we do not want to risk the overall movement of a project by throwing too many more of these pilots in. some of the ideas down around third and fourth street were a little bit limited right now because of the central subway construction. i want to caution and a little bit about the idea that we will be doing a whole bunch more pilots or that the check is in the mail. it is a great project and is a great effort and a great community effort. we have a strong cac, a strong technical advisory committee, design experts. from a stakeholder perspective, this project has been done very well. it will be great to see it happen. >> is there any possibility -- i know we had discussed a change

in the eir process as it relates to ceqa. director heinicke had brought up the question at that point, will there be a time when it makes more sense to wait for the new process? i do not remember what the change was called. >> that transportation system and a bill latifi was introduced this month. or maybe -- the transportation system was introduced this month. or maybe last month. depending on when we are ready to launch into environmental review, it is possible we could hit that point where it would make sense to delay. we will do the federal process as well. that may change the equation a little bit, although ceqa is the long straw. we will be watching for projects that come up with the next year or two. there will be a point where we may want to make that determination. market street will have -- the

two things that drive the environmental review process are transportation and -- the transportation system of the latifi change. market street may have some historic issues that need to be dealt with. i am sure there will be a lot of people -- a lot of things people will find to be historic. chairman nolan: thank you very much. >> thank you. >> nobody has turned in speaker cards. chairman nolan: next item. >> item 14, declining to renew access transit liability personal injury and property damage insurance coverage, return the sfmta to complete self ensuring personal injury and property damage claims by

third parties and placed on reserve the amount of the premiums for any such coverage to cloud cover future potential claims. >> i have read the written report and i understand a recommendation to be that we not renew the coverage. instead, we take the premium amount and put that aside in our reserve. i've spoken with the director offline about this too was polite enough to call me that i am in favor of having an excess liability coverage. i still favor that, but i will not jump up and down and do anything other than vote know. i respect the staff's recommendation. i have one question. how can we ensure good faith that we are setting aside money that would have been spent on a premium and not just calling money that we would have spent on the reserves, you know, how

can we be assured that we are accruing an extra two or $3 million each year? maybe we maintain our reserve policy and say they are reserve policy apply separately from this money. going forward, we need to meet our reserve policy or have the goal of that and separately have this set aside liability. >> thank you for the question. if the board decides to do that, we would create a separate designated reserve fund for insurance. we would place -- you would see $2.4 million being identified as an expense line item on the budget. director heinicke: that money would not count -- chairman nolan: the biggest single was $21 million.

>> $22 million. chairman nolan: if we were to get to a major claim against us, we have 10 years to pay it. >> we would negotiate with the other party. in some instances, we would want to push it out. in other instances, we would want to pay it up front. chairman nolan: we all understand that in no one here will we be paying $22 million. we would have the right to negotiate for that. >> installments, that is the state code. chairman nolan: i support it. questions or comments? lawyers, financial people? >> a motion to approve? chairman nolan: let's have a roll call on this. >> [roll call vote]

6-1. >> thank you for the diplomatic way you approach that with me. it was very respectful. chairman nolan: -- >> i will not remind us what happened. chairman nolan: next topic. >> item 15, discussion and vote as to whether conduct a closed session. chairman nolan: we are now in closed session. thank you.

>> good morning. today is wednesday, june 20, 2012. this is a meeting of the of the appeals board. like to remind everyone to come off electronic devices. the first item on the agenda is roll call. [roll call]

we have a quorum. the next item is item b, the oath. will all parties giving testimony today please stand and raise your right hand? do you swear that the testimony you are about to give is the truth to the best of your knowledge? you may be seated. beginning the proceedings, just to let everyone know, the department will go first, and then the appellant. each side gets seven minutes of testimony. and then three minutes of rebuttal, and we will have public comment.

item c, approval of minutes. discussion and possible action to approve the minutes for the meetings held on april 18, 2012, and may 16, 2012. >> i'm not sure if we receive those. >> i did not. >> we can have a continuance if you would like. >> yes, let's continue. >> item d, continued appeals. case 6758, 130 beulah street. action requested by the palin -- a moratorium regarding the existing two illegal units -- action requested by the appellant. >> good morning. senior inspector from the

housing division dept. of inspection. this is a pill 6758 -- appeal 6758. this is a case that was referred to us from the building inspection division to the housing inspection division on may 8, 2008. the inspection of the promises were made in 2008, and notice of violation was issued may 27, 2008. a final letter of warning was sent to the property, for noncompliance. first directors hearing was scheduled and heard on october 20, 2011. at that time, the hearing officer issued a 30-day continuance. the second directors hearing was held on december 1, 2011. again, the hearing also took testimony from the occupants who were complaining about the conditions of the illegal units,

