4.3 million budget is personnel, and it has very little discretionary money. a lot of it is used to respond to document request from either the federal court, or grand jury, or state court. this is an extremely high expense, so we do not have a lot of money. finally, audit recommendation 42 is that the occ has not provided for filing complaints online. i would welcome the ability to

do that, but again, the consultant cost would be $7,000. to conclude, i appreciate the opportunity to address supervisors this morning. regardless of the lack of resources, i will continue to lead the occ to impartially, fairly address instances of police misconduct. supervisor campos: thank you. >> thank you very much. as you are well aware from your days on the police commission, the reason we have director hicks was because of the 2007 audit report. the organization was in complete disarray. we meet with director hicks every wednesday evening and get weekly updates about the progress of their cases. we have quarterly reports regarding the number of cases assigned to investigators, so the police commission is closely monitoring this, but i need to tell you, this organization is doing an incredible job with less. there's a strong sense of organization under director hicks where the investigators

and the rest of the staff attorneys are working hard. the best way to give you an example of that is when i started, we had 77 pending disciplinary cases. today, we are down to 17. it went from a backlog to a manageable pocket, and thanks to the efforts of the occ, there are fewer police officers as members of this department because of disciplinary matters. we are monitoring the department peer director vix is doing an excellent job. my only concern is i do not know how long we can keep going and maintain what we are doing because a strong occ makes for a strong police department. that would be my request. i want to thank the government audit and oversight committee because this is an organization that turned around because of your committee.

supervisor campos: let me say, from my experience, the occ is one of those agencies that does a lot with very little. data and amazing job, but it comes down to having enough resources to do what is required, and i do have a concern about the lack of resources. i would simply hope that between now and the next time that the budget comes before the board that there is additional discussion about what that budget should look like. i know that we are in a tough economic times. we are making cuts, but i do think that investing in the occ is an investment that is wise. i think that we owe that not only to the public but also to the police officers to make sure that this agency has the resources for something like spending $7,000 so that someone can file a complaint online.

that is something that makes sense. i was a member of the public, i want to have that ability. i was a police officer who was the target of such a complete, i would want that expedited so there was resolution -- if i was a police officer who was the target of such a complaint. thank you. colleagues, any questions? >> thank you very much, supervisor campos. supervisor campos: thank you. >> good morning, supervisors. my name is douglas yep and i have lived in san francisco for 59 years. i want to thank the committee for hearing item number one. these hearings are long overdue. in my opinion, this committee is finally fulfilling the mission aaron wanted for the

committee, more or less a watchdog committee, not a lap dog committee. in the past few years it has been and that dog committee. i'm glad to see that this committee is making progress. i would also like to commend the different city agencies for trying to implement the improvements. i know it is hard to make changes at city bureaucracy, and i am glad to see now that agencies has a chance to make changes without being influenced unduly by their superiors. i would also like to make a request that item 4 and 5 be heard today before two and three. mainly because items to and 3 will take a few hours.

because so few of us are here for item 4 and 5, perhaps we could finish that before item 2 and 3. supervisor campos: thank you. next speaker. >> i wanted thank the commission for a holding this hearing today. between calendar year 2008 and 2010, the city payroll data base of the comptroller's office added another 42 employees, increasing the cost to run the city controller department by another $3.7 million. in calendar year 2010, the city comptroller's office had 233 staff that cost $18.6 million in

the city database. it is time that the auditor function, do the audit itself, and consider outsourcing some of the audits to an independent agency. i hope you all look into the csa performance, why they have not done a complete audit of the department of public health, which is long overdue, and schedule there were planned to include an audit of dph. thank you. >> provide for the common defense for the general welfare and secure the blessings of liberty to ourselves and prosperity to ordain and establish this constitution for

the united states of america. supervisor campos: thank you. next speaker. >> good morning, government audit and oversight. $1 is the loneliest. $1 is the loneliness. $1 is the loneliest number that you ever do. it is just no good anymore since ms. katz has gone away now i just spend my time making rhymes of general hospital yesterday one is the loneliest one is the loneliest dollar one is the loneliest dollar that you ever do one is the loan is general hospital no.

since miss katz has gone away from general hospital supervisor campos: thank you, mr. paulson. next speaker? it is a hard act to follow. seeing none, public comment is closed. colleagues, if we could continue this item to the call of the chair. without objection. please call item to and 3 together. >> item 2. hearing on the recently published 2010-2011 civil grand jury report entitled "central subway too much money for too little benefit." 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 "central subway too much money for too little benefit" and urging the mayor to cause the implementation of accepted findings and recommendations through his/her department

heads and through the development of the annual budget. supervisor campos: if i may ask the chair of the civil grand jury to come forward, and let me reiterate what we have said in the past, that we appreciate the service of the civil grand jury and the role they play in making the government here in the city and county of san francisco apparent and accountable. thank you, madam chair, members for volunteering your time, for their energy. welcome. >> good morning, and gentlemen. nice to see you again. my name is linda clarity. i have the privilege of serving as the 20102011 share of the civil grand jury. as you know, the grand jury consists of 19 individuals. there are 14 of last year's grand jury currently in the room with us today. i am pleased to report there are a large number of jurors here. in addition, four members of the

current sitting grand jury [inaudible] annuity function and fall off on this report. as you know, we are presenting you our report on the central subway. we ate knowledge the board of supervisors has passed a resolution unanimously supporting this central subway project, however, we on this grand jury must disagree with you based upon the current project and plan of this grand jury -- excuse me, of this central subway. i would like to present to you now the chair of the central subway committee for the grand jury. his name is bob perry. the other jury assisting him will be daniel schweitzer. supervisor campos: thank you. mr. perry, mr. schweitzer. good morning. welcome to government audit and oversight. again, thank you for your service. >> thank you.