Transcripts For SFGTV Citizens Govt Bond Oversight Committee 20200203

>> i have some hand outs. thank you. >> good morning. i am jerry drater, a retired cb a. i served as a civil grand in juy member. there are only four cgoboc meetings per year. i thought it would be useful to share the specific responsibilities to serving and my concerns. when you were worn you took an oath to exercise your responsibilities consistent with with the city charter. the two sections that spell out your responsibilities are article 5 and appendix f. i handed out copies of both. in both sections there are responsibilities you shall execute and responsibilities you may execute. it goes without saying the activities are mandatory. on page 2 of article five i highlighted section 5.31a which numrates what you shall do. section p numrating activities cgoboc may even gauge in. when i served i was concerned the meetings hours were allocated to may even gauge in activities, specifically reviewing the department bond reports to the excuse of the shall activities. on page of article 5.32b i highlighted the requirement the committee shall issue an annual report at least once a year. i would think the report should assure the citizens cgoboc has completed the shall do activities. oon page 3 of appendix f in the second highlight. i highlighted d8 to authorize easy to function as independent citizens audit review board and review whistle broker complaints. on page 9 i my lighted f1, 1.11 which assigned cgoboc the additional duties of serving as audit review board and shall review the service standards for accuracy and usefulness and review all audits to ensure they meet the requirements set forth above. i don't see where this responsibility is given any meeting time during the year, and it is adequately reported in ththe annual report of cgoboc. thank you very much. >> thank you. any other public comment? seeing none. item three. >> item 3 approval with possible modification of the minutes of the october 21, 2019 meeting. >> any changes? >> i saw a date that -- it is one of those mornings. i had a question that i marked in my notes. in item 4, it says the recreation and parks department is planning the 2020 projects scheduled for the june 2020 ballot. we don't have a june 2020 ballot this year. why are we going to have a june 2020 ballot? >> congress. >> our primary ballot is march 3rd. >> we elect members of congress every two years. >> in november. we don't have a june election this year as far as i am aware. the primary is march 3rd. the general election -- i don't think we have a june 1. that is what i was trying to clarify there. >> any other changes? does anyone in the audience know if we have a june primary for congress? >> primary is march 3rd for everything. it is for congress as well. >> thank you. >> is there any comment on this item, public comment? seeing none. i will go ahead to call item 4. >> move to approve. >> second. >> move to approve. >> second. item number 4. presentation from the port regarding the 2012 parks bond and possible action by the committee in response to such presentation. >> this is a holdover from last meeting because the port was not here to present. the way this is on the agenda is for the 2012 parks bond so i would urge our parks representative that we are not going to be discussing 2008 which is in the presentation. this is on here as 2012. 2012 is in the presentation. i would skip the 2008 one. it is for 10 minutes. we are to move it to this meeting which is a pretty long meeting as it is. for the other members, the sea wall project was passed by the voters recently and the port is representing that, which is a much larger amount of money we will be governing. if it is not up there, we don't see it. >> 10 minutes. >> good morning, community members. i am shannon cairns from the port of san francisco. i will be presenting on the 2012 bond for waterfront park. the bond was approved in november 2012. there were four components. i will speak about the waterfront parks component. that was $34.5 million. these are projects led by the port of san francisco. there were six waterfront parks funded by this bond, and one of them has been completed. that is what you see first one on the slide there. the cruise terminal at pier 27 and there are five active projects, four on this slide and the fifth on the next slide. the park is currently in the design phase. that will be delivered with the mission bay ferry landing project. we are currently preparing to go out forbid for that project. we expect completion of the entire project including the park in fall of 2012. the next project active is the creek that was originally funded for $2 million. we de-funded except for $250,000. we needed to do a feasibility study, and because we are coordinating with public works and the p.u.c., who have work in that area, we need to closely coordinate the work to see what is feasible for our project given the work they will be doing on the bridge in that area and the p.u.c. infrastructure. $250,000 is being used for a feasibility study. if proven feasible $250,000 will be used for design and the port will seek funding for construction. the reason we opted for that we knew we know not be able to spend $2 million within the timeframe needed. that leads me to the her on's head park. that park is currently in design. the project is scheduled for completion in november 2020. it is 90% design right now. next is the pier 27 art project currently in design. the san francisco arts commission is beginning artist selection. it is to be completed in fall of 2021. the final of the projects funded in the 2012 water project bond is the cove park. it is currently under construction. it will be completed in spring 2020. there are other components of the park beyond 2020. all of the bond funds are for completion of the park and the park itself is under a separate contract to be completed in spring of 2020. so this piechart shows the waterfront park allocation. you can see the pie is $34.5 million. so far we have expended $23.7 million leaving $12 million for the balance. this is where you can see what balance is left. the majority of it is on the cove park, which i explained will be expended in the spring this year, and the vista park will be with the mission bay ferry landing completed in fall of 2021, and with the heron's head park completed in fall of 2020. this is just a slide showing the schedule that i just explained for the parks. i am happy to answer any questions should you have them. >> i reached out to rob benson. is that in your department? >> brad is the port and the leader of the resilience department in the engineering department. >> i got no response from brad. we need someone to get ahold of that will respond. that will be great. >> we have assigned liaisons to each bond. we have been doing this for four years. we generally reach out personally, one of us, to have a conversation before you guys come to present to be able to have some. >> you are saying you reached out to brad and her he then responded? >> i am liaison. i am looking for someone to respond to me. i reached out to brad and got no response. >> i am happy to have you reach out directly to me. i manage the project management office in the engineering division. most projects will fall within my realm. you can't guarantee 100% but i can be the contact to get you to the right person in the port if you have a question not within the engineering division project management office. >> excellent. leave a card or contact information. >> absolutely. >> thank you. >> is the sea wall under your purview. >> no that is brad benson. >> can you reach out to brad and let him know we would like a response next time. we are the governance for his bond. >> where do you anticipate getting $2 million that you need for the creek now that what you had had to go to somewhere else? >> i think that through this feasibility study we don't know if it will be $2 million. we are figuring out what the project can be, given be the infrastructure in the area. we don't know exactly because we don't know how much is needed. we don't know if we will partner with other agencies in the projects as well. it will be a collaboration with multiple agencies to figure out the project and the cost share for that project, and given that answer, the port will investigate where to get the funds for that. >> basically, this park is on hold and may or may not be funded with public funds? a private developer could pick up the costs? is that what you are implying? >> i didn't mean to imply that. >> i just meant we don't know how much money we need and the sources available to us because we don't have the specific project first. we need to do this feasibility analysis. >> i have a question. i am a newer member. when a project like the creek comes on for the voters and is in the list of parks that we voted on. it seems it wasn't very well thought out given your description of what still needs to be done, is that normal for it just to be -- let's put a park here and a creek and put it on the ballot. it seems like we are starting from scratch on something that would have been more flushed out before going on the ballot. maybe that is not the way it works. >> i would say the majority of projects continue on. in this case the majority have continued on in the form they were conceived as. i don't know and i could get back to you about the specifics of the genesis of the project. i wasn't working at the port when that happened. >> this is unusual is what you are saying? >> it is unusual, yes. >> thank you. >> what body approved moving $2 million from one project to another? >> i would have to get back to you on that. >> you can respond to marry and -- respond to mary and she will send it to us. >> i have somebody here who could answer your questions. >> just the one question. if you know what body approved that. >> i do not have the answers to what body moved that funds. a little bit about this creek project. it is a creek-side connection between two spaces. the port does not control property beyond this very narrow creek side piece. the port is committed to completing the connection between pieces to the east and west, basically, and it is figuring out the scope and how we would fit that into the other efforts in the area. >> thank you. any other member? any public comment? >> good morning. i am jerry drater. i have three general questions to address financial oversight of specific bonds, which should be asked in all presentations or answered. using the current project forecast, the amount of the project is estimated to exceed the original budgeted cost, that wasn't disclosed. two. the sum of the actual change orders and projected change orders and what percentage of total project cost? will they exceed 2% of the project cost which is the dpw operational standard. three the sum of project management cost including outside consultants and dpw project management charm charged -- charge against the bond. we need to be mindful of duplication of costs. thank you very much for your time. >> thank you, mr. drater. any other public comment? seeing none, thank you for your time. item 5. presentation from various departments about the 2010 and 2014 earthquake safety and emergency response bonds and possible action by the committee in response to such presentation. >> good morning. i am charles higueras. i am acting director of project management. you know me as the easter bond program manager. i will introduce our presentation and turn it over to the project managers who actually are the day-to-day managers of the work effort for thetic bond components. as you can see by the first cover sheet, we have a variety of different departments within each bond program. the benefit from these bond funds, specifically as a generally first responder style bond program, we have police and fire and the p.u.c., which has management responsibilities of the dedicated firefighting water system. those three components are common to both 2010 and 2014. in addition, in 2014, we introduce the office of chief medical examiner for those of you familiar with that function. it also is very much adjacent to emergency response and so in that respect it fits neatly within the mantle of the earthquake safety and emergency response bond program. moving ahead to the next slide here. i won't steal the thunder of my manager. i won't speak to highlights and accomplishment. i will ask them to focus on that in their presentation. upcoming milestones. we have the financial closeout of projects that is the administrative completion of work. that takes longer than any one of us would like. eventually, we do accomplish that. that makes it neat and sets it aside. we are in milestones going to be strengthening a very special event tomorrow late at night, i think. the arrival of the float that will form the sub structure of the new fire boat station. that float will be arriving at treasure island pier 1 late tomorrow night. i don't know when it will be set in the water, but it should be happening at this juncture sometime in the early morning of the 29th. that will be an exceptional event. i don't think it has ever happened in the history of the city. traffic company forensic services division just houred its ground floor mat, foundation mat over the weekend. michael will be sharing with you the upcoming events regarding that project. we have fully sold all bonds for both programs and we will speak about the financials later. risks, issues and concerns. since we have pretty much accomplished the work of the bonds. the thread or challenge of the environment had lessened dramatically in regard to the impact of the bond. i will stop there, if that is okay with you. and i will move to the presentation of the public safety building, which actually is me. this project completed awhile ago. not much is needed to be said other than we are continuing the administrative closeout. the project is okay occupied fully by police and fire. we have facilities in the campus. with that, i will move to the next item and introduce magdalena and sherry katz. >> we only have one microphone. i am going to ask sherry to introduce her focus scope after i tell you about the seismic upgrade