. >> good morning. welcome to the government audit and oversight committee. i am carmen chu, chair of the committee. i am joined by our cochair malia cohen and david campos. our clerk today is here and we have sfgtv here. madam clerk do you have any announcements today? >> please silent all electronic devices and cell phones and all copies part of the file somebody submitted to the clerk. each member of the public will be allowed the same amount of time to speak and will appear on the agenda unless otherwise stated. >> thank you very much. will you call item number one. >> item number one is review of the citizen's general obligation

bond oversight committee annual report most recent report by the administrative code. >> thank you very much. >> good afternoon. i am pleased to be here as the chair of the citizen's general obligation bond oversight committee to give you the annual report. we have a short report for you today basically explaining what this is all about, what our operations have been and we have made changes this here. what is happening with the bonds in place, and finally the city services auditor role that we also play. so the citizen's general obligation bond oversight committee was brought into fruition in 2002 with proposition f when it was passed authorizing this to review and oversee the bond delivery and we make sure that the bonds are

on time, on scope and on budget, and we do everything that we can in our meetings to try to make sure that the cost saving measures are put in place that we need, and that of course that nothing is done that is not allowed to be done with the money. in 2003 additionally proposition c was passed which requires us also to review and provide input for the city services auditor and also the whistle blower program. we have nine appointed members, and they're appointed -- over here on the left hand side are the names of the members. we have the vice chair john [inaudible] in the audience. some of us are appointed by board of supervisors, one by the mayor, and one by the civil grand jury and two by the controller and in my case i will be leaving the

citizen's general obligation bond oversight committee shortly and i would urge another small business person if possible. my particular role is being active in a business organization. i think it would be great to have another small business person that comes into this role. so some of the things that we did this year we changed the frequency of our meetings from four times a year to six times a year, and we did that because we felt we didn't have enough time to address the bonds. i believe it's up over $2 billion in bonds which is a lot of money and a lot of responsibility and we thought more frequent meetings would allow to focus on the bonds and instead of focusing on all of the bonds we have liaisons and they focus on one or two bonds so in my case i was looking more closely at the

hospital rebuild program which is a multi-million dollar project and repaving and flanagan and emergency response with bob muscot who knows about unions and john alley and cory marshal who is a spur representative and the other program was with john madden and regina callan and others. we are still reviewing to some exvent the laguna honda which is not completed and that is under the general hospital program and the library program which cory marshall was charged with. so another change that was made this year is we started to use

the set aside -- there is a set aside in each bond of.1% of bond revenues and allocated to us so that is going to be -- 2 billion bonds it's $2 million if i have my zeros correct and we started to use that appropriately and by appropriately everything we were very clear on needed to save -- look for cost savings mostly in what we were doing, so we currently have -- we're conducts oversight activities to guide the city departments to stay on scope and budget and we have two proposals in budget and one is about community engagement which has in the past been an issue with bonds that the community engagement process is actually been problematic for keeping the bonds on time and to some extent on scope and certainly on

budget so we're doing an interesting research project there for best practices and also for benchmarking projects and looking at the design review process as well, so we hope these projects will help to improve the general obligation bonds and these are for the citizens of our city and county, and we also encourage if other people have ideas of research projects they think are applicable to let us know what those are. last here we responded to the civil grand jury report, and they did a report on the whistle blowing program and we did -- and the controller's office as well did quite a few changes that the report was substantively helpful in letting us know what we could do to make the whistle blower program better and we implemented changes including

hearing about the program more often and more substancely, so of course there are issues of privacy there, but being able to know more about the cases, have more benchmarking, see what kinds of cases are taking priority, and not and hopefully that will help oversee the whistle blowing program. okay. now we're going to go through some of the bonds we have currently open. the first one is the general hospital improvement bond program and i recently took a tour, and it is amazing. it's still not quite skeletal form but the last time i saw it two years ago it was a pit, and now it's a building, and it is on time. i am pleased to say on time, on scope and on budget and hopes to be done by the time supposed to be done

which is 2015 so $667 million of the money has been issued and things are going relatively well. of course the end part is some of the toughest part and we hope that continues to be successful. laguna honda bond program is not the same story and it's one of the reasons we came into existence . the program is vastly under budget and under scope and delayed and the good news i saw it won an award as a hospital so perhaps the end product is good but certainly the process by which we got the laguna honda and many of the reasons -- the issues that were found with giewn laguna honda hospital with the general bond and we wouldn't make the mistakes again. earthquake safety and emergency response

bond program was approved in 2010 and it is to seismickic -- >> can i ask a question? on laguna honda and you didn't do pre-planning to understand where the need was so that was a key difference between san francisco general and laguna honda and i wonder as you go through the different analysis and broken up the bonds and sometimes things have changed and we see this and whether it's a program where we under cover naturally occurring asbestos and complicate things more than we thought. for the laguna honda program with the oversight we didn't have planning to begin with even though the bond was issued at a certain level the real iftdic vision was more at a different higher level and kind of make adjustments for that because i think just reading this saying

