>> chairwoman: i will just start momentarily. i'm not sure if our meeting is going to be shown live or not. it looks like we are. okay. good morning. today is wednesday, january 29th, 2020. this is a special meeting of the building inspection commission. i would like to remind everyone to please silence your cell phones and all electronic equipment. the first item on the agenda is roll call. president mccarthy? >> yes. >> chairwoman: commissioner alexander? >> here. [roll call] >> chairwoman: we have a quorum. our next item is item 2, discussion and possible action on a proposed

budget of the department of building inspection for fiscal years 2020, 2021, and 2021/2022. >> good morning, taras madison. before you is the department's proposed fiscal year 2021 and 2022 budget, and i'll go over some of the highlights. i'll go over revenues first, and if you have any questions, and then we'll move on to expenditures. we'll start off with the budget instructions. the mayor's office is projecting a $400 million

fund deficit, and therefore they instructed general fund departments to reduce their budgets by 3.5% ongoing general fund support for the next two budget years. d.b.i. is completely funded by a fee, so that doesn't apply to us. the mayor's budget priorities are housing, shelter, and services for those in need, clean and safe streets for everyone, and healthy and vibrant neighbourhoods. in addition, the mayor also continues to focus on accountability and also equitable outcomes. all departments were given those instructions. the next slide as the departments' organizational charts. we have the building inspection commission, the director's office and three areas, permit services and section services and administrative services. and our budget is pretty much developed around these three main areas. next, our strategic plan goes: basically all

departments are required to have a strategic plan,p th,and the budget is to be based on those strategic plans. we want to address the goals of issuing permits, performing inspections, delivering high-quality customer service, implementing effective and efficient administrative practices, and then also proactively engaging the public and educating the public, also. in addition to those kind of high-level goals, we also want to focus on some specific things e in the in the upcoming budget. we continue to budget on the mayor's housing directors. and we continue to focus on emergency preparedness. and we're really trying to speed up and do a lot more code enforcement. and obviously, once again, based on the mayor's priority, also making sure there are equitable

outcomes and serving our most needy residents. we'll start off with revenues because revenues are very important because we don't get any general fund support. so what we collect in our fund balance is what actually helps to fund us. basically this first revenue is a revenue summary, we have department license fees and expenses recoveries. and they are monies we get from other departments because we provide other services for them. the total revenue amount now is at 87.5%, that's what we're proposing. if we go to fiscal year 2021-- although this is a two-year budget, it is a roll-in two-year budget so primarily focused on the first year. if we go to the first slide, you'll see the revenue details. sorry for the quality of the spread sheet, but there are so many of them, we tried to squeeze them on one page. these are all about revenues. and most of these are

charges for services. so when you look at the revenues, you see that we have -- i have highlighted two: plan-checking revenues and building permits revenues. because basically those two together -- if you go to the next one, sharon -- if you look at the pie chart, they make up 59% of our revenues. and those two are based on valuation. it is the valuation of the permits. our success, or the amount of revenue that we collect very much is dependent on these to revenue sources. overall what you've done is you see we've budgeted those two at the actual same year request. and the reason we've done that is because a couple of things have to happen. but we have adjusted a couple of the other ones. for instance, if you look at vacant and abandoned buildings at the bottom, we've increased that because code enforcement is focusing on going out

and working on the commercial storefront, and so we've seen an increase in fees in the current yeeyear, so we've increased those. so next slide. as i said before, our proposed budget currently maintains revenues at the base level. currently, because we're projecting about $69million in revenues -- and our expenditures we'll go over later, and it will be a little more, and we'll have to use about $17 million in fund balance. the department does have a fund balance, and we've been able to have a fund balance over the past couple of years and we've been using thosemore and morthose more andmore to balancr budget. which means the full 17 million won't have to happen. first of all, it is interest. which is budgeted at $985 million, but last year we collected over $3million in interest.

the problem is the controller's office does the entry, and we don't know how it is calculated. so we don't have an exact number. right off the bat, we assume we're at $2 million. and then, as i said before, because our two major revenues, plan review and building permits, over the next two months we'll be revising those estimates, and it will be based on current year collection, because so far we only have six months. but as you're aware, we have the 100% affordable waive and fee program. which was just implemented in october. we're going to work with m.i.s. to see what the current impact is. there will be a reduction, and then also just to note that the impact is normally not going to be just in this fiscal year. for the larger projects, those projects happen over multiple years. so some projects you may

follow in this year, but you may not get your permit issued until three years from now. so we have to balance that off and see what the impact will be this fiscal year versus next fiscal year. so i fully expect to have revisions when we come back for the second hearing. if there are any questions on revenues? okay. so expenditures. we'll start off with expenditures. similar to all departments, our salary and fringes make up the bulk of our budget. we have overhead. and we have non-personnel, and that includes travel and training. it includes i.t. systems types of things, professional services. we also have a line item of community-based organizations because we work very hard to work on the equitable outcomes and also to work with those in needs. and it includes our programs for emergency preparedness. so we have a seismic safety outreach program

