their four-legged fronds run freely with other dogs and a small touch of grass for the small dogs and wild flowers carpet the grasslands keep on the look out nor hawks and ot >> clerk of the committee is derrick evans and i'd like to give a thanks to the ones working or projector. thank you for broadcasting this. >> please silence all phones

and electronic devices. items acted upon today will appear in the june 25 supervisors agenda. >> thank you very much. please call item number one. >> item one is to revise the business tax code to provide for districts to -- park realm areas, including parks, sidewalks, landscape areas, plazas and gardens. >> i'm the sponsor on this. i'm working on a few remaining questions so i request that we continue this item to the call of the chair. before we do that i'd like to take some public comments and see if there's anyone who would like to speak on this item. okay. seeing none public comment is closed. thank you. may i have a motion to continue this item? >> moved. >> thank you very much. this

motion is motion accepted to the call of the chair. mr. clerk, could you please call item number two. >> item two -- the hearing of a san francisco budget and legislative analyst june 3, 2013 performance audit of the san francisco housing authority. >> thank you. supervisor campos is the sponsor of this item. do you have any opening remarks? >> thank you, i'll be very brief. i want to begin by thanking you, supervisor cohen as /kphaeur chair of this committee for putting this on the agenda so quickly. i want to thank soup /-r visor tang for hear /th-g and i'm pleased

to be joined by mr. reed. i don't know if anyone has the answer for how to deal with public housing. i think it's complicated issue and we have our own stories about public housing and i know many people in elected office have lived in public housing themselves and it's important to see the leadership role they will play in this effort, including mayor lee. for my family i haven't really talked about this, but i was speaking to my parents about some of the things that are happening here with the housing authority and they explained, to my surprise, some of the history that my own family had with public housing. my parents were making minimum wage in los angeles when we were growing up and we could not afford where we were living. and so we actually, as

a family, applied to get into public housing. unfortunately the wait list was so long at that time that we were never able to do that. my parents explained to me sort of their frustration with the system, which certainly, in los angeles, was not working very well and not very consumer friendly. the reason why i ask for an audit of this agency was that so instead of talking about personalities and the individuals involved, that we really focus on what's happening with the residents because at the end of the day that's what should be the number one priority. and i want to thank the analysts for the very thorough report they did. i want to thank the

housing authority, the interim executive director, president torres and the entire commission and their staff because they have worked collaboratively and have been very open in basically letting the analyst and his team look at all the facts and books so i really appreciate that. one thing that i am sure of is that things will get better and i want to commend mayor lee for his efforts to reform this agency. i want to thank the interim executive director, president of the commission, because i think a lot of a good things have happened in the last few months because of the leadership. i thank you for taking the time to meet with our residents. the whole point of this hearing today is not just to hear from the analysts, which is how we will work. we will hear from mr. rose and his

team first and then the housing authority, but the most important piece is to hear from the residents and i want to thank the residents for taking the time to come all the way to city hall to share their stories with us. before i turn this over to mr. rose and his team, i want to make sure i give anyone else the opportunity to say anything and i thank you again, supervisor cohen and reed for the leadership you both have already demonstrated in this issue and i look forward to working together to get to a point to address the problems that have been identified. >> supervisor reed would like to make some remarks. >> i want to start by thanking supervisor campos for calling this hearing. i was contacted by him last year. it was -- he's been extremely concern

about what's going on in public housing and this is really opening the door and shining a light on some of the challenges that residents of public housing face. i grew up in public housing -- born, raised, my mom, family, some members still live there. and i am still very connected with many of the residents of many of these developments and familiar with too many of the same challenges that existed when i lived there. and i am really excited because this is the first time that i felt that this matter of supporting residents who live in public housing developments throughout san francisco -- the city is taking notice. the mayor has taken notice, the members of the board of supervisors have.

i know super surprise so supervisor cohen has had one of the the biggest challenges with the residents of public housing. we can't continue moving forward business as usual without making sure that we're looking at the entire system and this audit from the budget analyst is definitely not surprising to me. i had a chance to read through the full report. there are definitely, clearly some major issues that we, as a board, need to look you at and figure out a way to solve those issues. i know our interim director, barbara, has been actively working to try to move the housing authority in the right direction as well as the new commissioners and i want to thank president torres

for being here and also making sure that he has taken the lead in making this his priority as well. so this is an important issue clearly to the city, having this report, having a lot of folks take interest in dealing with this issue is important to me, but more important for me is to make sure that i am hearing directly from the residents. i have gone door to do to all of the developments in all of my districts. i've talked to the residentses and listened to their concerns and am working hard with the housing authority to try to address those concerns. one of the biggest challenges that many of the residents face is jobs for themselves and jobs for their children and housing for their kids who are basically ageing out of -- i mean, who are becoming adults. we have got