and new upgrades. i am project manager at public works. good morning, president and committee members. i will start with the providing the status update on the fire station 5 and 16. station 5 is a few days away from the issuance of the final closeout package. there are minor items to be completed on the punch list. on fire station 16 that finally package was issued in july of last year. now we are proceeding with the financial closeout and the contractor is working on a couple of warranty items. on that next slide. i wanted to highlight and talk about pier 26, which is smaller project provided to accommodate birthing of the fire boats while we are constructing the facility on the flow for the firefighters. that project has been delayed. we had problems with scheduling inspections and also contractor vortex needed to change electrical subcontractor and had to be replaced that took a little time. our designer needs to update the drawings to finish the remaining electrical work, which we anticipate will be around mid february or earlier. fire station 5, i think, charles promised not to steal the thunder, but he did because the main event is happening tomorrow at 11:30 a.m. we were told the float is going to come to our bay, and then it will be inspected. after the inspection and customs control, it will be delivered to treasure island where the desi design-entity will construct the float. we are very excited about it. i will turn this over to my colleague, sherry katz. >> good morning. i am the project manager for the focus scope projects under the 2010 and 2014. the apparatus bay doors starting february 1st and ending in may, 25 of th the fire stations in te apparain theprogram will be com. that is 35 stations where we changed the doors. showers is completed at fire stations 19, 17, and 33. that completes the shower component of the focus scope program. also, exterior envelope at fire station 8 is completed. we are in the process of continuing on with fire station 29. then there will be one final station, fire station 23, which will be done, hopefully, this spring and summer. that completes my section of the presentation. thank you. >> i would like to now ask david marsh with public utilities commission to speak about the emergency firefighting water system. system. and that's out to bid with the bids due in february. from mission rock street to warriors' way. we'lling putting in new pipeline to help serve that area, with the new developments that are occurring. that will be part of design-build contract db129.1, which also includes a large electrical system that we're building. ashbury bypass pipeline. i believe all of the work is close to being done or is done. it's in the final stages of completion. pump station two, structural large projects at the north end of van ness. and that will continue throughout 2020. and we have some relatively minor street valve motorization projects that our city distribution is undertaking. is there any questions about the emergency firefighting water system? >> not at this time. >> thank you. >> and i will also be reporting on the police facilities. so we have three contracts and total nine facilities in those three contracts. so northern richmond renovation project, that should be really done any time. we are finalizing. we're doing the back check of the patch list and the same situation is on the park in engelside renovation. thank you, sherry. the only way we're experiencing is the bayview and tenderloin, where an inspector came to sign off on the work and proceeded to add a lot of scope of work, which is unfortunate. but at the same time it's needed and we just cannot say no to this. we won't get the sign-off. so this is going to delay the project a little bit. we think we'll be able to finish it, though, mid-february at the latest. any questions? >> thank you. >> oh, yes. and, of course, my favorite project. the chief medical examiner. yes. so, i mean, the client moved in over two years ago to the facility. this has been opened. there's one warranty item still under review and work by the contractor and the designer k.m.d. so we are working on resolving the water issue. and the very last is the lead goal, which we are pursuing and five of our credits that we submit ready under review. there-- they were originally red and we are now challenging that rejection. we are keeping our fingers crossed, because we are literally needing all five to get the lead goal. it's very difficult to get. it's a laboratory health care facility. very difficult to get a gold accreditation. thank you. >> good morning. i'm michael rossetto, forensic services division project manager. very pleased to speak about the fact that construction started in october and quite a bit of accomplishment has been made. already the deep foundation work is complete, including an indicator pile program, where certain number of piles are driven to bedrock and then tested for strength. that went very well and it allowed the production pile installation to begin in early october. and that completed as well. and as charles mentioned, this past saturday was the pouring of the mat slab. so that concludes all of the foundation work. and over the next week to week and a half, we'll see above-grade structure begin to rise. so we're very excited about that. we have very many permit applications into the department of building inspections. the largest of which is the architectural and mechanical, electrical plumbing application, over 700 sheets involved in that one review. and d.b.i. is quite busy. so it is challenging to get accomplishment of some of these permit review applications. however, we have recently received two of them. one is noted here and one came in last week for brace frames. so we are making accomplishments there. and that is holding to the project schedule. we also recently in december had a great success with the arts commission, concluding our civic design review process, with the unanimous approval of phase three. upcoming milestones. this is actually now something in the past. 100% construction documents were received on january 8th by the architects. h.o.k. we are in the process of bidding out. we are approximately 91% bought on the project. we have had to throw out one miscellaneous metals bid that came in significantly over budget. and we are rebiddingbidding thad trying to conclude the remaining 7% or 8% of the buyout for the project, within this month and probably into early february. we are looking at topping-out ceremony to be scheduled for end of april, early may. which will be a great milestone coming up. any questions? >> thank you. >> thank you, michael. >> so in regard to budget and financial plan for 2010, you can see from the graphic, we're 92% expended. we're literally managing several, few projects remaining. and we should have those completed this year. in regard to efcr2014, we're about 50% expended. most of that balance, remaining ballet crews to the completion of the traffic company project, as well as the fire boat station project and, of course, projects for the emergency firefighting water system. all of those are tracking according to our current plan. and those projects, for the most part, will be completed next year. and with that we'd like to conclude the presentation and ask for any questions you might have. >> before we do that, this is -- for the members, as you know, d.p.w. is providing a -- is acting like an contractor to the departments benefiting from this, specifically the fire department, police department. i'd like to take an opportunity, as i usually do, so ask the fire department and the police department if you have any comments for us on how you see the quality of the work going. is it meeting your expectations? feel free to comment, too. if there's no one here from the police department, fire department, that's fine, too. >> good morning. my name is dawn de witt, i'm with the division of support services. i pretty much have the same comments that i had last time i was here. it's just that i'm really appreciative of the level of service that d.p.w. is offering us. i feel like the people who have been chosen as our project managers are very much on top of what's going on and are really advocating on our behalf to save us money. and to address the problems that have come up with fire station 16. there have been some problems that have been ongoing. there's been some design problems and some mechanical issues. we've had some electrical issues. but magdalena has been on top of them every step of the way and following up and i really feel like they're doing a fantastic job. >> that's great to here. >> i appreciate the collaboration. and kathleen o'day for our ambulance deployment facility projects has just been like looking to save us money at every turn. they're working hard to keep the bond and all of the projects within budget. nothing but good things from me so far. >> great. thank you. any other comments? should we take public comment now before my questions? i don't know. yeah. >> good morning. my name is jerry accurateler. we just sat through an update on the status of actual project construction milestones. but very little was said about the financial metrics of the project, cgoboc's principle responsibility. i just presented three important expenditure questions. actual cost versus original budget, change orders as a percent of total project cost and duplication of project management costs, as a percent of total project costs. the recent presentation provided no insight on these important expenditure metrics. this is a great example of what cgoboc may do, but not what it shall do. the public safety building, which was mentioned, was a major project. it would be very interesting for d.p.w. to present a final financial summary of the public safety building, which breaks out change orders, construction costs, which are hard costs, and solve costs, -- soft costs, which include design, construction management and other consulting charges. it appears there was a significant amount of duplicate costs charged to this 200, $250 million project for construction management. i believe you'll find this building has soft costs around 20% of total expenditures, which is excessive. thank you very much. >> thank you, mr. dratler. lauren is our liaison for this project. >> thank you. i have some questions for mr. rossetto and higueras. dave has been very kind. mr. higueras and his staff has been very kind in showing me the projects they've described today, which will i will talk about in my official lie addison report later this morning. for now i have a few questions. and they're more general questions. one on the public safety building, if it was delivered 2016, why is closeout taking so long, we're four years later. can you give some reasons for that? >> that's an excellent question. you know, for that answer i think i'm going to call on my chief analyst kelly griffin. she handles the day-to-day matters that pertain to our projects by and large. but as well she actually grapples with matters of financial closeout more directly. in fairness to her, i don't want to misrepresent her work effort or diminish it. so i'm going to ask her to speak to it. >> good morning. kelly yiv grin, senior analysts for 2010 and 2013. there's a variety of contract closeout items that you have to obtain before closing out any remaining encumbrances and also arts commission is allowed to continue spending, based on their ordinance. so a variety of items that kind of continue on after the project is built and occupied. i can provide a more detailed explanation, when i have a little more time to prepare for this question. but hopefully high level for now is acceptable and i can certainly respond to. >> that would be great. >> okay. >> in general. >> absolutely. >> it seems like a long closeout. it would be helpful to know. >> yeah. >> if there were extraordinary circumstances. i know this is a particularly large project. thanks. maybe we can -- you and i can follow up on that and in my liaison report. and my next question is for mr. gairis. some of the projects, say i vote for a bond project on the november 2010 ballot. why would it take ten years for that fire station, for example, to be completed and delivered? could you give some reasons why when voters vote for a bond, with an okay, there's obviously an immediate need for fire station upgrades. for example, i'm going to support this bond. but then ten years before everything is really wrapped up. as a voter, i think maybe there wasn't an immediate need. what are some of the reasons that you encounter in delivering projects why things take so long. >> another excellent question. you know, not all projects are like the proverbial starting line, in a race for the gun goes off and everything rushes ahead. there's a variety of reasons. and this could constitute a whole morning. but we, for example, like to schedule projects according to how they impact the operational affairs of the particular department. so our ambition, for example, on the fire was not to launch two brand-new fire stations at the same time. they were intended to be end on end, if you will. to minimize the consequence to the fire department. unfortunately that best-laid plan proved unsuccessful, because of the delays that we experienced from project 16, which were frankly beyond the pale. again the subject of another morning's conversation. that caused the work to prolong. so delays during construction can prolong duration of time. you know, when we pass the bond, we only have so much preparedness to engage the work immediately. so, for example, for fire -- not police department in 2010, but certainly in regard to 2014. upon the passage of the bond, now we have the resources to begin to explore the more precise scope for each of the projects that we may have preliminarily identified before the bond. but had not been certain in importance or priority for the department, which is something that we gleaned subsequent to the bond. that certainly can take many, many months, the better part of a year perhaps to arrive at a conclusion. then we have to develop the design and documentation for those particular projects. as i mentioned a second ago, we have to schedule