that is in every neighborhood in the city. we do training to get people ready for earthquake preparedness in different languages. we reach out specifically to lower income neighborhoods, and so we have that program. we have the single-room occupancy program and the code enforcement outreach program that is actually managed by the housing inspection division. and that is crucial to our code enforcement effort and our housing preservation effort, once again, working with the most vulnerable citizens of san francisco. finally, we have equipment, and then we have services of other departments. so if you go to the next slide, you'll see a pie chart. basically salary and fringes at 38%, and the services department is sat 26%. they are, once again, work orders that we pay to other city departments, the city attorney, the department of together, the department of environmental, the a

assessor's office. next slide. thanks. here are the expenditure details. so you can see them down to the temp salaries, retirement fringes, and we're at $87.5 million. and this is just giving you a detail of what those individual expenses are. so expenditure changes, so for our salaries and fringes -- this is our department's largest expenditure, and the reason for the increase that you see now is because of colas, and retirement health benefits are going up, and we'll probably see some changes at the next meeting because we're reviewing our positions and we're going to lower our attritions. once again, as we said before, we want to work on housing initiatives and code enforcements. currently we have a budget

of about 300 positions, but the city has something walled attrition, and last you're our attrition was increased by the budget analyst, based on our vacancies. so we're going to propose to lower those at tritions so we'll be able to fill more positions. in professional services. we have an increase because we had to do a fee study. the last study was done in 2015. in october 2015, we had a new fee table. we lowered our fees. we are committed to changing our fees about every five years, and so we added money to do a fee study beginning next fiscal year. and we have some i.t. projects we want to work on, updating the web, doing some oracle upgrades, and that's where the increases are in professional services. and we also have increase in equipment. as a field inspection department, we have to make sure that we have a fleet that is green, and

also reliable. we've been working over the past few years to green our fleet completely. the goal is to get rid of all compressed natural gas and go into a plug-in hybrid. and so we're proposing to replace 15 vehicles this year, and then in addition to that equipment, we're also going to be doing some data processing equipment. we have to get some things from i.t., some scan pros for records management. that's the changes in our equipment budget. and similar to prior years, services of other departments, once again, is our second largest, at $22.7 million. and the huge increase is because of 49 south van ness. and they were one-time work orders that will be going away. there is a $7.6 million work order that was funding everything from the move to supplies to furniture, all of those things, and that is going owe way. that's onaway.

and we're going to be a may 1 department. although there are two-year budgets, every other year d.b.i. and a few other select departments will actually present their budget with the true fixed two-year departments. so instead of us presenting our budget, instead of the mayor presenting the budget on june 1, our budget will be presented on may 1. we will be working with the mayor's office. we expect expenditures to change. a lot of the work orders in particular are not really done at the department level. they will be done based on kind of a formula, and then they'll be updated. >>updated.and so as that happen- although you will approve a budget at the next budget hearing, probably the budget will change somewhat when it goes to may 1. i normally come in and give updates as the changes are made. so let's go to the next slide. so this next slide, i tried to -- this is all at

the department level, so i tried to give you a sense of at the division level what the budgets are. as i said before, we have these three major programs, three major service areas. and underneath that is basically the divisions that are under each of those. and every place that you see a change is primarily because of the salaries. so the colas, the retirement, the health benefits going up. in addition, inspection services, any field inspection division, there is also a change because we included vehicles to do those replacement vehicles. so just a summary of the division expenditures, 52% of all of our budget goes to inspection services. 22% to permit services, and the administration is at 26%. since i'm in administration, i want to put the caveats with that.

part of the reason why administration is higher than permit services, because a lot of department-wide items are budgeted there. a lot of the work orders are budgeted there. a lot of the professional services are budgeted there. we don't budget it at a division level or something like that. so it is that we have so much administration staff, it is just a lot of the city-wide or department-wide architecture tistdepartment-wide actually budgeted there. and the next slide is the service of other departments. so that is just showing you all of the different work orders. you can see in the second group, you can see that $7.6 million reduction for that one. and then, finally, we have our d.b.i. budget schedule. as i said before, we are going at may 1, so we have this first special hearing. we'll have another special meeting on february 13th. our budget is due to the

controller and mayor's office on february 21st. between february and may, we'll be working to finalize the budget. may 1, the mayor will submit the budget to the board. some time in may, we'll be having our budget hearings with other departments. and july 31st -- and the june 1 departments will come in, and then by july 31st, the full budget will need to have been approved by the board of supervisors, and we'll have to submit a letter basically saying our budget meets our needs. i'm happy to answer any questions now on expenditures or anything.

