Government Audit and Oversight Committee Meeting - November 17, 2022
STREAMING COPY IN PREPARATION — RECORDING AVAILABLE FROM THE ORIGINAL SOURCE
Government Audit and Oversight Committee Meeting - November 17, 2022
The Government Audit and Oversight Committee met on November 17, 2022, to consider a motion for two new performance audits, a resolution authorizing the Next Generation Clipper system MOU, a Mills Act historical property contract, and annual reports from the Tourism Improvement District, Moscone Expansion District, and six Community Benefit Districts (CBDs). The committee also convened in closed session to discuss litigation settlements. All public agenda items were forwarded to the full Board of Supervisors with positive recommendations.
Public Comments & Testimony
- Item 1 (BLA Audit Plan): Leen Boken, representing Coalition for San Francisco Neighborhoods, urged the board to expand the scope of the conflicts-of-interest audit to include the citywide affordable housing loan committee. He stated that voting members can approve their own projects, that the committee lacks minutes, and cited specific concerns about projects like 2550 Irving Street.
- Items 4-10 (CBD Annual Reports): Linda Chapman, a resident of Knob Hill, spoke critically of the Lower Polk CBD, alleging illegal fundraising from developers and governance failures, and stating that the neighborhood has suffered from a "nightlife and vice district" culture. She called for an inspector general office.
Discussion Items
- Item 1 – Motion to Amend the BLA Audit Plan: Chair Preston introduced a motion directing the Budget and Legislative Analyst (BLA) to conduct two proactive performance audits for FY2022-2023: (1) a multi-part audit of delegated procurement authority under Chapter 6 of the Administrative Code for public works contracts, and (2) a citywide audit of how conflicts of interest are managed. BLA Analyst Dan Goncher explained that delegated authority allows department heads to approve construction contracts up to $1 million without commission approval and between $1M and $10M with only commission approval, bypassing centralized procurement—an area never before audited. The conflicts audit will review tools like Statements of Economic Interests and explore best practices from other jurisdictions. Both audits are intended to proactively address potential corruption, not in response to specific scandals. Public comment was heard. The committee voted unanimously to send the motion to the full board.
- Item 2 – Next Generation Clipper MOU: Diana Hammonds, SFMTA Revenue Manager, presented a resolution authorizing the SFMTA Director to execute an amended MOU with the Metropolitan Transportation Commission and 23 other Bay Area transit operators for the Next Generation Clipper system. Key changes include a shift from variable transaction fees to a fixed monthly operating cost, with MTC covering 50% of ongoing costs and operators splitting the remainder based on usage. The 10-year agreement will support roll-out of virtual Clipper cards, cellular-connected fare equipment, and an account-based system. BLA Analyst Nick Minard noted that MTA's pre-COVID costs were $8.4M, dropped to $3M during the pandemic, and are projected to be $7.1M in FY2022-23 and $9.7M in FY2023-24 due to dual-system transition, then stabilizing between $6.5M and $8.5M annually. Discussion touched on fare capping and the exclusivity of Clipper for regional integration—a 12-year-old MTC resolution discourages competing systems, but SFMTA can still offer products not yet available on Clipper (e.g., day passes, lifeline passes) via the Muni Mobile app. The committee voted unanimously to forward the resolution.
- Item 3 – Mills Act Historical Property Contract for 942-944 Fell Street: Chair Preston recused himself because the property is within 500 feet of his residence. Vice Chair Chan presided. Gretel Gunther of the Planning Department presented the application for a 10-year rolling contract. The property is a contributor to the Alamo Square Historic District, built in 1908, valued under $3 million. The proposed rehabilitation plan includes siding repair, roof replacement, window repair, and other work costing $308,100 over 10 years, with annual maintenance estimated at $8,655. The Assessor-Recorder estimated annual property tax savings of $11,687. Owner Julie Chin spoke in support, emphasizing her commitment to stewardship, tenant retention (both units occupied since mid-2021), and the property's visibility to tourists. The committee voted unanimously (2—0) to recommend approval.
- Items 4-10 – Annual Reports of Tourism and Community Benefit Districts: Mimi Hiraki of the Office of Economic and Workforce Development (OEWD) summarized the compliance of eight districts with statutory benchmarks. Key findings: The Tourism Improvement District (TID) and Moscone Expansion District (MED) met all benchmarks, though their assessments tied to hotel revenue were significantly impacted by the pandemic; the TID's $5 million line of credit was extended to December 2022. The Yerba Buena CBD missed the non-assessment revenue benchmark due to the pandemic but has since secured a $300,000 state grant and a $200,000 OEWD grant. The East Cut CBD met all benchmarks, collecting 149,000 pounds of trash and 2,959 graffiti tags; it manages three parks and launched a 311 dispatch pilot. The Castro/Upper Market CBD renewed with 72% weighted assessment; graffiti abatement increased 31% and human feces collection 57%; it transitioned from patrol special police to unarmed community ambassadors. The Ocean Avenue CBD failed three of four benchmarks; OEWD presented serious governance deficiencies from its strategic plan, including board inexperience, lack of financial controls, and poor communication. OEWD requested a Controller's audit for FY2022-23. New Executive Director Christian Martin (six weeks on the job) acknowledged the issues and said a board training consultant had been hired, with improvements expected by Q1 2023. The Discover Polk CBD missed the non-assessment revenue benchmark but met all others; it is working to secure a grant from the Academy of Art University. The Lower Polk CBD met all four benchmarks, continuing its tenant-landlord clinic and working with a consultant to improve board governance. The committee voted unanimously to forward all eight resolutions to the full board.
