supervisor campos: good morning everyone, welcome to the thursday, january 12, 2012 meeting. i'm the chair of committee. the clerk of the committee today is filling in for her birthday. we want to thank members of the sfgtv staff for covering the committee today. can you make any announcements? >> the items that are recommended will go to the board on tuesday, january 24, unless

otherwise indicated. soap ok, thank you. can you please call the first item? >> item number one, general obligation bond oversight committee 2010 annual report. soap thanks. i understand we have shelby here, chair of the citizens general obligation bond oversight committee to present on this item. >> hello, i'm very glad to be here today. this will be my first time using this machine, so i may need some assistance. ok, it appears to be working. this is the first, this is the 2010 annual report. one of the things you're going to hear as we go through this report, it will be about 10 minutes, and then hopefully we'll have some questions from you. is that we have changed our year to now correspond with the fiscal year so we're hoping to come in front of you again in about seven months at the end of

our fiscal year. this is actually prepared by habe ham same nons who was the -- abraham simmons. i'm merely presenting it today. the first thing obviously is to explain what we do. we review and oversee the delivery of the general obligation bond program. and then in 2003 was added to our perview, also the city services audit and overseeing that and the whistle blower program underneath that. what we're going to do today is look first at the bonds and then we're going to look at the other pieces of what it is that we do. so just the major bonds. the first bond i want to bring your attention to is the laguna honda hospital. that started in originally

authorized $299 million, and has finally has a completion cost of $585 million. obviously our purr view -- our perview is to try to make it on time and on scope. things didn't go particularly well with this one. it did start prior. but we did learn a lot of lessons from that and these are lessons we can bring to quite directly with another product we have in front of us which is the general hospital. i should say the controller is also here. should i not be able to answer any questions, you will be more than happy -- ok, i'll keep going. so the second program here is the improvement program which again started prior, the good news is that 22 of the 24 branch

libraries are complete. and reopened. and the bad news is that it has well overrun its initial budget and schedule. and there's something that happens in the course of this that improves things, the m.o.u. between d.p.w. and the branch library improvement program helped a lot. there were a lot of, i think project management is actually an issue with some of these bonds and that when they actually do some memorandum of understanding then things do seem to get better. and this was probably the most similar the other bond that we have out there that's similar to this in the sense there's lots of little projects is the park. so that's one we can hopefully learn from the branch library project. and here we are, there was a $2,000 bond and then a 2008

bond. the 2000 bond was for $10 million and the 2008 with for $185 million. 2000 did have its difficulties. there was a lot of change orders that occurred. we are hoping, and obviously not at the end of the 2008 bond for completion, but we're hoping that the m.o.u. again between d.p.w. and recken park is going to help with those change orders. nonetheless, and this is a concern to us on the board right now, on the commission is that the committee is that there are delays already. some of those delays are greater than 12 months on some of these projects. and so we have requested that recken park figure out some ways and come back to us on some ways they might be able to reduce the amount of time. they're not overbudget, but they are overtime. and our experience in lessons that we've learned is that even if you're just overtime, that

can lead to overbudget later on down the line. this is our largest bond. it's the general hospital rebuild bond program, and there's an authorized amount of $887 million. this is a major, major project. and it's fairly early on. the current projects are on budget, but they are definitely potentially not going to be on time. however, we have been working with the project manager and i'm going to tell you a little bit how you change things beyond this report. to hopefully make things better. we go about what we can do, and the project manager is working with paralleling various projects. to try and reduce the overtime. he does estimate that the project will come in on schedule for 2015.

so, obviously some of the lessons that we learned from laguna honda came into play, not obviously, but they came into play before even we started. and that was one thing is that you can preplan. you actually can go out there and make a lot of preliminary investigation and budget process before you even put it on the ballot. that was done with this project. there is also a very close relationship between the architect and the construction manager and there is a third party estimator which the project manager thinks has done a world of good. having a third party estimatedor to come back and sort of check on the bids as they come in. and so, he believes that that has made a difference in this. so, we are cautiously optimistic about that bond. this is a new bond. it was in 2010 it was passed,

earthquake safety. there's not too much to report on this, particularly since this is 2010. we're supposed to be speaking about there was a first issue in the fall of 2011. there will be an exciting new, the large majority of the money is for the public safety building, which i think is going to be really important in the event of some sort of a catastrophe. we do have, as we've seen after 2010, we have some real issues with some of our fire stations that this will help with. this will also update or water supply system. so those are the major bonds that i'll be talking about today. i just wanted to say a few words about the city services audit division. that is that what we do is, and this is, mr. simmons actually had created a subcommittee, i was on that subcommittee.