and after hearing the testimony, the hearing officer ascertained there were no building permits taken out at the time and issued an order of abatement. the order of abatement was posted on the building on february 22, 2012. the complainant then filed an appeal on march 8, 2012. property owner is requesting a moratorium on these types of units. and again, the notice of violation -- let me just put up some kind of screen. sorry about that. this is the property here in the question. let me give you a frontal view

of the property. this is the path of travel towards the illegal units. you can see it is marked. that is the front, and this is b towards the back. the notice of inspection revealed hazardous conditions, lack of smoke detectors, basically what the property owner has created from eight two-unit building to a four- unit house. at this time, staff is requesting that members of the board of hold the order of abatement -- coupled --uphold

the order of abatement. any questions? >> are the units occupied? >> yes, the units are occupied, and staff is to the state receiving complaints regarding the conditions of the units. i might note that as of today, no permits have yet been filed to correct the notice of violations, to either remove them or to legalize the units. >> what are the nature of the complaints? >> the conditions of the habitable spaces, lack of smoke detectors and so forth. commissioner clinch: how many units are currently permitted? >> the legal use of the building is for two units. >> i have a question.

on your report, it says there is and an improved second means of egress. >> there is no second means of egress. it is a converted apartment house. the only path of travel is through that walkway, through that sad walkway. that is the only way in and out. >> when you go straight back, does it go into a backyard? where does it go? >> i have not been to this property myself. as far as i know, my understanding is it just goes straight back. there is no second way out of the property other than retracing steps back to the front entrance. >> and even though you can go forward or backwards in that alley, the other means of egress would have to be at the rear of the unit?

>> that is correct. commissioner mar: just one other question -- with the illegal electric and other things like that, are there separate meters for the two illegal units? >> no, there are not. there are only two units. i am not sure how the utilities are run. i have no knowledge of that, but there are only two meters for electrical and gas. >> do you know the allowable zoning? >> up to two units. >> it does not allow four units. has a discussion of happen -- the improvements are needed, so with the tenants have to move

out? >> in order to legalize the units, yes. you have to basically legalize the electrical wiring, plumbing, and so forth. commissioner walker: i want to say that i got called by three or four prior tenants who wanted to remain anonymous, and they indicated that there were new tenants, as of february, march, april of this year. people had been removed, and they re--- it as early as spring of this year. -- they re-rented it as early as spring of this year. i guess i am curious about that. that it was not a continuous tenant. they just re-rented it, even

with these violations. >> are we setting the property owner for illegal construction or illegal zoning use? >> we are setting the property owner for illegal creation of two units -- we are setting -- we are sending -- we are citing the property report illegal creation of two units. >> the department of building inspection cannot find violations of the plan to cut. we're dealing with the fact that it has now been four years since the notice has been issued. we are getting a lot of complaints from occupancy in the building. the property owner has not even filed a permit within four years to explore whether anything can be legalized. what we have, though, is an

apartment house without any kind of electrical building, plumbing,, and we have a significant amount of complaints coming in from occupants of the building. we had individuals who occupied a legal and illegal unit in this building, and they were very unhappy with the fact that this property owner was allowed to read constantly over and over these locations without the city doing anything about the legality of creating these units. i want to make sure you understand what was before me as a hearing officer. they considered it very serious. the property owner has not yet within the last four years filed a permit. she basically told me she did not intend to. here we are several months after that hearing -- it was december 1 last year -- and we still do not have any kind of building permits filed to see whether or not it even can be legalized, not necessarily as well units,

but maybe for occupancy. that has not even been attempted. here we are with concerns about the occupancy, never having any building permits, electrical or plumbing permits to legalize that and the safety of it, and people complaining about it. >> thank you. that is a good segue to perhaps ask for the appellant to come up. thank you. >> i am kathryn roberts -- katherine roberts. there were a lot of factual misrepresentations, and i understand the situation the city is in. there was some dry rot that required taking part of the wall

in, which i did with full inspections and everything. we found engine 51. we found a handblown light bulb that was too delicate for me to bring. we found a pattern applied in 1917. these are not me. i did not build them. there's no way i would have built them. i think the units were probably built sometime around 1994. it is possible there are even more permits that got destroyed in the great fire of 1906. there's no way to know for sure. they are really old. they were definitely built before i was born. i have had the wiring checks. it is totally safe. i had an intern from the department of building inspection. i am so did not bring him here as a witness today.