them. so that they aren't working across purposes which what must occur at particular stations, police or fire. these things do add up and create a time consequence in regard to delivery. now we're very much pledged to wanting to get work under way sooner lan -- than later. the sooner we can get work under way, the better. just no lack of interest or desire that we have to take advantage of time. so it doesn't work against us, vis-a-vis escalation. but things often interrupt that ambition that we have. but i would assure you very dutiful about wanting to prosecute that agenda work in a timely of a way as possible. >> do you find your program hampered at all by having to compete with other city programs, when bonds are issued? for example, we voted for a bond in 2010. the full amount, of course, is not issued in 2011. it can't overload taxpayers with the debt service. >> right. >> have you found, i presume, that could delay projects, having to wait for bond funds. do you have to sort of go with other departments to fight or found so far when you need bond funds, the city is issues them and it doesn't hold you back in terms of schedule? >> the short answer is no, we're not affected by what other departments do in regard to their own bond programs. we try and schedule bond sales, so that we can sell whatever number of bonds we can to a maximum. so you take advantage of the marketplace, you know, looking more kindly at larger than smaller sales. so that regard -- actually there's some synergy with other bond programs, as we present our selves to the bond market. in terms of the mechanics, the delivery of work, no, there's no inhibition or impact from other bonds on our program. >> that's loading up on debt service. okay. that's good to know. i have one more question for you. i want to ask mr. rossetto one question about the traffic company forensic services division. any update for us on those additional funding sources for the projected budget shortfall for that project? >> well, the project is tracking to budget, assuming that those funding sources will come to be. and i do not have specific information on the specific projects that will contribute to that funding source. charles i'm sure can elaborate on that. >> okay. >> sure. when we discovered the misalignment between the cost of the project and the fund as we had, we presented ourselves to capital planning, as is the requirement in those cases. and we were directed to seek the participation of police and fire in regard to identifying projects that could be suspended, in lieu -- well, in anticipation of the eventual buyout of the traffic company and forensic services company project. so two projects were identified that affected three stations, with the fire department. and two projects were identified that affected two police district stations, for the approximate sum of $8.5 million. it's required, as we know it today, to be necessary to even out the cost of the project with the funds we have at hand. so the intent was that upon the buyout of the project should we need those funds, well, we could avail ourselves of them. if we did not need them, they could return to the respective departments. i would love to think that we won't need them. given how we've been trending in our bids, and what we still yet have to bid, i don't really have an expectation that we're going to be able to return those funds and resume those projects. each of those projects was ready to go to bid. the expectation is that, hopefully upon the passage of the next bond program, easter 3, if i could call it that, in 2020, that we could then get under way with those projects that are ready to go to bid with the funds from the next bond program. because these are priority projects. all of the projects we do frankly, given the total need of each department, are priority projects. so we would -- as i said, we'll be looking forward to pursuing the execution of those several projects with the new bond. >> thank you. can you just give us a flavor, what will the new bond have? >> sure. >> i know it's on your website. just for the public. very briefly. what are the 2020 bonds to vote for on? >> total $628.5 million. five components in the bond. as is the custom with escr, police, fire and the emergency firefighting water system persist. separately we have two projects that are allied with this rubric of emergency response. and that is the 911 dispatch center, at the emergency operations center of the city at 1011 turk. and a yet-to--be-named facility. it would be an existing city facility that would be repurposed to be able to serve in post-disaster recovery and response. and that's the -- well, the other new project within the historic sort of breakdown of the easter bond. i just should say this. all three of the -- the components of the bond, the fire stations, the police stations they have great need that we've been whiting away at. i would expect we need to continue to address, in order to shore up the ability of the first responders to be very timely in their response to calls for service. and not allow the facilities to inhibit that, which i think we've shored up good deal of her to deficiencies that were present in 2009. before we passed the first bond. but there is still very much work to do to accomplish the -- i guess you could say the ultimate ambition that we shore up our facilities, so that they are able to be in service, even after a major event. >> thank you. and from my tour of the police stations, i would certainly support the need to upgrade those police stations. which i will detail more when you hear from me in the liaison report. last question, i promise, on your risks and overall summary, mr. garrettson. you want to elaborate on that. are you seeing the light at the end of the tunnel or are there still some issues with project management? >> well, what i would say is the new system debuted in july of 2017. you could say squarely in the middle, past the middle of the execution of our bonds. and it's a very hard transition to make, so incorporate all of the financials as we had them prior to the new system, into the new system. i would hope that with the next bond program, that starting fresh within the new system, we could have more reliable retrieval of financial information, more coherence in the information we're able to avail ourselves to properly manage the work we have under way. that's my ambition. >> does it include project management software? is there a project management to the family -- system? >> as managers we manage according to what our understanding is of how expenses relate to our spending plan, across time, week-by-week, months-by-months, year-by-year. having good granular-level detail on a weekly basis would be most ideal. and that's what i'm hoping that when we undertake the next bond, we will have that ability. it was something that was available to us in the prior system. if you look at our monthly or quarterly reports from several years back, you would see a very deep dive into that granularity. i would hope that we could accomplish, you know, reasonable amount of granularity within the new financial program, within the next bond program. >> okay. well, we'll look forward to hearing more about that. thank you. >> thank you. >> other comments, questions? please. >> following up on one of the questions you got, relative to the bidding climate and how it's important for you to get your contracts out on the street or packages out on the street. do you find that the city process can impede you in doing that? i'm asking you that question, because i'm aware of that for the bond, for which i'm a liaison, the transportation and highway improvement bond, they have had problems reprogramming money between categories and it's not like they're doing it on a permanent basis. well, we've got some money in this category, we could use over here and we'll pay it back. we'll make the system whole. are you having problems of that nature, where there's room for improvement in the process? >> yeah. i don't know that i could describe it as a problem. i think there must be a certain awareness as to should such a scenario present itself, or we need to shift monies around, that we would have the mindfulness that there's an obligation to discuss that with the proper entities and in our case capital planning is very much an interested party, in how we make any -- call dramatic shifts or intended shifts in how we move money around within a bond. frankly even within the context of a particular bond component, whether it's fire or police, if we're making radical shifts for some usually very good reason, we need to touch base with the folks who provide the oversight on a regular basis of our spending plan. and so that would generally be a conversation with the capital planning staff. depending on the -- i guess you could say the significance of the desire to shift monies, as a point of information for discussion, possible approval, depending as i said on the significance of the magnitude of it. for example, when we have a lot of interest savings, we generally like to think that we apportion according to the percentage of the sum of peach component part, in the bond. and we've done that. and where that's not possible or not recommended, because perhaps a particular component requires a good deal more help, if you will, financial assistance than any of the other components. again a subject of conversation with the key people at capital planning to know that we're going to progress in the most prudent way. so there is -- there is the necessary collaboration, coordination with folks who are very much interested in how we spend. and i wouldn't characterize it as problematic. it may be -- it's a process, that's how i would put it. >> when you say capital program, that doesn't mean having to go back to the board of supervisors, does it? >> no. >> you're lucky. because m.t.a. has to. >> yeah. they're different. >> yeah. lucky them. >> special. >> i had a couple of other questions that are more detailed. as i looked at your pie charts that you are in your report under the heading of "budget analysis," i didn't see that there was a whole lot of consistency among them. some of them had a whole lot of detail, others didn't. there were numbers on them, on the segments of the pie charts. i wasn't understanding what those meant. like, for instance, on page 5, under focus scope, 23 in the green area. and then a bunch of ones and twos and threes and the others. and following up on what jerry dratler said in public comment, i would like to see breakdown of change order costs on different projects. i don't necessarily need to see them as a percentage of total project costs. but construction contract changes i'd like to see against the bid price, the award price of the contract. gary said 2%. i'm not looking to see a change order percentage of 2%. but if it's getting towards 10%, 15% then i would like to see it. >> sure, of course. we do have a good amount of information in the actual report, that we produce on a quarterly basis, that offers a good deal more detail than these pie charts or this slide deck can offer you. but we're certainly ameanable to providing whatever other detailed information you would like to see. >> really this isn't a question i'm coming after your department on. i think generally speakinger at one point i know we were talking about having a standard format for these reports. and i don't know where that is. but it doesn't appear to have arrived for us yet. this is nothing to do with you. >> sure. i appreciate that. thank you. >> i think before the end of the meeting, could we -- i'd like to spend a couple of minutes talking about that. >> yeah. >> that's all. >> thank you. >> a question. it was mentioned earlier about a rebid on i think it was supplies of metal or something along those lines. >> yes. >> left me wondering what are the triggers for rebidding? or not rebidding, rather going out for a second round of r.f.p. was it? >> a second -- a rebid. well, you either rebid, where in general you have a sum of the low bid end, if you will. it's much higher than your scheduled budget. >> exactly. let me rephrase the question. if you're $1 over, or 1% over, does that trigger going back? >> no. it's triggered by the where -- wherewithal. it's much, much higher. it's not a percentage or particular number. it's according to what wherewithal we have to address, to designate for that particular bid package. >> if you want to add anything. >> in this specific instance, it was for miscellaneous metals. so the iron and so forth that's used on the project, only one bid was received. and typically you want two or three. very busy trade right now. and a couple of bidders decided not to bid. so the bid that we received was about $2.5 million over budget. so with our cmgc contractor, clark construction, they're doing an outreach to other companies that they know. they have good relationships with. and they are convincing them to have interest in the project, which will allow us to bid in a competitive environment. so the one bidder knew that they were the only player. so it came in quite a bit high. >> thank you. >> so just be another example of why projects get delayed, to my question of when i vote on something in 2,000 x, why five, six, eight years later, it's another example when you run into these things i guess. in the construction environment, bidding environment. when, i mean, we have heard from all of the bond programs how construction bids are coming in higher, higher, higher the past few years. i would think unfortunately for taxpayers, results in project delays, not just in easter, but all bonds on the project. >> yeah. i would say in this particular case, it's not an insignificant component of the work. but i don't believe it's going to drive the delay in the project per se, unless it's strung out quite a bit more time. we're very fortunate that some of the major trade contracts that we've bid out came in favorable to our estimate. so in that respect -- i mean, had those faltered greatly, then we would be looking at a likely delay of the project beyond that which we might otherwise like to see. >> any other questions? great. we took public comment already. thank