and the purpose of this subcommittee was to try to tighten up how we act with city services on audit division to review the scope to provide sta triage i think direction. in the past we only had four meetings per year, and litvinenko fitting everything in could -- and it will help to stream and we've streep lined the process so that as a group we will deal hopefully more effectively with a series audit division. i believe you've heard something about the whistle blower program from the civil grand jury. we are do oversee the whistle blower program, and under abraham same mon's, we began to

explore ways to improve how it functioned. we did hear regularly from whistle blower who did conduct a review of the program. he reported back what he found. we also heard regularly from wrissleblowers who made us aware of their concerns. a lot of what happened as a result of the civil grand jury, a result of chair simmons work. as a result of the whistleblowers who were brave enough to come forth and talk to us, some of the developments had happened more recently. first of all we did have a fair amoint of turnover. we have a couple of new members which bring fresh blood to the committee. it's actually quite a rocking little committee in my opinion. believe it or not.

we were really feeling as citizens dealing with, in particular $887 million project, it was just too big to really wrap our brains around. and so, we now have liasons, one to -- do we have three? one to three on each bond. we also have a liasons for the whistleblower. we are scheduled to meet for frequently. we decided that in order again to get our brains wrapped around this we needed to meet six times a year. and we are starting that this year. january 26 is our next meeting and we'll be meeting bimonthly. and as i mentioned earlier we changed our work plan so we'll coincide with your fiscal year. i am looking forward to hopefully coming up in front of you and telling you a little bit more about what we've been able to accomplish in seven months time or so. and, regarding the

whistleblower, in particular we are continuing to monitor the changes we worked very closely with the controlers office to implement the changes that we felt were reasonable on the part of the civil grand jury. that includes things like the website is going to change. we are going to get quarterly reports now instead of an annual report. they actually have all of the cases on there with the confidentially still in place so we can get a sense of what's going and what's not. and there will be regular public hearings among other things. we also had the ethics executive director ethics economics come in front of us to talk about his process for whistle blowing. and we will hopefully continue to work on improving the oversight of the whistle blowing program.

does anybody have any questions? supervisor farrell: are you also looking at the port projects? >> yes, we are. we are in the port project at least at this point are substancally on time and on scope and on budget. supervisor farrell: you mentioned there were some potential time weakenses? could you elaborate more on that? >> a lot of it happens, i think partially as a result of listening to the project manager. i'm actually one of the liasons for the general hospital. there are issues where in the past, there were issues where maybe weaknesses either on the architect or the construction management side that have been short. that was one thing. they were actually because of their budget problems on the state level that were slow downs with getting certain things done

in sacramento, and that has slowed thing down. those are two areas that i can definitely speak to. ben is there? >> a lot of things beyond our control. >> those things are beyond the control, but i think what we're really trying to do is say yes, there will always be things beyond our control. so what will we do to compensate? we're working directly with the project manager to try and create opportunities there to makeup the time. supervisor farrell: ok. so, question for you, it seems like you talk about laguna and the branch library and the parks, some already overbudget and overtime and some potentially in the near future here. it seems to me that, i guess i'm wondering how much -- what kind of a hammer do you have on the administration of it? because it seems like it's great that we're learning lessons and hopefully getting better in the future. but is that really what you think ultimately this committee is there for, the best -- the

thing that you're doing is best is preparing us for the future and how we incorporate and monitor these things ahead of time? or really the existing bonds that have been floating out there, what can you do so to speak? >> yeah. that's a great question. and it's one thing we have thought ourselves about. because really the only thing we have originally was the super, heavy-duty big fat hammer of no, you cannot issue the next section of your bond. and we have that. that is it. that's our sschtick. we've been working quite a bit and the way we're working with the park is part of this idea, what can we do between saying no, you may not issue this, which has never been done, it has never stepped in and done that and frankly it would be a big deal to do that. can we establish steps along the way that says in this case, the

steps if the park is essentially can you give us, and we ask for 10 ideas of ways that you can reduce the amount of time that you're overtime by the next meeting? so that we can see that progress is being made. if you cannot, then that's -- and we don't have it sort of solidified that. is that a point system. but that is certainly a mark against will you get your next bond portion issues? so that's what we're trying to establish because i had that exact same feeling. if nobody, there's a reason nobody has ever used the one stick that we have and it's so large it is almost too large. so we're trying to set up ways that we can monitor things that at least at the end of the day they've received several warnings before, actually not receiving the go ahead. >> ok, ok, thank you.