to figure out new innovative ways in which we address the immediate concerns of the residents, but how do we allow people to continue to grow. if my grandmother made a certain amount /o over what was required, where would we go? we have to make some changes to federal laws in order to allow people to keep their homes, because from my perspective people looked at it and they felt, well, that's the projects. to us, that was home and we need to start making people feel good about their residents taking care of their properties and treating people with dignity and respect and making sure people feel comfortable in their homes regardless of income level. there's so much to talk about and do. i'm looking forward to hearing from the people here as well. with that, thank you so

much for allowing me to participate in this hearing. i'm really looking forward to moving housing authority in the right direction. thank you all so much for being here. >> okay. just a point of informing everyone that's here, this is a hearing item so we are not going to be taking a vote on it. we'll be discussing the performance audit that mr. rose's office has evaluated. there will be public comment after this hearing item. public comment will be limited to two minutes per person. you'll hear a soft buzz which will indicate you have 30 more seconds and then a louder ding. if anyone else comes into the chamber they should know the overflow room is in the chamber because the seats are filled up in the committee. without for a do, let's get this show on the

road. i'd like to call up [inaudible]. thank you. >> good morning chair cohen, supervisor campos [inaudible] amanda is a project manager on this audit and she will be giving a very brief presentation, but first i want to say we conducted this audit based on the motion of the full board of supervisors who wanted us to look at the housing authority. it was declared to be a troubled /aeu yen /seu in december of 2012. as we began the audit the housing authority was going through major changes. there was a new commission that came into being of february 2013. there was a new interim executive director so as we were doing this audit the new housing authority director and the commission were beginning to make many changes that address some of the issues and concerns we saw

in the audit. i wan to thank miss smith and he staff and [inaudible] and his commission members for the assistance they gave us in conducting this audit. i will now have amanda give her presentation. >> good morning supervisors. my name is amanda and i'll be presenting some highlights from the budget analyst performance audit of the san francisco housing authority. our audit had five focus areas, compliance, government, financial management, program management and operational management with a particular focus on staffing. we looked at how efficient and effective the housing authority has

performed across those variables and we also considered how that compared with other housing authorities across the country. through its two housing programs which are public housing and section 8, the housing authority served approximately 31 thousand san francisco residents. you can see it broken out here. funded almost entirely from federal monies, the housing authority is technically separate from the city of san francisco, although the mayor does appoint seven member board of commissioners. for fiscal year ending september 30, 2013, the housing authority has a budget of 210.6 million -- sorry, can you hold on a minute. folks that are sitting on the side, i have to ask you to sit in the chamber. there's some

overflow seats in the chamber, we don't have room in the committee room right now. thank you. give me a second. there's seats in the overflow room in the chamber. maybe you don't hear me. sir, in the back standing up. i need you to either take a seat -- take a seat in the chamber. thank you, continue. >> so as i was saying, the budget for this fiscal year

which ends september 30, 2013, the housing authority has a budget of 210.6 million dollars with nine departments and 289 full-time positions. we should note that those staffing numbers were as of may 10, 2013. it's our understanding that the housing authority has made some staffing rejections and we'll let them speak to those changes during their report. because the housing authority is largely department on hud resources -- >> supervisor breed has a question for you. >> these numbers are really small and i was wondering if you had something larger 'cause i couldn't see them on the large screen either. >> i can try to pull that up for you. not sure if that's going to work. it's in our report if -- >> can you tell me which page?

>> the housing authority has faced significant financial challenges due to reduction of federal funding for public housing across the country. while that reduction has had a major impact on the agency the agency's poor internal financial management practices have worsened the situation. since 2009 the housing authority has not hired a chief financial officer and there's no long term financial plan. as you can see from this slide in 2011 and 2012 the housing authority faced budget shortfalls of 4 million and 2.6

million respectively. as of the first five months of this fiscal year 2013, the housing authority is already facing -- exceeded 1.7 million dollars. according to hud's latest report in march, the housing author ity is expected to run out of cash sometime between may or july of this year. responsibility for fiscal oversight lies primarily with its commission. for at least the past two years, commission has provided inadd kate oversight and insufficiently addressed the [inaudible] committees such as the finance subcommittee were allowed to lapse while at the /saoeupl time the authority of the executive director was expanded. as we look at government and compare san francisco's performance with

other housing authorities we found it was unusual for the executive body to have sole authority for commission appointments. typically this is shared between the executive and legislative bodies, but san francisco's legislative body is currently prohibitive from such participation by state law. we believe sheer participation will improve accountability and we believe relocating commission meetings to city hall will improve transparency. one concern is with procurement. as i noted the previous commission expanded the awe /thorbty of the director but didn't enforce proper procedures. the housing authority has not had a consistent home within the agency for years shifting five times in the -- we saw no evidence of contract

monitoring. beyond these more obvious deficiencies in financial management and procurement we saw weaknesses in management overall throughout the agency. they have not performed a staffing analysis in years and the organizational needs and staffing levels across departments are currently unknown. this has led to insufficient management across the department. in addition, several senior staff members have been in acting positions for several years and they're on going key vacancies in senior roles at the agency. one major department that has been managed by an acting director for several years is