you for your time. >> thank you. >> thank you, everyone. can you call the next item, please. >> i took public comment early. remember >> mr. dratler, i took public comment early. i'm sorry. do you remember when i was like -- no. i was responding to what you said. >> i did. i was trying to get back on the bandwagon here. >> clerk: item number 6, presentation from the mayor's office of housing and community development about the 2015 affordable housing bond, 2016 housing bond and 2019 affordable housing bond and possible action by the committee in response to such presentation. >> good morning, members of the committee. my name is rally catapang. since our last report in may of 2019, we have completed third and last issuance of the 2015 bond in october 2019. the city received eight bids for this issuance, with city group as a successful bidder at the true interest cost of 2.3%. we have three categories of expenditures, public housing, low-income housing, a portion of which was set aside for the mission district, and middle income housing. as you can see in the upper part of the slide, we have a sample of jobs that this bond is intended for. first issuance of -- the first issuance was issued on october 2016, and we are very pleased to report to you that we have made great progress on this issuance. as of december 2019, 99% of the first issuance funds have been encumbered and 91% have been spent. and we expect that the first issuance will be fully expended by the end of this year. the second issuance was issued on may 2018. and as of december 2019, 91% of the second issuance funds have been encumbered and 58% have been spent. we expect the second issuance to be fully expended by the end of this year. and the third issuance, which was issued in october 2019, we fully -- the project will fully expend in the end of the 2023. this schedule is primarily driven by the $25 million allocation to educator housing in 43rd and irving, which will start construction in the late 2021. with the bond it has been to issue around every 18 months for the spend down around every three years. with regards to unit production, out of the 1,462 projected units, 55% are in predevelopment, 21% are in construction and 24% are counted as completed. as you'll see highlighted in the presentation, we've completed our second public housing development in sunnydale parcel q, as well as 1296 shotwell, which is located in the mission district. these two developments are now in the sublease process. we also have several of our small sides programs, that has come online since our last report and numerous downpayment assistance loans dispersed. to date we are producing close to who -- 40 units of small size. just to give you a sense of the impact of these bonds. we were able to fund 50% of applicants to our down payment assistant loans lottery conducted in 2019. this coming year, we expect 143 units from 990 folsom. we expect to complete the middle income production in 88 broadway. this concludes our report on the 2015 housing bond. and here's jonah lee to give the report on the past program in 2016. >> good morning. i'm jonah lee from the mayor's office of housing and community development. since our last report on the preservation and seismic safety program, we've reached some key milestones that i'm very pleased to provide an update on. first, by way of background. i don't know why i'm holding my coffee mug because it was empty. i wish it was not empty. some key milestones and just a quick background. the original authority for this bond program dates back to 1992. and the seismic safety loan program, which authorized $350 million of bond funding. over the next approximately 25 years, only about $80 million or actually about $90 million was ever actually utilized. so the program was not very successful. and that really led to a -- our efforts to repurpose those bonds, which was -- which is the past program. and that occurred in november of 2016, proposition c. we repurposed the $261 million of remaining bond authority. subsequent to that in february of last year, we issued our first series to fund the program in the amount of $72 million. and then quickly moved to close the first project in may of that year. and since then, wrapping up the end of the calendar year 2019, we've closed 10 total projects, funding over $26 million, including over 100 units. including commercial spaces and are very pleased to say that the loan portfolio is performing with no default, no delinquencies, and no work outs. the past program is an acquisition and rehabilitation financing program. it's a loan program that provides senior financing to acquire small and large sites, including s.r.o.s. removing them from the speculative market and bringing them into permanent affordability. the program, pursuant to the original authority from the seismic safety loan program, also allows for the funding of seismic retrofits to unreinforce masonry buildings. and what's not eligible for funding is, of course, new construction or acquisitions without any rehabilitation. i like to bring up this map, because i think it's an important context for why this program exists. you know, over the last ten years, san francisco has seen a disturbingly high amount of displacement, particularly concentrated in low-income neighborhoods of our city. over the last ten years, our planning department estimates that about 400 units per year of rent controlled or rent-stabilized housing is removed from the rent ordinance protections. so we think that there's a huge need. there continues to be a huge need to preserve existing housing to bring it under permanent affordability. that's where the pass program by providing low-cost, long-term permanent financing is really an effective tool in our affordable housing tool kit. this slide shows our the pass program financing works, with respect to, in comparison to other conventional finance. in typical affordable housing transaction. the case on the slide is 1201 powell street. it's a site that was acquired by chinatown community development corporation in june of 2019. it's 17 total residential units. and if you look on the column on the left, you can see the financing that could be leveraged with a conventional execution, versus the financing that could be leveraged under our pass program. and, you know, just by way of comparison, you can see that one of the primary benefits of pass financing is a lower interest rate execution. most of our borrowers, who get conventional financing, are borrowing at rates at about 5.5%. and the loan terms that they're being offered on the conventional market are also shorter, which means that they can support less debt. so 30-year loan product versus a 40-year loan product in pass. all of that means that the project can support more financing. so in the case of this project we're looking at $2.1 million in a senior loan, versus $1.4 million on a conventional financing. and that -- in this project, it results in a reduction of about $760,000 in a financing gap, that the city now doesn't have to pay. so that's a significant savings to the city. it just delivers an overall, more efficient financing for the project. and i think illustrates the benefit of this program. i'm really happy to say that by all of our metrics of success, we've demonstrated good progress with this program. demand for the program financing continues to be very, very strong. we've invested almost $27 million to date since our first closing in may of last year. and we have a robust pipeline of approximately $170 million in additional projects. in terms of preserving affordability and permit affordability of at-risk housing, we've financed ten different projects, over 104 units, including 14 commercial spaces supporting locally owned businesses. and maybe most importantly we're keeping san franciscans in their homes. we're in those ten different developments that represents almost 200 households that have been stabilized, who are not at risk of eviction. and we're, you know, three our finance, through our below-market financing, we're able to lock in affordable rates, in in case on average of about less than 60% a.m.i. and then strong loan performance. this is, of course, a really important criteria. we want to make sure that when we're making loans, we're making good loans that are going to perform over their lifetime. of course, the history that we're looking at is relatively short at this reporting period. but i'm confident that it will continue to be strong at our next report. that continues -- oh, sorry. i do have one more slide. anticipated pipeline and next steps. i think i mentioned that we have a robust pipeline of about $170 million. we're going to be working on, you know, continuing our originations and we think that across the entire authority for the $261 million in remaining authority, our total authority, we're on track to deliver approximately 1400 units, including commercial space and so we're going to be working with the controller's office on lining up the next series, expected to be issued sometime this calendar year. and we'll continue our tracking and reporting. and that concludes my presentation. >> do we have a liaison report? >> well, i mean, -- >> yeah. >> no liaison report yet. that's not until may. i did meet with them. thank you for making time, benjamin, rally and jonah. i saw this report early. i don't -- i cleared up some of my questions then, just about some of the timing of some of these things. obviously there are multiple components of financing, which is why you see some news. i had a question about one of the small sites in my neighborhood, versus the timing and the projected package. some of the that has to do with the multiple financing sources. i had the opportunity to answer my questions. this is a notoriously difficult bond to deal with, especially because it deals with very emotional subject. we're talking about keeping people in their homes and things like that. how much value can we put on that. how do we assess that. these are really difficult things. in general, i'm pleased with the quality of the reports and conversations. i'm going to be going out and hopefully looking at a few sites before i do myelitis report in may, just to get an idea of what is there. and know a little bit more about this from my report. i would echo what has come up with the others. i think i just in general something we want to see more of, just more detail about like what is going on with the specific financing of some of these projects. i think it's a good thing for us to dig in a little bit more when we're talking about like, you know, whether or not there are a lot of change orders on certain developments that you're doing. i'm looking forward to digging into that and seeing more about that as well. but in general i'm pleased and i appreciate the hard work and the diligence of everyone in the mayor's office of housing and community development when i do have questions and want to follow up on this. >> great. >> questions? please. >> you mentioned confidence, that loan performance will continue strong. why are you confident? >> i'm confident because we have prudent and interface standards, underwriting standards that when we size these loans. so we make sure that all of the loans have an assumed vacancy rate. they have debt coverage ratios. we don't make the loans until they have achieved, stabilized operations. we capitalize reserves sufficient to meet the long-term capital needs of all of the projects. so in terms of mitigating those foreseeable risks facing the portfolio, that could affect financial, physical or regulatory compliance, we have strictprocedures in place to address those. >> i have a couple of questions. i just read, you know, in the chronicle the past couple of days, articles that concerned me. one today by guess a private multi-family housing owner, who had offered the city a number of buildings. the city showed some interest and then it went into a black hole. that's just based on, of course, "the chronicle's" report, could be right, could be wrong. i guess yesterday a parking lot in the tenderloin could be useed to help with the homeless. what the heck is going on with the office 50/50 housing? so it seems your program directly addresses at least the first, today's article about the property owners that are offering multi-family housing density. can you address today's "chronicle" article? >> yeah. i think you're referring to the article about the veritas? >> yes. >> that's currently being offered for sale. so conversations between the city and the seller have not commenced. it was copo ordinance passed by the board of supervisors, which authorizes qualified non-profits to have a right of first refusal. the first opportunity to purchase multi-family properties when they are offered on the market. and, you know, it sounds like a number of those qualified non-profits did express some initial interest in some of the sites. but didn't follow up. that's not something that's been done in collaboration with our office. obviously our office is interested in trying to preserve affordable housing, particularly the rent-stabilized stock. and, you know, this -- i think it certainly presents a unique opportunity. but also a very complicated and expensive one. but one that we are currently looking into. >> you are looking at it. you are jumping on it. >> yeah. >> the other question is regarding the 2015 bond in the presentation. the shotwell projects. who manages those projects once they're completed and occupied? >> well, in terms of ongoing management, the city plays a continuing role in doing the ongoing asset management of those -- of all of city-financed projects. so we do -- we have our sponsors submit an annual monitoring report, which includes a certification of compliance. we review physical needs assessments on a periodic basis to make sure that the assets are sufficiently capitalized, with respect to the long-term capital needs. we make sure -- we review the rent rolls to make sure that the units are being offered at the affordable rents that are pursuant to our restrictions. and yeah. >> i guess maybe, jane, maybe when you do your liaison report, i'd like it helpful, similar to what kristin