supervisor farrell: any other comments, questions? all right, thank you. appreciate your time here today. let's open this up to public comment. any members of the public that wish to comment here? everyone's going to have two minutes. >> good morning supervisors. my name is dr. derrick kerr. after 20 years at loo ghana honda hospital i became a whistleblower. then i was laid off. there are two missions in the annual report. i'm referring to this one you received, the line page report. the section on the whistleblower program does not mention tracking retaliation. that's because neither that or the whistleblower monitor retaliation against whistle blowers. that should be part of their function. proposition c authorized them to serve as the citizens audit

review board. they omitted the word independent. they authorize them to serve as an independent citizens audit review board. however it is dependent on the very department it oversees, the controlers office. goboc has no funds and no staff. they have no independent analysts or consultants. their secretary is paid by and reports to the controller. their emails are screened by the controlers secretary. public comments are edited to the point of censorship in the minutes. there's no way to contact the members without going through the controlers staff. and all reports go through one source, the controller. they need two things to oversee and even to advise the

controlers whistleblower program. the first is more independence. and the second is a whistleblower retaliation survey. thank you. supervisor farrell: thank you, next speaker. >> good morning supervisor. my name is patrick, i'm here as a private citizen. it's a shame that the 2010 annual report forwarded to this committee on january 13, 2010 took an entire year before this subcommittee is holding this hearing today. by contrast the 2009 annual report was scheduled at this subcommittee on april 8, 2010, just three months after it had been issued. a number of problems with goboc's report before you today.

page two, programs indicates laguna honda's $183 million were mostly due to change overs. referring to a footnote on page seven, that footnote is a place holder indicating it would include a summary of information from goboc march 2, 2010 minutes. but there is no. if you look at those minutes, they're a joke. my testimony was reduced to a single sentence that provided no data whatsoever. that $183 million cost over represent a 76.7% increase over the initial $401 million budget. and those change orders should have been reviewed closely by both this subcommittee and goboc. in fact, chair simmons had agreed with my testimony in 2010 that goboc should be charged with reviewing both the

financial data of bonds, and change orders that could easily be sent from d.p.w. over to goboc so that they could keep a close eye on those change orders as they're occurring. that is not mentioned in this report and i believe this subcommittee needs to take a more -- a closer look at change orders on every one of these projects. and they need to get these reports scheduled before you in a timely manner. supervisor farrell: thank you. any other speakers and public comment? >> good morning supervisors. i apologize for being late. i was held hostage on the meeting for the last hour. i worked laguna honda for 22 years before i became a whistleblower. i was pressured out of laguna honda and city employment by the administration at laguna honda. nothing in the employee hand

book and the controlers website prepares us to become whistleblowers. and in our experience unfortunately goboc, who oversees the program, knew even less about the unique and life changing experience of becoming a whistleblower than we did. over the past two years we've been a lot of research on this subject and would like to offer some suggestions. all new members should get some information beyond what the controller gives them. whistleblower advocacy groups should be giving information to all employees and also to perspective whistleblowers. the national whistleblower center has a guide book. a step by step guide to doing what's right and protecting yourself. the government accountability project guide book. corporate whistleblowers, survival guide, a hand book for committing the truth is another valuable resource.

the government accountability project also puts out a free newsletter called whistleblower news and finally the government accountability project has an introductional video on legal and ethical videos that includes a two hour educational film, and it's an excellent film. you can download it on the internet and it features whistleblowers, including daniel elseberg, the famous gentleman who leaked the pentagon papers, and who blew the whistle on bush's illegal wiretappings. this should be a must see. thank you very much. supervisor farrell: thank you, next speaker. >> good morning supervisors. i have lived here for 59 years. i would like to thank the

committee under the leadership of supervisor campos for its aggressive work. i'm surprised he's not here, but i guess that's the way things operate in city hall these days. you don't know who you can trust these days. anyway, i think that one of the benefits of today's hearing is that we're finally able to discuss laguna honda hospital. according to my research, it wasn't discussed very often in the past. and i have my own suspicions why it wasn't. also, my opinion general hospital is on schedule is because even they know they are being closely scrutinized. in fact, i'm kind of glad that they will meet its restraints because i will actually lose a financial bet