the project is vastly over budget and under scope and delayed it sounds like we thought the budget ballooned but it sounds like the difference is we never planned to begin with what the level should have been. >> i think that is right. i think the bond -- unfortunately there was no committee here and we have learned and one of the big problems with laguna honda had to do with changed orders and the fact there were many, many -- there were multiple issues but many change orders lead to ballooning costs and scope and all these things and the mou's i think that have been done to connect departments together to make for smooth running of things and dpw and the puc and that's helped a lot, and also trying to really minimize the number of change orders happening is something

that they have done quite a good job, and one of the things that we do is we ask to see the change orders. that's another thing we did this year actually. we asked for any change orders to be in the report itself when they come in front of us, so we can have an idea because that's one of the ways things get out of control. >> thank you. >> and as i say with earthquake -- eser as it is called and everything is on budget in the early days and we hope that continues and maybe you're referring to this chair. you can't know what you're going to find necessarily at the point you're writing the bond, but one thing i seen with general hospital they have done a very good job when something does go awry trying to do things at the same time so that they don't lose time, so that's another thing that i don't think they did and this kind of synced up

construction at the same time, so that they didn't lose time. another relatively new bond is the 2011 roadway repaving and street safety bond and this is repave streets and repair stairways and pake safety improvements and it was approved for twa $248 million some street repaving have begun and some are for the geo bond for repaving streets. the neighborhood parks program we have 2,000 to 2008 and now 2012 parks bond and this is an ongoing attempt to keep our parks in good shape and the parks bond to renovate parks is

expected to fully finished by i will the end of 2013, so -- is that right? yeah. >> [inaudible] >> yeah. okay. and then we have the blip, the bridge branch library improvement program and it was approved in 2000 -- actually a blip more than one way and it did see a lot of the problems which the mou fixed later on. it was one of the reasons along with park and rec bonds that we looked at community engagement because there were issues with community engagement there that perhaps if handled better might have sped up some of the process. nonetheless, and i think the bay view library is opening -- is it this weekend? it's really soon. we're coming to the end of the

branch library improvement program and we're have beautiful 22 libraries now. the north beach and bay view are the only two outstanding and i think bay view is opening shortly, so again chair chu in terms of overall lessons learned better scoping to the beginning is absolutely essential. we feel having memorandums of understanding between the departments have helped tremendously. making sure we have opted myselfed community engagement. weez have a very engaged community in our city and to optimize it will help i think to keep the bonds on scope, on time and budget and carefully bidding qualifications are necessary to make sure that we get what we voted for. another service that we provide is overseeing the service

auditors. we are the auditors of the city service auditors, and what we did this year was expand benchmark efforts, and this is actually what we recommend being done in the future sort of -- we have a group working with the auditor and expand them by incorporating efficiency measures into the report. we can also make reports better and more easy to understand and this is one way to do it, so that we can see the other times how this is doing. implementing vetting processes for using the data to evaluate the reasonableness of the bonds. to continue working with 311 to make sure the calls are appropriately routed to the whistle blower program so we get the calls to the program so we can keep the whistle blower program working well, and

making sure we publicize the availability of the whistle blower program to all of the employees working for the city so that we can again make sure that we have people who are free from fear who feel they can use the program and they know it exist disps they're educated to what it means to use the whistle blower program. so what do we see in the future of our committee? well, one of the things we will have a report for you that will show the community engagement best practices, the results of that study, and also the design review best practices project, and we hope that will help to develop recommendations to the relevant stakeholders and of course that would include the supervisors when they're looking over the various projects they're considering doing with general obligation bonds and it can be used for things beyond

general obligation bonds and continuing developing plans for set aside funds to help the geo bonds say on scope and budget and i encourage you to come to us if you have ideas how we use the geo bonds to further make things on time, on scope and on budget, the funds that we have there. i am relatively optimistic that we will close out in 2012 the branch library improvement program and laguna honda hospital and i will be excited if we can do that, and we have a new bond that was brought on board by the voters in 2012, a new parks bond so we will have things to be looking forward there to and to make sure that is on scope and on time and budget. >> thank you very much. supervisor campos. >> thank you. i appreciate the very thorough presentation and i know that we will definitely

miss you, so when does your term end? >> whenever they nominate a new person and i would like it to be a small business person if we could to continue that. it's a wonderful education process for those that don't come from geo bond land. >> right. i think all of this is great. i wanted to sort of step back a little bit and have sort of a larger conversation. looking at the various programs that are out there i don't know what the total amount of bond money that that we're talking about is, but i imagine it's hundreds of millions -- >> it's over $2 billion. >> it's over $2 billion, right, so the question i have is you have this nine person body providing oversight for over

$2 billion of bond expenditures, and i think all the things that you're doing make a great deal of sense, and i think it's wonderful for instance to see the focus on community, making sure that benchmarks are being met. i think all of that is great. i am wondering if you guys had a discussion about where your activities -- how they compare to what happens in other jurisdictions? you know other things for instance that other jurisdictions maybe doing that maybe we're not doing, or maybe is it the kind of thing that we're actually doing more than most jurisdictions do? i am just trying to have sort of an understanding of the larger picture sort of in the context of what we're seeing more than $2 billion worth of bond money. >> right. >> what is the proper level of input or