the section eight department. we focused on two areas of section eight, that being staff productivity performance and waiting list management. over the past ten years, hud assessments have -- everyone as the housing authority was inactive, correction action processes it really failed to demonstrate significant improvements across those deficiencies. one measure of performance for section at is which [inaudible] of their department's performance in 2011 and found that on average staff were completing one re-certify per day. the section eight /tkp-pt actually manages both the public housing and section eight waiting list, which we have found to be

unusual. despite hud guidelines to update the waiting list annual, they have not been updated in years. the section eight waiting list which currently has 8900 families on it, has not been updated since 2001 and the public housing hasn't been updated since 2008. this places a burden on the eligibility process. the section eight director notices that it typically takes completing an intake process for 80 applicants in order to find one viable candidate for a vacant housing unit. this wastes staff time and income as these housing units remain vacant longer than necessary. occupancy is the key indicator

used by hud to -- the hud standard for occupancy has been 98 percent. at the time of hud's last assessment of the san francisco housing authority it's act pansy rate was 93 percent. not only does the housing authority have a high number of /sra cant units, but they have remained vacant for extended periods of. you can see on this graph, hopefully, that the units -- and there are currently 276 vacant units in san francisco, have been vacant for an average of 195.5 days, or six-and-a-half months and this is despite hud standards that these units be turned over within 30 days. 276 current vacant units. that number may have changed since our audit. >> and what's the size of the wait list for these units?

>> 26 thousand families on the waiting list. >> thank you. >> a major factor relating to the high vacancy is the high cost of preparing units for occupancy. the cost varies significantly between the senior units and family units are respective average costs of 7306 dollars and 14,779 dollars. there are also costs to not preparing units for occupancy. they lose hud subsidies and also tenant rent as long as these units remain vacant. rent represents 33 percent of the authority's

public housing program budget. failure to collect rent means that other important agency functions cannot take place and those functions include things like ongoing maintenance and repairs. since 2010 the average number of delinquent -- 2572 delinquent tenants at the housing authority, only 19 percent were on payment plans. in accordance with hud guidelines, the housing authority is allowed to write off the uncollectible rent each year. the average amount of rent that the housing authority fails to collect is over 1.5 million dollars annually. in addition to rent the other opportunity that the housing authority has to generate

revenue is to charge tenants for damage caused by them to units. this is standard, but san francisco stopped enforcing this policy in 2009 and as a result the department has fewer resources to meet the growing maintenance need at their properties. as you can see from this slide, maintenance expenditures have far exceeded the budget in recent years and there are 3000 outstanding requests at properties across the city. one reason for this is that there's been a significant reduction in skilled craft workers and the other is that the housing authority has failed to [inaudible] by 40 percent in 2010 from 68 positions to 41 positions and we believe it's our understanding that there was another reduction in may of

2013, i believe of 11 position, which the housing authority can speak to in their report. at the same time the housing authority has been unable to transition to hud's new model of property management or asset management. a /kaoer barrier to the housing authority for this transition is creating a new class of maintenance workers, referred to as a maintenance mechanic, otherwise a typically handy man. the san francisco housing authority is trying to negotiate with the union for in classification, but in the meantime it has lost 1.5 million dollars annually for a total of 7.5 million dollars over over the past several years. the final area

we looked at was public safety. to address security concerns at its property, they have engaged in three primary efforts -- enhanced police services, private security guards and in-house security guards, however, to date the housing authority has not monitored the performance of these contracts, nor has it performed a needs assessment to determine the appropriate level of service at each property. as you can see from this slide in 2012 the housing authority paid 490.10 for security per housing unit, as compared to an average cost of $210 per unit for other comparable housing authority. with regard to the housing authority's memorandum of understanding with the san

francisco police department we found that despite its having been if place for ten years, performance has never been measured or effectiveness been determined. we believe the police department could continue to provide sufficient and effective policing at these properties using regular work shifts. we also recommend that the housing authority get a staff person toover see public safety and conduct a needs assessment of those needs. those are the key highlights from our report. we would like to thank the staff and management of the housing authority for all of their assistance, including the new housing commission. we'd also like to thank the housing authority clients who participated in our survey and we're happy to answer any questions. >> thank you very much. holly, any questions on the findings? none? okay. let's open up for public comment. wait. oh,

okay. housing authority. sorry barbara. >> it's okay. well, i do wish to thank all of you on behalf of the housing authority and express our appreciation to the board of supervisors and the budget audit. it begins with the hud assessment last year and designating the housing authority as troubled for failing the financial and management indicator scores. ? january hud sent a public housing recovery sustainability team to the housing authority for public assessment and identified many of the problems that the analyst has confirmed. if july of this year hud will begin to provide several