A Report of the 2002-2003 Civil Grand Jury For the City and County of San Francisco Preferential Treatment Persists in a

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Eliminate the undue influence of and pr eferential treatment received by certain DBI customers.

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Institute quality control procedures in bo th Plan Check and Inspection Services divisions of DBI.

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Comply with state law by determining t he actual costs of providing services of DBI, and adjust fees accordingly.

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Improve management and leadership skills of those in positions of responsibility. OVERVIEW The San Francisco Department of Building Inspection (DBI) serves its “customers” – primarily developers, contractors, and homeowners seeking building or related permits – in a professional and courteous manner. Most permits are issued and inspections conducted promptly with a minimum of bureaucratic inefficiency. A 2001 audit by the Office of the Controller found this, but noted that the department lacked adequate quality control measurement standards and suffered from the perception that undue influence and preferential treatment existed in the way it performed some of its services. The Controller recommended that the department develop a Code of Professional Conduct to guide its employees in the performance of their duties; that the Department develop quality control measures; and that it make changes in the operation of the department to dispel the perception of undue influence. The 2002-2003 Civil Grand Jury investigated DBI operations in its Plan Checking and Building Inspection programs1 to determine whether the perception of undue influence and preferential treatment of favored permit applicants had a basis in fact, whether the Controller’s recommendations had been implemented, and whether actions taken by DBI in response to the Controller’s audit recommendations have been adequate. The Grand Jury also considered other steps DBI can and should take to avoid actual or perceived inequalities in the way its customers are served, and generally to serve them better. The Grand Jury did not investigate the operation of the Housing Inspection Program, which handles code enforcement related to reported code violations in existing buildings with three or more units including transient and residential hotels. The Grand Jury notes, however, that staffing shortages have contributed to a backlog in inspection of residences for illegal units and for unsafe decks and balconies in multiple unit buildings. The investigation confirmed that DBI has many competent employees in managerial and line capacities. Those employees are dedicated to protecting the public, providing equal services to all customers, and to evenhanded code enforcement. Nonetheless, the Grand Jury repeatedly heard from sources inside and outside DBI that the directors (mangers in appointive positions) and some of the managers of departments within the Plan Check and Inspection Services divisions are subject to undue influence from certain segments of the construction industry and that certain customers receive preferential service. This information was corroborated in part by records obtained from DBI. The Grand Jury concludes that undue influence by outsiders over DBI decisions and preferential treatment of some customers is actual, not simply perceived. This favoritism is deeply ingrained in DBI operations and is embraced by some directors and managers. Directors have failed to institute a Code of Professional Conduct, to update the department’s conflict of interest policy, or to impress on employees the importance of giving equally prompt and professional service to all customers. They have not provided employees with a concise, easily understood summary of ethical obligations imposed by state and local laws and regulations that are applicable regardless of the status of the proposed Code of Professional Conduct. Whistleblowers are not assured of protection. Employees are reluctant to report improper conduct because they fear retaliation and ostracism. DBI management has failed to devise adequate quality control measures to be consistently followed throughout the Department. Management has failed to complete the development of a computerized permit and record tracking system that would significantly aid in reducing inadvertent or intentional delays in the processing of permit applications and make preferential and unequal treatment of customers apparent. The Grand Jury has concluded that these failings result from directors and managers at DBI who either lack the competence to make institutional changes in the department or are unwilling or uninterested in doing so. Political, rather than professional considerations in appointments to management positions in DBI may account for individuals who, while technically competent, lack management background and skills. These appointees appear to lack incentive to make administrative changes that are necessary to eradicate outside influence and preferential treatment, which would not be welcomed by those DBI customers whose influence permeates DBI. The Grand Jury recommends that DBI directors prepare and circulate to all employees a simple statement of the ethical rules that should govern their conduct. The director should impress on DBI employees that they are personally committed to these rules and they insist the employees follow these rules without exception. The department should finalize and implement the proposed Code of Professional Conduct. It should immediately implement a new permit tracking system that gives members of the public access to the status of a permit application, including required inspections. Additional in- house training for plan checkers and field inspectors, specific to their duties, should be designed and required. Regular Plan Check and Inspection staff meetings should be instituted to eliminate inconsistent application of codes and regulations. Directors should survey the quality control programs instituted in its Plan Check and Inspection Services divisions and revise them when necessary to ensure that code compliance and public 2 safety have priority equal to the department's dedication to promptness in all aspects of plan checking and inspection.