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COMMUNITY ADVISORY GROUP
Wednesday, February 11, 2004
12:00 Noon
1800 Oakdale Avenue, Conference Room B
San Francisco, CA 94124
I. Call to Order
Chair Shirley Jones called the Wednesday, February 11, 2004 Community Advisory Group meeting to order at 12:15 p.m.
II. Roll Call
Present: Chair Shirley Jones Ms. Esther Blanchard
Co-chair Damone Hale Dr. Harrison Parker
Mr. Andrew Bozeman Ms. Dorris Vincent
Mr. Michael Harris
Late Commissioner Millard Larkin Dean Veronica Hunnicutt
Arrival: Ms. Espanola Jackson
Staff Present: Robert Bryan, Deputy City Attorney; John Roddy, Deputy City Attorney; Joseph Tham, Dept. of Real Estate; Toye Moses, Exec. Dir., SECFC; Annette Price, SECFC-Sect.
III. Announcement: The Sunshine Ordinance read by Commission Secretary.
IV. Approval of Minutes:
Moved (Parker) seconded (Bozeman) to accept the minutes of Wednesday, January 7, 2004 with minor changes (Motion carried 7-0).
V. Public Comment:
There was no public comment at this meeting.
VI. Communications:
The Executive Director stated the following correspondence has been sent as directed:
a. Letter of invite to Jim Jefferson re: “State Water Resources Control Board” correspondence
b. Letter of invite to Gary Dowd, SFPUC Land Management re: “SECF expense/revenue”
c. Letter of invite to John Roddy re: “Drafting of S.F. Admin. Chapter 54”
d. Letter of invite to Charlie Dunn, SFPUC re: “History of SECF merger”
e. Letter of invite to Bill Keaney, Manager of Water Pollution Control
VII. Presentation(Discussion): Attorney Robert Bryan, Deputy City Attorney reminded that he was asked by the CAG to review records that would support an understanding of a promise related to the issue of funding for the facility and community beyond what is reflected in the Admin. Code 54.
Attorney Bryan stated in his review of the documents, he found no evidence of a “promise” that funds were to go to the community; however, he did find evidence of what seemed to be a belief on the part of the City as well as the community that there would be surplus revenue from the onset of operation. Attorney Bryan further noted that even though he found no documentation to substantiate that “promise”, that’s not to say it doesn’t exists. With the assistance from PUC and John Roddy, Deputy City Attorney, Attorney Bryan produced the following documents for review:
§ Additional Planning Studies: After brief review of Chapter 1, Sec. I-1, second paragraph,
discussion ensued regarding (1) non-profit Community Development Corporation; (2) excess revenue funds; (3) studies conducted; (4) impact of Community Development Corporation’s closure as related to bylaws; (5) city funded start-up cost ($250,000); (7) WRCB Ord. 81-1 creating governance structure.
§ Chapter 54, San Francisco Admin Code:
After review of Chapter 54.2 (h), Attorney Bryan stated his interpretation of that section is: The Commission is advisory in nature with the exception of the appointment of the
Executive Director and the use of surplus funds.
In response, Ms. Blanchard asked does PUC Commission bylaws cite who has authority/control over surplus funds as related to Southeast? Mr. Roddy responded during that time, he was part of the transition team merger and the general conclusion was PUC & Southeast were two independent commissions only connected if a shortfall arose. Some component of the SE budget is part of the PUC budget. Therefore, if PUC has authority over SECFC’s surplus funds, PUC is obligated to fund any shortfall. Dir. Moses interjected that CAG was set up for the sole purpose of clarifying some misconceptions noting that in the charter, which is obsolete and should be revised, DPW is still listed as the fiscal agent
Chair Jones suggested thorough review should take place of all documents produced prior to CAG’s recommendation to the Commission. The meeting was then turned over to Co-chair Hale.
§ Southeast Community Facility Summary, Attachment I:
Attorney Bryan referred CAG to Attachment 1, 1st paragraph and Attachment 3, 1st
paragraph, both of which address the “revenue issue”. Discussion ensued regarding
operational/maintenance costs of facility offset by revenue of Greenhouse & training center.
Dir. Moses explained that the revenue generated does not come close to meeting expenses. SECF is dependent on other city agencies to supplement both budgets (Clean
Water & General Fund). He asked that Joseph Tham, SFPUC Dept. of Real Estate come forward to interpret SECF’s annual income report. Attorney Bryan added there was also an assumption that the energy for SE would be at no cost based on a cogeneration facility from the sewage treatment.
§ San Francisco Clean Water Program:
Attorney Bryan referred CAG to the draft ordinance, Sec. 46.2, noting that no reference was made to “surplus funds”. In addition, the reference of having authority to enter into lease agreements has changed. Further dissimilarities addressed were the issues of charter commission vs. commission set up by ordinance. Distinction being one requires a vote of the people; one does not. Attorney Harris asked for clarification with regard to amending and/or revising the structure of the commission. Attorney Bryan explained that can occur by request to the Board of Supervisors, adding that it could be an advantage or disadvantage.
§ Letter to George White from Jim Jefferson (2/18/83):
After review of projected operating cost & expense, discussion arose concerning Jefferson’s assumption that revenue would exceed operating cost. Attorney Hale questioned whether Jefferson’s projections were based on market rate or on a nonprofit rate. Attorney Bryan suggested perhaps PUC Dept of Real Estate could look at past records to determine that. He also recalled seeing a document from City College voicing concern of being charged market rate rent. Discussion ensued on current tenant rents.