- Closed Session (Items 11-17): The committee convened in closed session to discuss seven litigation settlement items. After reconvening, the clerk reported that the committee voted unanimously to recommend items 11 through 15 and item 17 (lawsuits involving Phi Associates/Drisco Hotel, John LaSalle, Crystal & Martha Gomez, Linda Gebroe, Onjanette Hudson, and Visa U.S.A. Inc.) to the full board, and to continue item 16 (settlement for 100-120 Powell Owner L.P., L.L.C.) to the December 1, 2022 meeting. The committee voted unanimously not to disclose the closed session discussions.
Key Outcomes
- Item 1: Motion to direct BLA audits – forwarded to full board (3—0).
- Item 2: Resolution on Next Generation Clipper MOU – forwarded to full board (3—0).
- Item 3: Resolution for Mills Act contract at 942-944 Fell Street – forwarded to full board (2—0, Preston recused).
- Items 4-10: Resolutions for TID, MED, and six CBD annual reports – all forwarded to full board (3—0).
- Closed Session (Items 11-17): Items 11-15 and 17 recommended for approval; item 16 continued to December 1, 2022. Committee voted not to disclose discussions.
Meeting Transcript
Good morning. This meeting will come. Good morning. This meeting will come to order. Welcome to the uh November 17th, 2022 regular meeting of the Government Audit and Oversight Committee of the San Francisco Board of Supervisors. I'm Supervisor Dean Preston, Chair of the Committee, joined today by Vice Chair Connie Chan and Supervisor Catherine Stephanie. Our committee clerk today is Stephanie Cabrera, and I want to thank the team at SFGov TV for staffing this meeting. Madam Clerk, do you have any announcements? Yes, thank you, Chair. The Board of Supervisors and its committees are now convening hybrid meetings that allow in-person attendance and public comment while still providing remote access and public comment via telephone. The board recognizes that equitable public access is essential. Those attending in person will be allowed to speak first, then we'll take those who are waiting on the telephone line. For those watching either Channel 26, 28, 78, or 99, and sfgovtv.org. The public comment call-in number is streaming across the screen. The number is 41565501. Again, 415 65501. When prompted, enter meeting ID 2498 116218, then pound and pound again. When connected, you will hear the meeting discussions, but you'll be muted and in listening mode only. When your item of interest comes up and the public comment is called, those joining us in person should line up to speak along the curtain wall, and those on the telephone should dial star three to be added to the speaker line. If you are on your telephone, please remember to turn down your TV and all listening devices you may be using. As already indicated, we will be taking public comment from those attending in person first, then we'll go to our public comment telephone line. Alternatively, you may submit public comment in written in writing, either of the following ways. Email them to me, the government audit and oversight clerk at Stephanie.cabrera, C as in California, A, BSN Bay, R E R A at SFgov.org. If you submit public comment via email, it will be forwarded to the supervisors and also included as part of the official file. You may also send your written comments via U.S. Postal Service to our city in our office in City Hall. One, Dr. Carlton B. Goodlit Place, room 244, San Francisco, California 94102. Finally, items acted upon today are expected to appear on the Board of Supervisors Agenda of November 29th, unless otherwise stated. Thank you, Chair. Thank you, Madam Clerk. And before we call our first item, I want to make a motion to excuse uh Supervisor Mandelman. Um Madam Clerk, please call the roll. On the motion to excuse Member Mandelman. Vice Chair Chan. Aye. Member Stephanie. Aye. Chair Preston? Aye. Thank you. There are three ayes. Thank you. The motion passes. And Madam Clerk, please call item one. Item number one is a motion directing the budget and legislative analysts to conduct two additional performance audits for fiscal year 2022 through 2023, consisting of one, a multi-part audit of various departments, delegated authority for public works contracts pursuant to chapter 6 of the administrative code, and two, how conflicts of interest are managed citywide. Members of the public who wish to provide public comment on this item should call 415-655-0001. When prompted, enter meeting ID 2498-111-6218, then pound, then pound again. If you haven't already done so, please dial star three to line up to speak.
openpublica.com