>> is it possible to parse out the fees for affordable housing? >> that would be broad because we don't have affordable housing fees. we have building permit and fees. now what can happen, because we have this fee waiver, and basically what we've done in our system is that we track it, and we put a tickler "affordable." i can come back and say this is what an affordable housing project would have to pay and the building inspection fee. >> if that is possible? >> i can do that. >> great. thank you. >> i have a number of questions. my first question is: in terms of looking at the expenditure summary for the community-based organizations, i see that there is not a cola or a coda. do we have a policy for when we apply a cola or a

coda to any of our contractors? >> oh, sure. there actually will be an increase in there. the 5.3 that we have budgeted, because for,, we have some savings usual in the 5.3. yes, there is something called a minimum. there may be a cola, and that is discussed at the mayor's office. so normally that gets loaded in later. if there is going to be a cost of doing business -- i think they call it a "cost of doing business." that normally happens afterwards. and there is something called the minimum compensation ordinance, and that happens with the controller's office. we've done it in this fiscal year, and we're usually able to cover it because thr there is usually savings from the non-profit, but if there needs to be additional

funding, that is where it would go. >> thank you. >> any other commissioners? >> thank you for this. just a question about one of the last slides, about the services of other departments. i notice we have an increase in rent to van ness, which makes sense. wouldn't there be a deduction on the current property -- or do we own that property? i'm not sure. >> yes, so let me find that. do you see leases paid to real estate, the $4 million. you notice how that is going buy 2.3, and the 49 south van ness, they created a new account so we can distinguish between the two. >> i see. gotcha. thank you. >> deputy director, i think i know the answer to this, but can we go to code enforcements, the

city attorney's litigation part there. >> yes. >> i'm really curious about where do we come up with that number? is that based on previous years? >> so basically this is the 506 that was in the basin. it isn't based on previous years because as you recall, we actually collected a lot last year based on a couple of cases. in fact, i was just informed of another big case that is coming in. so this may need to be adjusted. but usually it is based on before we had a lot of these big cases come in, and so that is where that was based on before. because a couple of cases ended last fiscal year, we went back down to kind of a lower, what we felt would be something more reasonable. what we will do now, because i was just told of something that is coming in in the current year, and we're basing on current year collections, we will look and i'll probably talk to the

commission's secretary to find out if we're aware of any cases that will come in in 2021. >> so that may adjust for it? >> yes. >> and the seller issue that is ongoing, where -- is that stopped now? are you still paying to the seller? >> well, what i can say is the budget -- the current year budget included a reserve and some funding set aside for the project. and so in the next -- in the new budget, we haven't placed anything in there. and we haven't talked to the mayor's office to or d.t. about that. but because there is already funding set aside in the current year, i'm assuming maybe that will be used at a later date.

but i don't have any updates on specifically where we are with that specific project in general. just notice that it isn't necessarily reflected in the budget right now. >> that's my -- i know we're in limbo a little bit. the funds that you had from last year, they just sit there, but you don't lose them in this fiscal year if it is not line-itemed -- >> no, we don't lose them because a lot of our i.t. projects are budgeted in a bruchbudget, which means they're current. they automatically carry forward. >> in the land of milk and honey, and let's say we wake up five months from now, and everybody a walking back on this project, where are the funds coming from? >> the money is currently in the project funds. >> okay. and does that have a dollar amount on it now?

or we don't know? >> well...i think there was maybe a 2 or 3 million-dollar reserve that was set aside. and i'm not sure what has been used outside the reserve because d.t."holds t. holds the contract. >> is it safe to say whatever litigation is created is paid out of that account? >> i'm not familiar with that. i would defer to the city attorney on that. i don't know. >> i guess what i'm trying to figure out if this does accelerate under litigation of some sort, where would the no one come from that, if it is not in this? >> city attorney rob caplin. the money you would anticipate for litigation? >> yeah. > if we don't have the answers, we don't have the answers. >> i would have to look

into the answer, based on the contracts and how we have it determined we would apportion attorney's fees and costs. >> all right. so that's as far as we're concerned, whatever goes down doesn't reflect in our overall budget then, right? >> well, it doesn't reflect in our proposed budget. however, because there are already project funds, because, in fact, even if things were still on track, i'm not sure that means we would have to put new money in an annual fund because so much money was put in before. >> i apologize if it is an unfair question, but i'm trying to figure out -- >> that's okay. >> just a fullyu a a followup to that, i noticed in legal fees -- or legal expenditures, you have the same as the last fiscal