was say being having police and fire come, when we hear about the bonds, is the city meeting your needs. i'd like to know if the projects are meeting the needs of the people who live there. we're paying for the projects. i want to make sure they're not allowed to go to hell and a hand basket once they're built. you know what i'm saying. that's the extreme. it would be helpful to hear from people. are they being well managed, are they kept up. we spend a lot of money to build new, affordable housing. i want to be sure that the people who live there are happy and that i'm sure -- i'm not -- i don't have questions about use of the bond proceeds. my question -- kind of questions we raised before about parks. when we build new parks. are they properly maintained, that type of thing. i just want to be sure that once the bond projects are done, we don't just say see ya and that will end up costing money again. >> for sure. i think our office is completely aligned in that first and foremost. we, you know, this is about humans who live in these buildings. and we have, as i said, an entire division in our asset management group that -- whose sole purpose, sole function is to monitor ongoing compliance, both with, as i said the occupancy restrictions, physical conditions, as well as financial performance. and part of that, of course, includes responding to tenant inquiries and concerns. so we field those calls. i can say that there are really not that many, maybe the most frequent call we get are -- is from, you know, households who are frustrated that, you know, they've applied for an apartment at a development and weren't selected in the lottery process. largely because the demand is so much higher than the supply. >> okay. still i would like to hear from somebody -- i guess i should probably go out and take a look at the projects myself. but it would -- >> yeah. and maybe more quantitative way. so but peg and his team can help with some of those investigations i think. we can also look at what type of investigations are already being done. >> yeah. >> we talked about having affordable housing be the subject of the next time we go out and do a public perception survey. in connection with the go box work. and we talked about it last meeting and the one before. and benjamin mccloskey had helped us with looking at a list of sites that might be possible for this. there's not a lot of completions that would allow the same sort of package that we experienced with the bond and road projects that we chose for the last public perception survey. still there's a couple of ways to approach surveying in this area. i think it could get at what you're asking. director natoli has been thinking about this a little bit. so we agreed to kind of hold that thought over for at least one meeting, with the idea of trying to develop a public survey approach, focused on housing. that was your interest as a committee. >> great. the last thing i'd say, i do have a friend who was able to obtain her home through the slip program and very appreciative of that program. it's worked very well for her. >> is the slip program part of pass? >> no. enter the milestones. part of the bond program. >> i do have a couple of questions. for 2015. are you the right person to talk to? i think we're going to come up with a standard template for this report. i have never seen one that was to oriented around issuances. so we can give some feedback on that. what i think is really missing from this is on the last slide, you know, we want to measure what you thought you were going to do and what you actually did. this is just a line of what you did, which could change every month. so i think that there's a number of things that we can improve about this report. but most of all like i think you did a pretty good job on the 2016 in being oriented around success metrics, including metrics of success. so i'd like to see some of that in this one. so we can really understand what it is you were trying to do and what you actually did. >> so if you look at the written report, that we gave in the 2015 one. >> page 41. >> the metrics and how unit counts have changed over time. so, yeah, page 41. we've explained how when we first implemented the bond and we were first reporting to cgoboc in 2016 what the unit counts we're expecting and the variance has been. and a little bit of explanation of why. are there additional? >> i think that we should talk about that in this meeting. that's absolutely what we want to talk about. >> great. >> is what you said you were going to do and what you actually did. >> okay. >> good. i found page 41. i couldn't internalize it all so quickly. but that's absolutely it. thank you for pointing that out. for 2016 i thank you for doing the metric of success. i would love similar details on this one, for example, demand on pass, financing continues to be very strong. how do you measure very strong. how do you measure very strong? we know demand is very strong. >> i know it's very strong because we have right now on hand, for our first issuance, $72 million of which we've already originated about 27. and i have demand. >> so the investment of the money, not the units? not the outcome? i'm worried about the outcome? how do you tie a bunch of money into an outcome for the people that we were trying to help? >> well, in that it's really about trying to -- in terms of the outcome outside of the financial investment, it's about stemming the loss of that 400 units of rent-stabilized stock that's being removed from protections under the rent ordinance every year. >> so you're measuring against the 400 units. maybe that's how you measure success, how many of those 400 units is saved. >> and we've -- into that it's to date the 104. >> 104. okay. 104 of 400 intended. that's great. thank you. i mean, this is -- from the last time we had this conversation, this is much more information than we've had before. so i do appreciate that. the strong loan performance. congratulations. that's fantastic. i asked last time. what are you doing with the loan receipts? people are repaying loans now. so you've got money going out, a little bit of money coming in. that's great. last time i asked this question, there wasn't an answer to what do we do with the loan proceeds. >> loan proceeds come in and a portion of them, approximately 1% of the interest on the market-rate loans, this is going to get a little bit in the weeds. the loans, every single project that we finance so far has three loans from the pass program. a market-rate loan, a below-market rate loan and a deferred loan. that's a detail that relates back to the original bond authority, where there were the three different components. suffice to say that when we get loan repayments that come in, a portion of the repayment gets kept for administrative fees for the program. and the rest goes back to the city for repaying the bond debt service. and the portion that goes back to the city is really only 1% -- 1% on a portion of the loans, not even. not like 1% of the total loans. it's 1% of the market-rate loans. >> okay. so i'd love to see that finance in this report, to understand how the money is flowing. >> sure. >> how it flows out. we understand. how is it flowing back in, and if it is at all. this is a new type of loan for governance -- a new type of loan for governance. i find it difficult to understand where all of the money is going and all of that. what are the age of the lopes? you said you got strong performance of that. i remember correctly -- >> very early. >> very young. >> yeah. i mean, they're very immature loans. for 40-year loan, these were loans that were all originated just within the last year. the oldest one we originated in may. >> right. >> so we would expect nothing. 100% performance. >> yeah. so maybe add that in there. the age of the loans, it would probably be a little bit more frank. >> yeah. >> transparent. >> weighted average, life of the loan. >> yes. that would be helpful. and i suspect these are riskier loans anyway. right. rhyme -- right. i'm not sure this is measured -- >> i wouldn't characterize them as risky loans, because we're not really taking market risk in the same way that other lenders do in the san francisco market. the rents that all of these projects have are significantly below market and on average in this portfolio it's less than 60% a.m.i. so we really don't have market risk per se. i would say the risks that we do have in these loans is just did we build enough cushion. is there, you know, how are the sponsors able to manage those loans. that's why we have our asset management group doing the compliance reviews, reviewing the physical needs assessments, looking at the -- looking at all of these metrics. >> right. great. any other questions? >> yeah. go ahead. >> so i'm just kind of curious about the commercial, the retail space, the commercial properties. could you give me a couple of examples of why you choose one and, you know, kind of the goal you're trying to get out of that, having a commercial property. >> yeah. it's not -- certainly not a requirement of the program. but what we have found is particularly in the small sites program, a lot of the housing stock is like, you know, four, five, ten units above ground floor commercial. and that's just the housing stock that we're working with. we've, you know -- we take a conservative approach to underwriting commercial space. typically we assume a 20% commercial vacancy on the rents. we want to look to make sure that the commercial leases have a long-term, that they're with credit tenants if possible. but we're also balancing that with the policy benefit and policy goal of trying to support locally own the businesses, small businesses. and so that's, you know, in effect results in us assuming that they'll get less commercial revenue than maybe another lender might assume. and one example of a commercial project, that we're -- i think it's in the project summaries in the report, 4830 mission street. yeah. this is the -- i actually -- unfortunately i don't have the names of the different tenants. but this is a little bit unusual, in that it's a 21 residential units and six commercial spaces. this is definitely on the larger side of sites that have more commercial space than others. yeah. did i answer your question? >> yeah. i'm kind of curious because -- so basically subsidizing retailers, right. you're hoping the small business, family owned business or local business. kind of curious how that really worked. because they have to have -- they have to be selling some type of goods or service. you know, so really it's a lot of research on your part. you want somebody that's going to be somewhat successful, so they're not struggling. >> for sure. and we've also been connecting many of these commercial tenants with the office of economic and workforce development. a couple new programs that they're running. s.f. shines and community cornerstones, which provides additional capital funding for those commercial spaces on average. it's like $25,000 to $50,000 per storefront. and those funds going primarily towards costs that wouldn't necessarily be funded in our loan program, sump -- such as some accessibility work, or tenant improvements. and so all of those things contribute to the viability of those commercial spaces. >> so like you mentioned the 400 units we lose to rent control. so a lot of business that leaves san francisco, they can't afford the leasing. i see it happen all the time. so do you have the same type of looking for measurement, similar idea of -- so many businesses leave, we're trying to fight it back. is that something else you conclude in the report? >> for sure. that's why we started reporting on the number of commercial spaces in our portfolio. it wasn't established as a specific goal, because the bond authorization was primarily about preserving affordable housing and permanent affordability. that's the goal we want to stay true to. preservingcommercial space specifically for locally owned businesses is a positive externallality and we'll continue to report to you. i'd be hesitant to establish a specific goal around it. because it's hard to know what we would base that off of. >> without a goal, you're just being opportunistic. i mean, i think what we like to see in the bonds is understanding what the goals of the bonds are and that the bond group is following those goals, right. and so i think -- >> yes. for sure. and the goal -- as i said, the goal is preserving affordable housing, preserving commercial space is a, you know, a positive benefit. it's a benefit that is outside our specific goal. and it's outside of the original purpose of the bond. >> so why are you doing it? >> because it comes with the buildings. >> oh, i see. >> based on the buildings that they have to deal with. >> right. okay. sorry. >> any other? >> oh, sorry. real quick. basically sometimes businesses already there then? >> yeah. >> at times. they would continue to be there and -- okay. just trying to wrap my head around it. would you be rehabilitating those commercial establishments? do you leave them as is and just -- they just now own the building? >> in some cases there is rehabilitation on the commercial space. primarily our funds go toward preserving and rehabbing the residential space. but to the extent there's seismic retrofits and other things, other sources of funds we can pair with our financing to tenant improvements, we certainly want to do that. >> okay. thank you very much. >> i think you're on. >> okay. cool. you showed a slide before of the location, the areas where there was a high number of people below. could you put that back up there again? yeah. there's an area in the northwest part of the city where you're saying it's either 59% to 79% or 79% to 98% low-income. some of the area you're showing there is like sea cliff. why would that be? yeah, it is. that's sea cliff there. >> it's -- this is based on census track data, which aggregates, you know, multiple neighborhoods. so it's entirely -- i think we would expect that you might see some neighborhoods that, oh, this looks like relatively affluent neighborhood, but it's included in one of the more darker red colors. >> okay. >> and, sorry, one