§ Memo to Don Birrer from Roger Boas (2/23/83):
Attorney Bryan interpreted this memo as asking for justification of expenses and revenue.
§ Letter from Roger Boas to D. Birrer (2/24/83):
Letter responding to memo of 2/23/83 from Boas to Birrer, which attaches Jefferson’s memo to Mr. White. Dr. Parker remarked if the intent was to give tenants a break in terms of Greenhouse rent, it seems self-defeating in terms of surplus going back to the community.
§ Letter from Arthur Young to Robert Gamble (3/18/83):
Referring to the table projecting cost/revenue, Attorney Bryan noted that each year showed a projected deficit. In addition, heating/cooling expenses are included, which originally were to be free. Attorney Hale asked whether the projections are for both the Greenhouse and skill center? Attorney Bryan answered yes, they are. Attorney Hale referred back to the 2/24/83 document that indicated projected gross revenue would be $1.1 million for the Greenhouse alone. However, in ’86 it was clear that they were not close to approaching $1.1 million.
Mr. Caruso of Decorative Plants interjected his interpretation of that document relates to
business revenue, not real estate revenue. He further added that Decorative Plants’ rent has doubled to $160,000 a year. Also, Decorative pays for their own utilities, PG&E @ $68,000 a year and garbage @ $40,000 a year. Attorney Hale responded by saying a decision was made that the community would benefit from revenue generated by Decorative and that that did not occur. Ms. Jackson asked if Decorative paid for their water usage? Dir. Moses responded that the City pays for Decorative Plant’s water.
§ SWRCB letter to D. Birrer from P. Hernandez (10/4/84):
Attorney Bryan explained that this letter with attachment concluded that revenues would
exceed cost.
§ Minutes of Meeting (10/29/84):
Attorney Bryan reference sec B, Item IV under Governance duties & objectives, which
recommended distribution of excess revenues over operating expenses for community
purposes. In early 1984, it was still held that revenue would exceed cost. Referring to the
Arthur Young projection, Mr. Bozeman stated that there is a significant amount of money being spent on heating/cooling and asked why there is a cost associated when it was to be free? Dir. Moses responded $30,000 has been allocated for both facilities, which goes through PUC to PG&E. Commissioner Larkin asked is there some document that dictates Southeast should pay the utilities of a for profit facility? Dir. Moses stated SE pays only for water usage, not for the heating system, but that he would research to determine whether any such document exists. Ms. Vincent stated she has a fuzzy memory that the gases from the sewage plant were supposed to generate heat and hot water, which would not necessitate the need for natural gas.
Mr. Keaney further explained that 20 years ago there were plans to have a cogeneration system at the SE plant. Provisions were made for hot water to be sent to SE. Piping was operational for a number of years; however after numerous repairs, it became prohibitive to repair them. Thereafter, plans to build new digesters arose, did not happen. Now we are now in the process of reexamining what it would take to put those pipes back in place. Mr. Keaney stated he would look into that and update the CAG after he has researched the issue. Ms. Jackson stated she is very disturbed hearing this, as there were to be no cost incurred. She further stated that the agreement with several Peninsula cities to have their sewage directed to the Southeast plant was never discussed. Ms. LeBlonte, SFPUC stated she has personally undertaken to begin research of original agreements that address the issue of receiving sewage from other counties. Staff will meet next week and will produce a fact sheet which will have all supporting documents of the whole history, revenues generated and where they’re going. Dir. Moses suggested perhaps Mr. Roddy could be given an
opportunity to enlighten everyone more on the history of the charter, as he was responsible for putting the ordinance together.
Mr. Roddy explained that both he and Robert worked together to make the presentation and go through this history. He stated although he wrote it, he did not decide what went into it nor does he remember why certain decisions were made. He stated based on reading these documents and listening to all of the history, it’s very clear that it would be helpful to have a combination budget history, lease review just to settle some of those issues of why the rents were calculated the way they were. I cannot testify to whether promises were made or not,
but it’s very clear there was an expectation.
Dr. Parker stated that without a revenue accounting system, it’s unsettled. A system must be set up where there is revenue accountability. Ms. Blanchard suggested she hopes the Chair will go back and look to see through PUC’s rules & regulations and WPC how that relationship works where there is overlap and inconsistencies. If we don’t now what those are, how do we know what we’re operating under? Mr. Keaney stated he could walk CAG through the budget back 6, 7 years; however, the revenue side would have to be addressed by PUC.
In conclusion, Attorney Bryan referenced the distribution list and suggested that possibly
CAG could review and determine if there is anyone else they would like to speak with.
VIII. Introduction of New Business by Committee Members:
Co-chair Hale stated the following requests would fall under new business.
Ø Thorough review of all documents produced by Attorney Bryan, discuss as committee, and make a recommendation to the full Commission
Ø Research PUC Commission bylaws to determine who has ultimate authority regarding surplus funds (overlap – PUC vs. SECFC)
Ø Set up a revenue accountability system
Ø Ask Board of Supervisors for revision of the ordinance.
IX. Adjournment:
Ms. Vincent moved and Mr. Bozeman seconded to adjourn the SECFC/CAG meeting. Meeting adjourned at 2: 02 p.m.
Respectfully submitted,
_______________________
Commission Secretary