year, and perhaps that included the expenses associated with more than just code enforcement. could it be that we have some additional funds there for just simply matching last year's, when there was a lot of effort. >> can you tell me the account you're referring to? >> three-quarters down the left side, $3.5 million last year and this year, basically just a match -- is that just code enforcement or the other legal expenditures? >> that's all legal expenditures. in addition to code enforcement, the city attorney has to review all of our contracts and they sign off on all of our contracts, so all of those things are there. it isn't just code enforcement. any services that the city attorney has to provide to us. >> thank you. >> so my question is about staffing and the attrition policy that you referred to. particularly regarding the

policy of attrition for the permit technicians. and it is my understanding, or my memory, if it serves me correctly, is that over 10 years ago there were about eight permit technicians in the code enforcement housing program, and now i believe we're down to one, and hoping to fill two in the coming months. i'm concerned about the impact that this -- that the low staffing rate has on the public. >> uh-huh. >> the permit technicians, for those of the members of the public who are listening, there are more than 400,000 tenants in san francisco. when there is a lien put against a landlord for failing to meet a requirement, such as heat, or something similar, it is the permit technicians who actually assess the lien. and when the problem is

resolved, take it away. and then remove the lien. they're an important community resource. this is something i've gotten feedback about. and i'm concerned about -- i'm glad that the department is moving forward, and i thank you, director huey, for being very responsive, i know it has been a struggle to fill positions. but three is still a pretty low number. and my understanding is that housing inspectors are spending their time not doing their scope of work, but are actually doing this other clerical work. >> uh-huh. >> so i would like to see if this is addressed in here or if there is another way to address that. >> a couple of things. first, i'm not aware of what was 10 or 15 years ago, but i know that department-wide, during the big downturn in 2008, the department lost, like, 30% of theirs. and so gradually the department has been adding more positions, but it is

difficult to add those positions. attrition is not reflected solely at permit techs. in fact, it isn't even reflected by a job class. it is a number that you put in f.t.e., and then a system calculates it. no one is keeping permit techs vacant in order to meet attrition. and the third item is that the reason there is only one permit tech, once again, it is not because of attrition. it is because i believe three or four people went on to some place else, so we're back-filling it. we did send out a request to division managers, if they wanted to do a new initiative, or do something like that, and they had justification for it, to let us know to include it. i did not receive anything about the permit techs. this is my first time hearing about this. if that is, once again, what we're doing is we

will lower the number. so let's say the f.t. is 34 point something, our goal is to move it down to 20. here is the issue with us, and we've tried to do this before: we want to lower our attrition. our attrition has been increased before because we do have vacancies, and we continue to have vacancies. i've been here since 2014. i think every year we do at least 20, 30 positions, times 40 positions, but we're always playing catch-up. and the board says, we have these positions vacant, and so we're going to lower it again. so we're constantly trying to play catch-up. but we're willing to look because as i said before, housing is very important, code enforcement is very important. and so if there is a way for us to make sure we have enough support staff, we're all for that. it is just that i'm not sure if the fact that so

many are left at one time is basically -- it is simply an attrition issue, too. but we can look at that and i can follow up with the manager. >> thank you for your very thorough explanation about that. sure. >> i don't think there are anymore questions, other than to add, i know on the ramp-up we were doing on this attrition, we were trying to get people hired, and i know it is very frustrating because most of the people who applied for the different positions, to have to sit and take exams, and they expire, and then they go back again. what we've learned, as frustrating as it was, we were averaging it takes six or seven months to hire somebody. so it is very daw. it is very d. it is something we're always nervous about when we go before the board of supervisors for approval of our budget. that's the low-hanging fruit that always seems to

be taken. go ahead. >> i'm sorry, are you done? >> yep. >> in addition to that, besides, -- normally we do it internally. so you hire maybe three seniors or permit techs, but that ends up with three plumbing vacancies -- so besides the entry level, most all of our other positions are internally. we promote i internally. >> thank you, deputy director, for your presentation. there is no public comment on this, is there? >> there is a public comment on the item, but there is no public available. [laughter] >> that's what commissioner moss has always said. >> chairwoman: in our

budget meeting, we typically don't have a lot of public. okay. so is our next item adjournment. >> the next item is adjournment unless the deputy director has something else. >> chairwoman: did you have something else. >> make a motion. >> there is just to reiterate, as adapt director madison mentioned, we have a special meeting again for the budget on february 13th, at 1:00 p.m., and our regular meeting is on the 19th. >> chairwoman: so are they voting today or next -- >> i believe you vote on the second -- >> the 13th meeting is in here, correct? >> chairwoman: at city hall, but in room 408. i'll remind everyone. so do we have a motion to

adjourn? >> motion to adjourn. >> second. >> chairwoman: are all commissioners in favor? >> yea. >> chairwoman: we are now adjourned. it is 10:42 a.m.

we will come to order. mr. clerk, do you have any announcements? >> clerk: yes. please make sure to silence all phones and