other comment i would make that this is based on data from 2017. so, you know, new census -- there will be a new census coming up this year. and unfortunately i didn't have time to update this heat map for this presentation. but for the next report, we can do so. >> i'll look forward to seeing that. one other question. on page 5, the last item here before the photograph -- of the photographs, says the bond targets several priority populations, including low-income working families, veterans, seniors and disabled individuals. is there any residency requirement in san francisco before people can get on the list for some of these housing options, these housing programs? >> there is a -- all affordable housing financed by the city, whether through the pass program or through other programs, has a residence requirement. has to be a primary place of residence. >> i think he's asking, can some of us move here and qualify? do you have to live here a year, five years, 20 years, something like that. >> there is -- in some cases, not for this program, but in others there is a -- like a san francisco work-live preference. as long as you work or live in san francisco, you have a priority preference in the housing lottery. but it's not based on how many years you've -- how long you've been a resident. >> okay. all right. well, i wish there were. because we've got an awful lot of people who are living here already, who could use this kind of assistance. and if the issue gets mud welled people a-- muddled with people arriving last week saying i need help. we're never going to take care of all of the people who are already here, who have been here for a long time, who really legitimately need the assistance. >> point well made. i think it's -- you know, sfcta that we're -- our office is trying to work out in compliance with the fair housing laws, of course. and that introduces a fair amount of complexity into how to implement a program. our office does administer, in addition to the work-live preference, neighborhood preference for i believe it's -- is it 25, up to 40. in some cases up to 40% of the affordable units being offered through our dolly portal, our housing portal. up to 40% are offered for residents, within that, you know -- within a geographic proximity to the project. we are trying to do that. but again it's about accomplishing that without violating the fair housing rules. >> i don't doubt it's a complex process. and a worthy goal just the same. that's all. >> any other comments? thank you. we'll take public comment. >> good morning. my name is jerry dratler. the affordable housing presentation didn't include a financial metric on bond expenditures. the presentation reminds me of the annual performance review process, when an employee would tell me what they did without reference to their performance objectives for the year. i'd like to thank member larkin for clarifying that my questions were intended to be a general requirement and part of a standardized bond presentation format, that is overdue. it is my hope this year will be the year of the standardized cgoboc bond presentation format. and lastly a public perception survey is a great example of what cgoboc may do and not what cgoboc shall do. can we allocate more resource to shall do requirements. thank you. >> thank you, mr. dratler. great. >> clerk: item number 7, presentation from the city services auditor, regarding the 2016 public health and safety bond expenditures audit and possible action by the committee in response to such presentation. >> good morning. chair chu, members of the committee. mark de la rosa, acting director of audit. today i'm joined by simon wadsworth, director from coming construction management, which is a firm we've been working with in the last four years to complete our expenditure audits. just by way of background of the second slide, we started the bond expenditure program back in 2015-2016. and so far we have completed nine audits of the various geo bonds. we have a few others in the pipeline that i'll talk about later. i'll turn it over to simon who will go through background on the firm, for the benefit of the new member, as well as the results of the audit. >> thank you. good morning, committee members. i am with coming construction management. we have a firm of 800 people internationally. we've been around for 25 years, primarily in the construction industry. as mark had mentioned, the completion of the 2016 health and safety bond was our ninth audit that we've completed. i'll keep the project description brief, because i know item number 8 is the overview of it. basically the bond approved was $350 million for the construction acquisition and improvement of critical facilities that provide health and safety services to city residents. this includes three programs of which the bond allocation was $272 million, allocated for the public health project, which was the seismic retrofits and improvements to the zuckerberg general hospital. $58 million was associated for the public safety project of the neighborhood see you a stations and facilities and $20 million was associated with the homeless service sites improvements. so part of our scope we tested examples from the first and second bond issuances. public works spent $69.5 million against the first bond and $8.9 million for a total of $78.5 million. we tested 75% of that. $51.9 million, of which 72% was tested against the first bond and 99% was tested against the second bond issuance. public works provided numerous documents so that we could analyze and make sure that everything has been in accordance with it, such things as construction contracts, design and engineering and also provided internal d.p.w., labor invoices so we could see who would build against the project. very, very quickly. of everything that we tested, we found out that all expenditures had been tested and conformed with the legal text in the bond. and didn't take any issues during the items that were spent out. no recommendations at this time, other than the public works keep spending and ensuring that money spent in accordance with the bond. >> that concludes our presentation. very quick. just wanted to say thanks to our public works for their cooperation and responsiveness throughout the audit. we'd be happy to answer any questions you have. >> please. yep. >> so you mentioned that some of the testing was on labor reports from d.p.w. now d.p.w. was a part of the projects and also subcontract in some of these projects, correct? >> correct. yes. >> so certified payroll, do you guys ever look at that, as far as some of the subcontractors that they're, you know, that their workers are being paid properly? >> not in this test we didn't look at certified payroll. >> do you ever -- in the future testing, is that something that should be tested to make sure that the subcontracting is -- i know d.p.w. has plenty of job reports. but the subcontractors are also suppose to submit a report for them, because they're being subbed. >> we can definitely look into that. obviously a lot of subcontracts are led out by a master contractor or master agreement that we do look at. >> okay. >> but with you don't go into the -- but we don't go into the certified payroll. >> okay. i guess i ask for our committee. who would i guess? i have to find that out. >> let's see. >> olsc. okay. >> you do random testing. >> yes. >> thank you. >> yes. >> i have a few questions, as you can imagine. >> okay. >> so just for the other members, in this year's meetings for cgoboc, we're trying to orient the audit with the liaison report, with an intention to use the audit as one of the ways that we help answer the question of is this bond on budget. just so you know. when you talked about the background and your project objective, to determine whether bond funds were spent in accordance with the bond measure. we struggle to figure out whether bond funds are spent in accordance to the bond measure. as you heard us ask again and again. how do you define that? >> a lot of times in the legal text, in the bond it says it can be spent on things like that, duration on when bond funds can stop. we generally look there. the bond text was very -- it seemed to be very simple. so there wasn't those kind of time durations that we saw. so generally everything we said, as long as it was spending in accordance with the projects, and that scope of work should be called out for. she's what we looked at for test one. >> when you worked on something like the 2015 affordable housing, which we know the bond funds are moved around to different projects. how did you reconcile that, that they were spent in accordance with the ballot measure? >> that one again the affordable housing, the legal text, i personally came on late on that one. i can definitely get more information on that one for you. but generally the legal text in the bond is what we stick to. and seeing how it's done. if anything deviates, we raise it and we have those discussions beforehand, before submitting the finalized report. >> okay. yeah. i didn't mean to put you on the spot. >> that's okay. >> what did you think of mr. dratler's comments about measuring financial performance of these bonds? >> i think it's helpful. at least -- particularly when a bond is early on, how much you spent and how much you've got left to spend. what's left to spend is adequate enough to perform the final scope of work that you need to do. it's probably good to follow, yeah. >> i'm wondering whether we can add that kind of analysis into these types of audits? >> certainly consider that in our future audits. i know that in the pipeline, we have a couple that we haven't audits yesterday, the 2016 affordable housing. but in the future ones that will be doing on the expenditure audits, we can certainly include the financial performance, as part of the objectives. >> okay. >> do you think you can make a recommendation at our next meeting on what those metrics could be? do you understand the challenge that we have with some of these bonds, honestly this one isn't nearly as complex as eser or the affordable housing or the affordable housing, the 2019. so we're struggling with how do you -- how do we govern these things and certainly governing on the financial side is really, really important. and this audit is good. because it makes sure that, you know, the transactions are good. but i don't know it's going as deep as it possibly could. that we need it to go to really measure. >> we'll work with you on that. >> okay. thank you. >> any other comments? awesome. thank you. >> thank you. >> public comment? no public comment. >> clerk: we'll move on to item number 8. liaison report on the 2016 public health and safety bond and possible action by the committee in response to such presentation. >> yes. so i am the liaison for this. as you probably know, i work at ucsf and some of these bonds are for the benefit of our partnership with the department of public health at zuckerberg. and so i do work actually closely with the people that are on the ucsf side of this bond and they're very happy with the way that this has been progressing. i have -- this bond came on the heels of the hospital rebuild. and so i think that the success of this bond to date is heavily reliant on all of the policies -- the procedures and infrastructure that they put in place for that that bond. i think we're lucky in this one that -- that the team that we have on this continues to deliver at the level that they did. i think for that bond. i don't have any other comments from a liaison perspective. again i think it's fairly early in this bond. and i have the general complaints that i always have about these types of bonds, there's lots of projects. but i think there's less risk with this one, because the zuckerberg piece is such a large financial amount of this. so that makes me feel fairly comfortable. i'm sorry i don't have more of a structured liaison report for you. >> is there any public comment? okay. >> i'm sorry. i have to throw this in. again this article about the e.r. at zuckerberg general. >> oh, right. yeah. i saw that. >> i mean, we built this beautiful new hospital and they can't staff it properly. it's sort of the same issue that we're -- bond fund -- projects are getting built. but what happens once they're built. i mean, boy, we could go -- james raised this before about housing. fortunately it seems every bond it's not just about funding the facilities. but then, of course, managing them and things. i'm sorry. i had to vent for a moment. >> i think that we -- that we should have general funds ongoing programmatic funds to support the new capital things that we come up with. >> of course. of course. >> i get what you're saying. >> any other comments? great. >> clerk: item number 9 presentation from the city services auditor regarding the c.s.a. mid-year report. c.s.a. liaison report, possible action by the committee in response to such presentation and report. >> good morning, members. i'm peg stephenson. i'm the director of the performance part of the city services auditor. and i think maybe all of you, except mr. matthews, have been here for at least one of our periodic reports to you on our activities. so we'll just run very, very quickly through the background. charter appendix f. we service the city's internal auditor. we report on the quality and quantity of city services. a couple of very specific requirements about measuring and reporting on the city's performance in relation to standards for streets, parks and sidewalks, contracting, and whistleblower hotline. many specific clauses in charter appendix f that you're familiar with. every year we do a work planning process, where we do some risk analysis, we meet with departments at the executive level and down a couple of levels in their management. we look at audit, anything that's changed in the operating environment, new laws they're trying to comply with and try and work with them to develop a comprehensive program of technical assistance and performance work and audit work that helps them denver their services and improve their compliance. we -- the budget is created through a 2/10 of 1% of set-aside by fund, which is part of the charter requirement. as a