there is nothing wrong. -- i am sorry i did not bring him here as a witness. smoke detector is a total red herring. i have smoke detectors and carbon monoxide detectors. of course i do. i do not want my building to burn down. i think the day might inspector came in, it was in the wrong place. i did not realize it was not supposed to be in the kitchen. i have since moved it and installed many more. believe me, that part is totally up to code. there is a second means of egress for both units. both of them have front and back units. plus, they are underground and have big windows so you can jump out -- plus, they are on the ground and had big windows so you could jump out. i really would be stopped if the building caught on fire because there is no way down except to

jump, basically. these units -- it is not a safety issue. the people living there now are not complaining. it is two extremely vindictive tenants who did not even live in the units who were angry with me because i would not let them have aquariums. they were angry for all kinds of completely unrelated reasons. i know this will sound bad. they are kind of out of their minds. they are the ones -- they have made my life a living hell. they called every single city agency they possibly could about me for the entire year they were there. they reported me for being drunk and disorderly. they accused my roommate of battery. they lied about absolutely everything. they are basically lying about their fear. it was a question of how to get back at me for not giving them everything that they were demanding. and that puts me in a horrible situation because first of all,

it is important to me to provide housing. it is important to me to provide safe, affordable, habitable housing in a great neighborhood that i have lived in for the last 35 years. i did not build these units. at that not know they were illegal. i understand that was my responsibility. they were sold to me as unwarranted, not on permit it. as far as i can tell, they have been continuously occupied for the last -- could be 100 years. it is not an emergency. the only reason it has become one is because a couple of people got mad at me and started spreading all these rumors that enflamed all these other people, and suddenly, it became an issue that you guys have to deal with. those people not only moved -- they cleared everybody else out of the building out of these trumped up fears, mostly because of the complaints they were calling in, so i had a long record of complaints, not even

telling people they are the ones that called the complaints in. it is true that i re-rented the units. it took me probably 24 hours. they are in such demand. i cannot afford not to rent these units. there are four of them in a maximum three-unit zone. i cannot legalize them. i cannot afford to evict my tenants. i cannot afford -- i cannot afford this stuff. i did not say i have no intention of getting a permit. that was never my statement. it is that i do not know what to do about this. i feel like the only two options the city is giving me are both completely unviable, and there is no third option, and i need one. i have filed for chapter 13 bankruptcy last year. i cannot even afford to live in my building even with this rental income. i seriously cannot.

it being an old building, there is constant maintenance issues. the whole rear deck and stairway, which was also built without permits by the previous owner, got dry rot and termites, and i had to tear the entire thing down and rebuild it to a cost of $135,000 peer november, december, january, february, i had to come up with $135,000, and i did that without permits because i could look and see that it was rotted and potentially hazardous at some point down the line. there might be a tremor. it might come crashing down, and someone might get hurt. for me to turn around now and start hiring an army of experts, planners, whatever i will have to do -- it's my tenants, lose income -- i am not made out of money. i cannot afford to do that. if you put an order of a

statement on my building, that will impact me even further because if i do go to the bank and say i need money for this project, they are never going to lend it. it has just put me in a really horrible position. i have gone to my supervisor, and i understand that their people are working on a legislative remedy to this, which, honestly, to me, given that there's upward of 4000 illegal units in the city right now, it seems like the only rational approach would be legislated. it is just pick and choose this way. i am not the worst case scenario in the city. i take such good care of my building. i care and love my building. commissioner clinch: questions, commissioners?

>> thanks for coming, but this was originated in 2008. we are limited as to what we can do with illegal units. the option that you have is to legalize them or get rid of them. again, i just want to say that, you know, he said/she said in this scenario with the tenants, but i have never, as i sit here for almost 10 years -- i have never gotten calls from the tenants on one of these cases complaining so much. it bothers me especially that you have re-rented these units when there are violations active on them. i just feel like you are taking advantage of the situation, and i feel bad that you are in the situation, but, you know, we are

here to make sure they units are safe and that people can live in them that are built correctly, and will not provide hazards to them. i think that we are limited as to what we can do as a commission or as an abatement appeals board. i am really upset about you re- renting them as early as spring of this year. it does not look to us like you are doing anything to fix the problem. >> what can i do? i cannot afford to lose a day of rent. i did disclose to the new people -- i disclosed the entire situation. i realize that was a mistake for me not to do that before. they do not care. they are beautiful. >> it is really about whether they are legal units, and they are not. >> what can i do?

i cannot afford to lose rent. at this point, i can barely afford to buy dinner for myself, let alone hire another army of lawyers, architects, god knows what. what can i do? >> well, we will probably tell you as a commission. i think what you can do is probably if you cannot afford to keep the building, you have to look at that yourself. commissioner clinch: any questions, commissioners? commissioner mar? commissioner mar: i know you were not the original owner or builder of this building, but even when you bought it -- as i am here sitting in the seat as a landlord, i am and property owner in san francisco as well. unfortunately, itve