practical matter in fiscal year 19-20, we have an operating budget of approximately $20 million. and there's also a carry-forward forward of unspent bonds of $4.6 million. we get a small allocation from the capital and bond fund, which supports the type of expenditure audit that you just heard presented from cummings and other activities. we have approximately 68 full-time staff, including all of the audit staff, my staff and then the operating folks and budget folks who support our operations. just looking quick at the next slide. our budget looks like the city budget. the city is a big department is our large clients in that respect. general fund is right there at the top. the department of public health, m.t.a., human services and on down the list. so when you look at our work, you'll see that we're doing a great bulk of our work for the city's largest departments. we try and -- you know, there are many departments in the general fund departments to us. so police, fire, for example, and so we -- there isn't a calculation within the general fund allocation that says, you know, the department on the status of women is 1/10 of 1% of the general fund. it's more of a risk basis that we allocate our general fund work in. but we can certainly talk more about that if you're curious. there are two units. i'm the director of performance. mark is the acting director of audits. we've just listed quickly here our kind of major areas of activity. then the next couple of slides you are recipientses of all of our notices when we publish a report. i have listed the report that the city publishes between the start of the fiscal year and the end of december. some of them are compliance in nature are annual performance reports on streets, parks and sidewalks are there. the issuance of our performance measures report and the others are report outs of our special projects that are going on. i will just mention a couple of highlights of the things we're doing right now, that are critically important with our large clients. department of public health. we're doing a project that's been wanted by them for a long time, which we call patient flow. it looks at kind of every unit in the health department. how many patients do they have, at what cost, what's their length of stay, how do they come into that and how do they get referred out, to help the department understand how patients are moving through all of their units. and what the cost management is appearing like in different parts, critically important project, really interesting outcomes i hope will help them plan. for capital planning, you've all seen the new building going up at 49 south van ness. big residential tower in the front, big city office building in the back, which will have the department that issues permits. most of it will be building and city planning. everybody else who issues permits is moving in there as well. department of public works will have desks, entertainment commission, and our project is to help the building managers, the folks that are creating the plans to occupy it, make sure that we're not just picking up existing operations and moving them into a new building without using the forcing function of the building as an opportunity to improve permitting. do more work with the clients and the citizens on the front end, so that when they come in, they receive help from the city to understand codes. can move properly through the sequencing and spend less time having to have -- be in a physical brick and mortar building at all and do as much as they can online and over the counter. we're helping organize the front entry points. you know, people come in and get advice and get referred. and also the cashiering, so that we're having one way of taking money. and better understanding and control of all of the fees that are paid to city permits temperature there's a cross interest there with the controller's interest in just good financial control. the only other thing that i'll mention is there's a lot of movement coming up on the mental health. you'll recall the discussion over whether or not there would be a new mental health facility and/or programming put on the ballot in recent ballots. i think it's good that that was forestalled, at least for the time being. some members of the board of supervisors and the health department and the mayor's office are now trying to work together on designing new mental health programming. and possibly putting forward a facility, which might appear on a future ballot, bond funding request. so we're working with them on the planning and programming and trying to be an interdepartal liaison on that. next slide i have just listed the programs that we carry out on an ongoing basis. in this bucket, i put our performance program, the lien program, where we're teaching business process analysis and improvement and enacting it across all of our city compliant departments. the data academy, where we teach basic software skills and the non-profit program, which is working with about 12 city departments to monitor c.b.o., contracting, compliance together. we have improvement projects going on in each of those every year. and now i'm going to turn it over to mark, who will talk -- oh, i guess i did include a couple of other slides here. healthy streets operation center. i guess i put these in here to give you a little bit of detail on a couple of projects that are underway. and give you a little bit better sense of some of the products we put out. just a sentence or two on each. response times. this is a project that we did with them for the police department to improve reporting and transparency on response times. for a long time they had been reporting as their response time what was essentially a drove time. we worked to change the definition to fit a citizens' perspective. now response time will be counted as from when you make the call to 911 until they arrive on scene. that's a much more -- the citizen understands and expects. we'll be reporting on that. we worked with them to set targets. and one of the most interesting things that came out of it is the c-type calls, which are non- emergent. your car has been broken into, you came back from vacation, the house was burglarized, you're still making a police report and no immediate danger. it can take a long time for those things to respond to. there's critical public services. so once we looked at all of that data, they're able to understand the outliers and how they can improve response times on these in particular. we think we're doing pretty well on a's, lights and sirens. you can see that through the data analysis. and then on healthy streets, there is an interdepartmental effort, where they're trying to do a joint command, sort of emergency response type approach. the departments have some kind of responsibility in responding to 311 calls and homelessness and street conditions are working together to have the responses be more standard. we're sending out some combination of housing and homeless outreach workers, police, public works, and in some cases the street medicine crews are responding. and we are doing the data analytics and reporting for this group and trying to help them improve their structures, the work from 311. interesting new initiatives happening here, we're getting some funding and support from bloomberg philanthropy, which is very interested in this type of collaboration. a bunch of people went to new york to get coaching and advice from bloomberg on this project. and i'll stop there and turn it over to mark. >> c.s.a. audit side. one quick note. so one distinguishing factor between the engagements that we endeavor in c.s.a. audits versus c.s.a. performance, on the c.s.a. audit side, we adhere to the general accepted auditing standards. it's the standards that we abide by, to ensure that all of our engagements are based on appropriate and sufficient evidence and that we plan according to the auditing standards and procedures. so this slide is basically just depicting six main buckets of work that we have in c.s.a. audits. the first being the construction audit program that we have. this is where, as we just presented to you, our geo bond expenditure audits. this included. we do performance audits related to construction and capital programs. currently we're completing an audit at the m.t.a. on their construction and capital procedures. so we're basically looking at their -- whether the procedures and policies are effective and efficient in completing their capital improvement plan. we plan to issue that either february or march of this year. so in the next few weeks. we also have our body of work under that looking at construction contract close-outs. so just ensuring that all of the key requirements of each of the contracts, that we let on the chapter 6 or construction related, are completed before we close the projects. another bucket of work that we have, right in the middle is the citywide compliance audit program that we have been this is basically the suite of work that we do that looks at the key business processes across the city departments. so it looks at transactions, including our p-card transactions, just ensuring that departments are complying with all of the procedures. and that are within the accounting, basically rules and regulations. we also look at our cash transactions, our procurement, our payroll, our inventory, that cut across city departments. we conduct a risk analysis, risk assessment every year to determine which departments to do those cash audits, payroll audits, inventory audits. at any given time, five, six different departments that we're auditing, under those categories. we also have our suite of work under performance audits. these are basically above and beyond just looking at the compliance of departments on policies and procedures. these are also looking at how we the city can be more effective, efficient in using our resources. some of the examples of those performance audits are looking at and dually -- actually completing the below-market rate program, looking at the rental program specifically. just ensuring that certain eligibility requirements are being adhered to and that the department actually has sufficient controls to ensure that oversight of those various projects are in place. we also have our audit of the non-profit monitoring, which is basically citywide audit that we're doing, involving six different departments, looking at the efficiency and effectiveness of the departments oversight of certain contracting requirements. we're focusing on whether we are ensuring that we are collecting and are actually monitoring the performance of the non-profits against whatever is in the contract. and there's a whole other suite of performance audits that we do. some are divisional, some are management audits. really looking at effective and efficiency and best practices. we also have on the bottom corner of that slide our suite of work on the i.t. cybersecurity audit. we have a team that's involved in conducting penetration testing, vulnerability assessments, things like that. to ensure that our systems, data, networks are -- and applications are as secure as possible. we're working with in some of those engagements contracts, basically vendors who are more -- will have more experience in these areas, than we do. as we're going and trying to collect all of those internal knowledge, so we can do those testing and the assessments in the future. and, of course, our whistleblower program is part of our suite of work, as well as the following up on the recommendations. because every time we issue an audit, we ensure that we have a corrective actions. actually are being taken by the departments and that those reports are not just going nowhere. so we're following up on the recommendations every six months, until those recommendations have been completed or issued. so just a couple of highlights of some of the performance audits that we've actually completed in the last six months. we've completed a total of about 19 audits in reporting. and on the next slide is just highlighting an audit of the airports inventory management system. so this is looking at the policies and procedures for the facilities division, that is basically charged with a lot of the maintenance, the different facilities, the road work, so this is looking at how effective and efficient their processes are. and based on the criteria that we developed and that we basically follow based on the maturity models set forth by the institute of internal auditors, that the airport can definitely have opportunities to further improve their inventory management. the next one is just another performance audit that we complete ted human services agency or h.s.a. of their office of early care and education. looking at specifically the city-funded portion of that program on the childcare subsidy. just ensuring that the contractors that we contract with are actually adhering to the eligibility and some of the oversight procedures. and the last but certainly not the least, just wanted to highlight again similar to what we just reported. we have our geo bond expenditure audits. we have completed nine. and this is something that we'll continue to conduct, especially for those that are still pend, that we have not yet audited. as of today, we completed nine. the only ones we haven't really touch ready the two other affordable housing bond of 2016, 2019, of course. as well as the 2018 seawall bond program. and we'd be happy to, as mentioned, work with you and basically reconfiguring what that touch of the ones that we've already audited will look like, given that we obviously don't want to duplicate a lot of the testing that we've done. but we want to add value to the future bond audit work that we'll be doing. we're happy to answer any questions. >> i have a question for peg. for the healthy streets operation center, that's ongoing, that audit is in process, right, peg? >> yes. it's ongoing. >> great. >> it's not an audit. we are the data wranglers and trying to help them improve their structure in reporting. >> that would be great. it needs tremendous improvement on structure and reporting. and i would suggest that your team, that's working on this, reach out to all of the city's community benefits contradict. they augment, as you know, basic city services. and have had a lot of trouble working with the city, when they are addressing clean and safe questions on the streets, whether it's just picking up garbage, trying to get homeless to services, et cetera. coordinating with the city to get all of the data accumulated by our local c.b.d.s into the city system, so the city has accurate figures on what's going on. very difficult. it's been an ongoing problem for several years. i'm going to report back to the c.b.d. i live in they should plug into this. i truly think it would be very helpful for your staff to contact the community benefit district. >> i was not part of the group that went to new york to the bloomberg meeting. liaison with community organizations and including them in the progress was one of the chief recommendations that came after the meeting. >> great. thank you. >> any other comments? i'm the liaison for the c.s.a. but not the whistleblower. so all of the rest of it. i have been keeping an eye on the c.s.a.'s work for about seven years, eight years now, through the cgoboc. i'm consistently impressed with their ability to simultaneously do projects that keep the lights on, the compliance and the security staff and the future knowledge of sfgov in general and the lien program and the training programs. then finally in all of the reports, there's always something that's addressing immediate needs. something i saw in the newspaper recently and then all of a sudden the team is getting involved in. i'm really, really impressed. the other thing that strikes me is that the team couldn't be successful if they didn't have the trust of the departments that they work with. the departments wouldn't be reaching out for help if the trust wasn't there. so i'm also very impressed by that also. so good work. and that's my -- yes, please. >> you mentioned risk-based allocation of resources for the audits. can you talk about that? explain that to us. >> i can ask mark to comment as well. i mean, in general, when we're looking at our work orders and our work planning with the departments, when i say risk, we're focusing our efforts in maximum risk, maximum number of i clients, dollars, challenges to compliance. so, you know, if you're working with a health department, you want to focus your attention on patient care and the bulk of their activities. then the audits unit does more specific risk testing, that mark can speak to. >> yes. so in any given year, there's definitely more ideas that we can certainly audit than the resources that we have. so one of the key things that we do is we conduct these risk assessments of the very key business processes. just to ensure that we are hitting those key risks that are really exposing the city to the most, you know, types of bad things that can happen as possible. so that's one way that we basically prioritize the work plan in terms of which departments to touch, given that we only have a certain number of audit resources in any given year. we not only look at the requirements that are in the books, based on the city charter and the admin code, there's definitely a lot more than what's in the chapter, in the appendix. -- f of the city charter. information that we collect from the whistleblower program, since there's a lot of key risks that emerge, out of those investigations. so we want to make sure that we, as appropriate, touch on those key risks from a performance audit perspective. so it's really at any given year and right now we're, you know, starting our work planning for next fiscal year for fy20-21. and, you know, we just try to make sure that we allocate and we focus on the key departments that require the most attention at any given year. that's really how we kind of translate the risk-based approach to our -- at least our staffing or prioritization of our plan. >> in the may meeting, we'll be looking at the proposed work plan. every year ask for our feedback on that. and another thing to keep in mind is that we can also direct efforts. i mean, as we have. we've talked a little bit about that already in a couple of things. but don't hesitate to come up with good ideas that we could direct into next year's work plan. awesome. thank you. is there any public comment? >> good morning. my name is jerry dratler. one of the mandates of the city services auditor is ensure city services are needed and are cost effective, relative to other cities. the c.s.a. should be looking at department inputs and the department service outputs. a simple example is road repair, labor and materials are inputs. and miles of roads repaired is the output. i have never seen the city's cost-per mile of road repair benchmarked against other cities. the c.s.a. has a $20 million budget, with a $4.6 million carry-forward. why such a large carry-forward? i remember when the c.s.a. staff was 50 or 54f.t.e.s. how and why were approximately 14f.t.e.s, over 30% increase in staffing added and what new or more frequent services are the citizens of san francisco receiving for the increase in full-time staffing? i believe the city this year has a few hundred million dollar shortfall. i would think it would be useful for cgoboc to understand the approximately 3,000 or 10% increase in f.t.e.s. the city has added over the last few years. and specifically the new or better services the citizens are receiving from the 3,000 more f.t.e.s. i'd like to clarify departmental performance audits versus financial control audits. performance audits address the effectiveness of the city department in delivering services, financial control audits deal with financial controls. data wrangling was mentioned. data wrangling is certainly important and it falls under the category of a may-do requirement, but not a shall-do requirement. for the c.s.a. one of my favorite topics, being a former c.p.a., is risk-based auditing. risk-based auditing requires an enterprise risk analysis. once you identify the risk for the enterprise, in this case the city, you rank them highest to lowest. and then you allocate audit resources against major risks. it's that simple. i've been asking for the assessment many times, also when i was on the cgoboc. yet it's never been provided. thank you. >> thank you, mr. dratler. any other public comment? seeing none. >> item number 10. opportunity for committee members to comment or take action on any matters within the committee's jurisdiction, 2019-2020. , whistleblower program review, b, standardized templates. c, expenditure audits, d, public finances, e, housing public perception survey. two, other committee business. a, cgoboc fiscal year 19-20 work plan. b, other committee businesses. >> i know you're trying to get out of here. so i'll talk very quickly about each of these items. we keep them as standing items, in case updates or comments to report. the whistleblower program review. i emailed a couple of times with the members who are interested in this. the status is that audits is refreshing their pool of contractors, who could provide this through an independent contract. we will -- we are under way with forecasting a short scope of work, which we would send out when the pool is refreshed to auditors that can do this type of work, ask them to bid on it. actually if there's a company that the members like, that's already in the pool, we can just propose a contract, even without a bid process. and so we should be able to send a draft scope of work to commissioner mchugh and your other members who are interested shortly. so that by the time you meet again, i'm pretty confident we can have a test contract on this under way. standardized templates. we started work on compiling all of the reporting that's done, including to you and to commissions and others. i was a little out of date myself on understanding the reports and cycles that are being issued by the different departments. and then chair chu has volunteered herself as the liaison on this subject. so we'll be able to meet with her to look at the matrix. i've been taking notes throughout the meetings on the types of standardization that you like to the report. we'll work with public works on that. i'll skip over expenditure audits. you have the memo about the upcoming bond issuances. the office of public finance is here and could answer them. housing public perception survey. we touched on this very briefly. and again we're refreshing our pool right now of contractors that do public outreach and perception and polling and that kind of work. so we should have providers ready shortly. and member natoli is i think our primary liaison on this. and as we've discussed before, there was a couple of possible ways or audiences that you might want to test in affordable housing. sprotts and citizen -- voters and citizens of the bond was one. residents and citizens of the bond is other, a third is managers, owners, builders of fard projects. and so we need to do some work with member natoli to kind of focus your interest on that, by the time we have the pool refreshed, we think we could come up with a scope of work that would be useful. so i guess next step i'll do is just to reach out to member natoli and schedule a meeting about that, to talk about some of these ideas and kind of get our thoughts in order, while we're waiting for the provider school to be refreshed. >> anybody else want to join that? >> yes. >> yeah. >> okay. >> okay. okay. yeah. well, you can tell jane. >> he's talking about i think the template. >> the template? you're talking about the template? >> yes. >> that sounds good. for the perceptions study? okay. i think we're fine with just two people. we can do that without -- >> got it. >> the others -- i don't have any other comments or updates unless you have questions. >> i do have some questions about the bond forward calendar. michelle. so the seawall -- we're ready to go out for and bonds? >> that's right. so the bonds are approved by the board of supervisors. the middle of last year. the transaction itself was held up because of pending litigation. the litigation is now moving forward in the appeals court. and just through the discussions with the city attorney's office and our bond council, we feel the city's case is looking relatively strong on the merits. and we're comfortable with moving forward with some type of bond issuance, because the port has appropriated some interim harbor funds to get through the project's work for the fiscal year. but before those funds run out, we'd like to work with underwriters to issue bonds. we're planning to do that in the next couple of months. the next issuance we're working on right now is a refunding and probably soon after the refunding is completed we'll move forward with the seawall bonds. >> okay. why is that kind of low? >> it's the -- well, when the port comes, they can give you a little bit more detail. my understanding is the general scope is that this is the first set of pilot projects to test various approaches for the seawall problem. and so the first issuance will be funding-scale -- smaller-scale panel -- projects. they'll be issuing larger amounts to fund the balance of the project. >> that's good news. they're going to try something first. thank you. what is g.o. refunding? >> so when we issue g.o. bonds, we -- it's refinancing to achieve the interest savings. so that we can -- we have outstanding bonds that have already been issued seven, eight years ago, nine years ago or more. and when we sell bonds, we issue them with the future for optional redemption early. so that these new bonds will be issued to pay off the old bonds and the new bonds will be issued. lower interest rate. >> like refinancing your house. >> essentially. refinancing. >> okay. thank you. the transportation and road improvement. that's from 2014. do you have any idea -- i know this isn't your jurisdiction. why now? they've been sitting on the money for a really long time. >> well, they've been working through the funds from the previous issuances. and the status of the projects, they've expended a significant amount of funds. and they're ready to fund the next phase of the project. and so we've been working with them, reviewing the spend-down schedules and, you know, they have a good plan i think to spend the next money. >> getting some movement. >> we're just starting the kickoff of those transactions. i believe they'll be presenting at the next cgoboc meeting. you'll have an opportunity to get a little more detail about the plans for the next issuance and the status of the currently issued bonds for the transportation projects. >> all right. >> there's $258,000,000.550000 left in -- $258 million. we're expecting to issue $150 million to $200 million of that. we expect a fourth issuance to come. >> okay. thank you. any other comments? >> just a quick question. any more update on 2019 affordable housing in the past couple of weeks? up in the air. >> we're working with mayor's office of housing. we expect an issuance, but probably in the next fiscal year, not in this current fiscal year. >> okay. thank you. >> another question. peg or mark, when you get that issuance done of the capital expenditures on the m.t.a. bond, can i get a copy of that, even if it's a draft, you can email it or whatever. >> you're referring to the m.t.a. capital and construction issuance? >> and procedures. >> exactly. yeah. that hub -- should be issued in february or march. >> the sooner i see, the more likely i am to read it. you know. >> great. any other comments? is there public comment? no. seeing no public comment, i think we're adjourned. thank you. >> drinclear [roll call] item 3, sound producing devices. the ringing of a use of cellphones, pagers and other similar sound producing are remove. the chair may order the removal of the meeting of any person responsible. for the ringing of of use of a cell phone, pager or sound-producing element. the irony. >> item for approval of the minutes from the january 7th regular meeting. >> daytona 500 a motion on the january 7th, regular meeting minutes? >> motion to approve. >> second. >> all in favor -- >> chair, for the record. no member of the public has

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